0001404912kkr:ValuationTechniqueMarketApproachDiscountedCashFlowAndTransactionPriceMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PrivateEquityFundsMembersrt:WeightedAverageMemberus-gaap:MeasurementInputComparabilityAdjustmentMemberkkr:AssetManagementSegmentMember2022-03-31
Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
ý     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2017 March 31, 2022
Oror

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
o     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Transition period from           to           .
Commission File Number 001-34820
kkr-20220331_g1.jpg
KKR & CO. L.P.INC.
(Exact name of Registrant as specified in its charter)
Delaware26-0426107
(State or other Jurisdiction of

Incorporation or Organization)
(I.R.S. Employer

Identification Number)

9 West 57th Street, Suite 420030 Hudson Yards
New York, New York 1001910001
Telephone: (212) 750-8300
(Address, zip code, and telephone number, including
area code, of registrant’sregistrant's principal executive office.)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common StockKKRNew York Stock Exchange
6.00% Series C Mandatory Convertible Preferred StockKKR PR CNew York Stock Exchange
4.625% Subordinated Notes due 2061 of KKR Group Finance Co. IX LLCKKRSNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý☒ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý☒ No o

☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large"large accelerated filer,” “accelerated" "accelerated filer,” “smaller" "smaller reporting company,”" and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerx
☒
Accelerated filer o☐
Non-accelerated filer o
☐
Smaller reporting company o☐
Emerging growth company o
(Do not check if a smaller reporting company)☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No ý☒


As of November 1, 2017,May 4, 2022, there were 477,572,397 Common Units592,607,251 shares of common stock of the registrant outstanding.


Table of Contents

KKR & CO. L.P.
INC.
FORM 10-Q
For the Quarter Ended September 30, 2017March 31, 2022
INDEX
TABLE OF CONTENTS
Page
Item 1.
Page No.
PART I—FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Statements of Financial Condition (Unaudited) as of March 31, 2022 and December 31, 2021
5
Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2022 and 2021
9
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2022 and 2021
11
Condensed Consolidated Statements of Changes in Equity (Unaudited) for the Three Months Ended March 31, 2022 and 2021
12
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2022 and 2021
13
Notes to Financial Statements (Unaudited)
16
Item 2.Management’s
6394
Item 3.
143159
Item 4.
143159
Item 1.
144160
Item 1A.
144160
Item 2.
145161
Item 3.
146162
Item 4.
146162
Item 5.
146162
Item 6.Exhibits
162
147163


2
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This report contains forward lookingforward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended or the Securities Act,(the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended or the Exchange Act,(the "Exchange Act"), which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward lookingforward-looking statements by the use of words such as "outlook," "believe," "think," "expect," "potential," "continue," "may," "should," "seek," "approximately," "predict," "intend," "will," "plan," "estimate," "anticipate," the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. Without limiting the foregoing, statements regarding the declaration and payment of distributionsdividends on common or preferred unitsstock of KKR & Co. Inc.; the timing, manner and volume of repurchasesrepurchase of common unitsstock pursuant to aits repurchase program,program; expansion and the expectedgrowth opportunities and other synergies resulting from acquisitions, reorganizations or strategic partnerships,partnerships; and the timing and completion of the transactions contemplated by the Reorganization Agreement (as defined below) may constitute forward-looking statements. Forward lookingForward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements or cause the anticipated benefits and anticipated synergies from transactions to not be realized. We believe these factors include those described under the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the Securities and Exchange Commission on February 24, 2017.this report. These factors should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings.filings with the U.S. Securities and Exchange Commission (the "SEC"). We do not undertake any obligation to publicly update or reviewrevise any forward lookingforward-looking statement, whether as a result of new information, future developments or otherwise.otherwise, except as required by law.





CERTAIN TERMS USED IN THIS REPORT

In this report, references to "KKR," "we," "us,""us" and "our" and "our partnership" refer to KKR & Co. L.P.Inc. and its consolidated subsidiaries.subsidiaries, including The Global Atlantic Financial Group LLC ("TGAFG" and, together with its subsidiaries, "Global Atlantic"), unless the context requires otherwise. On February 1, 2021, KKR completed its acquisition of Global Atlantic. KKR holds all of the voting interests in Global Atlantic and owns 61.5% of the economic equity interests in Global Atlantic.

For periods between July 1, 2018 and December 31, 2019, references to “common stock” refer to Class A common stock of KKR & Co. Inc., and references to “Series I preferred stock” and “Series II preferred stock” refer to Class B common stock and Class C common stock of KKR & Co. Inc., respectively. Prior to July 1, 2018, KKR & Co. Inc. was a limited partnership named KKR & Co. L.P. becoming listed on the New York Stock Exchange ("NYSE") on July 15, 2010, KKR Group Holdings L.P. ("Group Holdings") consolidated the financial results of KKR Management Holdings L.P. and KKR Fund Holdings L.P. (together, the "KKR Group Partnerships") and their consolidated subsidiaries. On August 5, 2014, KKR International Holdings L.P. became a KKR Group Partnership. Each KKR Group Partnership has an identical number of partner interests and, when held together, one Class A partner interest in each of the KKR Group Partnerships together represents one KKR Group Partnership Unit.  In connection with KKR's issuance of Series A Preferred Units and Series B Preferred Units, the KKR Group Partnerships issued preferred units with economic terms designed to mirror those of the Series A Preferred Units and Series B Preferred Units, respectively.

References to "our Managing Partner"the “Series I preferred stockholder” or “KKR Management” are to KKR Management LLP, the holder of the sole outstanding share of our Series I preferred stock. References to our “senior principals” are to our senior employees who hold interests in the Series I preferred stockholder, including Mr. Henry Kravis and Mr. George Roberts (our "Co-Founders"). References to “non-employee operating consultants” for periods prior to January 1, 2020 refer to employees of KKR Capstone Americas LLC and its affiliates (“KKR Capstone”), which acts as our general partnerwere then owned and unlesscontrolled by their senior management and not subsidiaries or affiliates of KKR.

Unless otherwise indicated, references to equity interests in KKR'sKKR’s business, or to percentage interests in KKR'sKKR’s business, reflect the aggregate equity of theinterests in KKR Group PartnershipsPartnership L.P. ("KKR Group Partnership"), which is the intermediate holding company that owns the entirety of KKR’s business, and are net of amounts that have been allocated to the holders of certain minority interests, including our principals and other employees and non-employee operating consultants in respect of the carried interest from KKR's business as part of our "carry pool" and certain minority interests.carry pool participants (who are explained further below). References to "principals"“KKR Group Partnership” for periods prior to January 1, 2020 refer to KKR Fund Holdings L.P., KKR Management Holdings L.P. and KKR International Holdings L.P., collectively, which were combined on that date to form KKR Group Partnership. References to a “KKR Group Partnership Unit” refer to (i) one Class A partner interest in each of KKR Fund Holdings L.P., KKR Management Holdings L.P. and KKR International Holdings L.P., collectively, for periods prior to prior to January 1, 2020, and (ii) one Class A partner interest in KKR Group Partnership for periods on and after January 1, 2020.

References to “principals” are to our seniorcurrent and former employees and non-employee operating consultants who hold interests in KKR'sKKR’s business through KKR Holdings L.P., which we refer (“KKR Holdings”). As of March 31, 2022, KKR Holdings owned, as a limited partner, 258,726,163 Group Partnership Units representing 30.4% of the then outstanding Group Partnership Units. References to “principals” also includes our current employees who hold interests in KKR’s business through KKR Holdings II L.P. KKR Holdings II L.P. is a subsidiary of KKR & Co. Inc. but has an equity ownership in KKR Group Partnership similar to KKR Holdings. As of March 31, 2022, KKR Holdings II L.P. owned, as "KKR Holdings," and referencesa limited partner, less than 0.2% of the outstanding Group Partnership Units. References to our "senior principals"“carry pool participants” are to our seniorcurrent and former employees who hold interests in our Managing Partner entitling them to vote for the election of its directors.

References to non-employee operating consultants include employees of KKR Capstone and are not employees of KKR. KKR Capstone“carry pool,” which refers to a group of entitiesthe carried interest generated by KKR’s business that is allocated to KKR Associates Holdings L.P. (“KKR Associates Holdings”), in which carry pool participants are owned and controlled by their senior management.limited partners. Neither KKR CapstoneHoldings nor KKR Associates Holdings is notcurrently a subsidiary or affiliate of KKR. KKR Capstone operates under several consulting agreements with KKR and uses the "KKR" name under license from KKR.

Prior to October 1, 2009, KKR's business was conducted through multiple entities for which there was no single holding entity, but were under common control of senior KKR principals, and in which senior principals and KKR's other principals and individuals held ownership interests (collectively, the "Predecessor Owners"). On October 1, 2009, we completed the acquisition of all of the assets and liabilities of KKR & Co. (Guernsey) L.P. (f/k/Inc.

3
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On October 8, 2021, KKR entered into a Reorganization Agreement (the "Reorganization Agreement") with KKR Private Equity Investors, L.P. or "KPE")Holdings, KKR Management, KKR Associates Holdings, and in connection with such acquisition, completedthe other parties thereto. Pursuant to the Reorganization Agreement, the parties agreed to undertake a series of integrated transactions pursuant to whicheffect a number of transformative structural and governance changes, including (a) the businessacquisition by KKR of KKR was reorganized into a holding company structure. The reorganization involved a contributionHoldings and all of certain equity interests in KKR's business that were held by KKR's Predecessor Owners to the KKR Group Partnerships in exchangePartnership Units held by it, (b) the future elimination of voting control by KKR Management and the Series I preferred stock held by it, (c) the future establishment of voting rights for equity interests in the KKR Group Partnerships held through KKR Holdings. We referall common stock on a one vote per share basis, including with respect to the acquisitionelection of directors, and (d) the future control of the assetscarry pool by KKR. For more information about the Reorganization Agreement, see "Certain Relationships and liabilities of KPERelated Transactions, and toDirector Independence—Reorganization Agreement"in our subsequent reorganization into a holding company structure asAnnual Report on Form 10-K for the "KPE Transaction."year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission ("SEC").


In this report, the term "GAAP" refers to accounting principles generally accepted in the United States of America.



We disclose certain financial measures in this report that are calculated and presented using methodologies other than in accordance with GAAP.GAAP, including after-tax distributable earnings, distributable operating earnings, fee related earnings ("FRE"), asset management segment revenues, book value and book value per adjusted share. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholdersstockholders in assessing the overall performance of KKR's businesses. These non-GAAP financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP, if available.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, where applicable, are included within "Condensed Consolidated Financial Statements (Unaudited)—Note 14. Segment Reporting" and later in this report under "Management's Discussion and Analysis of Financial Condition and Results of Operations — Segment Operating and Performance Measures" and "— Segment Balance Sheet.Operations—Reconciliations to GAAP Measures."

This report also uses the terms assets under management or AUM,("AUM"), fee paying assets under management or FPAUM, economic net income or ENI, fee related earnings or FRE, distributable earnings,("FPAUM") and capital invested, syndicated capital and book value.invested. You should note that our calculations of these financial measures and other financial measuresoperating metrics may differ from the calculations of other investment managers and, as a result, our financial measures may not be comparable to similar measuresmetrics presented by other investment managers. These non-GAAP and other financial measuresoperating metrics are defined in the section "Management's Discussion and Analysis of Financial Condition &and Results of Operations—SegmentKey Non-GAAP Performance Measures and Other Operating and Performance Measures" and "— Segment Balance Sheet.Measures."


References to "our funds"our "funds" or "our vehicles"our "vehicles" refer to investment funds, vehicles and accounts that are advised, sponsoredmanaged or managedsponsored by one or more subsidiaries of KKR, including CLO and CMBS vehicles,collateralized loan obligations ("CLOs"), unless the context requires otherwise. They do not include investment funds, vehicles or accounts of any hedge fund or other manager with which we have formed a strategic partnership where we have acquired an ownership interest. References to “strategic investor partnerships” refers to separately managed accounts with certain investors, which have investment periods longer than our traditional funds and typically provide for investments across different investment strategies.References to “hedge fund partnerships” refers to strategic partnerships with third-party hedge fund managers in which KKR owns a non-controlling interest.minority stake.


Unless otherwise indicated, references in this report to our fully exchanged and dilutedoutstanding common units outstanding, or to our common units outstandingstock on a fully exchanged and diluted basis reflect (i) actual shares of common unitsstock outstanding, (ii) shares of common unitsstock into which KKR Group Partnership Units not held by usKKR Holdings are exchangeable pursuant to the terms of the exchange agreement described elsewhere in this report, (iii) shares of common units issuable in respectstock into which all outstanding shares of exchangeable equity securities issued in connection with the acquisition of Avoca Capital ("Avoca"),Series C Mandatory Convertible Preferred Stock are convertible, and (iv) shares of common unitsstock issuable pursuant to any equity awards actually granted from the Amended and Restated KKR & Co. L.P.Inc. 2010 Equity Incentive Plan which we refer to as(the "2010 Equity Incentive Plan") or the Amended and Restated KKR & Co. Inc. 2019 Equity Incentive Plan (the "2019 Equity Incentive Plan" and, together with the 2010 Equity Incentive Plan, our "Equity Incentive Plan."Plans"), including equity awards comprised of units in KKR Holdings II L.P. Our outstanding common stock on a fully exchanged and diluted common units outstanding dobasis does not include (i)shares of common unitsstock available for issuance pursuant to ourthe Equity Incentive PlanPlans for which equity awards have not yet been grantedgranted. 

The use of any defined term in this report to mean more than one entity, person, security or other item collectively is solely for convenience of reference and (ii) common units which we havein no way implies that such entities, persons, securities or other items are one indistinguishable group. For example, notwithstanding the optionuse of the defined terms "KKR," "we" and "our" in this report to issue in connection with our acquisitionrefer to KKR & Co. Inc. and its subsidiaries, each subsidiary of additional interests in Marshall Wace. KKR & Co. Inc. is a standalone legal entity that is separate and distinct from KKR & Co. Inc. and any of its other subsidiaries. Any KKR entity (including any Global Atlantic entity) referenced herein is responsible for its own financial, contractual and legal obligations.

4
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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
KKR & CO. L.P.INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
(Amounts in Thousands, Except UnitShare and Per Share Data)
March 31, 2022December 31, 2021
Assets  
Asset Management
Cash and Cash Equivalents$8,324,897 $6,699,668 
Restricted Cash and Cash Equivalents103,961 134,298 
Investments88,770,480 88,775,514 
Due from Affiliates1,277,574 1,224,283 
Other Assets2,407,714 2,886,313 
100,884,626 99,720,076 
Insurance
Cash and Cash Equivalents$4,590,032 $3,391,934 
Restricted Cash and Cash Equivalents523,503 300,404 
Investments122,799,871 123,763,675 
Reinsurance Recoverable24,639,148 25,062,256 
Insurance Intangible Assets1,481,284 1,407,149 
Other Assets6,302,775 5,053,518 
Separate Account Assets5,069,742 5,586,428 
165,406,355 164,565,364 
Total Assets$266,290,981 $264,285,440 
Liabilities and Equity  
Asset Management
Debt Obligations$36,112,872 $36,669,755 
Due to Affiliates457,668 462,722 
Accrued Expenses and Other Liabilities7,241,786 7,896,897 
43,812,326 45,029,374 
Insurance
Policy Liabilities$131,076,687 $126,520,044 
Debt Obligations2,029,769 1,908,006 
Funds Withheld Payable at Interest21,781,731 23,460,253 
Accrued Expenses and Other Liabilities4,615,841 3,263,566 
Reinsurance Liabilities607,014 378,549 
Separate Account Liabilities5,069,742 5,586,428 
165,180,784 161,116,846 
Total Liabilities208,993,110 206,146,220 
5
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 September 30,
2017		 December 31,
2016
Assets 
  
Cash and Cash Equivalents$2,436,566
 $2,508,902
Cash and Cash Equivalents Held at Consolidated Entities1,329,735
 1,624,758
Restricted Cash and Cash Equivalents44,175
 212,155
Investments37,251,837
 31,409,765
Due from Affiliates484,004
 250,452
Other Assets2,759,322
 2,996,865
Total Assets$44,305,639
 $39,002,897
    
Liabilities and Equity 
  
Debt Obligations$20,290,714
 $18,544,075
Due to Affiliates379,809
 359,479
Accounts Payable, Accrued Expenses and Other Liabilities3,769,682
 2,981,260
Total Liabilities24,440,205
 21,884,814
    
Commitments and Contingencies
 

    
Redeemable Noncontrolling Interests570,134
 632,348
    
Equity 
  
Series A Preferred Units
   (13,800,000 units issued and outstanding as of September 30, 2017
   and December 31, 2016)
332,988
 332,988
Series B Preferred Units
   (6,200,000 units issued and outstanding as of September 30, 2017
   and December 31, 2016)
149,566
 149,566
KKR & Co. L.P. Capital - Common Unitholders
   (473,134,387 and 452,380,335 common units issued and outstanding
   as of September 30, 2017 and December 31, 2016, respectively)
6,380,654
 5,457,279
Total KKR & Co. L.P. Partners' Capital6,863,208
 5,939,833
Noncontrolling Interests12,432,092
 10,545,902
Total Equity19,295,300
 16,485,735
Total Liabilities and Equity$44,305,639
 $39,002,897
March 31, 2022December 31, 2021
Commitments and Contingencies (See Note 24)00
Redeemable Noncontrolling Interests$81,793 $82,491 
Stockholders' Equity 
Series C Mandatory Convertible Preferred Stock, $0.01 par value. 23,000,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021.1,115,792 1,115,792 
Series I Preferred Stock, $0.01 par value. 1 share authorized, 1 share issued and outstanding as of March 31, 2022 and December 31, 2021.— — 
Series II Preferred Stock, $0.01 par value. 499,999,999 shares authorized, 258,726,163 and 258,726,163 shares, issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.2,587 2,587 
Common Stock, $0.01 par value. 3,500,000,000 shares authorized, 590,472,444 and 595,663,618 shares, issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.5,905 5,957 
Additional Paid-In Capital8,729,544 8,997,435 
Retained Earnings7,510,671 7,670,182 
Accumulated Other Comprehensive Income (Loss) ("AOCI")(1,650,212)(209,789)
Total KKR & Co. Inc. Stockholders' Equity15,714,287 17,582,164 
Noncontrolling Interests41,501,791 40,474,565 
Total Equity57,216,078 58,056,729 
Total Liabilities and Equity$266,290,981 $264,285,440 


See notes to condensed consolidated financial statements.

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KKR & CO. L.P.INC.
CONDENSEDCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (Continued) (UNAUDITED)
(Amounts in Thousands)
 
The following presents the portion of the consolidated balances presentedprovided in the condensed consolidated statements of financial condition attributable to consolidated variable interest entities (“VIEs”("VIEs") as. As of September 30, 2017March 31, 2022 and December 31, 2016.2021, KKR's consolidated VIEs consist primarily of (i) certain collateralized financing entities (“CFEs”("CFEs") holding collateralized loan obligations ("CLOs") and commercial real estate mortgage-backed securities ("CMBS”) and, (ii) certain investment funds. funds, and (iii) certain VIEs formed by Global Atlantic. The noteholders, creditors and equity holders of these VIEs have no recourse to the assets of any other KKR entity.

With respect to consolidated VIEs,CLOs and certain investment funds, the following assets may only be used to settle obligations of these consolidated VIEs and the following liabilities are only the obligations of these consolidated VIEs. The noteholders, limited partnersVIEs and other creditors of these VIEs have no recoursenot generally to KKR’s general assets.KKR. Additionally, KKR has no right to the benefits from, nor does KKR bear the risks associated with, the assets held by these VIEs beyond KKR’sKKR's beneficial interest therein and any feesincome generated from the VIEs. There are neither explicit arrangements nor does KKR hold implicit variable interests that would require KKR to provide any material ongoing financial support to the consolidated VIEs, beyond amounts previously committed to them, if any.

With respect to certain other VIEs consolidated by Global Atlantic, Global Atlantic has formed certain VIEs to hold investments, including fixed maturity securities, consumer and other loans, renewable energy, transportation and real estate. These VIEs issue beneficial interests primarily to Global Atlantic’s insurance companies.
March 31, 2022
 Consolidated CLOsConsolidated Funds and Other Investment VehiclesOther
VIEs		Total
Assets 
Asset Management
Cash and Cash Equivalents$837,670 $2,674,422 $— $3,512,092 
Restricted Cash and Cash Equivalents— 68,508 — 68,508 
Investments22,014,866 49,373,376 — 71,388,242 
Other Assets190,869 396,204 — 587,073 
23,043,405 52,512,510 — 75,555,915 
Insurance
Cash and Cash Equivalents— — 1,365,544 1,365,544 
Investments— — 23,186,192 23,186,192 
Accrued Investment Income— — 137,575 137,575 
Other Assets— — 1,072,608 1,072,608 
— — 25,761,919 25,761,919 
Total Assets$23,043,405 $52,512,510 $25,761,919 $101,317,834 
  
Liabilities 
Asset Management
Debt Obligations$21,213,206 $5,947,090 $— $27,160,296 
Accrued Expenses and Other Liabilities1,021,892 676,814 — 1,698,706 
22,235,098 6,623,904 — 28,859,002 
Insurance
Accrued Expenses and Other Liabilities— — 1,017,952 1,017,952 
Total Liabilities$22,235,098 $6,623,904 $1,017,952 $29,876,954 




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 September 30, 2017
 Consolidated CFEs Consolidated KKR Funds and Other Entities Total
Assets   
  
Cash and Cash Equivalents Held at Consolidated Entities$930,268
 $399,467
 $1,329,735
Restricted Cash and Cash Equivalents—
 8,928
 8,928
Investments15,500,898
 8,934,607
 24,435,505
Due from Affiliates—
 5,118
 5,118
Other Assets203,987
 202,798
 406,785
Total Assets$16,635,153
 $9,550,918
 $26,186,071
    
  
Liabilities   
  
Debt Obligations$15,083,900
 $817,069
 $15,900,969
Accounts Payable, Accrued Expenses and Other Liabilities839,097
 239,215
 1,078,312
Total Liabilities$15,922,997
 $1,056,284
 $16,979,281
December 31, 2021
 Consolidated CLOsConsolidated Funds and Other Investment VehiclesOther
VIEs		Total
Assets 
Asset Management
Cash and Cash Equivalents$1,215,992 $1,085,958 $— $2,301,950 
Restricted Cash and Cash Equivalents— 90,255 — 90,255 
Investments22,076,809 46,780,595 — 68,857,404 
Other Assets173,329 641,946 — 815,275 
23,466,130 48,598,754 — 72,064,884 
Insurance
Cash and Cash Equivalents— — 1,406,974 1,406,974 
Investments— — 20,043,016 20,043,016 
Accrued Investment Income— — 100,693 100,693 
Other Assets— — 506,777 506,777 
— — 22,057,460 22,057,460 
Total Assets$23,466,130 $48,598,754 $22,057,460 $94,122,344 
Liabilities 
Asset Management
Debt Obligations$21,271,084 $6,291,292 $— $27,562,376 
Accrued Expenses and Other Liabilities1,367,778 691,288 — 2,059,066 
22,638,862 6,982,580 — 29,621,442 
Insurance
Accrued Expenses and Other Liabilities— — 594,946 594,946 
Total Liabilities$22,638,862 $6,982,580 $594,946 $30,216,388 

 December 31, 2016
 Consolidated CFEs Consolidated KKR Funds and Other Entities Total
Assets   
  
Cash and Cash Equivalents Held at Consolidated Entities$1,158,641
 $466,117
 $1,624,758
Restricted Cash and Cash Equivalents86,777
 95,105
 181,882
Investments13,950,897
 8,979,341
 22,930,238
Due from Affiliates—
 5,555
 5,555
Other Assets153,283
 430,326
 583,609
Total Assets$15,349,598
 $9,976,444
 $25,326,042
    
  
Liabilities   
  
Debt Obligations$13,858,288
 $1,612,799
 $15,471,087
Accounts Payable, Accrued Expenses and Other Liabilities722,714
 316,121
 1,038,835
Total Liabilities$14,581,002
 $1,928,920
 $16,509,922


See notes to condensed consolidated financial statements.

8
Table of Contents

KKR & CO. L.P.INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in Thousands, Except UnitShare and Per Share Data)
Three Months Ended March 31,
 20222021
Revenues
Asset Management
Fees and Other$780,511 $493,311 
Capital Allocation-Based Income (Loss)(945,743)2,684,647 
(165,232)3,177,958 
Insurance
Net Premiums372,144 1,176,142 
Policy Fees318,436 201,683 
Net Investment Income812,605 444,781 
Net Investment-Related Gains (Losses)(368,680)(455,702)
Other Income34,744 18,144 
1,169,249 1,385,048 
Total Revenues1,004,017 4,563,006 
Expenses
Asset Management
Compensation and Benefits283,672 1,306,797 
Occupancy and Related Charges18,149 15,200 
General, Administrative and Other234,665 166,997 
536,486 1,488,994 
Insurance
Policy Benefits and Claims726,060 1,485,318 
Amortization of Policy Acquisition Costs(7,733)(20,478)
Interest Expense13,219 10,672 
Insurance Expenses116,743 52,084 
General, Administrative and Other167,214 79,955 
1,015,503 — 1,607,551 
Total Expenses1,551,989 — 3,096,545 
Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities914,261 2,696,200 
Dividend Income662,350 75,746 
Interest Income352,556 367,455 
Interest Expense(281,759)(251,756)
Total Investment Income (Loss)1,647,408 2,887,645 
9
Table of Contents

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues       
Fees and Other$692,877
 $687,056
 $2,340,617
 $1,426,618
        
Expenses       
Compensation and Benefits368,513
 358,161
 1,234,317
 780,062
Occupancy and Related Charges15,267
 16,405
 44,150
 49,159
General, Administrative and Other146,467
 136,551
 421,522
 413,437
Total Expenses530,247
 511,117
 1,699,989
 1,242,658
     

  
Investment Income (Loss)    

  
Net Gains (Losses) from Investment Activities108,779
 735,144
 1,085,655
 9,089
Dividend Income20,774
 73,105
 100,144
 167,987
Interest Income317,134
 256,505
 893,832
 753,194
Interest Expense(211,959) (255,105) (597,403) (607,812)
Total Investment Income (Loss)234,728
 809,649
 1,482,228
 322,458
     

  
Income (Loss) Before Taxes397,358
 985,588
 2,122,856
 506,418
     

  
Income Tax / (Benefit)18,420
 10,826
 77,500
 18,761
     

  
Net Income (Loss)378,938
 974,762
 2,045,356
 487,657
Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests
20,876
 3,121
 64,196
 4,616
Net Income (Loss) Attributable to
Noncontrolling Interests
196,158
 611,288
 1,137,585
 353,044
Net Income (Loss) Attributable to KKR & Co. L.P.161,904
 360,353
 843,575
 129,997
     

  
Net Income Attributable to
Series A Preferred Unitholders
5,822
 5,822
 17,466
 11,515
Net Income Attributable to
Series B Preferred Unitholders
2,519
 2,379
 7,557
 2,379
     

  
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders$153,563
 $352,152
 $818,552
 $116,103
        
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit       
Basic$0.33
 $0.79
 $1.76
 $0.26
Diluted$0.30
 $0.73
 $1.63
 $0.24
Weighted Average Common Units Outstanding       
Basic471,758,886
 445,989,300
 463,941,084
 448,149,747
Diluted506,873,177
 479,975,675
 501,615,635
 483,134,985
Three Months Ended March 31,
 20222021
Income (Loss) Before Taxes1,099,436 4,354,106 
Income Tax Expense (Benefit)(3,166)438,739 
Net Income (Loss)1,102,602 3,915,367 
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests(63)— 
Net Income (Loss) Attributable to Noncontrolling Interests1,159,185 2,245,531 
Net Income (Loss) Attributable to KKR & Co. Inc.(56,520)1,669,836 
Series A Preferred Stock Dividends— 5,822 
Series B Preferred Stock Dividends— 2,519 
Series C Mandatory Convertible Preferred Stock Dividends17,250 17,250 
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders$(73,770)$1,644,245 
Net Income (Loss) Attributable to KKR & Co. Inc.
Per Share of Common Stock
Basic$(0.12)$2.85 
Diluted$(0.12)$2.68 
Weighted Average Shares of Common Stock Outstanding
Basic592,202,835 576,727,967 
Diluted592,202,835 620,888,491 


See notes to condensed consolidated financial statements.

10
Table of Contents

KKR & CO. L.P.INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Amounts in Thousands)
 Three Months Ended March 31,
 20222021
Net Income (Loss)$1,102,602 $3,915,367 
Other Comprehensive Income (Loss), Net of Tax:
Unrealized Gains (Losses) on Available-For-Sale Securities and Other(3,339,211)(1,490,289)
Foreign Currency Translation Adjustments(22,281)(15,257)
Comprehensive Income (Loss)(2,258,890)2,409,821 
Comprehensive Income (Loss)
Attributable to Redeemable Noncontrolling Interests		(63)— 
Comprehensive Income (Loss)
Attributable to Noncontrolling Interests		(761,884)1,366,143 
Comprehensive Income (Loss) Attributable to KKR & Co. Inc.$(1,496,943)$1,043,678 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net Income (Loss)$378,938
 $974,762
 $2,045,356
 $487,657
 

      
Other Comprehensive Income (Loss), Net of Tax:

      
 

      
Foreign Currency Translation Adjustments10,001
 2,452
 47,097
 679
        
Comprehensive Income (Loss)388,939
 977,214
 2,092,453
 488,336
        
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests20,876
 3,121
 64,196
 4,616
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests199,904
 612,656
 1,161,651
 351,547
        
Comprehensive Income (Loss) Attributable to KKR & Co. L.P.$168,159
 $361,437
 $866,606
 $132,173

 
See notes to condensed consolidated financial statements.

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Table of Contents


KKR & CO. INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(Amounts in Thousands, Except Share and Per Share Data)
Three Months Ended
March 31, 2022		Three Months Ended
March 31, 2021
AmountsSharesAmountsShares
Series A and B Preferred Stock
Beginning of Period$— — $482,554 20,000,000 
End of Period— — 482,554 20,000,000 
Series C Mandatory Convertible Preferred Stock
Beginning of Period1,115,792 23,000,000 1,115,792 23,000,000 
End of Period1,115,792 23,000,000 1,115,792 23,000,000 
Series I Preferred Stock
Beginning of Period— 1 — 1 
End of Period— 1 — 1 
Series II Preferred Stock
Beginning of Period2,587 258,726,163 2,756 275,626,493 
Cancellation of Series II Preferred Stock— — (23)(2,258,781)
End of Period2,587 258,726,163 2,733 273,367,712 
Common Stock
Beginning of Period5,957 595,663,618 5,729 572,893,738 
Private Placement Share Issuance— — 9 964,871 
Exchange of KKR Holdings Units— — 23 2,258,781 
Net Delivery of Common Stock— — 37 3,657,470 
Clawback of Transfer Restricted Shares— — — (4,263)
Repurchases of Common Stock(52)(5,191,174)(15)(1,501,558)
End of Period5,905 590,472,444 5,783 578,269,039 
Additional Paid-In Capital
Beginning of Period8,997,435 8,687,817 
Private Placement Share Issuance— 38,454 
Exchange of KKR Holdings Units— 58,501 
Tax Effects - Exchange of KKR Holdings Units and Other26,780 4,627 
Net Delivery of Common Stock— (55,910)
Repurchases of Common Stock(346,599)(71,351)
Equity-Based Compensation51,928 46,201 
End of Period8,729,544 8,708,339 
Retained Earnings
Beginning of Period7,670,182 3,440,782 
Net Income (Loss) Attributable to KKR & Co. Inc.(56,520)1,669,836 
Series A Preferred Stock Dividends ($0.421875 per share)— (5,822)
Series B Preferred Stock Dividends ($0.406250 per share)— (2,519)
Series C Mandatory Convertible Preferred Stock Dividends ($0.75 per share)(17,250)(17,250)
Common Stock Dividends ($0.145 and $0.135 per share, respectively)(85,741)(77,804)
End of Period7,510,671 5,007,223 
Accumulated Other Comprehensive Income (Loss) (net of tax)
Beginning of Period(209,789)(18,612)
Other Comprehensive Income (Loss)(1,440,423)(626,158)
Exchange of KKR Holdings Units— (1,598)
End of Period(1,650,212)(646,368)
Total KKR & Co. Inc. Stockholders' Equity15,714,287 14,676,056 
Noncontrolling Interests (See Note 22)41,501,791 31,534,729 
Total Equity$57,216,078 $46,210,785 
Redeemable Noncontrolling Interests (See Note 23)$81,793 $91,845 

See notes to financial statements.
12
Table of Contents

KKR & CO. L.P.
CONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(Amounts in Thousands, Except Unit Data)

 KKR & Co. L.P.      
 
Common
Units
Capital -
Common
Unitholders
Accumulated
Other
Comprehensive
Income (Loss)
Total
Capital -
Common
Units
Capital -
Series A
Preferred
Units
Capital -
Series B
Preferred
Units
 
Noncontrolling
Interests
 
Total
Equity
 
Redeemable
Noncontrolling
Interests
Balance at January 1, 2016457,834,875
$5,575,981
$(28,799)$5,547,182
$—
$—
 $43,731,774
 $49,278,956
 $188,629
Net Income (Loss) 
116,103
 
116,103
11,515
2,379
 353,044
 483,041
 4,616
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) 
 
2,176
2,176
   (1,497) 679
  
Deconsolidation of Funds 

 —
   (34,240,240) (34,240,240)  
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units4,655,059
54,674
(480)54,194
   (54,194) —
  
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units and Other 
(158)(89)(247)    
 (247)  
Net Delivery of Common Units - Equity Incentive Plan5,098,522
(28,234) (28,234)     (28,234)  
Equity Based Compensation 
148,257
 
148,257
   37,775
 186,032
  
Unit Repurchases(21,387,836)(291,903) (291,903)     (291,903)  
Equity Issued in connection with Preferred Unit Offering   —
332,988
149,566
   482,554
  
Capital Contributions 
  
—
   1,948,552
 1,948,552
 223,739
Capital Distributions 
(213,483) 
(213,483)(11,515)(2,379) (1,164,758) (1,392,135) (21,774)
Balance at September 30, 2016446,200,620
$5,361,237
$(27,192)$5,334,045
$332,988
$149,566
 $10,610,456
 $16,427,055
 $395,210

 KKR & Co. L.P.      
 
Common
Units
Capital -
Common
Unitholders
Accumulated
Other
Comprehensive
Income (Loss)
Total
Capital -
Common
Units
Capital -
Series A
Preferred
Units
Capital -
Series B
Preferred
Units
 
Noncontrolling
Interests
 
Total
Equity
 
Redeemable
Noncontrolling
Interests
Balance at January 1, 2017452,380,335
$5,506,375
$(49,096)$5,457,279
$332,988
$149,566
 $10,545,902
 $16,485,735
 $632,348
Net Income (Loss) 
818,552
 
818,552
17,466
7,557
 1,137,585
 1,981,160
 64,196
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) 
 
23,031
23,031
   24,066
 47,097
  
Changes in Consolidation   —
   (71,657) (71,657) (315,057)
Transfer of interests under common control (See Note 15) 12,269
(1,988)10,281
   (10,281) —
  
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units14,524,298
198,970
(1,615)197,355
   (197,355) —
  
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and Other 
(8,093)498
(7,595)    
 (7,595)  
Net Delivery of Common Units - Equity Incentive Plan6,229,754
(37,304) (37,304)     (37,304)  
Equity Based Compensation 
149,840
 
149,840
   127,864
 277,704
  
Unit Repurchases   —
     —
  
Capital Contributions 
  
—
   2,486,848
 2,486,848
 189,172
Capital Distributions 
(230,785) 
(230,785)(17,466)(7,557) (1,610,880) (1,866,688) (525)
Balance at September 30, 2017473,134,387
$6,409,824
$(29,170)$6,380,654
$332,988
$149,566
 $12,432,092
 $19,295,300
 $570,134

See notes to condensed consolidated financial statements.

KKR & CO. L.P.INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in Thousands)
 Three Months Ended March 31,
20222021
Operating Activities
Net Income (Loss)$1,102,602 $3,915,367 
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities:
Equity-Based and Other Non-Cash Compensation168,792 88,162 
Net Realized (Gains) Losses - Asset Management(279,629)(584,381)
Change in Unrealized (Gains) Losses - Asset Management(634,632)(2,111,819)
Capital Allocation-Based (Income) Loss - Asset Management945,743 (2,684,647)
Net Realized (Gains) Losses - Insurance(74,974)441,553 
Net Accretion and Amortization74,962 82,607 
Interest Credited to Policyholder Account Balances (net of Policy Fees) - Insurance470,543 422,873 
Other Non-Cash Amounts(8,079)2,297 
Cash Flows Due to Changes in Operating Assets and Liabilities:
Reinsurance Transactions and Acquisitions, Net of Cash Provided - Insurance5,764 415,777 
Change in Premiums, Notes Receivable and Reinsurance Recoverable, Net of Reinsurance Premiums Payable - Insurance291,418 295,131 
Change in Deferred Policy Acquisition Costs - Insurance(120,435)(73,201)
Change in Policy Liabilities and Accruals, Net - Insurance(422,298)(189,108)
Change in Consolidation— (21,149)
Change in Due from / to Affiliates(68,560)(212,300)
Change in Other Assets570,262 308,439 
Change in Accrued Expenses and Other Liabilities(491,126)1,135,268 
Investments Purchased - Asset Management(12,736,719)(15,127,133)
Proceeds from Investments - Asset Management12,123,184 13,823,098 
Net Cash Provided (Used) by Operating Activities916,818 (73,166)
Investing Activities
Acquisition of Global Atlantic, Net of Cash Acquired (See Note 3)— (415,640)
Purchases of Fixed Assets(11,888)(27,727)
Investments Purchased - Insurance(15,105,620)(5,300,346)
Proceeds from Investments - Insurance13,130,681 5,255,841 
Other Investing Activities, Net - Insurance(11,002)111,836 
Net Cash Provided (Used) by Investing Activities(1,997,829)(376,036)
Financing Activities
Series A and B Preferred Stock Dividends— (8,341)
Series C Mandatory Convertible Preferred Stock Dividends(17,250)(17,250)
Common Stock Dividends(85,741)(77,804)
Distributions to Redeemable Noncontrolling Interests(635)— 
Distributions to Noncontrolling Interests(1,873,873)(1,027,834)
Contributions from Noncontrolling Interests3,494,333 3,164,049 
Net Delivery of Common Stock (Equity Incentive Plans)— (55,873)
Repurchases of Common Stock(346,651)(71,366)
Private Placement Share Issuance— 38,463 
Proceeds from Debt Obligations5,515,904 5,109,790 
Repayment of Debt Obligations(5,484,370)(3,552,362)
Financing Costs Paid(42,816)(921)
Additions to Contractholder Deposit Funds - Insurance5,066,018 2,433,498 
Withdrawals from Contractholder Deposit Funds - Insurance(2,628,071)(1,475,176)
Reinsurance Transactions, Net of Cash Provided - Insurance46,566 — 
Other Financing Activity, Net - Insurance503,062 269 
Net Cash Provided (Used) by Financing Activities4,146,476 4,459,142 
13
Table of Contents

 Nine Months Ended September 30,
 2017 2016
Operating Activities 
  
Net Income (Loss)$2,045,356
 $487,657
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities:

  
Equity Based Compensation271,226
 186,032
Net Realized (Gains) Losses on Investments2,662
 (354,105)
Change in Unrealized (Gains) Losses on Investments(1,088,317) 345,016
Carried Interest Allocated as a result of Changes in Fund Fair Value(1,224,235) (602,695)
Other Non-Cash Amounts11,121
 29,465
Cash Flows Due to Changes in Operating Assets and Liabilities:

  
Change in Cash and Cash Equivalents Held at Consolidated Entities367,713
 (56,992)
Change in Due from / to Affiliates(230,948) (157,793)
Change in Other Assets(66,260) (50,166)
Change in Accounts Payable, Accrued Expenses and Other Liabilities1,176,047
 442,025
Investments Purchased(29,464,933) (14,323,221)
Proceeds from Investments25,981,898
 13,498,957
Net Cash Provided (Used) by Operating Activities(2,218,670) (555,820)
    
Investing Activities 
  
Change in Restricted Cash and Cash Equivalents167,980
 32,953
Purchase of Fixed Assets(70,849) (8,177)
Development of Oil and Natural Gas Properties(1,041) (1,588)
Net Cash Provided (Used) by Investing Activities96,090
 23,188
    
Financing Activities 
  
Distributions to Partners(230,785) (213,483)
Distributions to Redeemable Noncontrolling Interests(525) (21,774)
Contributions from Redeemable Noncontrolling Interests189,172
 223,739
Distributions to Noncontrolling Interests(1,610,880) (1,164,758)
Contributions from Noncontrolling Interests2,482,649
 1,726,529
Issuance of Preferred Units (net of issuance costs)—
 482,554
Preferred Unit Distributions(25,023) (13,894)
Net Delivery of Common Units - Equity Incentive Plan(37,304) (28,234)
Unit Repurchases—
 (291,903)
Proceeds from Debt Obligations8,848,735
 5,339,824
Repayment of Debt Obligations(7,557,245) (4,353,147)
Financing Costs Paid(8,550) (3,761)
Net Cash Provided (Used) by Financing Activities2,050,244
 1,681,692
    
Net Increase/(Decrease) in Cash and Cash Equivalents(72,336) 1,149,060
Cash and Cash Equivalents, Beginning of Period2,508,902
 1,047,740
Cash and Cash Equivalents, End of Period$2,436,566
 $2,196,800
 Three Months Ended March 31,
20222021
Effect of exchange rate changes on cash, cash equivalents and restricted cash(49,376)(25,722)
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash$3,016,089 $3,984,218 
Cash, Cash Equivalents and Restricted Cash, Beginning of Period10,526,304 6,993,457 
Cash, Cash Equivalents and Restricted Cash, End of Period$13,542,393 $10,977,675 
Cash, Cash Equivalents and Restricted Cash are comprised of the following:
Beginning of the Period
Asset Management
Cash and Cash Equivalents$6,699,668 $6,507,874 
Restricted Cash and Cash Equivalents134,298 485,583 
Total Asset Management6,833,966 6,993,457 
Insurance
Cash and Cash Equivalents$3,391,934 $— 
Restricted Cash and Cash Equivalents300,404 — 
Total Insurance3,692,338 — 
Cash, Cash Equivalents and Restricted Cash, Beginning of Period$10,526,304 $6,993,457 
End of the Period
Asset Management
Cash and Cash Equivalents$8,324,897 $5,031,724 
Restricted Cash and Cash Equivalents103,961 79,017 
  Total Asset Management8,428,858 5,110,741 
Insurance
Cash and Cash Equivalents$4,590,032 $5,467,012 
Restricted Cash and Cash Equivalents523,503 399,922 
  Total Insurance5,113,535 5,866,934 
Cash, Cash Equivalents and Restricted Cash, End of Period$13,542,393 $10,977,675 
 
See notes to condensed consolidated financial statements.

14
Table of Contents

KKR & CO. L.P.INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued) (UNAUDITED)
(Amounts in Thousands)
Nine Months Ended September 30, Three Months Ended March 31,
2017 2016 20222021
Supplemental Disclosures of Cash Flow Information 
  
Supplemental Disclosures of Cash Flow Information  
Payments for Interest$577,428
 $600,701
Payments for Interest$329,776 $289,420 
Payments for Income Taxes$34,633
 $21,335
Payments for Income Taxes$24,406 $11,044 
Payments for Operating Lease LiabilitiesPayments for Operating Lease Liabilities$11,600 $9,846 
Supplemental Disclosures of Non-Cash Investing and Financing Activities

  
Supplemental Disclosures of Non-Cash Investing and Financing Activities 
Non-Cash Contributions of Equity Based Compensation$277,704
 $186,032
Non-Cash Contributions from Noncontrolling Interests$4,199
 $222,023
Equity-Based and Other Non-Cash ContributionsEquity-Based and Other Non-Cash Contributions$134,964 $82,517 
Non-Cash Contribution from Noncontrolling InterestsNon-Cash Contribution from Noncontrolling Interests$85,258 $845,943 
Debt Obligations - Net Gains (Losses), Translation and Other$(460,740) $(243,384)Debt Obligations - Net Gains (Losses), Translation and Other$545,574 $235,821 
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units$(7,595) $(247)
Tax Effects - Exchange of KKR Holdings L.P. Units and OtherTax Effects - Exchange of KKR Holdings L.P. Units and Other$26,780 $4,627 


  
Changes in Consolidation and Other

  
Cash and Cash Equivalents Held at Consolidated Entities$(2,244) $(270,458)
Restricted Cash and Cash Equivalents$—
 $(54,064)
Right-of-Use Assets obtained in Exchange for new Operating Lease LiabilitiesRight-of-Use Assets obtained in Exchange for new Operating Lease Liabilities$1,211 $31,003 
Investments Acquired through Reinsurance AgreementsInvestments Acquired through Reinsurance Agreements$2,697,956 $368,328 
Policyholder Liabilities and Accruals Acquired through Reinsurance AgreementsPolicyholder Liabilities and Accruals Acquired through Reinsurance Agreements$236,698 $1,112,370 
Contractholder Deposit Funds Acquired through Reinsurance AgreementsContractholder Deposit Funds Acquired through Reinsurance Agreements$2,537,960 $6,988 
Change in ConsolidationChange in Consolidation
Investments$(174,906) $(35,686,489)Investments$— $(49,403)
Due From Affiliates$(3,536) $147,427
Other Assets$(298,097) $(532,226)Other Assets$— $(32,689)
Debt Obligations$—
 $(2,355,305)Debt Obligations$— $(26,165)
Due to Affiliates$—
 $329,083
Due to Affiliates$— $(238)
Accounts Payable, Accrued Expenses and Other Liabilities$(114,573) $(129,348)
Accrued Expenses and Other LiabilitiesAccrued Expenses and Other Liabilities$— $(10,350)
Noncontrolling Interests$(71,657) $(34,240,240)Noncontrolling Interests$— $(66,488)
Redeemable Noncontrolling Interests$(315,057) $—
 
See notes to condensed consolidated financial statements.



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KKR & CO. L.P.INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(All Amounts in Thousands, Except Unit,Share and Per UnitShare Data, and Except Where Noted)


1. ORGANIZATION
 
KKR & Co. L.P.Inc. (NYSE: KKR), together withthrough its consolidated subsidiaries (“KKR”(collectively, "KKR"), is a leading global investment firm that manages multipleoffers alternative asset classes including private equity, energy, infrastructure, real estate, creditmanagement as well as capital markets and through its strategic manager partnerships, hedge funds.insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and drivingsupporting growth in its portfolio companies and value creationcommunities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of The Global Atlantic Financial Group LLC ("TGAFG" and, together with KKR's portfolio companies. KKR invests its own capital alongside its partners' capital and provides financing solutions and investment opportunities through its capital markets business.subsidiaries, "Global Atlantic").

KKR & Co. L.P. was formed as a Delaware limited partnership on June 25, 2007 and its general partner is KKR Management LLC (the “Managing Partner”). KKR & Co. L.P.Inc. is the parent company of KKR Group Limited,Holdings Corp., which is the non-economic general partner of KKR Group HoldingsPartnership L.P. (“("KKR Group Holdings”Partnership"), and. KKR & Co. L.P. is the sole limited partner of Group Holdings. Group Holdings holds a controlling economic interest in each of (i) KKR Management Holdings L.P. (“Management Holdings”) through KKR Management Holdings Corp., a Delaware corporation which is a domestic corporation for U.S. federal income tax purposes, (ii) KKR Fund Holdings L.P. (“Fund Holdings”) directly and through KKR Fund Holdings GP Limited, a Cayman Island limited company which is a disregarded entity for U.S. federal income tax purposes, and (iii) KKR International Holdings L.P. (“International Holdings”, and together with Management Holdings and Fund Holdings, the “KKR Group Partnerships”) directly and through KKR Fund Holdings GP Limited. Group Holdings also owns certain economic interests in Management Holdings through a wholly owned Delaware corporate subsidiary of KKR Management Holdings Corp. and certain economic interests in Fund Holdings through a Delaware partnership of which Group Holdings is the general partner with a 99% economic interest and KKR Management Holdings Corp. is a limited partner with a 1% economic interest. KKR & Co. L.P., through its indirect controlling economic interests in the KKR Group Partnerships, is the holding partnership for the KKR business.
KKR & Co. L.P.Inc. both indirectly controls the KKR Group PartnershipsPartnership and indirectly holds Class A partner unitsinterests in each KKR Group Partnership (collectively, “KKR("KKR Group Partnership Units”Units") representing economic interests in KKR’sKKR's business. The remaining KKR Group Partnership Units are held by KKR Holdings L.P. (“("KKR Holdings”Holdings"), which is not a subsidiary of KKR. As of September 30, 2017, KKR & Co. L.P. held approximately 58.2%Inc., and holders of the KKR Group Partnership Units and principalsother exchangeable securities through KKR Holdings II L.P. As of March 31, 2022, KKR & Co. Inc. held indirectly approximately 41.8%69.4% of the KKR Group Partnership Units. The percentage ownership in the KKR Group Partnerships willPartnership may continue to change as KKR Holdings and/or principalsand the holders of other exchangeable securities exchange units in thetheir KKR Group PartnershipsPartnership Units for shares of common stock of KKR & Co. L.P. common unitsInc. or when KKR & Co. L.P.Inc. otherwise issues or repurchases shares of common stock of KKR & Co. L.P. common units. TheInc. KKR Group PartnershipsPartnership also havehas outstanding equitylimited partner interests that provide for thea carry pool and preferred units with economic terms that mirror the preferred unitsSeries C Mandatory Convertible Preferred Stock issued by KKR & Co. L.P.Inc.


PAAMCO PrismaReferences to "KKR" in these financial statements refer to KKR & Co. Inc. and its subsidiaries, including Global Atlantic, unless the context requires otherwise, especially in sections where "KKR" is intended to refer to the asset management business only. References in these financial statements to "principals" are to KKR's current and former employees who hold interests in KKR's business through KKR Holdings. References to "Global Atlantic" in these financial statements includes the insurance companies of Global Atlantic, which are consolidated by KKR.


Reorganization Agreement

On June 1, 2017,October 8, 2021, KKR completedentered into a Reorganization Agreement (the "Reorganization Agreement") with KKR Holdings, KKR Management LLP (which holds the sole outstanding share of Series I preferred stock), KKR Associates Holdings L.P. and the other parties thereto. Pursuant to the Reorganization Agreement, the parties agreed to undertake a series of integrated transactions to effect a number of transformative structural and governance changes, including (a) the acquisition by KKR of KKR Holdings and all of the KKR Group Partnership Units held by it, (b) the future elimination of voting control by KKR Management LLP and its previously announced transactionownership of the Series I preferred stock, (c) the future establishment of voting rights for all common stock on a one vote per share basis, including with respect to combine Pacific Alternative Assetthe election of directors, and (d) the future control of the carry pool by KKR. In particular, the Reorganization Agreement provides for:

i.a simplifying reorganization of KKR’s current corporate structure whereby all holders of common stock of KKR & Co. Inc. immediately prior to such reorganization and all holders of interests in KKR Holdings immediately prior to such reorganization will receive the same common stock in a new parent company of KKR (“New KKR Parent”),

ii.the future elimination of control of New KKR Parent by KKR Management Company, LLC (“PAAMCO”) and Prisma Capital Partners LP (“Prisma”)LLP by having all voting power vested in the common stock of New KKR Parent on a one vote per share basis on the Sunset Date (as defined below),

iii.also on the Sunset Date, the future acquisition of control by KKR of KKR Associates Holdings L.P., formerlythe entity providing for the allocation of carry proceeds to KKR employees, also known as the carry pool,

iv.the termination of KKR's tax receivable agreement with KKR PrismaHoldings other than with respect to exchanges prior to the closing of the mergers contemplated by the Reorganization Agreement, and

v.in the merger of KKR Holdings with a subsidiary of New KKR Parent (the “Holdings Merger”), the issuance to limited partners of KKR Holdings of 8.5 million shares (as adjusted for any stock splits or KKR’s hedge fund solutions platform,similar adjustments) of common stock of New KKR Parent, which will not be transferrable (except in the case of death or for estate planning purposes) prior to create PAAMCO Prismathe Sunset Date.
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The “Sunset Date” will be the earlier of (i) December 31, 2026 and (ii) the six-month anniversary of the first date on which the death or permanent disability of both Mr. Henry Kravis and Mr. George Roberts (collectively, "Co-Founders") has occurred (or any earlier date consented to by KKR Management LLP in its sole discretion). In addition, KKR Management LLP agreed not to transfer its ownership of the sole share of Series I preferred stock. The transactions contemplated to occur under the Reorganization Agreement (including the establishment of New KKR Parent, the Holdings LLC ("PAAMCO Prisma"). PAAMCO Prisma is a leading liquid alternatives investment firm, which operates independently from KKR.

In connectionMerger, the termination of the tax receivable agreement except with this transaction, KKR contributed $114.1 millionrespect to exchanges of net assets, including intangible assets and an allocation of goodwill, in exchange for a 39.9% equity interest in PAAMCO PrismaHoldings units made prior thereto, and the rightchanges to receive certain payments from PAAMCO Prisma,occur effective on the collective fair valueSunset Date) are all required to be consummated together as integrated transactions under the Reorganization Agreement. The consummation of which was $131.6 million. KKR reports its investmentthe merger transactions is subject to the receipt of regulatory approvals and other conditions to closing as provided in PAAMCO Prisma using the equity methodReorganization Agreement. While the Sunset Date itself is expected to occur after, and is conditioned upon, the completion of accounting. See Note 16 "Goodwill and Intangible Assets."the merger transactions contemplated by the Reorganization Agreement, the changes to occur effective on the Sunset Date will be unconditional commitments upon the completion of the merger transactions.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of KKR & Co. L.P.Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”("GAAP") for interim financial information and the instructions to this Quarterly Report on Form 10-Q. The condensed consolidated financial statements (referred to hereafter as the “financial statements”"financial statements"), including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) such that the financial statements are presented fairly and that estimates made in preparing the financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The December 31, 2016 condensed consolidated balance sheet data wasas of December 31, 2021 were derived from audited consolidated financial statements included in KKR’sKKR & Co. Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016, which include all disclosures required by GAAP. These2021, and the financial statements should be read in conjunction with the audited consolidated financial statements included therein. Additionally, in KKR & Co. L.P.’s Annual Report on Form 10-K filed with the Securitiesaccompanying financial statements, the condensed consolidated statements of financial condition are referred to hereafter as the "consolidated statements of financial condition"; the condensed consolidated statements of operations are referred to hereafter as the "consolidated statements of operations"; the condensed consolidated statements of comprehensive income (loss) are referred to hereafter as the "consolidated statements of comprehensive income (loss)"; the condensed consolidated statements of changes in equity and Exchange Commission (“SEC”).redeemable non-controlling interests are referred to hereafter as the "consolidated statements of changes in equity"; and the condensed consolidated statements of cash flows are referred to hereafter as the "consolidated statements of cash flows."


KKR & Co. L.P. consolidates the financial results of the KKR Group PartnershipsPartnership and theirits consolidated subsidiaries,entities, which include the accounts of KKR’sKKR's investment management and capital markets companies, the general partners of certain unconsolidated investment funds, general partners of consolidated investment funds and their respective consolidated investment funds, Global Atlantic’s insurance companies and certain other entities including CFEs. References

The presentations in the accompanyingconsolidated statement of financial condition and consolidated statement of operations reflect the significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance business, and KKR operates an asset management business, each of which possess distinct characteristics. As a result, KKR developed a two-tiered approach for the financial statements presentation, where Global Atlantic's insurance operations are presented separately from KKR's asset management business. KKR believes that these separate presentations provide a more informative view of the consolidated financial position and results of operations than traditional aggregated presentations and that reporting Global Atlantic’s insurance operations separately is appropriate given, among other factors, the relative significance of Global Atlantic’s policy liabilities, which are not obligations of KKR (other than the insurance companies that issued them). If a traditional aggregate presentation were to “principals”be used, KKR would expect to eliminate or combine several identical or similar captions, which would condense the presentations, but would also reduce the level of information presented. KKR also believes that using a traditional aggregate presentation would result in no new line items compared to the two-tier presentation included in the financial statements in this report.

In the ordinary course of business, KKR’s Asset Management business and Global Atlantic enter into transactions with each other, which may include transactions pursuant to their investment management agreements and financing arrangements. The borrowings from these financing arrangements are non-recourse to KKR’s senior employeesKKR beyond the assets pledged to support such borrowings. All the investment management and non‑employee operating consultants who holdfinancing arrangements between KKR's Asset Management business and Global Atlantic are eliminated in consolidation; however, KKR's allocated share of the net income from the consolidation of Global Atlantic is increased by the amount of fees earned from and decreased by the amount of interest expense incurred from noncontrolling interest holders in Global Atlantic. Accordingly, the elimination of these fees and interest impacts the net income (loss) attributable to KKR and KKR stockholders' equity for the pro-rata ownership of the noncontrolling interests in KKR’s business through KKR Holdings.Global Atlantic.

All intercompany transactions and balances have been eliminated.

For a detailed discussion about KKR’s significant accounting policies and for further information on accounting updates adopted in the prior year, see Note 2 to the financial statements in the 2021 Form 10-K. During the three months ended March 31, 2022, there were no significant updates to KKR’s significant accounting policies.


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Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of fees,revenues, expenses, and investment income (loss) during the reporting periods. Such estimates include but are not limited to (i) the valuation of investments and financial instruments.instruments, (ii) the determination of the income tax provision, (iii) the impairment of goodwill and intangible assets, (iv) the impairment of available-for-sale investments, (v) the valuation of insurance policy liabilities, (vi) the valuation of embedded derivatives, (vii) the determination of the allowance for loan losses, and (viii) amortization of deferred revenues and expenses associated with the insurance business. Certain events particular to each industry and country in which the portfolio companies conduct their operations, as well as general economic, political, regulatory and public health conditions, may have a significant negative impact on KKR’s investments and profitability. Such events are beyond KKR’s control, and the likelihood that they may occur and the effect on KKR's use of estimates cannot be predicted. Actual results could differ from those estimates, and such differences could be material to the financial statements.

PrinciplesAdoption of Consolidationnew accounting pronouncements

The typesCoronavirus Aid, Relief, and Economic Security Act ("CARES Act") and related regulatory actions

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss ("NOL") carryovers and carrybacks to offset 100% of entities KKR assessestaxable income for consolidation include (i) subsidiaries, including management companies, broker-dealerstaxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and general partners2020 to be carried back to each of investment fundsthe five preceding taxable years to generate a refund of previously paid income taxes.

The provisions of the CARES Act, as amended by the Consolidated Appropriations Act, also permit financial institutions to suspend requirements under U.S. GAAP for loan modifications that KKR manages, (ii) entitiesotherwise would be categorized as troubled debt restructurings ("TDRs") if (1) the borrower was not more than 30 days past due as of December 31, 2019, and (2) the modifications are related to arrangements that have alldefer or delay the attributespayment of an investment company, like investment funds, (iii) CFEs and (iv) other entities, including entities that employ non-employee operating consultants. Each of these entities is assessed for consolidation on a case by case basis dependingprincipal or interest, or change the interest rate on the specific facts and circumstances surrounding that entity.

Pursuant to its consolidation policy, KKR first considers whether an entity is considered a VIE and therefore whether to applyloan, provided the consolidation guidance under the VIE model. Entities that do not qualify as VIEsmodifications are assessed for consolidation as voting interest entities (“VOEs”) under the voting interest model.

KKR’s funds are, for GAAP purposes, investment companies and therefore are not required to consolidate their investments in portfolio companies even if majority-owned and controlled. Rather, the consolidated funds and vehicles reflect their investments at fair value as described below in “Fair Value Measurements.”

An entity in which KKR holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, (b) the holders of the equity investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the success of the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both and substantially all of the legal entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Limited partnerships and other similar entities where unaffiliated limited partners have not been granted (i) substantive participatory rights or (ii) substantive rights to either

dissolve the partnership or remove the general partner (“kick-out rights”) are VIEs under condition (b) above. KKR’s investment funds that are not CFEs (i) are generally limited partnerships, (ii) generally provide KKR with operational discretion and control, and (iii) generally have fund investors with no substantive rights to impact ongoing governance and operating activities of the fund, including the ability to remove the general partner, and as such the limited partners do not hold kick-out rights. Accordingly, most of KKR’s investment funds are categorized as VIEs.

KKR consolidates all VIEs in which it is the primary beneficiary. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in a VIE. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (i) whether an entity in which KKR holds a variable interest is a VIE and (ii) whether KKR’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment. Fees earned by KKR that are customary and commensurate with the level of effort required to provide those services, and where KKR does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered variable interests. KKR factors in all economic interests including interests held through related parties, to determine if it holds a variable interest. KKR determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion periodically.

For entities that are determined not to be VIEs, these entities are generally considered VOEs and are evaluated under the voting interest model. KKR consolidates VOEs it controls through a majority voting interest or through other means.

The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE depends on the facts and circumstances surrounding each entity and therefore certain of KKR’s investment funds may qualify as VIEs whereas others may qualify as VOEs.

With respect to CLOs (which are generally VIEs), in its role as collateral manager, KKR generally has the power to direct the activities of the CLO that most significantly impact the economic performance of the entity. In some, but not all cases, KKR, through its residual interest in the CLO may have variable interests that represent an obligation to absorb losses of, or a right to receive benefits from, the CLO that could potentially be significant to the CLO. In cases where KKR has both the power to direct the activities of the CLO that most significantly impact the CLO's economic performancemade between March 1, 2020 and the obligation to absorb lossesearlier of the CLO or the right to receive benefits from the CLO that could potentially be significant to the CLO, KKR is deemed to be the primary beneficiary and consolidates the CLO.

With respect to CMBS vehicles (which are generally VIEs), KKR holds unrated and non-investment grade rated securities issued by the CMBS, which are the most subordinate tranche of the CMBS vehicle. The economic performance of the CMBS is most significantly impacted by the performance of the underlying assets. Thus, the activities that most significantly impact the CMBS economic performance are the activities that most significantly impact the performance of the underlying assets. The special servicer has the ability to manage the CMBS assets that are delinquent or in default to improve the economic performance of the CMBS. KKR generally has the right to unilaterally appoint and remove the special servicer for the CMBS and as such is considered the controlling class of the CMBS vehicle. These rights give KKR the ability to direct the activities that most significantly impact the economic performance of the CMBS. Additionally, as the holder of the most subordinate tranche, KKR is in a first loss position and has the right to receive benefits, including the actual residual returns of the CMBS, if any. In these cases, KKR is deemed to be the primary beneficiary and consolidates the CMBS.

Redeemable Noncontrolling Interests
Redeemable Noncontrolling Interests represent noncontrolling interests of certain investment funds and vehicles that are subject to periodic redemption by fund investors following the expiration of a specified period of time (typically between one and three years), or may be withdrawn subject to a redemption fee during the period when capital may not be otherwise withdrawn. Fund investors interests subject to redemption as described above are presented as Redeemable Noncontrolling Interests in the accompanying condensed consolidated statements of financial condition and presented as Net Income (Loss) Attributable to Redeemable Noncontrolling Interests in the accompanying condensed consolidated statements of operations.
When redeemable amounts become legally payable to fund investors, they are classified as a liability and included in Accounts Payable, Accrued Expenses and Other Liabilities in the accompanying condensed consolidated statements of financial condition. For all consolidated investment vehicles and funds in which redemption rights have not been granted, noncontrolling

interests are presented within Equity in the accompanying condensed consolidated statements of financial condition as noncontrolling interests.

Noncontrolling Interests
Noncontrolling interests represent (i) noncontrolling interests in consolidated entities and (ii) noncontrolling interests held by KKR Holdings.
Noncontrolling Interests in Consolidated Entities
Noncontrolling interests in consolidated entities represent the non-redeemable ownership interests in KKR that are held primarily by:
(i)third party fund investors in KKR’s funds;
(ii)third parties entitled to up to 1% of the carried interest received by certain general partners of KKR’s funds and 1% of KKR’s other profits (losses) through and including December 31, 2015;
(iii)certain former principals and their designees representing a portion of the carried interest received by the general partners of KKR’s private equity funds that was allocated to them with respect to private equity investments made during such former principals’ tenure with KKR prior to October 1, 2009;
(iv)certain principals and former principals representing all of the capital invested by or on behalf of the general partners of KKR’s private equity funds prior to October 1, 2009 and any returns thereon;
(v)third parties in KKR’s capital markets business;
(vi)holders of exchangeable equity securities representing ownership interests in a subsidiary of a KKR Group Partnership issued in connection with the acquisition of Avoca Capital ("Avoca"); and
(vii)holders of the 7.375% Series A LLC Preferred Shares of KKR Financial Holdings LLC ("KFN") whose rights are limited to the assets of KFN.

Noncontrolling Interests held by KKR Holdings
Noncontrolling interests held by KKR Holdings include economic interests held by principals in the KKR Group Partnerships. Such principals receive financial benefits from KKR’s business in the form of distributions received from KKR Holdings and through their direct and indirect participation in the value of KKR Group Partnership Units held by KKR Holdings. These financial benefits are not paid by KKR & Co. L.P. and are borne by KKR Holdings.
The following table presents the calculation of noncontrolling interests held by KKR Holdings:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Balance at the beginning of the period$4,683,673
 $4,018,305
 $4,293,337
 $4,347,153
Net income (loss) attributable to noncontrolling interests held by KKR Holdings (1)
115,434
 284,834
 637,146
 86,659
Other comprehensive income (loss), net of tax (2)
4,676
 231
 18,429
 (37)
Impact of the exchange of KKR Holdings units to
KKR & Co. L.P. common units (3) 
(43,553) (22,930) (184,254) (53,908)
Equity based compensation23,807
 7,822
 127,864
 27,469
Capital contributions39
 69
 2,989
 207
Capital distributions(58,347) (57,420) (177,701) (176,632)
Transfer of interests under common control
(See Note 15 "Equity")
—
 —
 7,919
 —
Balance at the end of the period$4,725,729
 $4,230,911
 $4,725,729
 $4,230,911
(1)Refer to the table below for calculation of Net income (loss) attributable to noncontrolling interests held by KKR Holdings.

(2)Calculated on a pro rata basis based on the weighted average KKR Group Partnership Units held by KKR Holdings during the reporting period. 
(3)Calculated based on the proportion of KKR Holdings units exchanged for KKR & Co. L.P. common units pursuant to the exchange agreement during the reporting period. The exchange agreement provides for the exchange of KKR Group Partnership Units held by KKR Holdings for KKR & Co. L.P. common units.
Net income (loss) attributable to KKR & Co. L.P.60 days after allocation to noncontrolling interests held by KKR Holdings, with the exception of certain tax assets and liabilities that are directly allocable to KKR Management Holdings Corp., is attributed based on the percentage of the weighted average KKR Group Partnership Units held by KKR and KKR Holdings, each of which holds equity of the KKR Group Partnerships. However, primarily because of the (i) contribution of certain expenses borne entirely by KKR Holdings, (ii) the periodic exchange of KKR Holdings units for KKR & Co. L.P. common units pursuant to the exchange agreement and (iii) the contribution of certain expenses borne entirely by KKR associated with the KKR & Co. L.P. 2010 Equity Incentive Plan (“Equity Incentive Plan”), equity allocations shown in the condensed consolidated statement of changes in equity differ from their respective pro-rata ownership interests in KKR’s net assets.
The following table presents net income (loss) attributable to noncontrolling interests held by KKR Holdings:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income (loss)$378,938
 $974,762
 $2,045,356
 $487,657
Less: Net income (loss) attributable to Redeemable Noncontrolling Interests20,876
 3,121
 64,196
 4,616
Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities80,724
 326,454
 500,439
 266,385
Less: Net income (loss) attributable to Series A and
Series B Preferred Unitholders
8,341
 8,201
 25,023
 13,894
Plus: Income tax / (benefit) attributable to
KKR Management Holdings Corp.
6,063
 3,187
 30,571
 (8,376)
Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings$275,060
 $640,173
 $1,486,269
 $194,386
        
Net income (loss) attributable to noncontrolling interests held by KKR Holdings$115,434
 $284,834
 $637,146
 $86,659
Investments
Investments consist primarily of private equity, real assets, credit, investments of consolidated CFEs, equity method, carried interest and other investments. Investments denominated in currencies other than the entity's functional currency are valued based on the spot rate of the respective currency at the end of the reporting period with changesnational emergency related to exchange rate movements reflected asthe COVID-19 pandemic or January 1, 2022. Global Atlantic has applied this guidance before the permitted suspension period expired on January 1, 2022 to loan forbearance requests that meet the requirements. The application of this guidance did not have a componentmaterial impact on the financial statements.

See Note 8 "Investments" for additional information on loan modifications.

Simplifying the accounting for income taxes

On December 18, 2019, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2019-12, which modifies ASC 740 to simplify the accounting for income taxes. This guidance eliminates the exceptions to the incremental approach, to accounting for basis differences when there are changes in ownership of Net Gains (Losses) from Investment Activities inforeign investments, and to interim period tax accounting for year-to-date losses that exceed anticipated losses. The guidance also simplifies the consolidatedapplication of tax guidance related to franchise taxes, transactions with government entities, separate financial statements of operations. Security and loan transactions are recorded on a trade date basis. Further disclosure on investments is presented in Note 4 “Investments.”
The following describes the types of securities held within each investment class.
Private Equity - Consists primarily of equity investments in operating businesses, including growth equity investments.
Real Assets - Consists primarily of investments in (i) energy related assets, principally oil and natural gas producing properties, (ii) infrastructure assets, and (iii) real estate, principally residential and commercial real estate assets and businesses.
Credit - Consists primarily of investments in below investment grade corporate debt securities (primarily high yield bonds and syndicated bank loans), distressed and opportunistic debt and interests in unconsolidated CLOs.
Investments of Consolidated CFEs - Consists primarily of (i) investments in below investment grade corporate debt securities (primarily high yield bonds and syndicated bank loans) held directly by the consolidated CLOs and (ii) investments in originated, fixed-rate mortgage loans held directly by the consolidated CMBS vehicles.

Equity Method - Consists primarily of (i) certain investments in private equity funds, real assets funds and credit funds, which are not consolidated and (ii) certain investments in operating companies in which KKR is deemed to exert significant influence under GAAP.

Carried Interest - Consists of carried interest from unconsolidated investment funds that are allocated to KKR as the general partner of the investment fund based on cumulative fund performance to date, and where applicable, subject to a preferred return.

Other - Consists primarily of investments in common stock, preferred stock, warrants and options of companieslegal entities that are not private equity, real assets, credit or investments of consolidated CFEs.

Investments held by Consolidated Investment Funds

The consolidated investment funds are, for GAAP purposes, investment companiessubject to tax, and reflect their investments and other financial instruments, including portfolio companies that are majority-owned and controlled by KKR's investment funds, at fair value. KKR has retained this specialized accounting for the consolidated funds in consolidation. Accordingly, the unrealized gains and losses resulting fromenacted changes in fair value of the investments and other financial instruments held by the consolidated investment funds are reflected as a component of Net Gains (Losses) from Investment Activitiestax laws in the condensed consolidated statements of operations.

Certain energy investments are made through consolidated investment funds, including investments in working and royalty interests in oil and natural gas producing properties as well as investments in operating companiesinterim periods. The guidance is effective for public business entities that operate in the energy industry. Since these investments are held through consolidated investment funds, such investments are reflected at fair value as of the end of the reporting period. 

Investments in operating companies that are held through KKR’s consolidated investment funds are generally classified within private equity investments and investments in working and royalty interests in oil and natural gas producing properties are generally classified as real asset investments.

Energy Investments held directly by KKR

Certain energy investments are made by KKR directly in working and royalty interests in oil and natural gas producing properties and not through investment funds. Oil and natural gas producing activities are accounted for under the successful efforts method of accounting and such working interests are consolidated based on the proportion of the working interests held by KKR. Accordingly, KKR reflects its proportionate share of the underlying statements of financial condition and statements of operations of the consolidated working interests on a gross basis and changes in the value of these working interests are not reflected as unrealized gains and losses in the consolidated statements of operations. Under the successful efforts method, exploration costs, other than the costs of drilling exploratory wells, are charged to expense as incurred. Costs that are associated with the drilling of successful exploration wells are capitalized if proved reserves are found. Lease acquisition costs are capitalized when incurred. Costs associated with the drilling of exploratory wells that do not find proved reserves, geological and geophysical costs and costs of certain nonproducing leasehold costs are charged to expense as incurred.
Expenditures for repairs and maintenance, including workovers, are charged to expense as incurred.
The capitalized costs of producing oil and natural gas properties are depleted on a field-by-field basis using the units-of production method based on the ratio of current production to estimated total net proved oil, natural gas and natural gas liquid reserves. Proved developed reserves are used in computing depletion rates for drilling and development costs and total proved reserves are used for depletion rates of leasehold costs.
Estimated dismantlement and abandonment costs for oil and natural gas properties, net of salvage value, are capitalized at their estimated net present value and amortized on a unit-of-production basis over the remaining life of the related proved developed reserves.

Whenever events or changes in circumstances indicate that the carrying amounts of oil and natural gas properties may not be recoverable, KKR evaluates oil and natural gas properties and related equipment and facilities for impairment on a field-by-field basis. The determination of recoverability is made based upon estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with

the carrying value of the related asset. Any impairment in value is recognized when incurred and is recorded in General, Administrative, and Other expense in the condensed consolidated statements of operations.

Fair Value Option
For certain investments and other financial instruments, KKR has elected the fair value option. Such election is irrevocable and is applied on a financial instrument by financial instrument basis at initial recognition. KKR has elected the fair value option for certain private equity, real assets, credit, investments of consolidated CFEs, equity method and other financial instruments not held through a consolidated investment fund with gains and losses recorded in net income. Accounting for these investments at fair value is consistent with how KKR accounts for its investments held through consolidated investment funds. Changes in the fair value of such instruments are recognized in Net Gains (Losses) from Investment Activities in the consolidated statements of operations. Interest income on interest bearing credit securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest Income in the condensed consolidated statements of operations.

Equity Method

For certain investments in entities over which KKR exercises significant influence but which do not meet the requirementsdefinition of an SEC filer for consolidation and for which KKR has not elected the fair value option, KKR uses the equity method of accounting. KKR’s share of earnings (losses) from these investments is reflected as a component of Net Gains (Losses) from Investment Activities in the condensed consolidated statements of operations. For equity method investments, KKR records its proportionate share of the investee's earnings or losses based on the most recently available financial information of the investee, which in certain cases may lag the date of KKR's financial statements by no more than three calendar months. As of September 30, 2017, equity method investees for which KKR reports financial results on a quarter lag include Marshall Wace LLP ("Marshall Wace") and USI, Inc. KKR evaluates its equity method investments for which KKR has not elected the fair value option for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

The carrying value of equity method investments in private equity funds, real assets funds and credit funds, which are not consolidated, approximate fair value, because the underlying investments of the unconsolidated investment funds are reported at fair value.

The carrying value of equity method investments in certain operating companies, which KKR is determined to exert significant influence under GAAP and for which KKR has not elected the fair value option, is determined based on the amounts invested by KKR, adjusted for the equity in earnings or losses of the investee allocated based on KKR’s respective ownership percentage, less distributions.

Financial Instruments held by Consolidated CFEs
KKR measures both the financial assets and financial liabilities of the consolidated CFEs in its financial statements using the more observable of the fair value of the financial assets and the fair value of the financial liabilities which results in KKR’s consolidated net income (loss) reflecting KKR’s own economic interests in the consolidated CFEs including (i) changes in the fair value of the beneficial interests retained by KKR and (ii) beneficial interests that represent compensation for services rendered.

For the consolidated CLO entities, KKR has determined that the fair value of the financial assets of the consolidated CLOs is more observable than the fair value of the financial liabilities of the consolidated CLOs. As a result, the financial assets of the consolidated CLOs are being measured at fair value and the financial liabilities are being measured as: (1) the sum of the fair value of the financial assets and the carrying value of any nonfinancial assets that are incidental to the operations of the CLOs less (2) the sum of the fair value of any beneficial interests retained by KKR (other than those that represent compensation for services) and KKR’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by KKR).

For the consolidated CMBS vehicles, KKR has determined that the fair value of the financial liabilities of the consolidated CMBS vehicles is more observable than the fair value of the financial assets of the consolidated CMBS vehicles. As a result, the financial liabilities of the consolidated CMBS vehicles are being measured at fair value and the financial assets are being measured in consolidation as: (1) the sum of the fair value of the financial liabilities (other than the beneficial interests retained by KKR), the fair value of the beneficial interests retained by KKR and the carrying value of any nonfinancial liabilities that are incidental to the operations of the CMBS vehicles less (2) the carrying value of any nonfinancial assets that are incidental to the operations of the CMBS vehicles. The resulting amount is allocated to the individual financial assets.

Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Except for certain of KKR's equity method investments (see "Equity Method" above in this Note 2 "Summary of Significant Accounting Policies") and debt obligations (as described in Note 10 "Debt Obligations"), KKR's investments and other financial instruments are recorded at fair value or at amounts whose carrying values approximate fair value. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation techniques are applied. These valuation techniques involve varying levels of management estimation and judgment, the degree of which is dependent on a variety of factors.

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments and financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows: 

Level I - Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date. The types of financial instruments included in this category are publicly-listed equities, credit investments and securities sold short.

Level II - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments included in this category are credit investments, investments and debt obligations of consolidated CLO entities, convertible debt securities indexed to publicly-listed securities, less liquid and restricted equity securities and certain over-the-counter derivatives such as foreign currency option and forward contracts. 

Level III - Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments generally included in this category are private portfolio companies, real assets investments, credit investments, equity method investments for which the fair value option was elected and investments and debt obligations of consolidated CMBS entities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. KKR’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset.

A significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant adjustment to the transactions or quoted prices may be necessary to estimate fair value.
The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by KKR in determining fair value is greatest for instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described above may cause transfers between Levels I, II, and III, which KKR recognizes at the beginning of the reporting period.

Investments and other financial instruments that have readily observable market prices (such as those traded on a securities exchange) are stated at the last quoted sales price as of the reporting date. KKR does not adjust the quoted price for these investments, even in situations where KKR holds a large position and a sale could reasonably affect the quoted price.
Management’s determination of fair value is based upon the methodologies and processes described below and may incorporate assumptions that are management’s best estimates after consideration of a variety of internal and external factors.

Level II Valuation Methodologies
Credit Investments: These instruments generally have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that KKR and others are willing to pay for an instrument. Ask prices represent the lowest price that KKR and others are willing to accept for an instrument. For financial assets and liabilities whose inputs are based on bid-ask prices obtained from third party pricing services, fair value may not always be a predetermined point in the bid-ask range. KKR’s policy is generally to allow for mid-market pricing and adjusting to the point within the bid-ask range that meets KKR’s best estimate of fair value.

Investments and Debt Obligations of Consolidated CLO Vehicles: Investments of consolidated CLO vehicles are reported within Investments of Consolidated CFEs and are valued using the same valuation methodology as described above for credit investments. Under ASU 2014-13, KKR measures CLO debt obligations on the basis of the fair value of the financial assets of the CLO.
Securities indexed to publicly-listed securities: The securities are typically valued using standard convertible security pricing models. The key inputs into these models that require some amount of judgment are the credit spreads utilized and the volatility assumed. To the extent the company being valued has other outstanding debt securities that are publicly-traded, the implied credit spread on the company’s other outstanding debt securities would be utilized in the valuation. To the extent the company being valued does not have other outstanding debt securities that are publicly-traded, the credit spread will be estimated based on the implied credit spreads observed in comparable publicly-traded debt securities. In certain cases, an additional spread will be added to reflect an illiquidity discount due to the fact that the security being valued is not publicly-traded. The volatility assumption is based upon the historically observed volatility of the underlying equity security into which the convertible debt security is convertible and/or the volatility implied by the prices of options on the underlying equity security.

Restricted Equity Securities: The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

Derivatives: The valuation incorporates observable inputs comprising yield curves, foreign currency rates and credit spreads.

Level III Valuation Methodologies
Investments and financial instruments categorized as Level III consist primarily of the following:

Private Equity Investments: KKR generally employs two valuation methodologies when determining the fair value of a private equity investment. The first methodology is typically a market comparables analysis that considers key financial inputs and recent public and private transactions and other available measures. The second methodology utilized is typically a discounted cash flow analysis, which incorporates significant assumptions and judgments. Estimates of key inputs used in this methodology include the weighted average cost of capital for the investment and assumed inputs used to calculate terminal values, such as exit EBITDA multiples. Other inputs are also used in both methodologies. In addition, when a definitive agreement has been executed to sell an investment, KKR generally considers a significant determinant of fair value to be the consideration to be received by KKR pursuant to the executed definitive agreement.
Upon completion of the valuations conducted using these methodologies, a weighting is ascribed to each method, and an illiquidity discount is typically applied where appropriate. The ultimate fair value recorded for a particular investment will generally be within a range suggested by the two methodologies, except that the value may be higher or lower than such range in the case of investments being sold pursuant to an executed definitive agreement.
When determining the weighting ascribed to each valuation methodology, KKR considers, among other factors, the availability of direct market comparables, the applicability of a discounted cash flow analysis, the expected hold period and manner of realization for the investment, and in the case of investments being sold pursuant to an executed definitive

agreement, an estimated probability of such sale being completed. These factors can result in different weightings among investments in the portfolio and in certain instances may result in up to a 100% weighting to a single methodology.
When an illiquidity discount is to be applied, KKR seeks to take a uniform approach across its portfolio and generally applies a minimum 5% discount to all private equity investments. KKR then evaluates such private equity investments to determine if factors exist that could make it more challenging to monetize the investment and, therefore, justify applying a higher illiquidity discount. These factors generally include (i) whether KKR is unable to sell the portfolio company or conduct an initial public offering of the portfolio company due to the consent rights of a third party or similar factors, (ii) whether the portfolio company is undergoing significant restructuring activity or similar factors and (iii) characteristics about the portfolio company regarding its size and/or whether the portfolio company is experiencing, or expected to experience, a significant decline in earnings. These factors generally make it less likely that a portfolio company would be sold or publicly offered in the near term at a price indicated by using just a market multiples and/or discounted cash flow analysis, and these factors tend to reduce the number of opportunities to sell an investment and/or increase the time horizon over which an investment may be monetized. Depending on the applicability of these factors, KKR determines the amount of any incremental illiquidity discount to be applied above the 5% minimum, and during the time KKR holds the investment, the illiquidity discount may be increased or decreased, from time to time, based on changes to these factors. The amount of illiquidity discount applied at any time requires considerable judgment about what a market participant would consider and is based on the facts and circumstances of each individual investment. Accordingly, the illiquidity discount ultimately considered by a market participant upon the realization of any investment may be higher or lower than that estimated by KKR in its valuations.

In the case of growth equity investments, enterprise values may be determined using the market comparables analysis and discounted cash flow analysis described above. A scenario analysis may also be conducted to subject the estimated enterprise values to a downside, base and upside case, which involves significant assumptions and judgments. A milestone analysis may also be conducted to assess the current level of progress towards value drivers that we have determined to be important, which involves significant assumptions and judgments. The enterprise value in each case may then be allocated across the investment’s capital structure to reflect the terms of the security and subjected to probability weightings.  In certain cases, the values of growth equity investments may be based on recent or expected financings.
Real Assets Investments: Real asset investments in infrastructure, energy and real estate are valued using one or more of the discounted cash flow analysis, market comparables analysis and direct income capitalization, which in each case incorporates significant assumptions and judgments. Infrastructure investments are generally valued using the discounted cash flow analysis. Key inputs used in this methodology can include the weighted average cost of capital and assumed inputs used to calculate terminal values, such as exit EBITDA multiples. Energy investments are generally valued using a discounted cash flow analysis. Key inputs used in this methodology that require estimates include the weighted average cost of capital. In addition, the valuations of energy investments generally incorporate both commodity prices as quoted on indices and long-term commodity price forecasts, which may be substantially different from commodity prices on certain indices for equivalent future dates. Certain energy investments do not include an illiquidity discount. Long-term commodity price forecasts are utilized to capture the value of the investments across a range of commodity prices within the energy investment portfolio associated with future development and to reflect a range of price expectations. Real estate investments are generally valued using a combination of direct income capitalization and discounted cash flow analysis. Key inputs used in such methodologies that require estimates include an unlevered discount rate and current capitalization rate. The valuations of real assets investments also use other inputs.

Credit Investments: Credit investments are valued using values obtained from dealers or market makers, and where these values are not available, credit investments are generally valued by KKR based on ranges of valuations determined by an independent valuation firm. Valuation models are based on discounted cash flow analyses, for which the key inputs are determined based on market comparables, which incorporate similar instruments from similar issuers.

Other Investments: With respect to other investments including equity method investments for which the fair value election has been made, KKR generally employs the same valuation methodologies as described above for private equity investments when valuing these other investments.

Investments and Debt Obligations of Consolidated CMBS Vehicles: Under ASU 2014-13, KKR measures CMBS investments, which are reported within Investments of Consolidated CFEs on the basis of the fair value of the financial liabilities of the CMBS. Debt obligations of consolidated CMBS vehicles are valued based on discounted cash flow analyses. The key input is the expected yield of each CMBS security using both observable and unobservable factors, which may include recently offered or completed trades and published yields of similar securities, security-specific characteristics (e.g. securities ratings issued by nationally recognized statistical rating organizations, credit support by other subordinate securities issued by the CMBS and coupon type) and other characteristics.

 Key unobservable inputs that have a significant impact on KKR’s Level III investment valuations as described above are included in Note 5 “Fair Value Measurements.” KKR utilizes several unobservable pricing inputs and assumptions in determining the fair value of its Level III investments. These unobservable pricing inputs and assumptions may differ by investment and in the application of KKR’s valuation methodologies. KKR’s reported fair value estimates could vary materially if KKR had chosen to incorporate different unobservable pricing inputs and other assumptions or, for applicable investments, if KKR only used either the discounted cash flow methodology or the market comparables methodology instead of assigning a weighting to both methodologies.
Level III Valuation Process

The valuation process involved for Level III measurements is completed on a quarterly basis and is designed to subject the valuation of Level III investments to an appropriate level of consistency, oversight, and review.

For Private Markets investments classified as Level III, investment professionals prepare preliminary valuations based on their evaluation of financial and operating data, company specific developments, market valuations of comparable companies and other factors. These preliminary valuations are reviewed by an independent valuation firm engaged by KKR to perform certain procedures in order to assess the reasonableness of KKR’s valuations annually for all Level III investments in Private Markets and quarterly for investments other than certain investments, which have values less than pre-set value thresholds and which in the aggregate comprise less than 5% of the total value of KKR’s Level III Private Markets investments. The valuations of certain real asset investments are determined solely by an independent valuation firm without the preparation of preliminary valuations by our investment professionals, and instead such independent valuation firm relies principally on valuation information available to it as a broker or valuation firm. For credit investments and debt obligations of consolidated CMBS vehicles, an independent valuation firm is generally engaged by KKR with respect to investments classified as Level III. The valuation firm either provides a value, or provides a valuation range from which KKR’s investment professionals select a point in the range to determine the preliminary valuation or performs certain procedures in order to assess the reasonableness and provide positive assurance of KKR’s valuations. After reflecting any input from the independent valuation firm, the valuation proposals are submitted to their respective valuation sub-committees.

KKR has a global valuation committee comprised of senior employees including investment professionals and professionals from business operations functions, and includes one of KKR's Co-Presidents and Co-Chief Operating Officers and its Chief Financial Officer, General Counsel and Chief Compliance Officer. The global valuation committee is assisted by valuation sub-committees and investment professionals for each business strategy. All preliminary Level III valuations are reviewed and approved by the valuation sub-committees for private equity, real estate, energy and infrastructure, and credit, as applicable. For periods prior to the completion of the PAAMCO Prisma transaction, when Level III valuations were required to be performed on hedge fund investments, a valuation sub-committee for hedge funds reviewed these valuations. The valuation sub-committees are responsible for the review and approval of valuations in their respective business lines on a quarterly basis. The members of the valuation sub-committees are comprised of investment professionals, including the heads of each respective strategy, and professionals from business operations functions such as legal, compliance and finance, who are not primarily responsible for the management of the investments.

The global valuation committee provides general oversight of the valuation sub-committees. The global valuation committee is responsible for coordinating and implementing the firm’s valuation process to ensure consistency in the application of valuation principles across portfolio investments and between periods. All valuations are subject to approval by the global valuation committee. When valuations are approved by the global valuation committee after reflecting any input from it, the valuations of Level III investments, as well as the valuations of Level I and Level II investments, are presented to the audit committee of the board of directors of the general partner of KKR & Co. L.P. and are then reported to the board of directors.

Fees and Other

Fees and other consist primarily of (i) transaction fees earned in connection with successful investment transactions and from capital markets activities, (ii) management and incentive fees from providing investment management services to unconsolidated funds, CLOs, other vehicles, and separately managed accounts, (iii) monitoring fees from providing services to portfolio companies, (iv) carried interest allocations to general partners of unconsolidated funds, (v) revenue earned by oil and gas-producing entities that are consolidated and (vi) consulting fees earned by consolidated entities that employ non-employee operating consultants.


For the three and nine months ended September 30, 2017 and 2016, respectively, fees and other consisted of the following:    
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Management Fees$178,942
 $152,491
 $517,393
 $468,390
Transaction Fees181,280
 113,056
 581,410
 277,776
Monitoring Fees41,848
 23,367
 145,203
 99,388
Fee Credits(70,641) (46,975) (207,396) (106,506)
Carried Interest337,459
 414,864
 1,224,235
 602,695
Incentive Fees2,519
 3,800
 3,637
 6,045
Oil and Gas Revenue12,441
 16,191
 47,096
 47,977
Consulting Fees9,029
 10,262
 29,039
 30,853
Total Fees and Other$692,877
 $687,056
 $2,340,617
 $1,426,618
All revenues presented in the table above, except for oil and gas revenue and certain transaction fees earned by KKR's Capital Markets business, are earned from KKR investment funds and portfolio companies. Consulting fees are earned by certain consolidated entities that employ non-employee operating consultants from providing advisory and other services to portfolio companies and other companies. These fees are separately negotiated with each company for which services are provided and are not shared with KKR.

Management Fees
Management fees are recognized in the period during which the related services are performed in accordance with the contractual terms of the related agreement. Management fees earned from private equity funds and certain investment funds are based upon a percentage of capital committed or capital invested during the investment period, and thereafter generally based on remaining invested capital or net asset value. For certain other investment funds, CLOs, and separately managed accounts, management fees are based upon the net asset value, gross assets or as otherwise defined in the respective agreements.
Management fees received from KKR’s consolidated funds and vehicles are eliminated in consolidation. However, because these amounts are funded by, and earned from, noncontrolling interests, KKR’s allocated share of the net income from KKR’s consolidated funds and vehicles is increased by the amount of fees that are eliminated. Accordingly, the elimination of these fees does not have an effect on the net income (loss) attributable to KKR or KKR partners’ capital.
Transaction Fees
Transaction fees are earned by KKR primarily in connection with successful investment transactions and capital markets activities. Transaction fees are recognized in the period when the transaction closes. Fees are typically paid on or shortly after the closing of a transaction.
In connection with pursuing successful portfolio company investments, KKR receives reimbursement for certain transaction‑related expenses. Transaction‑related expenses, which are reimbursed by third parties, are typically deferred until the transaction is consummated and are recorded in Other Assets on the consolidated statements of financial condition on the date incurred. The costs of successfully completed transactions are borne by the KKR investment funds and included as a component of the investment’s cost basis. Subsequent to closing, investments are recorded at fair value each reporting period as described in the section above titled “Investments”. Upon reimbursement from a third party, the cash receipt is recorded and the deferred amounts are relieved. No fees or expenses are recorded for these reimbursements.
Monitoring Fees
Monitoring fees are earned by KKR for services provided to portfolio companies and are recognized as services are rendered. These fees are generally paid based on a fixed periodic schedule by the portfolio companies either in advance or in arrears and are separately negotiated for each portfolio company.
In connection with the monitoring of portfolio companies and certain unconsolidated funds, KKR receives reimbursement for certain expenses incurred on behalf of these entities. Costs incurred in monitoring these entities are classified as general,

administrative and other expenses and reimbursements of such costs are classified as monitoring fees. In addition, certain monitoring fee provisions may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period when the related transaction closes.
Fee Credits

Agreements with the fund investors of certain of its investment funds require KKR to share with these fund investors an agreed upon percentage of certain fees, including monitoring and transaction fees received from portfolio companies (“Fee Credits”). Fund investors receive Fee Credits only with respect to monitoring and transaction fees that are allocable to the fund’s investment in the portfolio company and not, for example, any fees allocable to capital invested through co-investment vehicles. Fee Credits are calculated after deducting certain fund-related expenses and generally amount to 80% for older funds, or 100% for our newer funds, of allocable monitoring and transaction fees after fund-related expenses are recovered, although the actual percentage may vary from fund to fund as well as among different classes of investors within a fund.

Carried Interest

For certain investment fund structures, carried interest is allocated to the general partner based on cumulative fund performance to date, and where applicable, subject to a preferred return to limited partners. At the end of each reporting period, KKR calculates the carried interest that would be due to KKR for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (a) positive performance resulting in an increase in the carried interest allocated to the general partner or (b) negative performance that would cause the amount due to KKR to be less than the amount previously recognized as revenue, resulting in a negative adjustment to carried interest allocated to the general partner. In each case, it is necessary to calculate the carried interest on cumulative results compared to the carried interest recorded to date and make the required positive or negative adjustments. KKR ceases to record negative carried interest allocations once previously recognized carried interest allocations for a fund have been fully reversed. KKR is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative carried interest over the life of a fund. Accrued but unpaid carried interest as of the reporting date is reflected in Investments in the condensed consolidated statements of financial condition.
Incentive Fees
Incentive fees earned on the performance of certain hedge fund structures are recognized based on fund performance, subject to the achievement of minimum return levels, and/or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive fee rates generally range from 5% to 20%. KKR does not record performance‑based incentive fees until the end of each fund’s measurement period (which is generally one year) when the performance‑based incentive fees become fixed and determinable.
Oil and Gas Revenue Recognition
Oil and gas revenues are recognized when production is sold to a purchaser at fixed or determinable prices, when delivery has occurred and title has transferred and collectability of the revenue is reasonably assured. The oil and gas producing entities consolidated by KKR follow the sales method of accounting for natural gas revenues. Under this method of accounting, revenues are recognized based on volumes sold, which may differ from the volume to which the entity is entitled based on KKR’s working interest. An imbalance is recognized as a liability only when the estimated remaining reserves will not be sufficient to enable the under-produced owners to recoup their entitled share through future production. Under the sales method, no receivables are recorded when these entities have taken less than their share of production and no payables are recorded when it has taken more than its share of production unless reserves are not sufficient.

Consulting Fees
Consulting fees are earned by certain consolidated entities that employ non‑employee operating consultants from providing advisory and other services to portfolio companies and other companies and are recognized as the services are rendered. These fees are separately negotiated with each company for which services are provided and are not shared with KKR.

Recently Issued Accounting Pronouncements
Revenue from Contracts with Customers
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Topic 606 (“ASU 2014-09”) which has subsequently been amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2017-13. These ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Revenue recorded under ASU 2014-09 will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of ASU 2014-09 to annual reporting periodsfiscal years beginning after December 15, 2017. Early adoption will be permitted as of annual reporting periods beginning after December 15, 2016,2020, including interim reporting periodsperiod within those annual periods. A full retrospective or modified retrospective approach is required.

Carried interest is a capital allocation tofiscal years. KKR adopted the general partner based on fund performance, and where applicable, subject to a preferred return to limited partners. KKR has concluded that capital allocation-based carried interest represents income from equity method investments that is not in the scope of ASU 2014-09. Accordingly, in connection with thestandard effective January 1, 2021. The adoption of ASU 2014-09, KKR will account for such carried interest asthis new guidance did not have a financial instrument under the equity method of accounting within the scope of ASC 323, Investments - Equity Method and Joint Ventures (“ASC 323”). In accordance with ASC 323, KKR will record equity method income (losses) basedmaterial impact on the change in KKR’s proportionate claim onfinancial statements.

Reference rate reform

In March 2020, the net assetsFASB issued new guidance to ease the accounting implications of the investment fund, including performance-based capital allocations, assumingtransition away from the investment fund was liquidated as of each reporting date pursuant to each investment fund's governing agreements. As carried interestLondon Interbank Offering Rate ("LIBOR") and the related general partner investmentsother reference rates which are consideredscheduled to be discontinued, including LIBOR tenors after June 30, 2023. The new guidance offers a single unitvariety of account under KKR’s newoptional expedients and exceptions related to accounting policy, the equity method income associated with the general partner interests will be combined with the associated carried interestfor contract modifications and reported in a single line within the statement of operations. KKR expectshedging relationships. These expedients and exceptions apply only to apply this change in accounting on a full retrospective basis. The patterncontracts, hedging relationships and amount of recognition under the new policy is notother transactions that reference LIBOR or another reference rate expected to differ materiallybe discontinued because of reference rate reform. The new guidance is effective for contract modifications made and hedging relationships existing or entered into from KKR’s existing recognition. As it pertains to incentive fees,January 1, 2020 through December 31, 2022. In the first quarter 2022, KKR expects the recognition of incentive fees, which are a form of variable consideration, to be deferred until such fees are no longer subject to significant reversal, which is consistent with KKR’s existing recognition treatment. Additionally, KKR is currently in the process of implementing the new revenue guidance and is continuing to evaluate the effect this guidance will have on other revenue streams. KKR expectselected to adopt the new revenue recognition guidance effective January 1, 2018.and, for the modifications that have occurred to date, the adoption of the guidance has not had a material impact on KKR’s consolidated financial statements.


Financial Instruments
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Table of Contents


Future application of accounting standards

Targeted improvements to the accounting for long-duration contracts

In January 2016,August 2018, the FASB issued ASU No. 2016-01, Financial Instruments (Topic 825): Recognitionnew guidance for insurance and Measurementreinsurance companies that issue long-duration contracts such as life insurance and annuities. The objective of Financial Assetsthis guidance is to improve, simplify and Liabilities (“ASU 2016-01”).enhance the financial reporting of long-duration contracts by providing financial statement users with useful information in a timely and transparent manner. The amended guidance (i) requires equity investments (except those accountedprimary changes include:

(1) more timely recognition of assumption changes in the liability for future policy benefits and use of a current rate for the discounting of future cash flows – The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts are required to be reviewed and updated periodically (versus set at inception and not changed under the equity methodcurrent guidance). Cash flow assumptions are required to be reviewed at least annually with the impact recognized in net income. The standard also prescribes that the discount rate assumption should be based on a current upper-medium grade (i.e., low credit risk) fixed income instrument yield (e.g., a single A credit-rating) with the impact recognized in other comprehensive income ("OCI").

(2) standardization and improvement in the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts– The new guidance creates a new category of accountingbenefits referred to as market risk benefits, which are contracts or thosecontract features that result in consolidation ofprovide both protection to the investee)policyholder from capital market risk and expose the insurer to other-than-nominal capital market risk. Market risk benefits are required to be measured at fair value with changesthe change in fair value recognized in net income; (ii) eliminatesincome, except for changes in the requirement to discloseentity’s non-performance risk, which is recognized in OCI.

(3) simplification of the method(s)amortization of deferred acquisition costs - Deferred policy acquisition costs ("DAC") and significant assumptions used to estimate the fair value that is currentlyother similar actuarial balances (e.g., deferred sales inducements) for life and annuity contracts are required to be disclosed for financial instruments measured at fair value; (iii) requires an entity to present separately in other comprehensive incomeamortized on a constant basis over the portionterm of the total changerelated contracts.

(4) enhanced disclosures– Additional disclosures are required including disaggregated roll-forwards of significant insurance liabilities as well as disclosures about significant inputs, judgments, assumptions and methods used in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01measurement.

The guidance is effective for fiscal years beginning after December 15, 2017,2022, including interim periods within those fiscal years. The amended guidance should be applied by means of a cumulative-effect adjustmentEarly adoption is permitted. For changes related to the balance sheet asliability for future policy benefits and deferred acquisition costs, the new guidance requires adoption using a modified retrospective approach upon transition with an option to elect a retrospective approach. For changes related to market risk benefits, the new guidance requires a retrospective approach.

KKR intends to implement this standard using the retrospective approach for the liability for future policy benefits, deferred acquisition costs and market risk benefits with an adoption date of January 1, 2023. KKR has completed the design and planning phase of its implementation effort and has begun detailed implementation activities. KKR has established a governance framework to manage the implementation activities and support timely application of the beginningguidance. KKR has made progress in the following areas:

•High level impact assessment;

•Identification of the fiscal yearkey accounting policy decisions;

•Evaluation and selection of adoption. The amended guidance relatedactuarial system solutions;

•Development of detailed business requirements document inclusive of roll-forward disclosures; and

•Preliminary modeling of market risk benefits.

KKR continues to equity securities without readily determinable fair values (including the disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption. KKR is currently evaluatingevaluate the impact of this guidance but anticipates that the new standard will have a material impact on the consolidated financial statements. The new guidance is expected to increase financial statement volatility primarily due to the requirement to measure market risk benefits at fair value, which is recorded in net income, except for changes in value attributable to changes in an entity’s non-performance risk, which is recognized in OCI. In addition, the new guidance is expected to have a significant impact on KKR’s systems, processes and controls.



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Leases

Troubled debt restructurings and vintage disclosures

In February 2016,March 2022, the FASB issued ASU No. 2016-02, Leases (Topic 842).new guidance regarding the modification of receivables, which affects their recognition and measurement. The guidance eliminates the concept of troubled debt restructurings and instead requires the recognitionall modifications to be analyzed to determine whether they result in a new receivable or a continuation of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP.an existing receivable. The guidance retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similaralso makes related updates to the classification criteriameasurement of expected credit losses for distinguishing between capital leases and operating leases under previous GAAP.receivables. The recognition, measurement and presentationnew guidance requires additional disclosures for receivable modifications involving borrowers experiencing financial difficulty as well as disclosure of expenses and cash flows arising from a leaseloan charge-offs by a lesseeorigination year (vintage). For entities that have not changed significantly from previous GAAP. For operating leases, a lessee is required to doalready adopted ASC 326 (addressing credit losses on financial instruments), the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the statement of cash flows. The guidance is effective for fiscal periods beginning after December 15, 2018. Early application is permitted. KKR is currently evaluating the impact of this guidance on the financial statements.

Investments

In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting ("ASU 2016-07"), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for all entities for fiscal years beginning after December 15, 2016,2022, including interim periodsperiod within those fiscal years, with early adoption permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. Additional transition disclosures are not required upon adoption. This guidance has been adopted as of January 1, 2017 and did not have a material impact on KKR's results of operations or financial condition.

Equity-Based Compensation

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting ("ASU 2016-09"), which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. KKR adopted ASU 2016-09 on January 1, 2017 and will apply prospective application. In connection with this adoption, the most significant impacts to KKR relate to the following: (i) with respect to the tax impact of equity based compensation charges, KKR has accounted for the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes as an income tax expense or benefit in the statement of operations, (ii) KKR has classified this difference with other income tax cash flows as an operating activity in the statement of cash flows and (iii) KKR has made an election to continue to estimate the number of equity compensation awards that are expected to vest, net of forfeitures, over the life of an equity award and not account for forfeitures as they occur.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"), which amends the scope of modification accounting for share-based payment arrangements. ASU 2017-09 provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. ASU 2017-09 is effective for fiscal years and interim periods beginning after December 15, 2017.years. Early adoption is permitted. KKR is currently evaluating the impact of this guidanceaccounting standard update on theits consolidated financial statements.

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In August 2016,3. ACQUISITIONS

Acquisition of Mitsubishi Corp-UBS Realty Inc.

On March 17, 2022, KKR announced the FASB issued ASU No. 2016-15, Statementsigning of Cash Flows (Topic 230): Classificationa strategic transaction by 76KK, an indirect subsidiary of Certain Cash ReceiptsKKR & Co. Inc., to acquire all of the outstanding shares of Mitsubishi Corp-UBS Realty Inc. from Mitsubishi Corporation and Cash Payments,UBS Asset Management in an all-cash transaction valued at approximately ¥230 billion (or approximately $1.8 billion). On April 28, 2022, KKR completed the acquisition of Mitsubishi Corp-UBS Realty Inc., which amendschanged its name to KJR Management ("KJRM"). Given the guidance onrecent closing, the classificationpurchase accounting analysis is incomplete.
Acquisition of certain cash receiptsGlobal Atlantic

On July 7, 2020, indirect subsidiaries of KKR & Co. Inc., namely Magnolia Parent LLC and paymentsMagnolia Merger Sub Limited, entered into an Agreement and Plan of Merger (the “GA Merger Agreement”) with Global Atlantic Financial Group Limited ("GAFG"), Global Atlantic Financial Life Limited ("GAFLL"), LAMC LP, and Goldman Sachs & Co. LLC, solely in its capacity as the Equity Representative (as defined in the statement of cash flows. The amended guidance adds or clarifies guidance on eight cash flow matters: (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relationGA Merger Agreement). Pursuant to the effective interest rateGA Merger Agreement, at the closing of the borrowing, (iii) contingentacquisition of Global Atlantic by KKR (the "GA Acquisition"), among other things, Global Atlantic Financial Group Limited continued as the surviving entity in its merger with Magnolia Merger Sub Limited and became a direct subsidiary of Magnolia Parent LLC, which subsequently changed its name to The Global Atlantic Financial Group LLC (“TGAFG”).

On February 1, 2021 (the “GA Acquisition Date”), the GA Acquisition was completed, and KKR acquired all of the voting interests in Global Atlantic and an economic ownership of 61.1% of Global Atlantic prior to certain post-closing purchase price adjustments discussed below and after taking into account GA Rollover Investors’ and GA Co-Investors’ (each as defined below) equity ownership of Global Atlantic. In addition to entering into the retirement and life insurance business through KKR's indirect ownership of Global Atlantic's insurance companies, KKR's flagship investment management company became the investment adviser for Global Atlantic’s insurance companies, which increases KKR’s presence in the insurance community. Furthermore, the transaction allows Global Atlantic to gain access to KKR’s origination and asset management capabilities.

Under the GA Merger Agreement, KKR agreed to pay former shareholders of Global Atlantic Financial Group Limited an amount in cash equal to 1.0x U.S. GAAP Shareholders’ Equity of Global Atlantic Financial Group Limited, excluding Accumulated Other Comprehensive Income and subject to certain other purchase price adjustments ("GA Book Value," determined as $4.7 billion as of February 1, 2021 for purposes of the purchase price determination). The amount of consideration payments made afterpayable by KKR was reduced by the amount of equity rolled over by certain former shareholders of Global Atlantic Financial Group Limited who elected to continue their equity ownership in Global Atlantic at closing ("GA Rollover Investors"). In addition, KKR syndicated equity interests in Global Atlantic to minority co-investors ("GA Co-Investors"), which also had the effect of reducing the amount of consideration payable by KKR at closing. The purchase price is as follows (in thousands):

Cash consideration paid by KKR$2,914,455 
GA Co-Investors and GA Rollover Investors1,824,239 
Total Purchase Price$4,738,694 

The purchase price paid at closing was subject to certain post-closing adjustments, which were finalized in June 2021, and KKR and certain GA Co-Investors paid incremental amounts of $55 million and $3 million, respectively ($58 million in total). As a result of the post-closing adjustments, KKR's economic ownership of Global Atlantic increased from 61.1% at closing to 61.5%.

The GA Acquisition was accounted for as a business combination (iv) proceeds from the settlementunder FASB Accounting Standards Codification Topic 805, Business Combinations ("Topic 805"). Goodwill of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions and (viii) separately identifiable cash flows and application of the predominance principle. The

guidance in the ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The guidance must be applied retrospectively to all periods presented but may be applied prospectively from the earliest date practicable if retrospective application would be impracticable. KKR is currently evaluating the impact of this guidance$497.1 million has been recorded based on the financial statements.

In November 2016,amount that the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which amends the guidance to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The amended guidance requires the following: (i) restricted cash and restricted cash equivalents should be included in the cash and cash-equivalents balances in the statement of cash flows; (ii) changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the statement of cash flows; (iii) a reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents; and (iv) the nature of the restrictions must be disclosed for material restricted cash and restricted cash equivalents amounts. The guidance in this ASU is effective for fiscal years beginning after December 15, 2017, including interim periods therein. Early adoption is permitted. The guidance must be applied retrospectively to all periods presented. KKR is currently evaluating the impact of this guidance on the financial statements.

Income Taxes

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which removed the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. KKR is currently evaluating the impact of this guidance on the financial statements.

Clarifying the Definition of a Business

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This guidance amends the definition of a business and provides a threshold which must be considered to determine whether a transaction is an asset acquisition or a business combination. ASU 2017-01 is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted. KKR is currently evaluating the impact of this guidance on the financial statements.

Goodwill

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance simplifies the accounting for goodwill impairments by eliminating the second step from the goodwill impairment test. The ASU requires goodwill impairments to be measured on the basis ofpurchase price exceeds the fair value of a reporting unit relativethe net assets acquired less the amounts attributable to noncontrolling interests. Goodwill is primarily attributable to the reporting unit’s carrying amount rather thanscale, skill sets, operations, and synergies that can be achieved subsequent to the GA Acquisition. The goodwill recorded is not expected to be deductible for tax purposes and it has been allocated to the Insurance segment.


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The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed and resulting goodwill as of the GA Acquisition Date:

February 1, 2021
($ in thousands)
Consideration Transferred
Cash Consideration paid by KKR$2,914,455 
GA Co-Investors978,296 
GA Rollover Investors845,943 
Settlement of pre-existing relationships(1)
(60,200)
Total Consideration Transferred(2)
$4,678,494 
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash, Cash Equivalents and Restricted Cash$3,358,772 
Investments99,544,755 
Reinsurance Recoverable15,753,030 
Insurance Intangible Assets1,024,520 
Other Assets(3)
3,325,652 
Separate Account Assets5,371,060 
Policy Liabilities(100,374,765)
Debt Obligations(1,450,920)
Funds Withheld Payable at Interest(13,800,969)
Accrued Expenses and Other Liabilities(2,735,811)
Reinsurance Liabilities(180,573)
Separate Account Liabilities(5,371,060)
Total Identifiable Net Assets4,463,691 
Redeemable non-controlling interests(4)
(91,845)
Other Noncontrolling interests(4)
(190,405)
Goodwill$497,053 

(1)    Represents KKR debt obligations held by Global Atlantic at the GA Acquisition Date.
(2)    At the GA Acquisition Date, the transaction was funded with a combination of (i) cash on hand by KKR, (ii) cash proceeds from syndication of the equity interests in Global Atlantic to minority co-investors and equity rolled over from certain former Global Atlantic shareholders. The equity held by GA co-investors and rollover investors are presented as noncontrolling interests in the financial statements. Acquisition of Global Atlantic, Net of Cash Acquired in the consolidated statements of cash flows represents the Total Consideration Transferred (excluding GA Rollover Investors) net of acquired Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.
(3)    Includes $1.0 billion of deferred tax assets recognized from the step-up in basis under purchase accounting.
(4)    Represents the fair value of Noncontrolling Interests in consolidated renewable energy entities held by Global Atlantic on the GA Acquisition Date. Such interests do not represent ownership interests held by GA Rollover Investors or GA Co-Investors in Global Atlantic's equity.

Measurement Period Adjustments
KKR finalized the valuation of the acquired assets and assumed liabilities in December 2021. During the second quarter of 2021, KKR recognized measurement period adjustments to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period adjustments also reflected the increase in the total consideration transferred of $58 million as a result of final purchase price adjustments. Measurement period adjustments consist primarily of a $50 million increase in the value of distribution agreements acquired, a $63 million increase in policy liabilities, a $25 million increase in investments, and a $46 million increase in goodwill. The related impact to net income that would have been recognized in previous periods if the adjustments were recognized as of the GA Acquisition Date was not material to the consolidated financial statements.
KKR performed a valuation of the acquired investments, policy liabilities, value of business acquired ("VOBA"), other identifiable intangibles, and funds withheld at interest payables and receivables. The following is a summary of significant inputs to the valuation:

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Investments
Global Atlantic’s investment portfolio primarily consists of fixed maturity securities, mortgage and other loan receivables, equity securities, and investments in real assets such as renewable energy and transportation assets. All of the assets included within the investment portfolio were measured and reported at their fair values on the GA Acquisition Date consistent with the valuation methodologies discussed in Note 2 "Summary of Significant Accounting Policies" in audited financial statements included in KKR & Co. Inc.'s Annual Report on Form 10-K for the year ended December 31, 2021. As a result, the cost basis of each respective investment was reset to equal fair value on the GA Acquisition Date.
Policy liabilities
Policy liabilities were remeasured based on generally accepted actuarial methods and reported at their fair values on the GA Acquisition Date. Assumptions for future mortality, persistency, policyholder behavior, expenses, investment return and other actuarial factors were based on an evaluation of Global Atlantic’s recent experience, industry experience, and anticipated future trends. These assumptions are intended to be representative of market assumptions used by buyers and sellers in similar transactions. The approach employed to develop these projection assumptions is described below:
•Discount rates used to calculate fair value ranged from 11% to 15%, depending on product;
•Mortality and persistency assumptions are based on both Global Atlantic and general industry experience;
•Expenses were projected reflecting Global Atlantic’s unit expenses with an allocation of a portion of overhead expenses to in-force business;
•Future investment income reflects a runoff of the existing asset portfolios and reinvestment strategies based on Global Atlantic’s assumptions for asset yield, quality, and maturity. The projections are based on forward interest rates implied amountby the Treasury yield curve. Credit rates reflect Global Atlantic’s target spreads;
•Separate account and index account growth rates are based on long-term return expectations for different fund types and on the underlying mix of goodwill relativefunds; and
•Statutory reserves underlying the valuation reflect Global Atlantic’s current reserving methodologies.
Value of business acquired ("VOBA")
VOBA represents the estimated fair value of future net cash flows from in-force life and annuity insurance contracts acquired at the GA Acquisition Date.
Other identifiable intangible assets
Other identifiable intangible assets represent distribution relationships, trade names and state insurance licenses. The distribution relationships were valued using the excess earnings method, which derives value based on the present value of the cash flow attributable to the goodwill balancedistribution relationships, less returns for contributory assets. The trade name intangible asset represents the Global Atlantic trade name, and was valued using the relief-from-royalty method giving consideration to publicly available third-party trade name royalty rates as well as expected premiums generated by the use of the reporting unit.trade name over its anticipated life. The ASU also (i) clarifiesstate insurance licenses represent Global Atlantic’s jurisdictional insurance licenses, which include 52 insurance licenses, encompassing all 50 U.S. states, the requirementsDistrict of Columbia, and the U.S. Virgin Islands. They were protected through registration and were valued using the market approach based on third-party market transactions from which the prices paid for excludingstate insurance licenses could be derived.
Funds withheld at interest receivables and allocating foreign currency translationpayables
Funds withheld at interest receivables and payables were remeasured at fair value based on the fair value of assets held in the underlying portfolios supporting those receivables or payables.
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The fair value and weighted average estimated useful lives of Value of Business Acquired and Other Identifiable Intangible Assets acquired in the GA Acquisition consist of the following (dollars in thousands):

Fair ValueAverage Useful Life
($ in thousands)(in years)
VOBA (included within Insurance Intangible Assets)$1,024,520 28.6
Negative VOBA (included within Policy Liabilities)(1,273,414)22.2
Total VOBA$(248,894)
Value of Distribution Agreements Acquired$250,000 16 to 21
Trade Names50,000 15 to 18
State Insurance Licenses10,000 Indefinite
Total Identifiable Other Intangible Assets (included within Other Assets)$310,000 


As of the GA Acquisition Date, Global Atlantic's financial results are reflected in these financial statements. Global Atlantic's revenues of $1.4 billion and net income before allocation to noncontrolling interest holders of $(203.9) million, respectively, are included in the consolidated statement of operations for the three months ended March 31, 2021.

Pro- Forma Financial Information

Unaudited pro-forma financial information for the three months ended March 31, 2021 is presented below. Pro-forma financial information presented does not include adjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment;reflect any potential revenue synergies or cost savings that may be achievable in connection with the GA Acquisition and (ii) clarifies that an entity should consider income tax effects from any tax deductible goodwill onassume the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for fiscal periods beginning after December 15, 2019. Early adoption is allowed for entitiesGA Acquisition occurred as of January 1, 2017,2020. The unaudited pro forma financial information is presented for annualinformational purposes only, and any interim impairment tests occurring afteris not necessarily indicative of future operations or results had the GA Acquisition been completed as of January 1, 2017. KKR is currently evaluating the impact of this guidance on the financial statements.2020.


Other
Three months ended
March 31, 2021
Total Revenues$5,077,184 
Net Income Attributable to KKR & Co. Inc. Common Stockholders$1,738,106 


In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The ASU conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue standard (ASC 606, as amended). The effective date of the new guidance is aligned with the requirements in the new revenue standard, which is effective for annual and interim reporting periods beginning after December 15, 2017. The ASU allows an entity to use a full or modified retrospective adoption approach. KKR is currently evaluating the impact of this guidance on the financial statements.



Premium Amortization on Purchased Callable Debt Securities

In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”). This guidance amends the amortization period forAmounts above reflect certain purchased callable debt securities held at a premium. The guidance requires the premium to be amortizedpro forma adjustments that were directly attributable to the earliest call date. The guidance does not require an accounting change for securities held at a discount;GA Acquisition. These adjustments include the discount continuesfollowing:

•adjustment to be amortized to maturity. ASU 2017-08 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permittedreflect the elimination of historical amortization of Global Atlantic’s intangibles and the guidance when adopted should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earningsadditional amortization of intangibles measured at fair value as of the beginningGA Acquisition Date;
•adjustment to reflect the prospective reclassification from accumulated other comprehensive earnings of the period of adoption. KKR is currently evaluating the impact of this guidanceunrealized gains on available-for-sale securities to a premium which will be amortized into income based on the financial statements.expected life of the investment securities;

•adjustments to reflect the KKR pro-rata economic ownership as well as financing consummated by KKR to complete the acquisition; and

•adjustments to reflect the adoption of ASC 326 "Financial Instruments - Credit Losses" in 2020 by Global Atlantic.

3.

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4. REVENUES - ASSET MANAGEMENT

For the three months ended March 31, 2022 and 2021, respectively, Asset Management revenues consisted of the following:    

 Three Months Ended March 31,
 20222021
Management Fees$398,046 $276,181 
Fee Credits(187,745)(35,398)
Transaction Fees466,966 165,893 
Monitoring Fees39,400 35,388 
Incentive Fees7,057 3,438 
Expense Reimbursements41,303 27,729 
Consulting Fees15,484 20,080 
Total Fees and Other780,511 493,311 
Carried Interest(783,688)2,140,426 
General Partner Capital Interest(162,055)544,221 
Total Capital Allocation-Based Income (Loss)(945,743)2,684,647 
Total Revenues - Asset Management$(165,232)$3,177,958 






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5. NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES
- ASSET MANAGEMENT
Net Gains (Losses) from Investment Activities in the condensed consolidated statements of operations consist primarily of the realized and unrealized gains and losses on investments (including foreign exchange gains and losses attributable to foreign denominated investments and related activities) and other financial instruments, including those for which the fair value option has been elected. Unrealized gains or losses result from changes in the fair value of these investments and other financial instruments during a period. Upon disposition of an investment or financial instrument, previously recognized unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period.
The following tables summarizetable summarizes total Net Gains (Losses) from Investment Activities for the three and nine months ended September 30, 2017March 31, 2022 and 2016,2021, respectively:
Three Months Ended March 31, 2022
Net Realized Gains (Losses)Net Unrealized Gains (Losses)Total
Private Equity (1)
$198,380 $(265,326)$(66,946)
Credit (1)
(11,455)(188,974)(200,429)
Investments of Consolidated CFEs (1)
2,949 (269,548)(266,599)
Real Assets (1)
(2,761)1,297,270 1,294,509 
Equity Method - Other (1)
14,284 (72,642)(58,358)
Other Investments (1)
1,743 (15,015)(13,272)
Foreign Exchange Forward Contracts and Options (2)
90,890 (147,007)(56,117)
Securities Sold Short (2)
36,082 10,181 46,263 
Other Derivatives (2)
(12,005)20,137 8,132 
Debt Obligations and Other (3)
(38,478)265,556 227,078 
Net Gains (Losses) From Investment Activities$279,629 $634,632 $914,261 
Three Months Ended March 31, 2021
Net Realized Gains (Losses)Net Unrealized Gains (Losses)Total
Private Equity (1)
$756,347 $794,318 $1,550,665 
Credit (1)
33,916 (4,509)29,407 
Investments of Consolidated CFEs (1)
(2,628)128,143 125,515 
Real Assets (1)
39,749 234,398 274,147 
Equity Method - Other (1)
5,187 396,514 401,701 
Other Investments (1)
(226,899)433,080 206,181 
Foreign Exchange Forward Contracts and Options (2)
(5,643)15,192 9,549 
Securities Sold Short (2)
50,623 50,996 101,619 
Other Derivatives (2)
(30,521)29,334 (1,187)
Debt Obligations and Other (3)
(35,750)34,353 (1,397)
Net Gains (Losses) From Investment Activities$584,381 $2,111,819 $2,696,200 
(1)See Note 8 "Investments."
(2)See Note 9 "Derivatives" and Note 15 "Other Assets and Accrued Expenses and Other Liabilities."
(3)See Note 17 "Debt Obligations."
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 Three Months Ended
September 30, 2017		 Three Months Ended
September 30, 2016
 
Net Realized
Gains (Losses)
 
Net Unrealized
Gains (Losses)
 Total Net Realized
Gains (Losses)		 Net Unrealized
Gains (Losses)		 Total
Private Equity (1)
$74,483
 $77,299
 $151,782
 $172,390
 $37,465
 $209,855
Credit and Other (1)
(46,946) 35,882
 (11,064) (262,826) 256,137
 (6,689)
Investments of Consolidated CFEs (1)
(83,797) 43,905
 (39,892) (18,697) 40,049
 21,352
Real Assets (1)
24,479
 56,217
 80,696
 28,803
 70,700
 99,503
Foreign Exchange Forward Contracts
  and Options (2)
(26,043) (69,046) (95,089) 41,254
 (63,997) (22,743)
Securities Sold Short (2)
(7,785) 14,369
 6,584
 232,448
 29,545
 261,993
Other Derivatives (2)
(148) (5,049) (5,197) (17,224) 14,472
 (2,752)
Debt Obligations and Other (3)
18,343
 2,616
 20,959
 112,469
 62,156
 174,625
Net Gains (Losses) From Investment
Activities		$(47,414) $156,193
 $108,779
 $288,617
 $446,527
 $735,144
            
 Nine Months Ended
September 30, 2017		 Nine Months Ended
September 30, 2016
 Net Realized
Gains (Losses)		 Net Unrealized
Gains (Losses)		 Total Net Realized
Gains (Losses)		 Net Unrealized
Gains (Losses)		 Total
Private Equity (1)
$202,549
 $372,335
 $574,884
 $370,266
 $(412,303) $(42,037)
Credit and Other (1)
(633,145) 740,499
 107,354
 (284,992) (104,028) (389,020)
Investments of Consolidated CFEs (1)
(88,677) 71,952
 (16,725) (239,502) 547,099
 307,597
Real Assets (1)
(34,208) 233,608
 199,400
 41,158
 66,927
 108,085
Foreign Exchange Forward Contracts
  and Options (2)
(7,975) (311,427) (319,402) 41,829
 (75,398) (33,569)
Securities Sold Short (2)
497,926
 66,037
 563,963
 231,474
 (10,343) 221,131
Other Derivatives (2)
(6,027) (10,602) (16,629) (35,613) 40,081
 4,468
Debt Obligations and Other (3)
66,895
 (74,085) (7,190) 229,485
 (397,051) (167,566)
Net Gains (Losses) From Investment
Activities		$(2,662) $1,088,317
 $1,085,655
 $354,105
 $(345,016) $9,089
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6. NET INVESTMENT INCOME - INSURANCE

Net investment income for Global Atlantic is comprised primarily of interest income, including amortization of premiums and accretion of discounts, based on yields that change due to expectations in projected cash flows, dividend income from common and preferred stock, earnings from investments accounted for under equity method accounting, and lease income on other investments.

The components of net investment income were as follows:

Three Months Ended March 31,
20222021
Fixed maturity securities – interest and other income$691,293 $351,540 
Mortgage and other loan receivables324,141 122,466 
Investments in transportation and other leased assets67,679 36,743 
Investments in renewable energy25,218 796 
Short-term and other investment income20,697 5,113 
Income assumed from funds withheld receivable at interest19,605 13,473 
Policy loans7,911 1,847 
Investments in real estate3,903 1,084 
Equity securities – dividends and other income— (484)
Income ceded to funds withheld payable at interest(179,702)(29,839)
Gross investment income980,745 502,739 
Less investment expenses:
Investment management and administration113,131 33,946 
Transportation and renewable energy asset depreciation and maintenance53,953 23,509 
Interest expense on derivative collateral and repurchase agreements1,056 503 
Net investment income$812,605 $444,781 


7. NET INVESTMENT-RELATED GAINS (LOSSES) - INSURANCE
Net investment-related (losses) gains from insurance operations primarily consists of (i) realized gains and (losses) from the disposal of investments, (ii) unrealized gains and (losses) from investments held for trading, equity securities, real estate investments accounted for under investment company accounting, and investments with fair value remeasurements recognized in earnings as a result of the election of a fair-value option, (iii) unrealized gains and (losses) on funds withheld at interest, (iv) unrealized gains and (losses) from derivatives not designated in an hedging relationship, and (v) allowances for credit losses, and other impairments of investments.

Net investment-related gains (losses) were as follows:

Three Months Ended March 31,
20222021
Realized gains (losses) on equity investments$— $2,243 
Realized gains (losses) on available-for-sale fixed maturity debt securities(243,350)(45,640)
Credit loss allowances on available-for-sale securities(10,602)(21,351)
Credit loss allowances on mortgage and other loan receivables(26,085)(183,641)
Allowances on unfunded commitments6,790 (14,609)
Unrealized gains (losses) on fixed maturity securities classified as trading(1,038,446)(317,052)
Unrealized gains (losses) on investments recognized under the fair-value option(2,493)(12,166)
Unrealized gains (losses) on real estate investments recognized at fair value under investment company accounting77,692 — 
Net gains (losses) on derivative instruments859,734 148,532 
Realized gains (losses) on funds withheld at interest, payable portfolio(26,387)(7,378)
Realized gains (losses) on funds withheld at interest, receivable portfolio25,600 354 
Other realized gains (losses)8,867 (4,994)
Net investment-related gains (losses)$(368,680)$(455,702)
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(1)See Note 4 "Investments."
(2)See Note 8 "Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities."
(3)See Note 10 "Debt Obligations."



Allowance for credit losses
4.
Available-for-sale fixed maturity securities

The table below presents a roll-forward of the allowance for credit losses recognized for fixed maturity securities held by Global Atlantic:

Three Months Ended March 31, 2022
CorporateStructuredTotal
Balance, as of beginning of period$3,238 $84,895 $88,133 
Initial impairments for credit losses recognized on securities not previously impaired122 15,758 15,880 
Initial credit loss allowance recognized on purchased credit deteriorated ("PCD") securities— 140 140 
Accretion of initial credit loss allowance on PCD securities— 477 477 
Reductions due to sales (or maturities, pay downs or prepayments) during the period of securities previously identified as credit impaired— (2,444)(2,444)
Net additions / reductions for securities previously impaired1,640 (6,918)(5,278)
Balance, as of end of period$5,000 $91,908 $96,908 

Three Months Ended March 31, 2021
CorporateStructuredTotal
Balance, as of beginning of period(1)
$— $120,895 $120,895 
Initial impairments for credit losses recognized on securities not previously impaired— 27,423 27,423 
Initial credit loss allowance recognized on PCD securities— 222 222 
Accretion of initial credit loss allowance on PCD securities— 321 321 
Reductions due to sales (or maturities, pay downs or prepayments) during the period of securities previously identified as credit impaired— (2,537)(2,537)
Net additions / reductions for securities previously impaired— (6,072)(6,072)
Balance, as of end of period$— $140,252 $140,252 

(1)Includes securities designated as purchased credit impaired as of the time of the acquisition of Global Atlantic.

Mortgage and other loan receivables

Changes in the allowance for credit losses on mortgage and other loan receivables held by Global Atlantic are summarized below:

Three Months Ended March 31, 2022
Commercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotal
Balance, as of beginning of period$65,970 $72,082 $236,025 $374,077 
Net provision (release)15,566 15,501 (4,982)26,085 
Balance, as of end of period$81,536 $87,583 $231,043 $400,162 

Three Months Ended March 31, 2021
Commercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotal
Balance, as of beginning of period (1)
$58,203 $62,056 $— $120,259 
Net provision21,853 16,683 145,105 183,641 
Balance, as of end of period$80,056 $78,739 $145,105 $303,900 

(1) Includes loans designated as purchased credit deteriorated as of the time of the acquisition of Global Atlantic.
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Proceeds and gross gains and losses from voluntary sales

The proceeds from voluntary sales and the gross gains and losses on those sales of available-for-sale ("AFS") fixed maturity securities were as follows:

Three Months Ended March 31,
20222021
AFS fixed maturity securities:
Proceeds from voluntary sales$6,128,285 $1,903,120 
Gross gains8,942 4,776 
Gross losses(245,871)(50,972)
8. INVESTMENTS
Investments consist of the following:

March 31, 2022December 31, 2021
 
September 30, 2017 December 31, 2016
Asset ManagementAsset Management
Private Equity$3,896,535
 $2,915,667
Private Equity$26,180,914 $25,685,750 
Credit6,427,635
 4,847,936
Credit6,821,730 7,949,573 
Investments of Consolidated CFEs15,500,898
 13,950,897
Investments of Consolidated CFEs22,014,866 22,076,809 
Real Assets2,278,699
 1,807,128
Real Assets14,788,831 12,500,749 
Equity Method3,524,781
 2,728,995
Carried Interest2,697,294
 2,384,177
Other2,925,995
 2,774,965
Equity Method - OtherEquity Method - Other4,667,571 4,877,592 
Equity Method - Capital Allocation-Based IncomeEquity Method - Capital Allocation-Based Income10,254,226 11,539,945 
Other InvestmentsOther Investments4,042,342 4,145,096 
Investments - Asset ManagementInvestments - Asset Management$88,770,480 $88,775,514 
InsuranceInsurance
Fixed maturity securities, available-for-sale, at fair value(1)
Fixed maturity securities, available-for-sale, at fair value(1)
$64,243,697 $68,870,886 
Mortgage and other loan receivablesMortgage and other loan receivables31,576,685 28,876,759 
Fixed maturity securities, trading, at fair value(2)
Fixed maturity securities, trading, at fair value(2)
13,061,360 13,753,573 
Other investmentsOther investments10,150,075 8,208,566 
Funds withheld receivable at interestFunds withheld receivable at interest2,966,803 2,999,448 
Policy loansPolicy loans762,460 765,310 
Equity securities at fair valueEquity securities at fair value38,791 289,133 
Investments - InsuranceInvestments - Insurance$122,799,871 $123,763,675 
Total Investments$37,251,837
 $31,409,765
Total Investments$211,570,351 $212,539,189 
(1) Amortized cost of $69.1 billion and $69.5 billion, net of credit loss allowances of $96.9 million and $88.1 million.
(2) Amortized cost of $14.2 billion and $13.9 billion.

As of September 30, 2017March 31, 2022 and December 31, 2016,2021, there were no investments which represented greater than 5% of total investments. In addition,


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Fixed maturity securities

The cost or amortized cost and fair value for AFS fixed maturity securities were as follows:

Cost or amortized cost
Allowance for Credit Losses (2)(3)
Gross unrealizedFair value
As of March 31, 2022gainslosses
AFS fixed maturity securities portfolio by type:
U.S. government and agencies$528,130 $— $475 $(37,431)$491,174 
U.S. state, municipal and political subdivisions5,330,590 — 2,677 (546,271)4,786,996 
Corporate40,541,267 (5,000)43,940 (3,634,576)36,945,631 
Residential mortgage-backed securities ("RMBS")7,377,229 (50,060)71,724 (235,551)7,163,342 
Commercial mortgage-backed securities ("CMBS")6,622,204 (6,442)3,679 (289,380)6,330,061 
Collateralized bond obligations ("CBOs")3,089,089 (20,800)2,807 (87,089)2,984,007 
Collateralized loan obligations ("CLOs")2,685,279 (3,665)1,009 (39,669)2,642,954 
All other structured securities(1)
2,968,505 (10,941)19,967 (77,999)2,899,532 
Total AFS fixed maturity securities$69,142,293 $(96,908)$146,278 $(4,947,966)$64,243,697 

(1)    Includes primarily asset-backed securities ("ABS").
(2)    Represents the cumulative amount of credit impairments that have been recognized in the consolidated statement of operations (as net investment (losses) gains) or that were recognized as a gross-up of the purchase price of PCD securities. Amount excludes unrealized losses related to non-credit impairment.
(3)    Includes credit loss allowances on purchase-credit deteriorated fixed-maturity securities of $(38.5) million.
Cost or amortized cost
Allowance for Credit Losses (2)(3)
Gross unrealizedFair value
As of December 31, 2021gainslosses
AFS fixed maturity securities portfolio by type:
U.S. government and agencies$785,144 $— $4,171 $(4,768)$784,547 
U.S. state, municipal and political subdivisions5,122,651 — 42,286 (55,240)5,109,697 
Corporate41,433,757 (3,238)190,516 (688,648)40,932,387 
RMBS7,703,030 (50,975)126,662 (113,359)7,665,358 
CMBS5,952,656 (282)16,332 (56,523)5,912,183 
CBOs3,111,620 (22,160)6,862 (27,466)3,068,856 
CLOs2,985,098 (639)6,554 (5,776)2,985,237 
All other structured securities(1)
2,425,540 (10,839)19,990 (22,070)2,412,621 
Total AFS fixed maturity securities$69,519,496 $(88,133)$413,373 $(973,850)$68,870,886 

(1)    Includes primarily asset-backed securities ("ABS").
(2)    Represents the cumulative amount of credit impairments that have been recognized in the consolidated statement of operations (as net investment (losses) gains) or that were recognized as a gross-up of the purchase price of PCD securities. Amount excludes unrealized losses related to non-credit impairment.
(3)    Includes credit loss allowances on purchase-credit deteriorated fixed-maturity securities of $(46.4) million.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or Global Atlantic may have the right to put or sell the obligations back to the issuers.

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The maturity distribution for AFS fixed maturity securities is as follows:

As of March 31, 2022Cost or
amortized cost (net of allowance)		Fair value
Due in one year or less$850,975 $844,911 
Due after one year through five years8,531,656 8,218,579 
Due after five years through ten years9,999,591 9,505,003 
Due after ten years27,012,765 23,655,308 
Subtotal46,394,987 42,223,801 
RMBS7,327,169 7,163,342 
CMBS6,615,762 6,330,061 
CBOs3,068,289 2,984,007 
CLOs2,681,614 2,642,954 
All other structured securities2,957,564 2,899,532 
Total AFS fixed maturity securities$69,045,385 $64,243,697 

As of December 31, 2021Cost or
amortized cost (net of allowance)		Fair value
Due in one year or less$871,340 $869,287 
Due after one year through five years9,256,449 9,171,707 
Due after five years through ten years11,460,032 11,350,091 
Due after ten years25,750,493 25,435,546 
Subtotal47,338,314 46,826,631 
RMBS7,652,055 7,665,358 
CMBS5,952,374 5,912,183 
CBOs3,089,460 3,068,856 
CLOs2,984,459 2,985,237 
All other structured securities2,414,701 2,412,621 
Total AFS fixed maturity securities$69,431,363 $68,870,886 

Purchased credit deteriorated securities

Certain securities purchased by Global Atlantic were assessed at acquisition as having experienced a more-than-insignificant deterioration in credit quality since their origination. These securities are identified as PCD, and a reconciliation of the difference between the purchase price and the par value of these PCD securities is below:

Three Months Ended March 31,
20222021
Purchase price of PCD securities acquired during the current period$5,185 $1,591,176 
Allowance for credit losses at acquisition140 121,117 
Discount (premium) attributable to other factors1,207 277,480 
Par value$6,532 $1,989,773 

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Securities in a continuous unrealized loss position

The following tables provide information about AFS fixed maturity securities that have been continuously in an unrealized loss position:

Less than 12 months12 months or moreTotal
As of March 31, 2022Fair
value		Unrealized lossesFair
value		Unrealized lossesFair
value		Unrealized losses
AFS fixed maturity securities portfolio by type:
U.S. government and agencies$296,069 $(29,763)$92,301 $(7,668)$388,370 $(37,431)
U.S. state, municipal and political subdivisions4,312,737 (512,738)252,147 (33,533)4,564,884 (546,271)
Corporate27,551,887 (3,022,312)4,842,176 (612,264)32,394,063 (3,634,576)
RMBS3,997,811 (160,389)845,265 (75,162)4,843,076 (235,551)
CBOs2,209,873 (65,789)507,754 (21,300)2,717,627 (87,089)
CMBS5,668,051 (273,082)202,155 (16,298)5,870,206 (289,380)
CLOs2,259,867 (39,213)26,875 (456)2,286,742 (39,669)
All other structured securities1,801,889 (68,226)187,510 (9,773)1,989,399 (77,999)
Total AFS fixed maturity securities in a continuous loss position$48,098,184 $(4,171,512)$6,956,183 $(776,454)$55,054,367 $(4,947,966)

Less than 12 months12 months or moreTotal
As of December 31, 2021Fair
value		Unrealized lossesFair
value		Unrealized lossesFair
value		Unrealized losses
AFS fixed maturity securities portfolio by type:
U.S. government and agencies$311,096 $(4,768)$— $— $311,096 $(4,768)
U.S. state, municipal and political subdivisions2,802,309 (55,240)— — 2,802,309 (55,240)
Corporate30,385,514 (688,648)— — 30,385,514 (688,648)
RMBS3,196,876 (113,359)— — 3,196,876 (113,359)
CBOs2,152,790 (27,466)— — 2,152,790 (27,466)
CMBS3,405,774 (56,523)— — 3,405,774 (56,523)
CLOs1,172,330 (5,776)— — 1,172,330 (5,776)
All other structured securities1,348,356 (22,070)— — 1,348,356 (22,070)
Total AFS fixed maturity securities in a continuous loss position$44,775,045 $(973,850)$— $— $44,775,045 $(973,850)

Unrealized gains and losses can be created by changing interest rates or several other factors, including changing credit spreads. Global Atlantic had gross unrealized losses on below investment grade AFS fixed maturity securities of $219.4 million and $77.0 million as of September 30, 2017March 31, 2022 and December 31, 2016,2021, respectively. The single largest unrealized loss on AFS fixed maturity securities was $27.2 million and $7.3 million as of March 31, 2022 and December 31, 2021, respectively. Global Atlantic had 5,729 and 4,370 securities in an unrealized loss position as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, AFS fixed maturity securities in an unrealized loss position for 12 months or more consisted of 814 debt securities. These debt securities primarily relate to Corporate, RMBS, and U.S. state, municipal and political subdivisions fixed maturity securities, which have depressed values due primarily to an increase in interest rates since the purchase of these securities. Unrealized losses were not recognized in net income on these debt securities since Global Atlantic neither intends to sell the securities nor does it believe that it is more likely than not that it will be required to sell these securities before recovery of their cost or amortized cost basis. For securities with significant declines in value, individual security level analysis was performed utilizing underlying collateral default expectations, market data and industry analyst reports.

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Mortgage and other loan receivables

Mortgage and other loan receivables consist of the following:

March 31, 2022December 31, 2021
Commercial mortgage loans(1)
$15,489,750 $13,824,772 
Residential mortgage loans(1)
9,704,021 8,724,904 
Consumer loans6,137,735 5,617,925 
Other loan receivables(2)(3)
645,341 1,083,235 
Total mortgage and other loan receivables31,976,847 29,250,836 
Allowance for credit losses(4)
(400,162)(374,077)
Total mortgage and other loan receivables, net of allowance for loan losses$31,576,685 $28,876,759 

(1)    Includes $980.1 million and $805.4 million of loans carried at fair value using the fair value option as of March 31, 2022 and December 31, 2021, respectively. The fair value option was elected for these loans for asset-liability matching purposes. These loans had unpaid principal balances of $989.8 million and $794.1 million as of March 31, 2022 and December 31, 2021, respectively.
(2)    As of March 31, 2022 and December 31, 2021, other loan receivables consisted primarily of loans collateralized by aircraft of $410.8 million and $850.1 million, respectively.
(3)    Includes $28.2 million and $27.3 million of related party loans carried at fair value using the fair value option as of March 31, 2022 and December 31, 2021, respectively. These loans had unpaid principal balances of $28.2 million and $27.3 million as of March 31, 2022 and December 31, 2021, respectively.
(4)    Includes credit loss allowances on purchase-credit deteriorated mortgage and other loan receivables of $(85.1) million and $(77.9) million as of March 31, 2022 and December 31, 2021, respectively.

The maturity distribution for residential and commercial mortgage loans was as follows as of March 31, 2022:

YearsResidentialCommercialTotal mortgage loans
Remainder of 2022$299,047 $1,000,106 $1,299,153 
2023127,475 1,193,881 1,321,356 
2024832,243 1,710,830 2,543,073 
202517,770 1,262,962 1,280,732 
2026699,076 3,086,745 3,785,821 
2027118,413 2,571,094 2,689,507 
2028 and thereafter7,609,997 4,664,132 12,274,129 
Total$9,704,021 $15,489,750 $25,193,771 

Actual maturities could differ from contractual maturities, because borrowers may have the right to prepay (with or without prepayment penalties) and loans may be refinanced.

Global Atlantic diversifies its mortgage loan portfolio by both geographic region and property type to reduce concentration risk. The following tables present the mortgage loans by geographic region and property type:

Mortgage loans - carrying value by geographic regionMarch 31, 2022December 31, 2021
Pacific$7,313,819 $6,675,064 
West South Central2,957,751 2,675,890 
South Atlantic6,057,624 4,996,043 
Middle Atlantic3,377,082 3,142,973 
East North Central1,143,793 590,911 
Mountain2,257,201 1,957,099 
New England1,114,162 1,099,157 
East South Central577,278 1,035,764 
West North Central335,757 350,546 
Other regions59,304 26,229 
Total by geographic region$25,193,771 $22,549,676 


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Mortgage loans - carrying value by property typeMarch 31, 2022December 31, 2021
Residential$9,704,021 $8,724,904 
Office building4,570,721 4,185,146 
Apartment7,240,838 6,194,819 
Industrial2,002,947 1,981,713 
Retail723,329 780,071 
Other property types753,879 483,560 
Warehouse198,036 199,463 
Total by property type$25,193,771 $22,549,676 

As of March 31, 2022 and December 31, 2021, Global Atlantic had $213.1 million and $202.7 million of mortgage loans that were 90 days or more past due or in the process of foreclosure, respectively. Global Atlantic ceases accrual of interest on loans that are more than 90 days past due and recognizes income as cash is received. As of March 31, 2022 and December 31, 2021, there were $213.1 million and $202.7 million of mortgage loans that were non-income producing, respectively.

As of March 31, 2022 and December 31, 2021, less than 1% and 1% of residential mortgage loans have been granted forbearance due to COVID-19, respectively. This forbearance, which generally involves a 3-month period in which payments are not required (though must subsequently be made up), is not considered to result in troubled debt restructurings for the three months ended March 31, 2022 and 2021. Interest continues to accrue on loans in temporary forbearance.

As of March 31, 2022 and December 31, 2021, Global Atlantic had $6.1 million and $5.1 million of consumer loans that were delinquent by more than 120 days or in default, respectively.

Purchased credit deteriorated loans

Certain residential mortgage loans purchased by Global Atlantic were assessed at acquisition as having experienced a more-than-insignificant deterioration in credit quality since their origination. These loans are identified as PCD, and a reconciliation of the difference between the purchase price and the par value of these PCD loans is below. There were no PCD loans purchased during the three months ended March 31, 2022:

Three Months Ended March 31,
March 31, 2021
Purchase price of PCD loans acquired during the current period$3,694,867 
Allowance for credit losses at acquisition120,259 
Discount (premium) attributable to other factors(146,694)
Par value$3,668,432
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Credit quality indicators

Mortgage and loan receivable performance status

The following table represents the portfolio of mortgage and loan receivables by origination year and performance status:

As of March 31, 2022
Performance status20222021202020192018PriorTotal
Commercial mortgage loans
Current$1,868,657 $6,951,312 $948,847 $1,751,631 $1,305,089 $2,664,214 $15,489,750 
30 to 59 days past due— — — — — — — 
60 to 89 days past due— — — — — — — 
Over 90 days past due— — — — — — — 
Total commercial mortgage loans$1,868,657 $6,951,312 $948,847 $1,751,631 $1,305,089 $2,664,214 $15,489,750 
Residential mortgage loans
Current$219,133 $5,336,585 $1,686,516 $357,644 $22,359 $1,621,706 $9,243,943 
30 to 59 days past due— 74,146 12,931 13,197 1,025 90,602 191,901 
60 to 89 days past due— 20,935 2,507 1,294 544 29,774 55,054 
Over 90 days past due— 11,221 16,696 15,554 2,737 166,915 213,123 
Total residential mortgage loans$219,133 $5,442,887 $1,718,650 $387,689 $26,665 $1,908,997 $9,704,021 
Total mortgage loans$2,087,790 $12,394,199 $2,667,497 $2,139,320 $1,331,754 $4,573,211 $25,193,771 

As of December 31, 2021
Performance status20212020201920182017PriorTotal
Commercial mortgage loans
Current$6,831,655 $976,369 $1,883,908 $1,373,865 $817,954 $1,941,021 $13,824,772 
30 to 59 days past due— — — — — — — 
60 to 89 days past due— — — — — — — 
Over 90 days past due— — — — — — — 
Total commercial mortgage loans$6,831,655 $976,369 $1,883,908 $1,373,865 $817,954 $1,941,021 $13,824,772 
Residential mortgage loans
Current$4,505,537 $1,576,342 $393,153 $123,995 $65,070 $1,711,156 $8,375,253 
30 to 59 days past due24,955 6,028 5,818 1,155 739 75,104 113,799 
60 to 89 days past due4,247 1,243 607 — — 27,028 33,125 
Over 90 days past due5,305 14,272 21,985 2,686 — 158,479 202,727 
Total residential mortgage loans$4,540,044 $1,597,885 $421,563 $127,836 $65,809 $1,971,767 $8,724,904 
Total mortgage loans$11,371,699 $2,574,254 $2,305,471 $1,501,701 $883,763 $3,912,788 $22,549,676 

The following table represents the portfolio of consumer loan receivables by performance status:

Performance statusMarch 31, 2022December 31, 2021
Consumer loans
Current$6,043,214 $5,556,923 
30 to 59 days past due54,012 34,048 
60 to 89 days past due23,937 16,817 
Over 90 days past due16,572 10,137 
Total consumer loans$6,137,735 $5,617,925 
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Loan-to-value ratio on mortgage loans

The loan-to-value ratio is expressed as a percentage of the current amount of the loan relative to the value of the underlying collateral. The following table summarizes the loan-to-value ratios for commercial mortgage loans as of March 31, 2022 and December 31, 2021:

Loan-to-value as of March 31, 2022, by year of originationCarrying value loan-to-value 70% and lessCarrying value loan-to-value 71% - 90%Carrying value loan-to-value over 90%Total carrying value
2022$1,716,958 $151,699 $— $1,868,657 
20214,965,273 1,986,039 — 6,951,312 
2020788,984 124,861 35,002 948,847 
20191,615,931 135,700 — 1,751,631 
20181,256,207 48,882 — 1,305,089 
2017767,459 44,829 — 812,288 
Prior1,848,431 3,495 — 1,851,926 
Total commercial mortgage loans$12,959,243 $2,495,505 $35,002 $15,489,750 

Loan-to-value as of December 31, 2021, by year of originationCarrying value loan-to-value 70% and lessCarrying value loan-to-value 71% - 90%Carrying value loan-to-value over 90%Total carrying value
2021$4,910,170 $1,921,485 $— $6,831,655 
2020819,406 121,997 34,966 976,369 
20191,747,656 136,252 — 1,883,908 
20181,324,807 49,058 — 1,373,865 
2017772,989 44,965 — 817,954 
2016425,926 2,440 — 428,366 
Prior1,497,503 15,152 — 1,512,655 
Total commercial mortgage loans$11,498,457 $2,291,349 $34,966 $13,824,772 

Changing economic conditions affect the valuation of commercial mortgage loans. Changing vacancies and rents are incorporated into the discounted cash flow analysis that Global Atlantic performs for monitored loans and may contribute to the establishment of (or increase or decrease in) a commercial mortgage loan valuation allowance for credit losses. In addition, Global Atlantic continuously monitors its commercial mortgage loan portfolio to identify risk. Areas of emphasis are properties that have exposure to specific geographic events, or have deteriorating credit.

The weighted average loan-to-value ratio for the residential mortgage loans was 66% and 68% as of March 31, 2022 and December 31, 2021, respectively.

Other investments totaling $18.6

Other investments consist of the following:

March 31, 2022December 31, 2021
Investments in real estate(1)
$3,564,803 $1,564,853 
Investments in renewable energy(2)
3,510,579 3,573,811 
Investments in transportation and other leased assets(3)
2,638,884 2,663,759 
Other investment partnerships250,796 234,301 
FHLB common stock and other investments185,013 171,842 
Total other investments$10,150,075 $8,208,566 

(1)    Investments in real estate are held in consolidated investment companies that use fair value accounting.
(2)    Net of accumulated depreciation attributed to consolidated renewable energy assets of $177.9 million and $156.8 million as of March 31, 2022 and December 31, 2021, respectively.
(3)    Net of accumulated depreciation of $137.5 million and $105.1 million as of March 31, 2022 and December 31, 2021, respectively.    


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The total amount of other investments accounted for using the equity method of accounting was $1.2 billion as of both March 31, 2022 and December 31, 2021. Global Atlantic's maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $20.5 million and $22.4 million as of March 31, 2022 and December 31, 2021, respectively.

In addition, Global Atlantic has investments that would otherwise require the equity method of accounting for which the fair value option has been elected. The carrying amount of these investments was $174.9 million and $147.8 million as of March 31, 2022 and December 31, 2021, respectively.

Funding agreements

Certain Global Atlantic subsidiaries are members of regional banks in the Federal Home Loan Bank ("FHLB") system. These subsidiaries have also entered into funding agreements with their respective FHLB. The funding agreements are issued in exchange for cash. The funding agreements require that Global Atlantic pledge eligible assets, such as commercial mortgage loans, as collateral. With respect to certain classes of eligible assets, the FHLB holds the pledged eligible assets in custody at the respective FHLB. The liabilities for the funding agreements are included in policy liabilities in the consolidated statements of financial condition.

Information related to the FHLB investment and funding agreements as of March 31, 2022 and December 31, 2021 is as follows:

Investment in common stockFunding agreements issued to FHLB member banksCollateral
March 31, 2022December 31, 2021March 31, 2022December 31, 2021March 31, 2022December 31, 2021
FHLB Indianapolis$80,640 $80,640 $1,616,408 $1,619,765 $2,584,557 $2,577,698 
FHLB Des Moines34,600 34,600 620,901 620,006 1,036,313 1,004,530 
FHLB Boston22,520 22,520 325,375 326,639 482,410 553,384 
Total$137,760 $137,760 $2,562,684 $2,566,410 $4,103,280 $4,135,612 

In addition, in January 2021, Global Atlantic launched an inaugural funding agreement backed note ("FABN") program, through which GA Global Funding Trust, a special purpose statutory trust, was established to offer its senior secured medium-term notes. Net proceeds from each sale of the aforementioned notes are used to purchase one or more funding agreements from Forethought Life Insurance Company, an insurance subsidiary of Global Atlantic. As of March 31, 2022and December 31, 2021, Global Atlantic had $4.6 billion and $16.1$3.5 billion of such funding agreements outstanding, with $5.4 billion and $6.5 billion of remaining capacity under the program, respectively. Subsequent to quarter-end, in April 2022, Global Atlantic issued an additional $900 million of funding agreements in connection with the program.

Repurchase agreement transactions

As of March 31, 2022 and December 31, 2021, Global Atlantic participated in third-party repurchase agreements with a notional value of $810.5 million and $300.4 million, respectively. As collateral for these transactions, as of March 31, 2022 and December 31, 2021, Global Atlantic posted fixed maturity securities with a fair value and amortized cost of $829.0 million and $915.0 million, and $313.0 million and $317.0 million, respectively, werewhich are included in Insurance - Investments in the consolidated statements of financial condition.

The fair value of securities pledged for repurchase agreements by class of collateral and remaining contractual maturity as direct collateral against various financing arrangements. See Note 10 “Debt Obligations.” The majorityof March 31, 2022 and December 31, 2021 is presented in the following tables:

As of March 31, 2022Overnight<30 Days30 - 90 Days> 90 DaysTotal
Corporate Securities$— $519,752 $— $309,292 $829,044 
Total borrowing$— $519,752 $— $309,292 $829,044 

As of December 31, 2021Overnight<30 Days30 - 90 Days> 90 DaysTotal
Corporate Securities$— $— $— $312,965 $312,965 
Total borrowing$— $— $— $312,965 $312,965 
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Other

As of March 31, 2022 and December 31, 2021, the cost or amortized cost and fair value of the securities underlying private equity investments represent equity securities.assets on deposit with various state and governmental authorities was $184.0 million and $165.6 million, and $182.6 million and $180.8 million, respectively.


Carried Interest

Carried
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9. DERIVATIVES

Asset Management

KKR and certain of its consolidated funds have entered into derivative transactions as part of their overall risk management for the asset management business and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include forward, swap and option contracts related to foreign currencies and interest allocatedrates to manage foreign exchange risk and interest rate risk arising from certain assets and liabilities. All derivatives are recognized in Other Assets or Accrued Expenses and Other Liabilities and are presented on a gross basis in the consolidated statements of financial condition and measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. KKR's derivative financial instruments contain credit risk to the general partner in respectextent that its counterparties may be unable to meet the terms of performance of investment fundsthe agreements. KKR attempts to reduce this risk by limiting its counterparties to major financial institutions with strong credit ratings.

Insurance

Global Atlantic holds derivative instruments that are primarily used in its hedge program. Global Atlantic has established a hedge program that seeks to mitigate economic impacts primarily from interest rate and equity price movements, while taking into consideration accounting and capital impacts.

Global Atlantic hedges interest rate and equity market risks associated with its insurance liabilities including fixed-indexed annuities, indexed universal life policies, variable annuity policies and variable universal life policies, among others. For fixed-indexed annuities and indexed universal life policies, Global Atlantic generally seeks to use static hedges to offset the exposure primarily created by changes in its embedded derivative balances. Global Atlantic generally purchases options which replicate the crediting rate strategies, often in the form of call spreads. Call spreads are the purchase of a call option matched by the sale of a different call option. For variable annuities and variable universal life policies, Global Atlantic generally seeks to dynamically hedge its exposure to changes in the value of the guarantee it provides to policyholders. Doing so requires the active trading of several financial instruments to respond to changes in market conditions. In addition, Global Atlantic enters into inflation swaps to manage inflation risk associated with inflation-indexed preneed policies.

In the context of specific reinsurance transactions in the institutional channel or acquisitions, Global Atlantic may also enter into hedges which are designed to limit short-term market risks to the economic value of the target assets. From time to time, Global Atlantic also enters into hedges designed to mitigate interest rate and credit risk in investment income, interest expense, and fair value of assets and liabilities. In addition, Global Atlantic enters into currency swaps and forwards to manage any foreign exchange rate risks that may arise from investments denominated in foreign currencies.

Global Atlantic attempts to mitigate the risk of loss due to ineffectiveness under these derivative investments through a regular monitoring process which evaluates the program’s effectiveness. Global Atlantic is exposed to risk of loss in the event of non-performance by the counterparties and, accordingly, all option contracts are purchased from counterparties that have been evaluated for creditworthiness. All of these counterparties are nationally recognized financial institutions with a Moody’s or S&P investment-grade credit rating. Global Atlantic monitors its derivative activities by reviewing portfolio activities and risk levels. Global Atlantic also oversees all derivative transactions to ensure that the types of transactions entered into and the results obtained from those transactions are consistent with both Global Atlantic's risk management strategy and its policies and procedures.

The restricted cash which was held in connection with open derivative transactions with exchange brokers was $363.7 million and $151.1 million as of March 31, 2022 and December 31, 2021, respectively.

Global Atlantic also has embedded derivatives related to reinsurance contracts that are accounted for on a modified coinsurance and funds withheld basis. An embedded derivative exists because the arrangement exposes the reinsurer to third-party credit risk. These embedded derivatives are included in funds withheld receivable at interest in the consolidated balance sheets.

Derivatives designated as accounting hedges

Where Global Atlantic has derivative instruments that are designated and qualify as accounting hedges, these derivative instruments receive hedge accounting.

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Global Atlantic has designated interest rate swaps to hedge the interest rate risk associated with the $500 million senior unsecured notes due 2029, $650 million senior unsecured notes due 2031, FHLB and FABN funding agreement liabilities in fair value hedges. The 2029 Senior Notes and 2031 Senior Notes are reported in debt and FHLB and FABN funding agreement liabilities are reported in policy liabilities in the consolidated statements of financial condition and are hedged through their respective maturities. These hedges qualify for the shortcut method of assessing hedge effectiveness.

The following table represents the gains (losses) recognized on derivative instruments and related hedged items in fair value hedging relationship:

Three Months Ended March 31, 2022DerivativesHedged itemsNet
2029 Senior Notes$(29,121)$29,121 $— 
2031 Senior Notes(41,439)41,439 — 
FHLB funding agreement liabilities(18,791)18,791 — 
FABN liabilities(102,583)102,583 — 

Three Months Ended March 31, 2021DerivativesHedged itemsNet
2029 Senior Notes$(26,379)$26,379 $— 
FHLB funding agreement liabilities(5,325)5,325 — 

The following table represents the carrying values and fair value adjustments for the hedged items:

As of March 31, 2022As of December 31, 2021
Carrying valueFair value of hedge adjustmentsCarrying valueFair value of hedge adjustments
2029 Senior Notes$436,868 $(29,121)$473,890 $(18,808)
2031 Senior Notes608,561 (41,439)644,439 (5,561)
FHLB funding agreement liabilities1,038,085 (18,791)1,070,770 (16,092)
FABN liabilities3,921,609 (102,583)— — 

Global Atlantic has designated bond forwards to hedge the interest rate risk associated with the planned purchase of AFS debt securities in cash flow hedges. Regression analysis is used to assess the effectiveness of these hedges. As of March 31, 2022 and December 31, 2021, there was a cumulative (loss) gain of $(48.1) million and $9.4 million on the bond forwards recorded in accumulated other comprehensive (loss) income, respectively. Amounts deferred in accumulated other comprehensive (loss) income are reclassified to net investment income following the qualifying purchases of AFS securities, as an adjustment to the yield earned over the life of the purchased securities, using the effective interest method. These arrangements are hedging purchases from July 2021 through January 2027 and are expected to affect earnings until 2051. There were $2.9 million of securities purchased for the three months ended March 31, 2022. Global Atlantic estimates that the amount of gains/losses in accumulated other comprehensive (loss) income to be reclassified into earnings in the next 12 months will not consolidatedbe material.

Global Atlantic has designated foreign exchange forward purchase contracts ("FX forwards") to hedge the foreign currency risk associated with foreign currency-denominated bonds in fair value hedges. These foreign currency-denominated bonds are accounted for as AFS fixed maturity securities. Changes in the fair value of the hedged AFS fixed maturity securities due to changes in spot exchange rates are reclassified from AOCI to earnings, which offsets the earnings impact of the spot changes of the FX forwards. The effectiveness of these hedges is assessed using the spot method. Changes in the fair value of the FX forwards related to changes in the spot-forward difference are excluded from the assessment of hedge effectiveness and are deferred in AOCI and recognized in earnings using a systematic and rational method over the life of the FX forwards.

The following table represents the gains (losses) related to the FX forwards hedging instruments:

Three Months Ended March 31,
20222021
Net investment-related gains (losses)$40,742 $2,825 
AOCI18,318 165 
Amortization - excluded component3,544 (839)

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The fair value and notional value of the derivative assets and liabilities were as follows:

As of March 31, 2022Notional ValueDerivative
Assets		Derivative
Liabilities
Asset Management
Foreign Exchange Contracts and Options$5,891,394,106 $367,079 $239,875 
Other Derivatives98,851,905 5,294 28,077 
Total Asset Management372,373 267,952 
Insurance
Equity market contracts$129,988,065 $931,021 $181,694 
Interest rate contracts11,794,558 297,358 509,816 
Foreign currency contracts2,209,118 47,866 20,988 
Credit risk contracts113,133 — 1,360 
Impact of netting(1)
(251,656)(251,656)
Fair value included within derivative assets and derivative liabilities1,024,589 462,202 
Embedded derivative – indexed universal life products— 512,015 
Embedded derivative – annuity products— 1,777,832 
Fair value included within policy liabilities— 2,289,847 
Embedded derivative – funds withheld at interest8,196 (1,219,491)
Total Insurance1,032,785 1,532,558 
Fair value included within total assets and liabilities$1,405,158 $1,800,510 

(1)     Represents netting of derivative exposures covered by qualifying master netting agreements.

As of December 31, 2021
Notional Value		Derivative
Assets		Derivative
Liabilities
Asset Management
Foreign Exchange Contracts and Options$12,822,521 $590,637 $319,511 
Other Derivatives505,725 491 45,003 
Total Asset Management591,128 364,514 
Insurance
Equity market contracts$31,294,053 $1,216,843 $186,754 
Interest rate contracts16,692,035 198,658 101,245 
Foreign currency contracts1,517,434 32,464 7,639 
Credit risk contracts107,754 — 1,540 
Impact of netting(1)
(152,015)(152,015)
Fair value included within derivative assets and derivative liabilities1,295,950 145,163 
Embedded derivative – indexed universal life products— 557,276 
Embedded derivative – annuity products— 1,983,949 
Fair value included within policy liabilities— 2,541,225 
Embedded derivative – funds withheld at interest31,740 (49,491)
Total Insurance1,327,690 2,636,897 
Fair value included within total assets and liabilities$1,918,818 $3,001,411 

(1)     Represents netting of derivative exposures covered by qualifying master netting agreements.


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Balance at December 31, 2016 $2,384,177
Carried Interest Allocated as a result of Changes in Fund Fair Value 1,224,235
Cash Proceeds Received (911,118)
Balance at September 30, 2017 $2,697,294
The amounts of derivative gains and losses recognized are reported in the consolidated statements of operations as follows:
Derivative contracts not designated as hedgesThree Months Ended March 31,
20222021
Asset Management
Net Gains (Losses) from Investment Activities:
Foreign Exchange Contracts and Options$(56,117)$9,549 
Other Derivatives8,132 (1,187)
   Total included in Net Gains (Losses) from Investment Activities$(47,985)$8,362 
Insurance
Net investment-related gains (losses):
Funds withheld receivable embedded derivatives$(33,980)$55,883 
Funds withheld payable embedded derivatives1,180,435 313,230 
Equity index options(223,366)104,021 
Equity future contracts79,796 (69,583)
Interest rate contracts(150,176)(256,793)
Credit risk contracts(1,532)(36)
Total included in net investment-related gains (losses)$851,177 $146,722 

5.
Derivative contracts designated as hedgesThree Months Ended March 31,
20222021
Insurance
Revenues:
Foreign currency forwards$8,557 $1,810 
Total included in net investment-related gains (losses)$8,557 $1,810 
Policy benefits and claims:
Interest rate swap$(129,931)$(8,403)
Total included in policy benefits and claims$(129,931)$(8,403)
Interest expense:
Interest rate swap$(70,561)$(24,776)
Total included in interest expense$(70,561)$(24,776)

The amount of Global Atlantic's net derivative assets and liabilities after consideration of collateral received or pledged were as follows:
As of March 31, 2022Gross amount recognized
Gross amounts offset in the statement of financial position(1)
Net amounts presented in the statement of financial conditionCollateral (received) / pledgedNet amount after collateral
Derivative assets (excluding embedded derivatives)$1,276,245 $(251,656)$1,024,589 $(894,687)$129,902 
Derivative liabilities (excluding embedded derivatives)$713,858 $(251,656)$462,202 $79,070 $383,132 

(1)Represents netting of derivative exposures covered by qualifying master netting agreements.
As of December 31, 2021Gross amount recognized
Gross amounts offset in the statement of financial position(1)
Net amounts presented in the statement of financial conditionCollateral (received) / pledgedNet amount after collateral
Derivative assets (excluding embedded derivatives)$1,447,965 $(152,015)$1,295,950 $(1,086,061)$209,889 
Derivative liabilities (excluding embedded derivatives)$297,178 $(152,015)$145,163 $49,860 $95,303 

(1)Represents netting of derivative exposures covered by qualifying master netting agreements.
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10. FAIR VALUE MEASUREMENTS
The following tables summarize the valuation of KKR's assets and liabilities measured and reported at fair value by the fair value hierarchy. Carried Interest andInvestments classified as Equity Method Investments- Other, for which the fair value option has not been elected, and Equity Method - Capital Allocation-Based Income have been excluded from the tables below.
Assets, at fair value:
 March 31, 2022
 Level ILevel IILevel IIITotal
Asset Management
Private Equity$1,906,139 $275,759 $23,999,016 $26,180,914 
Credit— 1,506,877 5,314,853 6,821,730 
Investments of Consolidated CFEs— 22,014,866 — 22,014,866 
Real Assets— 1,496,708 13,292,123 14,788,831 
Equity Method - Other492,913 29,985 984,904 1,507,802 
Other Investments898,329 9,087 3,134,926 4,042,342 
Total Investments3,297,381 25,333,282 46,725,822 75,356,485 
Foreign Exchange Contracts and Options— 367,079 — 367,079 
Other Derivatives547 4,042 705 (1)5,294 
Total Assets at Fair Value - Asset Management$3,297,928 $25,704,403 $46,726,527 $75,728,858 
Insurance
AFS fixed maturity securities:
U.S. government and agencies$301,899 $189,275 $— $491,174 
U.S. state, municipal and political subdivisions— 4,786,996 — 4,786,996 
Corporate— 28,975,437 7,970,195 36,945,632 
Structured securities— 20,637,356 1,382,539 22,019,895 
Total AFS fixed maturity securities301,899 54,589,064 9,352,734 64,243,697 
Trading fixed maturity securities:
U.S. government and agencies233,754 158,440 — 392,194 
U.S. state, municipal and political subdivisions— 857,021 — 857,021 
Corporate— 7,582,756 705,685 8,288,441 
Structured securities— 2,893,125 630,579 3,523,704 
Total trading fixed maturity securities233,754 11,491,342 1,336,264 13,061,360 
Equity securities5,854 — 32,937 38,791 
Mortgage and other loan receivables(2)
— — 1,007,906 1,007,906 
Other investments(3)
— — 3,620,186 3,620,186 
Funds withheld receivable at interest— — 8,196 8,196 
Reinsurance recoverable— — 1,231,957 1,231,957 
Derivative assets:
Equity market contracts57,568 873,453 — 931,021 
Interest rate contracts38,903 258,455 — 297,358 
Foreign currency contracts— 47,866 — 47,866 
Impact of netting(4)
(38,609)(213,047)— (251,656)
Total derivative assets57,862 966,727 — 1,024,589 
Separate account assets5,069,742 — — 5,069,742 
Total Assets at Fair Value - Insurance$5,669,111 $67,047,133 $16,590,180 $89,306,424 
Total Assets at Fair Value$8,967,039 $92,751,536 $63,316,707 $165,035,282 
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December 31, 2021
September 30, 2017 Level ILevel IILevel IIITotal
Level I Level II Level III Total
Asset ManagementAsset Management
Private Equity$1,194,887
 $93,524
 $2,608,124
 $3,896,535
Private Equity$2,044,380 $318,736 $23,322,634 $25,685,750 
Credit—
 1,694,761
 4,732,874
 6,427,635
Credit— 2,122,912 5,826,661 7,949,573 
Investments of Consolidated CFEs—
 10,090,782
 5,410,116
 15,500,898
Investments of Consolidated CFEs— 22,076,809 — 22,076,809 
Real Assets36,751
 39,948
 2,202,000
 2,278,699
Real Assets— 1,111,219 11,389,530 12,500,749 
Equity Method—
 205,460
 555,538
 760,998
Other1,117,473
 38,511
 1,770,011
 2,925,995
Total2,349,111
 12,162,986
 17,278,663
 31,790,760
Equity Method - OtherEquity Method - Other482,061 105,647 1,013,807 1,601,515 
Other InvestmentsOther Investments759,002 146,081 3,240,013 4,145,096 
Total InvestmentsTotal Investments3,285,443 25,881,404 44,792,645 73,959,492 
       
Foreign Exchange Contracts and Options—
 100,460
 —
 100,460
Foreign Exchange Contracts and Options— 590,637 — 590,637 
Other Derivatives—
 7,020
 55,877
(1)62,897
Other Derivatives— 12 479 (1)491 
Total Assets$2,349,111
 $12,270,466
 $17,334,540
 $31,954,117
Total Assets at Fair Value - Asset ManagementTotal Assets at Fair Value - Asset Management$3,285,443 $26,472,053 $44,793,124 $74,550,620 
InsuranceInsurance
AFS fixed maturity securities:AFS fixed maturity securities:
U.S. government and agenciesU.S. government and agencies$500,325 $284,222 $— $784,547 
U.S. state, municipal and political subdivisionsU.S. state, municipal and political subdivisions— 5,109,697 — 5,109,697 
CorporateCorporate— 33,281,727 7,650,660 40,932,387 
Structured securitiesStructured securities— 21,215,854 828,401 22,044,255 
Total AFS fixed maturity securitiesTotal AFS fixed maturity securities500,325 59,891,500 8,479,061 68,870,886 
Trading fixed maturity securities:Trading fixed maturity securities:
U.S. government and agenciesU.S. government and agencies371,366 252,266 — 623,632 
U.S. state, municipal and political subdivisionsU.S. state, municipal and political subdivisions— 879,463 — 879,463 
CorporateCorporate— 8,486,922 565,025 9,051,947 
Structured securitiesStructured securities— 2,779,757 418,774 3,198,531 
Total trading fixed maturity securitiesTotal trading fixed maturity securities371,366 12,398,408 983,799 13,753,573 
Equity securitiesEquity securities256,196 — 32,937 289,133 
Mortgage and other loan receivables(2)
Mortgage and other loan receivables(2)
— — 832,674 832,674 
Other investments(3)
Other investments(3)
— — 1,603,345 1,603,345 
Funds withheld receivable at interestFunds withheld receivable at interest— — 31,740 31,740 
Reinsurance recoverableReinsurance recoverable— — 1,293,791 1,293,791 
Derivative assets:Derivative assets:
Equity market contractsEquity market contracts66,510 1,150,333 — 1,216,843 
Interest rate contractsInterest rate contracts44,472 154,186 — 198,658 
Foreign currency contractsForeign currency contracts— 32,464 — 32,464 
Impact of netting(4)
Impact of netting(4)
(25,588)(126,427)— (152,015)
Total derivative assetsTotal derivative assets85,394 1,210,556 — 1,295,950 
Separate account assetsSeparate account assets5,586,428 — — 5,586,428 
Total Assets at Fair Value - InsuranceTotal Assets at Fair Value - Insurance$6,799,709 $73,500,464 $13,257,347 $93,557,520 
Total Assets at Fair ValueTotal Assets at Fair Value$10,085,152 $99,972,517 $58,050,471 $168,108,140 

(1)Includes derivative assets that were valued using a third-party valuation firm. The approach used to estimate the fair value of these derivative assets was generally the discounted cash flow method, which includes consideration of the current portfolio, projected portfolio construction, projected portfolio realizations, portfolio volatility (based on the volatility, correlation, and size of each underlying asset class), and the discounting of future cash flows to the reporting date.

(1)Includes derivative assets that were valued using a third party valuation firm. The approach used to estimate the fair value of these derivative assets was generally the discounted cash flow method, which includes consideration of the current portfolio, projected portfolio construction, projected portfolio realizations, portfolio volatility (based on the volatility, correlation, and size of each underlying asset class), and the discounting of future cash flows to the reporting date.

(2)Includes related party balance of $28.2 million and $27.3 million in Level III for mortgage and other loan receivables as of March 31, 2022 and December 31, 2021, respectively.
45
Table of Contents

 December 31, 2016
 Level I Level II Level III Total
Private Equity$1,240,108
 $116,000
 $1,559,559
 $2,915,667
Credit—
 1,557,575
 3,290,361
 4,847,936
Investments of Consolidated CFEs—
 8,544,677
 5,406,220
 13,950,897
Real Assets—
 —
 1,807,128
 1,807,128
Equity Method—
 220,896
 570,522
 791,418
Other994,677
 12,715
 1,767,573
 2,774,965
Total2,234,785
 10,451,863
 14,401,363
 27,088,011
        
Foreign Exchange Contracts and Options—
 240,627
 —
 240,627
Other Derivatives—
 81,593
 —
 81,593
Total Assets$2,234,785
 $10,774,083
 $14,401,363
 $27,410,231
(3)Other investments excluded from the fair value hierarchy include certain real estate and private equity funds for which fair value is measured at net asset value per share as a practical expedient. As of March 31, 2022 and December 31, 2021, the fair value of these investments was $135.9 million and $108.7 million, respectively.

(4)Represents netting of derivative exposures covered by qualifying master netting agreements.


Liabilities, at fair value:
 March 31, 2022
 Level ILevel IILevel IIITotal
Asset Management
Securities Sold Short$136,128 $— $— $136,128 
Foreign Exchange Contracts and Options— 239,875 — 239,875 
Unfunded Revolver Commitments— — 64,556 (1)64,556 
Other Derivatives— 28,077 — 28,077 
Debt Obligations of Consolidated CFEs— 21,213,206 — 21,213,206 
Total Liabilities at Fair Value - Asset Management$136,128 $21,481,158 $64,556 $21,681,842 
Insurance
Policy liabilities$— $— $466,408 $466,408 
Closed block policy liabilities— — 1,269,991 1,269,991 
Funds withheld payable at interest— — (1,219,491)(1,219,491)
Derivative instruments payable:
Equity market contracts63,886 117,808 — 181,694 
Interest rate contracts72,352 437,464 — 509,816 
Foreign currency contracts— 20,988 — 20,988 
Credit contracts— 1,360 — 1,360 
Impact of netting(2)
(38,609)(213,047)— (251,656)
Total derivative instruments payable97,629 364,573 — 462,202 
Embedded derivative – indexed universal life products— — 512,015 512,015 
Embedded derivative – annuity products— — 1,777,832 1,777,832 
Total Liabilities at Fair Value - Insurance$97,629 $364,573 $2,806,755 $3,268,957 
Total Liabilities at Fair Value$233,757 $21,845,731 $2,871,311 $24,950,799 
46
Table of Contents

December 31, 2021
September 30, 2017 Level ILevel IILevel IIITotal
Level I Level II Level III Total
Asset ManagementAsset Management
Securities Sold Short$810,698
 $—
 $—
 $810,698
Securities Sold Short$249,383 $— $— $249,383 
Foreign Exchange Contracts and Options—
 243,595
 —
 243,595
Foreign Exchange Contracts and Options— 319,511 — 319,511 
Unfunded Revolver Commitments—
 —
 13,912
(1)13,912
Unfunded Revolver Commitments— — 64,276 (1)64,276 
Other Derivatives—
 28,421
 50,400
(2)78,821
Other Derivatives— 45,003 — 45,003 
Debt Obligations of Consolidated CFEs—
 9,788,717
 5,295,183
 15,083,900
Debt Obligations of Consolidated CFEs— 21,271,084 — 21,271,084 
Total Liabilities$810,698
 $10,060,733
 $5,359,495
 $16,230,926
Total Liabilities at Fair Value - Asset ManagementTotal Liabilities at Fair Value - Asset Management$249,383 $21,635,598 $64,276 $21,949,257 
InsuranceInsurance
Policy liabilitiesPolicy liabilities$— $— $519,454 $519,454 
Closed block policy liabilitiesClosed block policy liabilities— — 1,350,224 1,350,224 
Funds withheld payable at interestFunds withheld payable at interest— — (49,491)(49,491)
Derivative instruments payable:Derivative instruments payable:
Equity market contractsEquity market contracts33,933 152,821 — 186,754 
Interest rate contractsInterest rate contracts14,009 87,236 — 101,245 
Foreign currency contractsForeign currency contracts— 7,639 — 7,639 
Credit contractsCredit contracts— 1,540 — 1,540 
Impact of netting(2)
Impact of netting(2)
(25,588)(126,427)— (152,015)
Total derivative instruments payableTotal derivative instruments payable22,354 122,809 — 145,163 
Embedded derivative – indexed universal life productsEmbedded derivative – indexed universal life products— — 557,276 557,276 
Embedded derivative – annuity productsEmbedded derivative – annuity products— — 1,983,949 1,983,949 
Total Liabilities at Fair Value - InsuranceTotal Liabilities at Fair Value - Insurance$22,354 $122,809 $4,361,412 $4,506,575 
0000
Total Liabilities at Fair ValueTotal Liabilities at Fair Value$271,737 $21,758,407 $4,425,688 $26,455,832 

(1)These unfunded revolver commitments are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR's Level III credit investments.

(2)Represents netting of derivative exposures covered by qualifying master netting agreement.



47
 December 31, 2016
 Level I Level II Level III Total
Securities Sold Short$644,196
 $3,038
 $—
 $647,234
Foreign Exchange Contracts and Options—
 75,218
 —
 75,218
Unfunded Revolver Commitments—
 9,023
 —
 9,023
Other Derivatives—
 44,015
 56,000
(2)100,015
Debt Obligations of Consolidated CFEs—
 8,563,547
 5,294,741
 13,858,288
Total Liabilities$644,196
 $8,694,841
 $5,350,741
 $14,689,778
Table of Contents



(1)These unfunded revolver commitments are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR’s Level III credit investments.
(2)Includes options issued in connection with the acquisition of the 24.9% equity interest in Marshall Wace and its affiliates to increase KKR's ownership interest to 39.9% in periodic increments from 2017 to 2019. The option is valued using a Monte-Carlo simulation valuation methodology. Key inputs used in this methodology that require estimates include Marshall Wace's dividend yield, assets under management volatility and equity volatility. See Note 19 "Subsequent Events."


The following tables summarize changes in investmentsassets and debt obligationsliabilities measured and reported at fair value for which Level III inputs have been used to determine fair value for the three and nine months ended September 30, 2017March 31, 2022 and 2016, respectively: 2021, respectively. For certain insurance disclosures, the beginning of the period represents balances as of the GA Acquisition Date.

Three Months Ended March 31, 2022
Balance, Beg. of PeriodTransfers In / (Out) - Changes in ConsolidationTransfers
In		Transfers OutNet Purchases/Issuances/Sales/SettlementsNet Unrealized and Realized Gains (Losses)Change in OCIBalance, End of PeriodChanges in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting DateChanges in Net Unrealized Gains (Losses) Included in OCI related to Level III Assets and Liabilities still held as of the Reporting Date
Assets
Asset Management
Private Equity$23,322,634 $— $— $(138,220)$680,792 $133,810 $— $23,999,016 $18,304 $— 
Credit5,826,661 — — — (383,841)(126,598)(1,369)5,314,853 (58,683)(1,369)
Real Assets11,389,530 — — — 1,008,641 893,952 — 13,292,123 864,586 — 
Equity Method - Other1,013,807 — — — 40,182 (69,085)— 984,904 (71,310)— 
Other Investments3,240,013 — — — (86,258)(18,829)— 3,134,926 (14,995)— 
Other Derivatives479 — — — 11,284 (11,058)— 705 (11,058)— 
Total Assets - Asset Management44,793,124 — — (138,220)1,270,800 802,192 (1,369)46,726,527 726,844 (1,369)
Insurance
AFS fixed maturity securities:
Corporate fixed maturity securities7,650,660 — — — 391,605 1,275 (73,345)7,970,195 — (46,123)
Structured securities828,401 — 343,338 — 228,734 (3,409)(14,525)1,382,539 — (20,703)
Total AFS fixed maturity securities8,479,061 — 343,338 — 620,339 (2,134)(87,870)9,352,734 — (66,826)
Trading fixed maturity securities:
Corporate fixed maturity securities565,025 — — (31,407)182,432 (10,365)— 705,685 (11,116)— 
Structured securities418,774 — 98,307 (21,745)144,203 (8,960)— 630,579 (10,412)— 
Total trading fixed maturity securities983,799 — 98,307 (53,152)326,635 (19,325)— 1,336,264 (21,528)— 
Equity securities32,937 — — — — — — 32,937 20,292 — 
Mortgage and other loan receivables832,674 — — — 203,197 (27,965)— 1,007,906 (9,559)— 
Other investments1,603,345 — — — 1,920,480 96,361 — 3,620,186 108,587 — 
Funds withheld receivable at interest31,740 — — — 10,435 (33,979)— 8,196 — — 
Reinsurance recoverable1,293,791 — — — (14,375)(47,459)— 1,231,957 — — 
Total Assets - Insurance13,257,347 — 441,645 (53,152)3,066,711 (34,501)(87,870)16,590,180 97,792 (66,826)
Total$58,050,471 $— $441,645 $(191,372)$4,337,511 $767,691 $(89,239)$63,316,707 $824,636 $(68,195)

48
Table of Contents

 Three Months Ended September 30, 2017  
 Level III Investments 
Level III 
Debt Obligations
 
Private
Equity
 Credit 
Investments of
Consolidated
CFEs
 Real Assets Equity Method Other Total 
Debt 
Obligations of
Consolidated
CFEs
Balance, Beg. of Period$2,394,498
 $3,865,070
 $5,447,250
 $2,423,419
 $571,575
 $1,771,627
 $16,473,439
 $5,333,203
Transfers Out Due to Deconsolidation of Funds—
 —
 —
 —
 —
 —
 —
 —
Transfers In—
 —
 —
 —
 —
 —
 —
 —
Transfers Out—
 (4,187) —
 —
 —
 —
 (4,187) —
Asset Purchases / Debt Issuances98,955
 1,112,297
 —
 62,453
 4,457
 35,700
 1,313,862
 —
Sales / Paydowns(56,193) (224,135) (17,022) (361,451) (28,864) (45,887) (733,552) —
Settlements—
 27,528
 —
 —
 —
 —
 27,528
 (17,022)
Net Realized Gains (Losses)7,182
 (6,896) —
 24,479
 6,282
 (29,943) 1,104
 —
Net Unrealized Gains (Losses)163,682
 (27,876) (20,112) 53,100
 2,088
 38,514
 209,396
 (20,998)
Change in Other Comprehensive Income—
 (8,927) —
 —
 —
 —
 (8,927) —
Balance, End of Period$2,608,124
 $4,732,874
 $5,410,116
 $2,202,000
 $555,538
 $1,770,011
 $17,278,663
 $5,295,183
                
Changes in Net Unrealized Gains (Losses) Included in Net Gains (Losses) from Investment Activities related to Level III Assets and Liabilities still held as of the Reporting Date$163,682
 $(40,131) $(20,112) $68,239
 $5,225
 $38,514
 $215,417
 $(20,998)
Three Months Ended March 31, 2021
Balance, Beg. of PeriodTransfers In / (Out) - Changes in ConsolidationTransfers InTransfers OutNet Purchases/Issuances/Sales/SettlementsNet Unrealized and Realized Gains (Losses)Change in OCIBalance, End of PeriodChanges in Net Unrealized Gains (Losses) Included in Net Gains (Losses) from Investment Activities related to Level III Assets and Liabilities still held as of the Reporting DateChanges in Net Unrealized Gains (Losses) Included in OCI related to Level III Assets and Liabilities still held as of the Reporting Date
Assets
Asset Management
Private Equity$15,234,904 $— $— $— $130,309 $1,698,596 $— $17,063,809 $1,622,804 $— 
Credit9,172,848 (1,021)86,135 — 92,140 33,640 2,139 9,385,881 61,774 2,139 
Real Assets5,924,575 — — — 696,345 258,297 — 6,879,217 231,898 — 
Equity Method - Other1,014,378 — — — (153,840)181,242 — 1,041,780 180,258 — 
Other Investments2,341,981 (2,879)— (105,644)63,054 176,853 — 2,473,365 214,879 — 
Other Derivatives6,668 — — — 3,574 (6,841)— 3,401 (6,841)— 
Total Assets - Asset Management33,695,354 (3,900)86,135 (105,644)831,582 2,341,787 2,139 36,847,453 2,304,772 2,139 
Insurance
AFS fixed maturity securities:
Corporate fixed maturity securities3,519,368 — — — 244,578 — (24,416)3,739,530 — (22,210)
Structured securities197,983 — — — (1,692)— (3,185)193,106 — 474 
Total AFS fixed maturity securities3,717,351 — — — 242,886 — (27,601)3,932,636 — (21,736)
Trading fixed maturity securities:
Corporate fixed maturity securities674,380 — — — 55,699 (4,001)— 726,078 (3,600)— 
Structured securities14,661 — — — 8,055 (183)— 22,533 (222)— 
Total trading fixed maturity securities689,041 — — — 63,754 (4,184)— 748,611 (3,822)— 
Equity securities66,660 — — — — 3,325 — 69,985 3,325 — 
Mortgage and other loan receivables929,855 — — — 247,719 5,500 — 1,183,074 6,322 — 
Other investments443,824 — — — — 1,058 — 444,882 6,092 — 
Funds withheld receivable at interest— — — — 334 55,549 — 55,883 — — 
Reinsurance recoverable— — — — — 1,317,962 — 1,317,962 — — 
Total Assets - Insurance5,846,731 — — — 554,693 1,379,210 (27,601)7,753,033 11,917 (21,736)
Total$39,542,085 $(3,900)$86,135 $(105,644)$1,386,275 $3,720,997 $(25,462)$44,600,486 $2,316,689 $(19,597)



49
Table of Contents

 Three Months Ended September 30, 2016  
 Level III Investments Level III 
Debt Obligations
 
Private
Equity
 Credit 
Investments of
Consolidated
CFEs
 Real Assets Equity Method Other Total 
Debt 
Obligations of
Consolidated
CFEs
Balance, Beg. of Period$1,231,868
 $2,672,179
 $5,615,342
 $1,819,709
 $477,219
 $1,495,697
 $13,312,014
 $5,506,281
Transfers Out Due to Deconsolidation of Funds—
 —
 —
 —
 —
 —
 —
 —
Transfers In—
 1,677
 —
 —
 —
 —
 1,677
 —
Transfers Out—
 —
 —
 —
 —
 —
 —
 —
Asset Purchases / Debt Issuances253,736
 616,041
 —
 59,963
 —
 46,233
 975,973
 —
Sales / Paydowns(43,789) (168,342) (8,993) (164,419) (725) (16,677) (402,945) —
Settlements—
 24,296
 —
 —
 —
 —
 24,296
 (8,993)
Net Realized Gains (Losses)17,386
 (518) —
 28,803
 225
 (1,173) 44,723
 —
Net Unrealized Gains (Losses)29,884
 67,753
 (61,670) 70,700
 28,465
 54,798
 189,930
 (61,697)
Change in Other Comprehensive Income—
 5,926
 —
 —
 —
 —
 5,926
 —
Balance, End of Period$1,489,085
 $3,219,012
 $5,544,679
 $1,814,756
 $505,184
 $1,578,878
 $14,151,594
 $5,435,591
                
Changes in Net Unrealized Gains (Losses) Included in Net Gains (Losses) from Investment Activities related to Level III Assets and Liabilities still held as of the Reporting Date$46,895
 $67,140
 $(61,670) $70,700
 $28,465
 $54,798
 $206,328
 $(61,697)
Three Months Ended March 31, 2022
PurchasesIssuancesSalesSettlementsNet Purchases/ Issuances/ Sales/ Settlements
Assets
Asset Management
Private Equity$904,261 $— $(223,469)$— $680,792 
Credit519,351 — (885,330)(17,862)(383,841)
Real Assets1,510,787 — (502,146)— 1,008,641 
Equity Method - Other41,819 — (1,637)— 40,182 
Other Investments161,876 — (248,134)— (86,258)
Other Derivatives11,284 — — — 11,284 
  Total Assets - Asset Management3,149,378 — (1,860,716)(17,862)1,270,800 
Insurance
AFS fixed maturity securities:
Corporate fixed maturity securities924,672 — (58,392)(474,675)391,605 
Structured securities231,916 — — (3,182)228,734 
Total AFS fixed maturity securities1,156,588 — (58,392)(477,857)620,339 
Trading fixed maturity securities:
Corporate fixed maturity securities189,017 — — (6,585)182,432 
Structured securities155,253 — — (11,050)144,203 
Total trading fixed maturity securities344,270 — — (17,635)326,635 
Mortgage and other loan receivables220,225 — — (17,028)203,197 
Other investments1,920,480 — — — 1,920,480 
Funds withheld receivable at interest— 10,435 — — 10,435 
Reinsurance recoverable— — — (14,375)(14,375)
Total Assets - Insurance3,641,563 10,435 (58,392)(526,895)3,066,711 
Total$6,790,941 $10,435 $(1,919,108)$(544,757)$4,337,511 


Three Months Ended March 31, 2021
PurchasesIssuancesSalesSettlementsNet Purchases/ Issuances/ Sales/ Settlements
Assets
Asset Management
Private Equity$221,344 $— $(91,035)$— $130,309 
Credit1,120,791 — (1,028,651)— 92,140 
Real Assets924,320 — (227,975)— 696,345 
Equity Method - Other144 — (153,984)— (153,840)
Other Investments89,502 — (26,448)— 63,054 
Other Derivatives3,574 — — — 3,574 
  Total Assets - Asset Management2,359,675 — (1,528,093)— 831,582 
Insurance
AFS fixed maturity securities:
Corporate fixed maturity securities287,638 — (3,299)(39,761)244,578 
Structured securities10 — — (1,702)(1,692)
Total AFS fixed maturity securities287,648 — (3,299)(41,463)242,886 
Trading fixed maturity securities:
Corporate fixed maturity securities57,451 — — (1,752)55,699 
Structured securities8,110 — — (55)8,055 
Total trading fixed maturity securities65,561 — — (1,807)63,754 
Mortgage and other loan receivables254,995 — (5,076)(2,200)247,719 
Funds withheld receivable at interest— 334 — — 334 
Total Assets - Insurance608,204 334 (8,375)(45,470)554,693 
Total$2,967,879 $334 $(1,536,468)$(45,470)$1,386,275 
50
Table of Contents

 Nine Months Ended September 30, 2017  
 Level III Investments 
Level III 
Debt Obligations
 
Private
Equity
 Credit 
Investments of
Consolidated
CFEs
 Real Assets Equity Method Other Total 
Debt 
Obligations of
Consolidated
CFEs
Balance, Beg. of Period$1,559,559
 $3,290,361
 $5,406,220
 $1,807,128
 $570,522
 $1,767,573
 $14,401,363
 $5,294,741
Transfers Out Due to Deconsolidation of Funds—
 (95,962) —
 —
 —
 —
 (95,962) —
Transfers In—
 —
 —
 —
 —
 —
 —
 —
Transfers Out—
 (4,187) —
 —
 —
 (1,496) (5,683) —
Asset Purchases / Debt Issuances923,460
 2,056,195
 —
 667,681
 15,589
 259,204
 3,922,129
 —
Sales / Paydowns(228,676) (942,459) (34,957) (469,092) (49,842) (188,623) (1,913,649) —
Settlements—
 46,653
 —
 —
 —
 —
 46,653
 (34,957)
Net Realized Gains (Losses)7,871
 (109,525) —
 (34,208) 6,908
 (53,384) (182,338) —
Net Unrealized Gains (Losses)345,910
 476,920
 38,853
 230,491
 12,361
 (13,263) 1,091,272
 35,399
Change in Other Comprehensive Income—
 14,878
 —
 —
 —
 —
 14,878
 —
Balance, End of Period$2,608,124
 $4,732,874
 $5,410,116
 $2,202,000
 $555,538
 $1,770,011
 $17,278,663
 $5,295,183
                
Changes in Net Unrealized Gains (Losses) Included in Net Gains (Losses) from Investment Activities related to Level III Assets and Liabilities still held as of the Reporting Date$345,910
 $367,269
 $38,853
 $175,183
 $15,498
 $(13,263) $929,450
 $35,399
Three Months Ended March 31, 2022
Balance, Beg. of PeriodTransfers In / (Out) - Changes in ConsolidationTransfers InTransfers OutNet Purchases/Sales/Settlements/IssuancesNet Unrealized and Realized Gains (Losses)Change in OCIBalance, End of PeriodChanges in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date
Liabilities
Asset Management
Unfunded Revolver Commitments$64,276 $— $— $— $— $280 $— $64,556 $280 
Total Liabilities - Asset Management64,276 — — — — 280 — 64,556 280 
Insurance
Policy liabilities519,454 — — — — (53,046)— 466,408 — 
Closed block policy liabilities1,350,224 — — — (81,101)(2,992)3,860 1,269,991 — 
Funds withheld payable at interest(49,491)— — — 10,435 (1,180,435)— (1,219,491)— 
Embedded derivative – indexed universal life products557,276 — — — 3,302 (48,563)— 512,015 — 
Embedded derivative – annuity products1,983,949 — — — 107,302 (313,419)— 1,777,832 — 
Total Liabilities - Insurance4,361,412 — — — 39,938 (1,598,455)3,860 2,806,755 — 
Total$4,425,688 $— $— $— $39,938 $(1,598,175)$3,860 $2,871,311 $280 

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 Nine Months Ended September 30, 2016  
 Level III Investments Level III 
Debt Obligations
 
Private
Equity
 Credit 
Investments of
Consolidated
CFEs
 Real Assets Equity Method Other Total 
Debt 
Obligations of
Consolidated
CFEs
Balance, Beg. of Period$18,903,538
 $5,012,355
 $—
 $4,048,281
 $891,606
 $2,581,188
 $31,436,968
 $—
Transfers Out Due to Deconsolidation of Funds(17,856,098) (2,354,181) —
 (2,628,999) —
 (984,813) (23,824,091) —
Transfers In—
 45,427
 4,343,829
 —
 —
 —
 4,389,256
 4,272,081
Transfers Out(104,000) (760) —
 —
 (311,270) —
 (416,030) —
Asset Purchases / Debt Issuances507,812
 1,170,140
 1,026,801
 513,734
 18,992
 249,903
 3,487,382
 990,450
Sales / Paydowns(43,789) (648,416) (23,910) (237,176) (61,111) (147,495) (1,161,897) —
Settlements—
 74,474
 —
 —
 —
 —
 74,474
 (23,910)
Net Realized Gains (Losses)17,386
 (9,113) —
 41,158
 (1,766) (8,588) 39,077
 —
Net Unrealized Gains (Losses)64,236
 (74,384) 197,959
 77,758
 (31,267) (111,317) 122,985
 196,970
Change in Other Comprehensive Income—
 3,470
 —
 —
 —
 —
 3,470
 —
Balance, End of Period$1,489,085
 $3,219,012
 $5,544,679
 $1,814,756
 $505,184
 $1,578,878
 $14,151,594
 $5,435,591
                
Changes in Net Unrealized Gains (Losses) Included in Net Gains (Losses) from Investment Activities related to Level III Assets and Liabilities still held as of the Reporting Date$81,247
 $(74,997) $197,959
 $77,758
 $(31,267) $(135,067) $115,633
 $196,970
Three Months Ended March 31, 2021
Balance, Beg. of PeriodTransfers In / (Out) - Changes in ConsolidationTransfers InTransfers OutNet Purchases/Sales/Settlements/IssuancesNet Unrealized and Realized Gains (Losses)Change in OCIBalance, End of PeriodChanges in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date
Liabilities
Asset Management
Unfunded Revolver Commitments$46,340 $— $— $— $1,167 $(11,870)$— $35,637 $(11,870)
Total Liabilities - Asset Management$46,340 $— $— $— $1,167 $(11,870)$— $35,637 $(11,870)
Insurance
Policy liabilities637,800 — — — — (72,158)— 565,642 — 
Closed block policy liabilities1,395,746 — — — — (25,982)(2,885)1,366,879 — 
Funds withheld payable at interest59,230 — — — — (372,460)— (313,230)— 
Embedded derivative – indexed universal life products386,746 — — — (931)48,427 — 434,242 — 
Embedded derivative – annuity products1,024,601 — — — 44,809 (84,500)— 984,910 — 
Total Liabilities - Insurance3,504,123 — — — 43,878 (506,673)(2,885)3,038,443 — 
Total3,550,463 — — — 45,045 (518,543)(2,885)3,074,080 (11,870)

Three Months Ended March 31, 2022
IssuancesSettlementsNet Purchases/Issuances/Sales/Settlements
Liabilities
Asset Management
Unfunded Revolver Commitments$— $— $— 
Total Liabilities - Asset Management— — — 
Insurance
Closed block policy liabilities— (81,101)(81,101)
Funds withheld payable at interest10,435 — 10,435 
Embedded derivative – indexed universal life products8,985 (5,683)3,302 
Embedded derivative – annuity products107,302 — 107,302 
Total Liabilities - Insurance126,722 (86,784)39,938 
Total$126,722 $(86,784)$39,938 

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Three Months Ended March 31, 2021
IssuancesSettlementsNet Issuances/Settlements
Liabilities
Asset Management
Unfunded Revolver Commitments$1,167 $— $1,167 
Total Liabilities - Asset Management1,167 — 1,167 
Insurance
Embedded derivative – indexed universal life products5,607 (6,538)(931)
Embedded derivative – annuity products44,809 — 44,809 
Total Liabilities - Insurance50,416 (6,538)43,878 
Total$51,583 $(6,538)$45,045 
Total realized and unrealized gains and losses recorded for Asset Management - Level III assets and liabilities are reported in Net Gains (Losses) from Investment Activities in the accompanying condensedconsolidated statements of operations while Insurance - Level III assets and liabilities are reported in Net Investment Gains and Policy Benefits and Claims in the accompanying consolidated statements of operations.

The following table summarizes the fair value transfers between fair value levels for the three and nine months ended September 30, 2017 and 2016:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Assets, at fair value:       
Transfers from Level I to Level II (1)
$53,416
 $—
 $53,416
 $73,600
Transfers from Level II to Level I (4)
$33,634
 $—
 $33,634
 $—
Transfers from Level II to Level III (2)
$—
 $1,677
 $—
 $4,389,256
Transfers from Level III to Level II (3)
$4,187
 $—
 $4,187
 $312,030
Transfers from Level III to Level I (4)
$—
 $—
 $1,496
 $104,000
     

 

Liabilities, at fair value:    

 

Transfers from Level II to Level III (5)
$—
 $—
 $—
 $4,272,081

(1)Transfers out of Level I into Level II are principally attributable to certain investments that are no longer valued using a publicly traded market price.
(2)Transfers out of Level II into Level III are principally attributable to certain investments that experienced an insignificant level of market activity during the period and thus were valued in the absence of observable inputs.
(3)Transfers out of Level III into Level II are principally attributable to certain investments that experienced a higher level of market activity during the period and thus were valued using observable inputs.
(4)Transfers out of Level III and Level II into Level I are attributable to portfolio companies that are valued using their publicly traded market price.
(5)Transfers out of Level II into Level III are principally attributable to debt obligations of CMBS vehicles due to an insignificant level of market activity during the period and thus were valued in the absence of observable inputs.



The following table presents additional information about valuation methodologies and significant unobservable inputs used for investmentsfinancial assets and debt obligationsliabilities that are measured and reported at fair value and categorized within Level III as of September 30, 2017:March 31, 2022. Because input information includes only those items for which information is reasonably available, balances shown below may not equal total amounts reported for such Level III assets and liabilities:
Level III AssetsFair Value March 31, 2022Valuation
Methodologies
Unobservable Input(s) (1)
Weighted
Average (2)
Range
Impact to
 Valuation
from an
Increase in
Input (3)
ASSET MANAGEMENT      
Private Equity$23,999,016 
Private Equity$21,320,867 Inputs to market comparables, discounted cash flow and transaction priceIlliquidity Discount6.7%5.0% - 15.0% Decrease
  Weight Ascribed to Market Comparables29.1%0.0% - 100.0% (4)
  Weight Ascribed to Discounted Cash Flow65.4%0.0% - 100.0% (5)
  Weight Ascribed to Transaction Price5.5%0.0% - 100.0% (6)
  Market comparablesEnterprise Value/LTM EBITDA Multiple17.3x8.2x - 31.2x Increase
Enterprise Value/Forward EBITDA Multiple15.1x6.4x - 23.8x Increase
  Discounted cash flowWeighted Average Cost of Capital9.2%4.6% - 14.6% Decrease
  Enterprise Value/LTM EBITDA Exit Multiple14.3x6.0x - 20.0x Increase
Growth Equity$2,678,149 Inputs to market comparables, discounted cash flow and milestonesIlliquidity Discount8.6%5.0% - 20.0%Decrease
Weight Ascribed to Market Comparables37.6%0.0% - 100.0%(4)
Weight Ascribed to Discounted Cash Flow2.1%0.0% - 50.0%(5)
Weight Ascribed to Milestones60.3%0.0% - 100.0%(6)
Scenario WeightingBase76.1%70.0% - 80.0%Increase
Downside4.9%0.0% - 10.0%Decrease
Upside19.0%10.0% - 25.0%Increase
Credit$5,314,853 Yield AnalysisYield8.8%5.0% - 40.6% Decrease
Net Leverage6.1x0.3x - 33.6xDecrease
EBITDA Multiple13.8x0.7x - 33.0xIncrease
Real Assets$13,292,123       
Energy$1,434,690 Inputs to market comparables and discounted cash flowWeight Ascribed to Market Comparables29.0%0.0% - 50.0%(4)
Weight Ascribed to Discounted Cash Flow71.0%50.0% - 100.0%(5)
Market comparablesEnterprise Value/LTM EBITDA Multiple5.7x5.7x - 5.7xIncrease
Enterprise Value/Forward EBITDA Multiple5.9x4.5x - 8.8xIncrease
Discounted cash flowWeighted Average Cost of Capital12.8%10.1% - 15.4% Decrease
Average Price Per BOE (8)$48.63$44.38 - $58.31Increase
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Fair Value
September 30,
2017
 
Valuation
Methodologies
 Unobservable Input(s) (1) 
Weighted
Average (2)
 Range 
Impact to
 Valuation
from an
Increase in
Input (3)
            
Private Equity$2,608,124
          
            
Private Equity$1,154,227
 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.2% 5.0% - 15.0% Decrease
  
  Weight Ascribed to Market Comparables 48.3% 0.0% - 50.0% (4)
  
  Weight Ascribed to Discounted Cash Flow 49.6% 0.0% - 100.0% (5)
  
  Weight Ascribed to Transaction Price 2.1% 0.0% - 100.0% (6)
  
 Market comparables Enterprise Value/LTM EBITDA Multiple 13.6x 6.4x - 26.1x Increase
    Enterprise Value/Forward EBITDA Multiple 11.9x 5.7x - 22.0x Increase
  
 Discounted cash flow Weighted Average Cost of Capital 9.6% 6.8% - 13.8% Decrease
  
  Enterprise Value/LTM EBITDA Exit Multiple 10.6x 5.6x - 14.9x Increase
            
Growth Equity$1,453,897
 Inputs to market comparables, discounted cash flow and milestones Illiquidity Discount 10.9% 8.0% - 20.0% Decrease
    Weight Ascribed to Market Comparables 26.9% 0.0% - 100.0% (4)
    Weight Ascribed to Discounted Cash Flow 4.9% 0.0% - 75.0% (5)
    Weight Ascribed to Milestones 68.2% 0.0% - 100.0% (6)
   Scenario Weighting Base 51.9% 30.0% - 80.0% Increase
    Downside 22.1% 5.0% - 40.0% Decrease
    Upside 26.0% 10.0% - 45.0% Increase
            
Credit$4,732,874
 Yield Analysis Yield 11.6% 3.6% - 37.6% Decrease
    Net Leverage 4.9x 0.6x - 20.7x Decrease
    EBITDA Multiple 10.1x 0.1x - 17.1x Increase
            
Investments of Consolidated CFEs$5,410,116
(9)         
Debt Obligations of Consolidated CFEs$5,295,183
 Discounted cash flow Yield 5.5% 1.9% - 27.9% Decrease
            
Real Assets$2,202,000
(10)         
            
Energy$1,097,636
 Discounted cash flow Weighted Average Cost of Capital 10.1% 9.2% - 16.1% Decrease
     Average Price Per BOE (8) $38.97 $31.77 - $41.84 Increase
            
Real Estate$881,465
 Inputs to direct income capitalization and discounted cash flow Weight Ascribed to Direct Income Capitalization 34.3% 0.0% - 100.0% (7)
  
  Weight Ascribed to Discounted Cash Flow 65.7% 0.0% - 100.0% (5)
  
 Direct income capitalization Current Capitalization Rate 5.8% 2.9% - 8.7% Decrease
  
 Discounted cash flow Unlevered Discount Rate 9.2% 4.5% - 20.0% Decrease
            
Other$1,770,011
 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 10.4% 5.0% - 15.0% Decrease
    Weight Ascribed to Market Comparables 27.1% 0.0% - 100.0% (4)
    Weight Ascribed to Discounted Cash Flow 48.3% 0.0% - 100.0% (5)
    Weight Ascribed to Transaction Price 24.6% 0.0% - 100.0% (6)
   Market comparables Enterprise Value/LTM EBITDA Multiple 10.1x 0.1x - 17.4x Increase
    Enterprise Value/Forward EBITDA Multiple 9.9x 4.6x - 15.1x Increase
   Discounted cash flow Weighted Average Cost of Capital 11.3% 5.5% - 21.1% Decrease
    Enterprise Value/LTM EBITDA Exit Multiple 6.4x 1.9x - 11.5x Increase
            
Level III AssetsFair Value March 31, 2022Valuation
Methodologies
Unobservable Input(s) (1)
Weighted
Average (2)
Range
Impact to
 Valuation
from an
Increase in
Input (3)
Infrastructure
$3,880,965 Inputs to market comparables, discounted cash flow and transaction priceIlliquidity Discount5.0%5.0% - 5.0% Decrease
Weight Ascribed to Market Comparables1.7%0.0% - 25.0%(4)
Weight Ascribed to Discounted Cash Flow69.7%0.0% - 100.0% (5)
Weight Ascribed to Transaction Price28.6%0.0% - 100.0% (6)
Market comparablesEnterprise Value/Forward EBITDA Multiple11.4x11.4x - 11.4xIncrease
Discounted cash flowWeighted Average Cost of Capital6.7%4.7% - 8.5%Decrease
Enterprise Value/LTM EBITDA Exit Multiple12.1x10.0x - 13.0xIncrease
Real Estate$7,976,468 Inputs to direct income capitalization, discounted cash flow and transaction priceWeight Ascribed to Direct Income Capitalization18.4%0.0% - 100.0% (7)
  Weight Ascribed to Discounted Cash Flow72.4%0.0% - 100.0% (5)
Weight Ascribed to Transaction Price9.2%0.0% - 100.0%(6)
  Direct income capitalizationCurrent Capitalization Rate5.1%3.6% - 7.4% Decrease
  Discounted cash flowUnlevered Discount Rate6.2%3.8% - 18.0% Decrease
Equity Method - Other$984,904 Inputs to market comparables, discounted cash flow and transaction priceIlliquidity Discount7.5%5.0% - 10.0% Decrease
Weight Ascribed to Market Comparables38.8%0.0% - 100.0% (4)
  Weight Ascribed to Discounted Cash Flow26.7%0.0% - 100.0% (5)
  Weight Ascribed to Transaction Price34.6%0.0% - 100.0% (6)
  Market comparablesEnterprise Value/LTM EBITDA Multiple11.9x5.7x - 18.1x Increase
Enterprise Value/Forward EBITDA Multiple12.0x4.5x - 18.5x Increase
  Discounted cash flowWeighted Average Cost of Capital10.2%6.0% - 17.0% Decrease
  Enterprise Value/LTM EBITDA Exit Multiple9.9x6.0x - 15.0x Increase
Other Investments$3,134,926 (9)Inputs to market comparables, discounted cash flow and transaction priceIlliquidity Discount11.1%10.0% - 20.0% Decrease
Weight Ascribed to Market Comparables22.9%0.0% - 100.0% (4)
Weight Ascribed to Discounted Cash Flow58.5%0.0% - 100.0% (5)
Weight Ascribed to Transaction Price18.6%0.0% - 100.0% (6)
Market comparablesEnterprise Value/LTM EBITDA Multiple12.0x0.8x - 25.0x Increase
Enterprise Value/Forward EBITDA Multiple11.2x0.7x - 22.9x Increase
Discounted cash flowWeighted Average Cost of Capital14.4%6.5% - 100.0% Decrease
Enterprise Value/LTM EBITDA Exit Multiple10.4x5.5x - 23.1x Increase
INSURANCE
Corporate fixed maturity securities$1,620,204 Discounted cash flowDiscount Spread2.01%—% - 4.91%Decrease
Structured securities$134,475 Discounted cash flowDiscount Spread3.00%2.50% - 5.75%Decrease
Constant Prepayment Rate7.31%5.00% - 15.00%Increase/Decrease
Constant Default Rate1.17%1.00% - 2.50%Decrease
Loss Severity100%Decrease
Other investments$1,445,961 Direct capitalizationCurrent Capitalization Rate5.36%5.11% - 5.61%Decrease
Vacancy rate5.00%Decrease
Discounted cash flowYield8.00%Decrease
Rate5.12%5.00% - 5.25%Decrease
Terminal capitalization rate3.97%3.70% - 4.25%Decrease
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Level III AssetsFair Value March 31, 2022Valuation
Methodologies
Unobservable Input(s) (1)
Weighted
Average (2)
Range
Impact to
 Valuation
from an
Increase in
Input (3)

(1)Funds withheld receivable at interestIn determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. Management has determined that market participants would take these inputs into account when valuing the investments and debt obligations. LTM means last twelve months and EBITDA means earnings before interest taxes depreciation and amortization.$8,196Discounted cash flowDuration/Weighted Average Life9.56 years0.0 years - 22.6 yearsIncrease
Contractholder Persistency6.39%3.50% - 17.20%Increase
Nonperformance Risk0.51% - 1.56%Decrease
(2)Reinsurance recoverableInputs were weighted based$1,231,957Present value of expenses paid from the open block plus the cost of capital held in support of the liabilities.Expense assumptionThe average expense assumption is between $5.26 and $78.00 per policy, increased by inflation.Increase
Unobservable inputs are a market participant’s view of the expenses, a risk margin on the fair valueuncertainty of the investments includedlevel of expenses and a cost of capital on the capital held in support of the range.liabilities.Expense risk margin9.42%Decrease
Cost of capital3.69% - 13.85%Increase
Discounted cash flowMortality Rate5.46%Increase
Surrender Rate2.01%Increase
(1)In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. KKR has determined that market participants would take these inputs into account when valuing the investments and debt obligations. "LTM" means last twelve months, and "EBITDA" means earnings before interest, taxes, depreciation and amortization.
(2)Inputs were weighted based on the fair value of the investments included in the range.
(3)Unless otherwise noted, this column represents the directional change in the fair value of the Level III investments that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these inputs in isolation could result in significantly higher or lower fair value measurements.
(4)The directional change from an increase in the weight ascribed to the market comparables approach would increase the fair value of the Level III investments if the market comparables approach results in a higher valuation than the discounted cash flow approach and transaction price. The opposite would be true if the market comparables approach results in a lower valuation than the discounted cash flow approach and transaction price.
(5)The directional change from an increase in the weight ascribed to the discounted cash flow approach would increase the fair value of the Level III investments if the discounted cash flow approach results in a higher valuation than the market comparables approach, transaction price and direct income capitalization approach. The opposite would be true if the discounted cash flow approach results in a lower valuation than the market comparables approach, transaction price and direct income capitalization approach.
(6)The directional change from an increase in the weight ascribed to the transaction price or milestones would increase the fair value of the Level III investments if the transaction price or milestones results in a higher valuation than the market comparables and discounted cash flow approach. The opposite would be true if the transaction price or milestones results in a lower valuation than the market comparables approach and discounted cash flow approach.
(7)The directional change from an increase in the weight ascribed to the direct income capitalization approach would increase the fair value of the Level III investments if the direct income capitalization approach results in a higher valuation than the discounted cash flow approach. The opposite would be true if the direct income capitalization approach results in a lower valuation than the discounted cash flow approach.
(8)The total energy fair value amount includes multiple investments (in multiple locations throughout North America) that are held in multiple investment funds and produce varying quantities of oil, condensate, natural gas liquids, and natural gas. Commodity price may be measured using a common volumetric equivalent where one barrel of oil equivalent ("BOE"), is determined using the ratio of six thousand cubic feet of natural gas to one barrel of oil, condensate or natural gas liquids. The price per BOE is provided to show the aggregate of all price inputs for the various investments over a common volumetric equivalent although the valuations for specific investments may use price inputs specific to the asset for purposes of our valuations. The discounted cash flows include forecasted production of liquids (oil, condensate, and natural gas liquids) and natural gas with a forecasted revenue ratio of approximately 87% liquids and 13% natural gas.
(9)Consists primarily of investments in common stock, preferred stock, warrants and options of companies that are not private equity, real assets, credit, equity method - other or investments of consolidated CFEs.


55
Table of Contents

Level III LiabilitiesFair Value March 31, 2022Valuation
Methodologies
Unobservable Input(s) (1)
Weighted
Average (2)
Range
Impact to
 Valuation
from an
Increase in
Input (3)
ASSET MANAGEMENT
Unfunded Revolver Commitments$64,556 Yield AnalysisYield5.8%3.7% - 7.4%Decrease
INSURANCE
Policy liabilities$466,408 Present value of best estimate liability cash flows. Unobservable inputs include a market participant view of the risk margin included in the discount rate which reflects the variability of the cash flows.Risk Margin Rate0.51% - 1.82%Decrease
Policyholder behavior is also a significant unobservable input, including surrender and mortality.Surrender Rate3.61% - 6.45%Increase
Mortality Rate3.65% - 8.59%Increase
Closed block policy liabilities$1,269,991 Present value of expenses paid from the open block plus the cost of capital held in support of the liabilities.Expense assumptionThe average expense assumption is between $5.26 and $78.00 per policy, increased by inflation.Increase
Nonperformance Risk0.51% - 1.56%Decrease
Unobservable inputs are a market participant’s view of the expenses, a risk margin on the uncertainty of the level of expenses and a cost of capital on the capital held in support of the liabilities.Expense Risk Margin9.42%Decrease
Cost of Capital3.69% - 13.85%Increase
Discounted cash flowMortality Rate5.46%Increase
Surrender Rate2.01%Increase
Funds withheld payable at interest$(1,219,491)Discounted cash flowDuration/Weighted Average Life9.6 years0.0 years - 18.9 yearsDecrease
Contractholder Persistency6.39%3.50% - 17.20%Decrease
Nonperformance Risk0.51% - 1.56%Decrease
Embedded derivative – indexed universal life products$512,015 Policy persistency is a significant unobservable input.Lapse Rate3.86%Decrease
Mortality Rate0.71%Decrease
Future costs for options used to hedge the contract obligationsOption Budge Assumption3.58%Increase
Nonperformance Risk0.51% - 1.56%Decrease
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(3)Unless otherwise noted, this column represents the directional change in the fair value of the Level III investments that would result LiabilitiesFair Value March 31, 2022Valuation
Methodologies
Unobservable Input(s) (1)
Weighted
Average (2)
Range
Impact to
 Valuation
from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases
Increase in these inputs in isolation could result in significantly higher or lower fair value measurements.
Input (3)
(4)Embedded derivative – annuity productsThe directional change from an increase in the weight ascribed to the market comparables approach would increase the fair value of the Level III investments if the market comparables approach results in$1,777,832Policyholder behavior is a higher valuation than the discounted cash flow approachsignificant unobservable input, including utilization and transaction price. The opposite would be true if the market comparables approach results in a lower valuation than the discounted cash flow approach and transaction price.lapse.
Utilization:
(5)The directional change from an increase in the weight ascribed to the discounted cash flow approach would increase the fair value of the Level III investments if the discounted cash flow approach results in a higher valuation than the market comparables approach, transaction price and direct income capitalization approach. The opposite would be true if the discounted cash flow approach results in a lower valuation than the market comparables approach and transaction price.Fixed-indexed annuity3.87%Decrease
Variable annuity4.21%2.32% - 35.02%Decrease
Surrender Rate:
(6)The directional change from an increase in the weight ascribed to the transaction price or milestones would increase the fair value of the Level III investments if the transaction price results in a higher valuation than the market comparables and discounted cash flow approach. The opposite would be true if the transaction price results in a lower valuation than the market comparables approach and discounted cash flow approach.Fixed-indexed annuity10.67%Decrease
Variable annuity4.09% - 39.60%Decrease
Mortality Rate:
(7)The directional change from an increase inFixed-indexed annuity1.99%Decrease
Variable annuity1.36% - 7.38%Decrease
Future costs for options used to hedge the weight ascribed to the direct income capitalization approach would increase the fair value of the Level III investments if the direct income capitalization approach results in a higher valuation than the discounted cash flow approach. The opposite would be true if the direct income capitalization approach results in a lower valuation than the discounted cash flow approach.contract obligations
Option Budge Assumption:
(8)The total energy fair value amount includes multiple investments (in multiple locations throughout North America) that are held in multiple investment funds and produce varying quantities of oil, condensate, natural gas liquids, and natural gas. Commodity price may be measured using a common volumetric equivalent where one barrel of oil equivalent, or BOE, is determined using the ratio of six thousand cubic feet of natural gas to one barrel of oil, condensate or natural gas liquids. The price per BOE is provided to show the aggregate of all price inputs for the various investments over a common volumetric equivalent although the valuations for specific investments may use price inputs specific to the asset for purposes of our valuations. The discounted cash flows include forecasted production of liquids (oil, condensate, and natural gas liquids) and natural gas with a forecasted revenue ratio of approximately 86% liquids and 14% natural gas.Retail RIA1.60%Increase
Fixed-indexed annuity2.01%Increase
Variable annuityn/a
(9)KKR measures CMBS investments on the basis of the fair value of the financial liabilities of the CMBS vehicle. See Note 2 "Summary of Significant Accounting Policies."
(10)Includes one Infrastructure investment for $222.9 million that was valued using a discounted cash flow analysis. The significant inputs used included the weighted average cost of capital 7.7% and the enterprise value/LTM EBITDA Exit Multiple 12.0x.Nonperformance Risk0.51% - 1.56%Decrease

The table above excludes equity method(1)In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. KKR has determined that market participants would take these inputs into account when valuing the investments and debt obligations. "LTM" means last twelve months, and "EBITDA" means earnings before interest, taxes, depreciation and amortization.
(2)Inputs were weighted based on the fair value of the investments included in the amountrange.
(3)Unless otherwise noted, this column represents the directional change in the fair value of $555.5 million, comprised primarily of interests in real estate joint ventures, which were valued usingthe Level III investments that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these inputs in isolation could result in significantly higher or lower fair value methodologies which are generally the same as those shown for real estate investments.measurements.



In the table above, certain private equity investments may be valued at cost for a period of time after an acquisition as the best indicator of fair value. In addition, certain valuations of private equity investments may be entirely or partially derived by reference to observable valuation measures for a pending or consummated transaction.
The various unobservable inputs used to determine the Level III valuations may have similar or diverging impacts on valuation. Significant increases and decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurements as noted in the table above.



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6.
Financial Instruments Not Carried At Fair Value
Asset management financial instruments are primarily measured at fair value on a recurring basis, except as disclosed in Note 17 "Debt Obligations."
The following tables present carrying amounts and fair values of Global Atlantic’s financial instruments which are not carried at fair value as of March 31, 2022 and December 31, 2021:

Fair Value Hierarchy
As of March 31, 2022Carrying ValueLevel ILevel IILevel IIIFair Value
($ in thousands)
Financial assets:
Insurance
Mortgage and other loan receivables$30,568,779 $— $— $30,759,101 $30,759,101 
Policy loans762,460 — — 759,299 759,299 
FHLB common stock and other investments185,013 — — 185,013 185,013 
Funds withheld receivables at interest2,958,607 — 2,958,607 — 2,958,607 
Cash and cash equivalents4,590,032 4,590,032 — — 4,590,032 
Restricted cash and cash equivalents523,503 523,503 — — 523,503 
Total financial assets$39,588,394 $5,113,535 $2,958,607 $31,703,413 $39,775,555 
Financial liabilities:
Insurance
Other contractholder deposit funds$34,823,758 $— $32,804,568 $— $32,804,568 
Supplementary contracts without life contingencies11,765 — — 11,959 11,959 
Funding agreements2,562,684 — — 2,515,380 2,515,380 
Funds withheld payables at interest23,001,222 — 23,001,222 — 23,001,222 
Debt obligations2,029,769 — — 1,923,154 1,923,154 
Securities sold under agreements to repurchase810,535 — 810,535 — 810,535 
Total financial liabilities$63,239,733 $— $56,616,325 $4,450,493 $61,066,818 
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Fair Value Hierarchy
As of December 31, 2021Carrying ValueLevel ILevel IILevel IIIFair Value
($ in thousands)
Financial assets:
Insurance
Mortgage and other loan receivables$28,044,085 $— $— $28,645,675 $28,645,675 
Policy loans765,310 — — 754,530 754,530 
FHLB common stock and other investments171,842 — — 171,842 171,842 
Funds withheld receivables at interest2,967,708 — 2,967,708 — 2,967,708 
Cash and cash equivalents3,391,934 3,391,934 — — 3,391,934 
Restricted cash and cash equivalents300,404 300,404 — — 300,404 
Total financial assets$35,641,283 $3,692,338 $2,967,708 $29,572,047 $36,232,093 
Financial liabilities:
Insurance
Other contractholder deposit funds$30,295,965 $— $28,419,520 $— $28,419,520 
Supplementary contracts without life contingencies31,118 — — 31,311 31,311 
Funding agreements2,566,410 — — 2,549,494 2,549,494 
Funds withheld payables at interest23,509,744 — 23,509,744 — 23,509,744 
Debt obligations1,908,006 — — 1,953,631 1,953,631 
Securities sold under agreements to repurchase300,446 — 300,446 — 300,446 
Total financial liabilities$58,611,689 $— $52,229,710 $4,534,436 $56,764,146 

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11. FAIR VALUE OPTION


The following table summarizes the financial instruments for which the fair value option has been elected:

 March 31, 2022December 31, 2021
Assets
Asset Management
Credit$696,906 $2,019,229 
Investments of Consolidated CFEs22,014,866 22,076,809 
Real Assets207,543 182,858 
Equity Method - Other1,507,802 1,601,515 
Other Investments169,492 197,675 
  Total Asset Management$24,596,609 $26,078,086 
Insurance
Mortgage and other loan receivables$1,007,906 $832,674 
Other investments174,875 147,811 
Reinsurance recoverable1,231,957 1,293,791 
  Total Insurance$2,414,738 $2,274,276 
     Total Assets$27,011,347 $28,352,362 
Liabilities
Asset Management
Debt Obligations of Consolidated CFEs$21,213,206 $21,271,084 
  Total Asset Management$21,213,206 $21,271,084 
Insurance
Policy liabilities$1,736,399 $1,869,678 
  Total Insurance$1,736,399 $1,869,678 
     Total Liabilities$22,949,605 $23,140,762 


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 September 30, 2017 December 31, 2016
Assets   
Private Equity$573,555
 $96,721
Credit3,338,434
 1,392,525
Investments of Consolidated CFEs15,500,898
 13,950,897
Real Assets400,991
 247,376
Equity Method760,998
 791,418
Other374,271
 240,343
     Total$20,949,147
 $16,719,280
    
Liabilities   
Debt Obligations of Consolidated CFEs$15,083,900
 $13,858,288
     Total$15,083,900
 $13,858,288

The following tables presenttable presents the net realized and net change in unrealized gains (losses) on financial instruments onfor which the fair value option was electedelected:
Three Months Ended March 31, 2022
Net Realized
Gains (Losses)		Net Unrealized
Gains (Losses)		Total
Assets
Asset Management
Credit$(37,515)$(15,834)$(53,349)
Investments of Consolidated CFEs2,949 (269,548)(266,599)
Real Assets85 24,685 24,770 
Equity Method - Other(16,333)(45,468)(61,801)
Other Investments6,308 (7,685)(1,377)
   Total Asset Management$(44,506)$(313,850)$(358,356)
Insurance
Mortgage and other loan receivables— (27,015)(27,015)
Other investments— 27,737 27,737 
    Total Insurance$— $722 $722 
Total Assets$(44,506)$(313,128)$(357,634)
Liabilities
Asset Management
Debt Obligations of Consolidated CFEs(785)226,058 225,273 
   Total Asset Management$(785)$226,058 $225,273 
Insurance
Policy liabilities— 42,419 42,419 
   Total Insurance$— $42,419 $42,419 
Total Liabilities$(785)$268,477 $267,692 
Three Months Ended March 31, 2021
 Net Realized
Gains (Losses)		Net Unrealized
Gains (Losses)		Total
Assets
Asset Management
Credit$(15,689)$(18,745)$(34,434)
Investments of Consolidated CFEs(2,628)128,143 125,515 
Real Assets47 727 774 
Equity Method - Other984 229,081 230,065 
Other Investments5,050 7,004 12,054 
   Total Asset Management$(12,236)$346,210 $333,974 
Insurance
Mortgage and other loan receivables— 7,561 7,561 
Other investments— 3,866 3,866 
   Total Insurance— 11,427 11,427 
Total Assets$(12,236)$357,637 $345,401 
Liabilities
Asset Management
Debt Obligations of Consolidated CFEs$(2,048)$(44,096)$(46,144)
   Total Asset Management$(2,048)$(44,096)$(46,144)
Insurance
Policy liabilities$— $(65,834)$(65,834)
   Total Insurance$— $(65,834)$(65,834)
Total Liabilities$(2,048)$(109,930)$(111,978)


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12. INSURANCE INTANGIBLES, UNEARNED REVENUE RESERVES AND UNEARNED FRONT-END LOADS

The following reflects the changes to the deferred policy acquisition costs ("DAC") asset:

Three Months Ended March 31,
20222021
Balance, as of beginning of period$447,886 $— 
Deferrals114,935 76,694 
Amortized to expense during the period(1)
(9,343)798 
Adjustment for unrealized investment-related losses (gains) during the period(14,313)— 
Balance, as of end of period$539,165 $77,492 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the value of business acquired ("VOBA") asset:

Three Months Ended March 31,
20222021
Balance, as of beginning of period$959,263 $1,024,520 
Amortized to expense during the period(1)
(17,144)(12,182)
Balance, as of end of period$942,119 $1,012,338 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the negative VOBA liability:

Three Months Ended March 31,
20222021
Balance, as of beginning of period$1,118,716 $1,273,414 
Amortized to expense during the period(1)
(34,220)(31,862)
Balance, as of end of period$1,084,496 $1,241,552 

(1)     These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

The following reflects the changes to the unearned revenue reserve ("URR") and unearned front-end load ("UFEL):

Three Months Ended March 31,
20222021
Balance, as of beginning of period$33,603 $— 
Deferrals16,686 9,575 
Amortized to revenue during the period(1)
(5,934)(2,013)
Adjustment for unrealized investment-related gains during the period(40,577)— 
Balance, as of end of period$3,778 $7,562 

(1)     These amounts are reported within policy fees in the consolidated statements of operations.

13. REINSURANCE

Global Atlantic maintains a number of reinsurance treaties with third parties whereby Global Atlantic assumes fixed annuity, variable annuity, payout annuity, universal life, variable universal life and term life insurance policies on a coinsurance, modified coinsurance and funds withheld basis. Global Atlantic also maintains other reinsurance treaties including the cession of certain fixed annuity, variable annuity, payout annuity, universal life policies, individual disability income policies and discontinued accident and health insurance.

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The effects of all reinsurance agreements on the consolidated statement of financial condition were as follows:

March 31, 2022December 31, 2021
Policy liabilities:
Direct$68,444,765 $67,131,818 
Assumed62,631,922 59,388,226 
Total policy liabilities131,076,687 126,520,044 
Ceded(1)
(24,625,159)(25,035,228)
Net policy liabilities$106,451,528 $101,484,816 

(1)Reported within reinsurance recoverable within the consolidated statement of financial condition.

A key credit quality indicator is a counterparty’s A.M. Best financial strength rating.A.M. Best ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. Global Atlantic mitigates counterparty credit risk by requiring collateral and credit enhancements in various forms including engaging in funds withheld at interest and modified coinsurance transactions. The following shows the amortized cost basis of Global Atlantic’s reinsurance recoverable and funds withheld receivable at interest by credit quality indicator and any associated credit enhancements Global Atlantic has obtained to mitigate counterparty credit risk:

As of March 31, 2022As of December 31, 2021
A.M. Best Rating(1)
Reinsurance recoverable and funds withheld receivable at interest(2)
Credit enhancements(3)
Net reinsurance credit exposure(4)
Reinsurance recoverable and funds withheld receivable at interest(2)
Credit enhancements(3)
Net reinsurance credit exposure(4)
A++$8,810 $— $8,810 $7,911 $— $7,911 
A+1,977,750 — 1,977,750 1,989,426 — 1,989,426 
A2,571,414 — 2,571,414 2,652,286 — 2,652,286 
A-5,587,142 4,822,173 764,969 5,645,633 5,166,559 479,074 
B++37,176 — 37,176 33,410 — 33,410 
B+1,564 — 1,564 1,122 — 1,122 
B9,290 — 9,290 9,227 — 9,227 
B-1,850 — 1,850 1,274 — 1,274 
Not rated(5)
17,430,904 16,959,558 471,346 17,698,613 18,323,795 — 
Total$27,625,900 $21,781,731 $5,844,169 $28,038,902 $23,490,354 $5,173,730 

(1)Ratings are periodically updated (at least annually) as A.M. Best issues new ratings.
(2)At amortized cost, excluding any associated embedded derivative assets and liabilities.
(3)Includes funds withheld payable at interest and deferred intangible reinsurance assets and liabilities.
(4)Includes credit loss allowance of $28.1 million and $8.4 million as of March 31, 2022 and December 31, 2021, respectively, held against reinsurance recoverable.
(5)Includes $17.4 billion and $17.7 billion as of March 31, 2022 and December 31, 2021, respectively, associated with cessions to Ivy Re Limited, a Bermuda insurance company and a subsidiary of an investment vehicle that participates in qualifying reinsurance transactions sourced by Global Atlantic.

As of both March 31, 2022 and December 31, 2021, Global Atlantic had $3.0 billion of funds withheld receivable at interest, with 6 counterparties related to modified coinsurance and funds withheld contracts. The assets supporting these receivables were held in trusts and not part of the respective counterparty’s general accounts.

The effects of reinsurance on the consolidated statements of operations were as follows:

Three Months Ended March 31,
20222021
Premiums:
Direct$36,573 $14,175 
Assumed(1)
401,515 1,280,753 
Ceded(65,944)(118,786)
Net premiums$372,144 $1,176,142 
(1)Includes related party activity of $2.7 million for the three and nine months ended September 30, 2017March 31, 2021.
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Three Months Ended March 31,
20222021
Policy fees:
Direct$240,991 $148,999 
Assumed(1)
77,778 52,955 
Ceded(333)(271)
Net policy fees$318,436 $201,683 

(1)Includes related party activity of $2.1 million for the three months ended March 31, 2021.

Three Months Ended March 31,
20222021
Policy benefits and claims:
Direct$235,604 $182,801 
Assumed(1)
604,233 1,467,127 
Ceded(113,777)(164,610)
Net policy benefits and claims$726,060 $1,485,318 

(1)Includes related party activity of $22.5 million for the three months ended March 31, 2021.

Global Atlantic holds collateral for and 2016, respectively:provides collateral to our reinsurance clients. Global Atlantic held $22.9 billion and $23.4 billion of collateral on behalf of our reinsurers as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, reinsurers held collateral of $1.4 billion and $1.3 billion on behalf of Global Atlantic, respectively. A significant portion of the collateral that Global Atlantic provides to its reinsurance clients is provided in the form of assets held in a trust for the benefit of the counterparty. As of March 31, 2022 and December 31, 2021, these trusts held in excess of the $58.6 billion and $55.2 billion of assets it is required to hold in order to support reserves of $59.0 billion and $55.8 billion, respectively. Of the cash held in trust, Global Atlantic classified $159.7 million and $149.3 million as restricted as of March 31, 2022 and December 31, 2021, respectively.

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 Three Months Ended
September 30, 2017		 Three Months Ended
September 30, 2016
 
Net Realized
Gains (Losses)
 Net Unrealized Gains (Losses) Total Net Realized
Gains (Losses)		 Net Unrealized Gains (Losses) Total
Assets           
Private Equity$2,981
 $(6,692) $(3,711) $—
 $(446) $(446)
Credit6,878
 (10,835) (3,957) (31,310) 12,376
 (18,934)
Investments of Consolidated CFEs(83,797) 43,905
 (39,892) (18,697) 40,049
 21,352
Real Assets12,611
 10,498
 23,109
 2,945
 (2,051) 894
Equity Method6,282
 (29) 6,253
 225
 42,525
 42,750
Other(5,457) 12,348
 6,891
 (762) (11,016) (11,778)
     Total$(60,502) $49,195
 $(11,307) $(47,599) $81,437
 $33,838
            
Liabilities           
Debt Obligations of Consolidated CFEs13,403
 24,483
 37,886
 107,844
 68,658
 176,502
     Total$13,403
 $24,483
 $37,886
 $107,844
 $68,658
 $176,502
            
 Nine Months Ended
September 30, 2017		 Nine Months Ended
September 30, 2016
 
Net Realized
Gains (Losses)
 Net Unrealized Gains (Losses) Total Net Realized
Gains (Losses)		 Net Unrealized Gains (Losses) Total
Assets

 

 

      
Private Equity$3,670
 $33,803
 $37,473
 $—
 $(2,744) $(2,744)
Credit(401,720) 74,003
 (327,717) (26,293) (29,662) (55,955)
Investments of Consolidated CFEs(88,677) 71,952
 (16,725) (239,502) 547,099
 307,597
Real Assets12,425
 58,108
 70,533
 2,945
 8,544
 11,489
Equity Method6,908
 (3,075) 3,833
 (1,766) (58,572) (60,338)
Other(27,602) 25,158
 (2,444) (2,578) (30,013) (32,591)
     Total$(494,996) $259,949
 $(235,047) $(267,194) $434,652
 $167,458
            
Liabilities           
Debt Obligations of Consolidated CFEs53,849
 (30,490) 23,359
 210,386
 (378,505) (168,119)
     Total$53,849
 $(30,490) $23,359
 $210,386
 $(378,505) $(168,119)
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7.14. NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P.INC. PER SHARE OF COMMON UNITSTOCK
 
For the three and nine months ended September 30, 2017March 31, 2022 and 2016,2021, basic and diluted Net Income (Loss) attributable to KKR & Co. L.P.Inc. per share of common unitstock were calculated as follows:
 Three Months Ended March 31,
 20222021
Net Income (Loss) Available to KKR & Co. Inc.
Common Stockholders - Basic		$(73,770)$1,644,245 
(+) Series C Mandatory Convertible Preferred Dividend (if dilutive) (1)
—17,250
Net Income (Loss) Available to KKR & Co. Inc.
Common Stockholders - Diluted		$(73,770)$1,661,495 

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders$153,563
 $352,152
 $818,552
 $116,103
Basic Net Income (Loss) Per Share of Common Stock
Weighted Average Shares of Common Stock Outstanding - Basic592,202,835 576,727,967 
Net Income (Loss) Attributable to KKR & Co. Inc.
Per Share of Common Stock - Basic		$(0.12)$2.85 

Basic Net Income (Loss) Per Common Unit       
Weighted Average Common Units Outstanding - Basic471,758,886
 445,989,300
 463,941,084
 448,149,747
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic$0.33
 $0.79
 $1.76
 $0.26
Diluted Net Income (Loss) Per Share of Common Stock
Weighted Average Shares of Common Stock Outstanding - Basic592,202,835 576,727,967 
Incremental Common Shares:
Assumed vesting of dilutive equity awards (2)
— 17,337,924 
Assumed conversion of Series C Mandatory Convertible Preferred Stock (1)
— 26,822,600 
Weighted Average Shares of Common Stock Outstanding - Diluted592,202,835 620,888,491 
Net Income (Loss) Attributable to KKR & Co. Inc.
Per Share of Common Stock - Diluted		$(0.12)$2.68 
Diluted Net Income (Loss) Per Common Unit        
Weighted Average Common Units Outstanding - Basic471,758,886
 445,989,300
 463,941,084
 448,149,747
Weighted Average Unvested Common Units and Other Exchangeable Securities35,114,291
 33,986,375
 37,674,551
 34,985,238
Weighted Average Common Units Outstanding - Diluted506,873,177
 479,975,675
 501,615,635
 483,134,985
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted$0.30
 $0.73
 $1.63
 $0.24
(1)    For the three months ended March 31, 2022 the impact of Series C Mandatory Convertible Preferred Stock is excluded from the calculation of Diluted Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock because inclusion of such shares would be anti-dilutive having the effect of decreasing the loss per share of common stock. For the three months ended March 31, 2021, the impact of Series C Mandatory Convertible Preferred Stock calculated under the if-converted method was dilutive, and as such (i) 26.8 million shares of common stock (assuming a conversion ratio based on the average volume weighted average price per share of common stock over each reporting period) were included in the Weighted Average Shares of Common Units Outstanding—Stock Outstanding - Diluted primarilyand (ii) $17.3 million of Series C Mandatory Convertible Preferred dividends were added back to Net Income (Loss) Available to KKR & Co. Inc. Common Stockholders - Diluted.
(2)    For the three months ended March 31, 2021, Weighted Average Shares of Common Stock Outstanding – Diluted includes unvested equity awards, including certain equity awards that have met their market price-based vesting condition but have not satisfied their service-based vesting condition, which have been granted under the Equity Incentive Plan as well as exchangeable equity securities issued in connection with the acquisition of Avoca.Plans. Vesting or exchanges of these equity interestsawards dilute equityholders of KKR Group Partnership, including KKR & Co. Inc. and KKR Holdings pro rata in accordance with their respective ownership interests in the KKR Group Partnerships.Partnership. For the three months ended March 31, 2022, all unvested shares of common stock are excluded from the calculation of Diluted Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock because inclusion of such unvested shares of common stock would be anti-dilutive having the effect of decreasing the loss per share of common stock.



 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Weighted Average KKR Holdings Units Outstanding341,214,527
 357,528,999
 346,716,489
 358,853,469
The adoption of ASU 2020-06 in 2022 did not result in a material impact to the calculation of the Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock – Diluted. For three months ended March 31, 2021 the Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock – Diluted was unchanged by the adoption of ASU 2020-06, and there was no impact to previously reported amounts.


KKR Holdings Units

For the three and nine months ended September 30, 2017March 31, 2022 and 2016,2021 KKR Holdings units have been excluded from the calculation of Net Income (Loss) attributableAttributable to KKR & Co. L.P. per common unitInc. Per Share of Common Stock - dilutedDiluted since the exchange of these units would not dilute KKR’s respectiveKKR & Co. Inc.'s ownership interests in the KKR Group Partnerships.Partnership.

 Three Months Ended March 31,
 20222021
Weighted Average KKR Holdings Units258,726,163 274,748,078 





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8.
Market Condition Awards

For the three months ended March 31, 2022 and 2021, 17.0 million and 15.3 million, respectively, of unvested equity awards that are subject to market price based and service-based vesting conditions were excluded from the calculation of Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock - Diluted since the market price based vesting condition was not satisfied. See Note 19 "Equity Based Compensation."
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15. OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES
Other Assets consist of the following:
 March 31, 2022December 31, 2021
Asset Management
Unsettled Investment Sales (1)
$200,402 $182,267 
Receivables82,966 81,133 
Due from Broker (2)
28,899 365,053 
Deferred Tax Assets, net (See Note 18)95,533 85,770 
Interest Receivable147,124 144,221 
Fixed Assets, net (3)
819,069 820,143 
Foreign Exchange Contracts and Options (4)
367,079 590,637 
Goodwill (5)
83,500 83,500 
Derivative Assets5,294 491 
Prepaid Taxes65,692 93,296 
Prepaid Expenses37,127 29,290 
Operating Lease Right of Use Assets (6)
220,458 228,363 
Deferred Financing Costs15,989 17,953 
Other238,582 164,196 
Total Asset Management$2,407,714 $2,886,313 
Insurance
Unsettled Investment Sales(1)
$1,613,094 $941,427 
Deferred Tax Assets, net1,536,986 755,876 
Derivative Assets1,024,589 1,295,950 
Accrued Investment Income898,120 817,486 
Goodwill (8)
501,496 501,496 
Intangible Assets and Deferred Sales Inducements(7)
289,412 293,824 
Operating Lease Right of Use Assets(6)
171,344 160,888 
Premiums and Other Account Receivables117,997 86,524 
Other96,576 96,093 
Current Income Tax Recoverable53,161 103,954 
Total Insurance$6,302,775 $5,053,518 
Total Other Assets$8,710,489 $7,939,831 
(1)Represents amounts due from third parties for investments sold for which cash settlement has not occurred.
(2)Represents amounts held at clearing brokers resulting from securities transactions.
(3)Net of accumulated depreciation and amortization of $153.5 million and $141.6 million as of March 31, 2022 and December 31, 2021, respectively. Depreciation and amortization expense of $12.7 million and $11.0 million for the three months ended March 31, 2022 and 2021, respectively, are included in General, Administrative and Other in the accompanying consolidated statements of operations.
(4)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments. Such instruments are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. See Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" for the net changes in fair value associated with these instruments.
(5)As of March 31, 2022, the carrying value of goodwill is recorded and assessed for impairment at the reporting unit.
(6)For Asset Management, non-cancelable operating leases consist of leases for office space in North America, Europe, Asia and Australia. KKR is the lessee under the terms of the operating leases. The operating lease cost was $12.2 million and $11.5 million for the three months ended March 31, 2022 and 2021, respectively. For Insurance, non-cancelable operating leases consist of leases for office space and land in the U.S. For the three months ended March 31, 2022 and 2021, the operating lease cost was $5.9 million and $2.6 million, respectively. Insurance lease right-of-use assets are reported net of $22.2 million and $22.7 million in deferred rent and lease incentives as of March 31, 2022 and December 31, 2021, respectively. The weighted average remaining lease term was 26.9 years and 27.9 years as of March 31, 2022 and December 31, 2021, respectively.
(7)The definite life intangible assets are amortized by using the straight-line method over the useful life of the assets which is an average of 16 years. The indefinite life intangible assets are not subject to amortization. The amortization expense of definite life intangible assets was $4.4 million and $2.5 million for the three months ended March 31, 2022 and 2021, respectively.
(8)The amounts include approximately $4.5 million of goodwill related to an immaterial acquisition of a residential mortgage platform, which Global Atlantic acquired in October 2021 for a purchase price consideration of $4.6 million.
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 September 30, 2017 December 31, 2016
Unsettled Investment Sales (1)
$200,470
 $144,600
Receivables172,788
 49,279
Due from Broker (2)
819,492
 1,084,602
Oil & Gas Assets, net (3)
258,431
 276,694
Deferred Tax Assets, net281,583
 286,948
Interest Receivable215,338
 158,511
Fixed Assets, net (4)
341,800
 283,262
Foreign Exchange Contracts and Options (5)
100,460
 240,627
Intangible Assets, net (6)
17,438
 135,024
Goodwill (6)
83,500
 89,000
Derivative Assets62,897
 81,593
Deferred Transaction Related Expenses56,322
 17,688
Prepaid Taxes46,085
 46,996
Prepaid Expenses30,150
 17,761
Deferred Financing Costs8,747
 10,507
Other63,821
 73,773
Total$2,759,322
 $2,996,865
(1)Represents amounts due from third parties for investments sold for which cash settlement has not occurred.
(2)Represents amounts held at clearing brokers resulting from securities transactions.
(3)Includes proved and unproved oil and natural gas properties under the successful efforts method of accounting, which is net of impairment write-downs, accumulated depreciation, depletion and amortization.
(4)Net of accumulated depreciation and amortization of $153,053 and $141,911 as of September 30, 2017 and December 31, 2016, respectively. Depreciation and amortization expense of $3,710 and $4,121 for the three months ended September 30, 2017 and 2016, respectively, and $11,774 and $12,025 for the nine months ended September 30, 2017 and 2016, respectively, is included in General, Administrative and Other in the accompanying condensed consolidated statements of operations.
(5)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments.
(6)See Note 16 “Goodwill and Intangible Assets.”



Accounts Payable, Accrued Expenses and Other Liabilities consist of the following:
 March 31, 2022December 31, 2021
Asset Management
Amounts Payable to Carry Pool (1)
$3,138,465 $3,650,312 
Unsettled Investment Purchases (2)
1,138,357 1,315,163 
Securities Sold Short (3) 
136,128 249,383 
Derivative Liabilities28,077 45,003 
Accrued Compensation and Benefits438,550 210,789 
Interest Payable161,358 162,801 
Foreign Exchange Contracts and Options (4)
239,875 319,511 
Accounts Payable and Accrued Expenses170,398 187,564 
Taxes Payable104,796 42,745 
Uncertain Tax Positions54,975 78,226 
Unfunded Revolver Commitments64,556 64,276 
Operating Lease Liabilities (5)
223,652 230,995 
Deferred Tax Liabilities, net (See Note 18)791,575 900,436 
Other Liabilities551,024 439,693 
Total Asset Management$7,241,786 $7,896,897 
Insurance
Unsettled Investment Purchases(2)
$1,138,365 $395,722 
Collateral on Derivative Instruments894,687 1,086,061 
Accrued Expenses753,160 747,237 
Securities Sold Under Agreements to Repurchase810,535 300,446 
Derivative Liabilities462,202 145,163 
Accrued Employee Related Expenses248,861 280,668 
Operating Lease Liabilities(5)
190,855 180,574 
Tax Payable to Former Parent Company64,886 74,423 
Interest Payable32,353 12,930 
Accounts and Commissions Payable15,196 26,054 
Other Tax Related Liabilities4,741 14,288 
Total Insurance$4,615,841 $3,263,566 
Total Accrued Expenses and Other Liabilities$11,857,627 $11,160,463 
(1)Represents the amount of carried interest payable to current and former KKR employees arising from KKR's investment funds and co-investment vehicles that provide for carried interest.
(2)Represents amounts owed to third parties for investment purchases for which cash settlement has not occurred.
(3)Represents the obligations of KKR to deliver a specified security at a future point in time. Such securities are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. See Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" for the net changes in fair value associated with these instruments.
(4)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments. Such instruments are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. See Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" for the net changes in fair value associated with these instruments.
(5)For Asset Management, operating leases have remaining lease terms that range from approximately 1 year to 14 years, some of which include options to extend the leases for up to 3 years. The weighted average remaining lease terms were 9.4 years and 9.5 years as of March 31, 2022 and December 31, 2021, respectively. The weighted average discount rates were 1.2% and 1.2% as of March 31, 2022 and December 31, 2021, respectively. For Insurance, operating leases for office space have remaining lease terms that range from approximately 1 year to 12 years, some of which include options to extend the leases for up to 10 years. The weighted average remaining lease terms was 7.6 years and 7.8 years as of March 31, 2022 and December 31, 2021, respectively. The weighted average discount rate was 2.9% as of both March 31, 2022 and December 31, 2021.
68
 September 30, 2017 December 31, 2016
Amounts Payable to Carry Pool (1)
$1,131,071
 $987,994
Unsettled Investment Purchases (2)
811,340
 722,076
Securities Sold Short (3) 
810,698
 647,234
Derivative Liabilities78,821
 100,015
Accrued Compensation and Benefits269,826
 20,764
Interest Payable150,781
 114,894
Foreign Exchange Contracts and Options (4)
243,595
 75,218
Accounts Payable and Accrued Expenses131,556
 114,854
Deferred Rent18,789
 19,144
Taxes Payable32,271
 12,514
Redemptions Payable—
 4,021
Due to Broker (5)
—
 83,206
Other Liabilities90,934
 79,326
Total$3,769,682
 $2,981,260
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(1)Represents the amount of carried interest payable to principals, professionals and other individuals with respect to KKR’s active funds and co-investment vehicles that provide for carried interest.
(2)Represents amounts owed to third parties for investment purchases for which cash settlement has not occurred.
(3)Represents the obligations of KKR to deliver a specified security at a future point in time. Such securities are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying condensed consolidated statements of operations. See Note 3 “Net Gains (Losses) from Investment Activities” for the net changes in fair value associated with these instruments.
(4)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments.
(5)Represents amounts owed for securities transactions initiated at clearing brokers.



9.16. VARIABLE INTEREST ENTITIES
Consolidated VIEs
KKR consolidates certain VIEsvariable interest entities ("VIEs") in which it is determined that KKR is the primary beneficiary as described in Note 2 "Summary of Significant Accounting Policies" and whichbeneficiary. The consolidated VIEs are predominately CFEsCLOs and certain investment funds.funds sponsored by KKR. The primary purpose of these VIEs is to provide strategy specific investment opportunities to earn capitalinvestment gains, current income or both in exchange for management and performance based fees or carried interest. KKR’sincome. KKR's investment strategies differ for these VIEs differ by product;VIEs; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and carried interests.performance income. KKR does not provide performance guarantees and has no other financial obligation to provide funding to these consolidated VIEs, beyond amounts previously committed, if any.
Furthermore, KKR consolidates certain VIEs, which are formed by Global Atlantic to hold investments, including investments in transportation, renewable energy, consumer and other loans and fixed maturity securities.
Unconsolidated VIEs
KKR holds variable interests in certain VIEs which are not consolidated as it has been determined that KKR is not the primary beneficiary. VIEs that are not consolidated predominantly include certain investment funds sponsored by KKR andas well as certain CLO vehicles.
Investments in Unconsolidated Investment Funds
KKR’sinvestment partnerships where Global Atlantic retains an economic interest. KKR's investment strategies differ by investment fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and carried interests. KKR’sperformance income. KKR's maximum exposure to loss as a result of its investments in the unconsolidated investment funds is the carrying value of such investments, including KKR's capital interest and any unrealized carried interest, which was approximately $4.2 billion at September 30, 2017.interest. Accordingly, disaggregation of KKR’sKKR's involvement by type of unconsolidated investment fund would not provide more useful information. For these unconsolidated investment funds in which KKR is the sponsor, KKR may have an obligation as general partner to provide commitments to such investment funds. As of September 30, 2017,March 31, 2022, KKR's commitments to these unconsolidated investment funds was $2.3were $4.9 billion. KKR has not provided any financial support other than its obligated amount as of September 30, 2017.
InvestmentsMarch 31, 2022. Additionally, Global Atlantic also has unfunded commitments of $23.7 million in Unconsolidated CLO Vehicles
KKR provides collateral management services for, and has made nominal investments in, certain CLO vehicles that it does not consolidate. KKR’s investments in the unconsolidated CLO vehicles, if any, are carried at fair value in the consolidated statements of financial condition. KKR earns management fees, including subordinated collateral management fees, for managing the collateral of the CLO vehicles. As of September 30, 2017, combined assets under management in the pools of unconsolidated CLO vehicles were $0.5 billion. KKR’s maximum exposurerelation to loss as a result of its investments in the residualother limited partnership interests of unconsolidated CLO vehicles is the carrying value of such investments, which was $1.0 million as of September 30, 2017. CLO investors in the CLO vehicles may only use the assets of the CLO to settle the debt of the related CLO, and otherwise have no recourse against KKR for any losses sustained in the CLO structures.March 31, 2022.

As of September 30, 2017March 31, 2022 and December 31, 2016,2021, the maximum exposure to loss, before allocations to the carry pool and noncontrolling interests, if any, for those VIEs in which KKR is determined not to be the primary beneficiary but in which it has a variable interest is as follows:
 March 31, 2022December 31, 2021
Investments - Asset Management$10,254,226 $11,539,945 
Due from (to) Affiliates, net1,027,639 1,046,210 
Maximum Exposure to Loss - Asset Management$11,281,865 $12,586,155 
Other Investment in Partnership - Insurance$204,984 $190,106 
Investment in Renewable Partnerships - Insurance30,194 30,760 
Maximum Exposure to Loss- Insurance$235,178 $220,866 
Total Maximum Exposure to Loss$11,517,043 $12,807,021 

69
 September 30, 2017 December 31, 2016
Investments$4,151,598
 $3,632,162
Due from (to) Affiliates, net134,308
 (60,604)
Maximum Exposure to Loss$4,285,906
 $3,571,558
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10.17. DEBT OBLIGATIONS

Asset Management Debt Obligations

In Asset Management, KKR borrows and enters into credit agreements and issues debt for its general operating and investment purposes. Additionally, certain of KKR's consolidated investment funds borrow to meet financing needs of their operating and investing activities. KKR consolidates and reports KFN's debt obligations of KKR Financial Holdings LLC, a KKR subsidiary ("KFN"), which are non-recourse to KKR beyond the assets of KFN.


FundCertain of KKR's consolidated investment funds have entered into financing facilitiesarrangements with financial institutions, generally to provide liquidity to such investment funds. These financing arrangements are generally not direct obligations of the general partners of KKR's investment funds (beyond KKR's capital interest) or its management companies. Such borrowings have been establishedvarying maturities and bear interest at floating rates. Borrowings are generally secured by the investment purchased with the proceeds of the borrowing and/or the uncalled capital commitment of each respective fund. When an investment vehicle borrows, the proceeds are available only for use by that investment vehicle and are not available for the benefit of certainother investment funds. When anvehicles or KKR. Collateral within each investment fund borrows from the facility in which it participates, the proceeds fromvehicle is also available only against borrowings by that investment vehicle and not against the borrowings of other investment vehicles or KKR.

In certain other cases, investments and other assets held directly by majority-owned consolidated investment vehicles have been funded with borrowings that are limited for their intended usecollateralized by the borrowinginvestments and assets they own. These borrowings are non-recourse to KKR beyond the investments or assets serving as collateral or the capital that KKR has committed to fund such investment fund. KKR’s obligations with respect to these financing arrangements arevehicles. Such borrowings have varying maturities and generally limited to KKR’s pro-rata equitybear interest in such funds.at fixed rates.


In addition, certain consolidated CFE vehiclesCFEs issue debt securities to third partythird-party investors which are collateralized by assets held by the CFE vehicle.CFE. Debt securities issued by CFEs are supported solely by the assets held at the CFEs and are not collateralized by assets of any other KKR entity. CFEs also may have warehouse facilities with banks to provide liquidity to the CFE. The CFE's debt obligations are non-recourse to KKR beyond the assets of the CFE.

KKR’s borrowings
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KKR's Asset Management debt obligations consisted of the following:
 March 31, 2022 December 31, 2021
Financing AvailableBorrowing OutstandingFair Value Financing AvailableBorrowing OutstandingFair Value
Revolving Credit Facilities:
Corporate Credit Agreement$1,000,000 $— $—  $1,000,000 $— $— 
KCM Credit Agreement728,493 — — 728,799 — — 
KCM 364-Day Revolving Credit Agreement750,000 — — 750,000 — — 
Notes Issued: (1)
KKR ¥25 billion (or $205.0 million)
0.509% Notes Due 2023
(4)— 204,706 204,479 — 216,881 216,818 
KKR ¥5 billion (or $41.0 million)
0.764% Notes Due 2025
(4)— 40,661 40,881 — 43,082 43,452 
KKR €650 million (or $723.8 million)
1.625% Notes Due 2029
(5)— 717,092 703,183 — 729,048 776,926 
KKR $750 million 3.750% Notes Due 2029(4)— 743,555 766,035 — 743,333 825,540 
KKR ¥10.3 billion (or $84.5 million)
1.595% Notes Due 2038
(4)— 83,473 83,191 — 88,505 92,198 
KKR $500 million 5.500% Notes Due 2043 (6)
(4)— 491,451 567,543 — 491,153 661,351 
KKR $1 billion 5.125% Notes Due 2044 (6)
(4)— 956,647 1,074,160 — 951,462 1,237,888 
KKR $500 million 3.625% Notes Due 2050(4)— 492,553 447,275 — 492,486 535,550 
KKR $750 million 3.500% Notes Due 2050 (6)
(4)— 736,056 658,983 — 735,905 784,650 
KKR $750 million 3.250% Notes Due 2051(4)— 739,569 629,693 — 739,481 747,900 
KKR $500 million 4.625% Notes Due 2061(5)— 486,133 439,000 — 486,044 523,200 
KFN $500 million 5.500% Notes Due 2032(2)— 495,147 466,871 — 495,025 487,779 
KFN $120 million 5.200% Notes Due 2033(2)— 118,683 108,766 — 118,654 115,535 
KFN $70 million 5.400% Notes Due 2033
(2)— 68,980 64,437 — 68,957 68,532 
KFN Issued Junior Subordinated Notes (3)
(2)— 236,467 186,989 — 236,138 178,335 
2,478,493 6,611,173 6,441,486 2,478,799 6,636,154 7,295,654 
Other Debt Obligations(6)
5,685,293 29,501,699 29,501,699 4,941,755 30,033,601 30,033,601 
 $8,163,786 $36,112,872 $35,943,185  $7,420,554 $36,669,755 $37,329,255 

 September 30, 2017 December 31, 2016 
 Financing Available Borrowing Outstanding Fair Value Financing Available Borrowing Outstanding Fair Value 
Revolving Credit Facilities:            
Corporate Credit Agreement$1,000,000
 $—
 $—
 $1,000,000
 $—
 $—
 
KCM Credit Agreement488,256
 —
 —
 500,000
 —
 —
 
KCM Short-Term Credit Agreement750,000
 —
 —
 —
 —
 —
 
Notes Issued:            
KKR Issued 6.375% Notes Due 2020 (1)
—
 498,243
 556,655
(10) 
—
 497,804
 562,960
(10) 
KKR Issued 5.500% Notes Due 2043 (2)
—
 491,412
 564,560
(10) 
—
 491,158
 502,800
(10) 
KKR Issued 5.125% Notes Due 2044 (3)
—
 990,283
 1,081,200
(10) 
—
 990,009
 955,240
(10) 
KFN Issued 5.500% Notes Due 2032 (4)
—
 367,852
 377,656
 —
 —
 —
 
KFN Issued 7.500% Notes Due 2042 (5)
—
 —
 —
 —
 123,008
 116,699
(11) 
KFN Issued Junior Subordinated Notes (6)
—
 235,684
 201,400
 —
 250,154
 210,084
 
Other Consolidated Debt Obligations:            
Fund Financing Facilities and Other (7)
2,028,972
 2,623,340
 2,623,340
(12) 
2,039,532
 2,333,654
 2,333,654
(12) 
CLO Senior Secured Notes (8)
—
 9,499,495
 9,499,495
 —
 8,279,812
 8,279,812
 
CLO Subordinated Notes (8)
—
 289,222
 289,222
 —
 283,735
 283,735
 
CMBS Debt Obligations (9)
—
 5,295,183
 5,295,183
 —
 5,294,741
 5,294,741
 
 $4,267,228
 $20,290,714
 $20,488,711
 $3,539,532
 $18,544,075
 $18,539,725
 
(1)Borrowing outstanding includes: (i) unamortized note discount (net of premium), as applicable and (ii) unamortized debt issuance costs, as applicable. Financing costs related to the issuance of the notes have been deducted from the note liability and are being amortized over the life of the notes.
(1)$500 million aggregate principal amount of 6.375% senior notes of KKR due 2020. Borrowing outstanding is presented net of i) unamortized note discount and ii) unamortized debt issuance costs of $1.1 million and $1.4 million as of September 30, 2017 and December 31, 2016, respectively.
(2)$500 million aggregate principal amount of 5.500% senior notes of KKR due 2043. Borrowing outstanding is presented net of i) unamortized note discount and ii) unamortized debt issuance costs of $3.8 million and $3.9 million as of September 30, 2017 and December 31, 2016, respectively.
(3)$1.0 billion aggregate principal amount of 5.125% senior notes of KKR due 2044. Borrowing outstanding is presented net of i) unamortized note discount (net of premium) and ii) unamortized debt issuance costs of $8.4 million and $8.6 million as of September 30, 2017 and December 31, 2016, respectively.
(4)KKR consolidates KFN and thus reports KFN’s outstanding $375 million aggregate principal amount of 5.500% senior unsecured notes due 2032. Borrowing outstanding is presented net of i) unamortized note discount and ii) unamortized debt issuance costs of $4.6 million as of September 30, 2017. These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR’s Level III credit investments.
(5)KKR consolidates KFN and thus reports KFN’s outstanding $115 million aggregate principal amount of 7.500% senior notes due 2042. These senior notes were redeemed in April 2017. Borrowing outstanding is presented net of unamortized note premium as of December 31, 2016.    
(6)KKR consolidates KFN and thus reports KFN’s outstanding $264.8 million aggregate principal amount of junior subordinated notes. The weighted average interest rate is 3.8% and the weighted average years to maturity is 19.3 years as of September 30, 2017. These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR’s Level III credit investments.

(7)Certain of KKR’s consolidated investment funds have entered into financing arrangements with major financial institutions, generally to enable such investment funds to make investments prior to or without receiving capital from fund limited partners. The weighted average interest rate is 2.9% and 2.4% as of September 30, 2017 and December 31, 2016, respectively. In addition, the weighted average years to maturity is 3.8 years and 2.4 years as of September 30, 2017 and December 31, 2016, respectively.
(8)CLO debt obligations are carried at fair value and are classified as Level II within the fair value hierarchy. See Note 5 “Fair Value Measurements.”
(9)CMBS debt obligations are carried at fair value and are classified as Level III within the fair value hierarchy. See Note 5 “Fair Value Measurements.”
(10)The notes are classified as Level II within the fair value hierarchy and fair value is determined by third party broker quotes.
(11)The notes are classified as Level I within the fair value hierarchy and fair value is determined by quoted prices in active markets since the debt is publicly listed.
(12)Carrying value approximates fair value given the fund financing facilities’ interest rates are variable.

(2)These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR's Level III credit investments.
(3)KKR consolidates KFN and reports KFN's outstanding $258.5 million aggregate principal amount of junior subordinated notes. The weighted average interest rate is 2.6% and 2.6% and the weighted average years to maturity is 14.5 years and 14.8 years as of March 31, 2022 and December 31, 2021, respectively.
(4)The notes are classified as Level II within the fair value hierarchy and fair value is determined by third party broker quotes.
(5)The notes are classified as Level I within the fair value hierarchy and fair value is determined by quoted prices in active markets since the debt is publicly listed.
(6)As of March 31, 2022 and December 31, 2021, the borrowing outstanding reflects the elimination for the portion of these debt obligations that are held by Global Atlantic.


Asset Management Revolving Credit Facilities


KCM Short-Term Credit Agreement


On June 29, 2017,April 8, 2022, KKR Capital Markets ("KCM"Holdings L.P. and certain other capital markets subsidiaries (the "KCM Borrowers") entered into a 364-day revolving credit agreement (the “KCM"KCM Short-Term Credit Agreement”) with a major financial institution for use in KKR’s capital markets business. This financial institution also providesMizuho Bank, Ltd., as administrative agent, and one or more lenders party thereto. The KCM Short-Term Credit Agreement replaces the existingprior 364-day revolving credit agreement, dated as of April 9, 2021, between the KCM Credit Agreement.Borrowers and the administrative agent, and one or more lenders party to the KCM Short-Term Agreement, which was terminated according to its terms on April 8, 2022. The KCM Short-Term Credit Agreement provides for revolving borrowings of up to $750 million, expires on June 28, 2018,April 7, 2023, and ranks pari passu with the KCM Credit Agreement. Borrowings under the KCM Short-Term Credit Agreement may only be used to facilitate the settlement of debt transactions syndicatedexisting $750 million revolving credit facility provided by KKR’s capital markets business. Obligations under the KCM Short-Term Credit Agreement are limited solely to entities involved in KKR’sthem for KKR's capital markets business and liabilities under the KCM Short-Term(the "KCM Credit Agreement are non-recourse to other partsAgreement").
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If a borrowing is made under the KCM Short-Term Credit Agreement, the interest rate will vary depending on the type of drawdown requested. If the borrowing is (i) denominated in U.S. dollars and a Eurocurrency loan,term rate, it will be based on a LIBOR ratethe term Secured Overnight Financing Rate (SOFR), (ii) denominated in euros, it will be based on EURIBOR and (iii) denominated in pounds sterling, it will be based on the Sterling Overnight Interbank Average Rate (SONIA), in each case, plus anthe applicable margin rangingwhich ranges initially between 1.25%1.50% and 2.50%2.75%, depending on the duration of the loan. If the borrowing is an alternate base rate loan,ABR Loan, it will be based on a basethe greater of (i) the federal funds rate plus an0.50% and (ii) term SOFR for one-month tenor plus 1.00%, in each case, plus the applicable margin rangingwhich ranges initially between 0.25%0.50% and 1.50%,1.75% depending on the durationamount and nature of the loan.

For the three and nine months ended September 30, 2017, $145 million was borrowed and repaid Borrowings under the KCM Short-Term Credit Agreement.Agreement may only be used to facilitate the settlement of debt transactions syndicated by KKR's capital markets business. Obligations under the KCM Short-Term Credit Agreement are limited to the KCM Borrowers, which are solely entities involved in KKR's capital markets business, and liabilities under the KCM Short-Term Credit Agreement are non-recourse to other parts of KKR.


Notes IssuancesThe KCM Short-Term Credit Agreement contains customary representations and Redemptions

KFN Issued 5.500% Notes Due 2032

On March 30, 2017, KFN issued $375.0 million par amountwarranties, events of 5.500% Senior Unsecured Notes (“KFN 2032 Senior Unsecured Notes”) indefault, and affirmative and negative covenants, including a private placement, resulting in net proceedsfinancial covenant providing for a maximum debt to KFN of $368.6 million. Interest onequity ratio for the KFN 2032 Senior Unsecured Notes is payable semi-annually on March 30th and September 30th.KCM Borrowers. The KFN 2032 Senior Unsecured Notes will mature on March 30, 2032. KFN may redeemKCM Borrowers' obligations under the KFN 2032 Senior Unsecured Notes in whole, but not in part, at a redemption price equal to 100%KCM Short-Term Credit Agreement are secured by certain assets of the outstanding principal amount plus accrued and unpaid interest to, but excluding, the dateKCM Borrowers, including a pledge of redemption on or after March 30, 2022 and annually thereafter, after providing notice to noteholdersequity interests of such redemption not less than 30 and no more than 60 business days prior to such redemption date. At any time prior to March 30, 2022, KFN may redeem the KFN 2032 Senior Unsecured Notes in whole, but not in part, at a redemption price equal to (i) 100%certain subsidiaries of the outstanding principal amount, (ii) plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) plus the excess, if any, of (a) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes (as if the Notes matured on March 30, 2022), discounted to the redemption date on a semi-annual basis (assuming a 360-day year of twelve 30-day months) at a rate equal to the sum of the applicable treasury rate plus 50 basis points, minus accrued and unpaid interest, if any, on the KFN 2032 Senior Unsecured Notes being redeemed to, but excluding, the redemption date over (b) the principal amount of the KFN 2032 Senior Unsecured Notes being redeemed.KCM Borrowers.


KFN Issued 7.500% Notes Due 2042

On April 24, 2017, KFN redeemed all of its outstanding 7.500% Senior Notes due 2042 (the “KFN 2042 Senior Notes”) for cash, in accordance with the optional redemption provisions provided in the documents governing the KFN 2042 Senior Notes. The redemption price was equal to 100% of the principal amount of the KFN 2042 Senior Notes plus unpaid interest accrued thereon to, but excluding, the redemption date, in accordance with the terms of the KFN 2042 Senior Notes.


Other ConsolidatedAsset Management Debt Obligations


Debt Obligations of Consolidated CFEs
As of September 30, 2017,March 31, 2022, other debt obligations of consolidated CFEs consisted of the following:      
Financing AvailableBorrowing
Outstanding		Fair ValueWeighted
Average
Interest Rate		Weighted Average Remaining Maturity in Years
Financing Facilities of Consolidated Funds and Other (1)
$5,685,293 $8,288,493 $8,288,493 3.5%4.4
Debt Obligations of Consolidated CLOs— 21,213,206 21,213,206 (2)10.5
 $5,685,293 $29,501,699 $29,501,699   

 
Borrowing
Outstanding
 
Weighted
Average
Interest Rate
 
Weighted Average
Remaining
Maturity in Years
Senior Secured Notes of Consolidated CLOs$9,499,495
 2.7% 11.6
Subordinated Notes of Consolidated CLOs289,222
 (1)
 11.5
Debt Obligations of Consolidated CMBS Vehicles5,295,183
 4.4% 26.9
 $15,083,900
  
  
(1)Includes borrowings collateralized by fund investments, fund co-investments and other assets held by levered investment vehicles of $2.0 billion.
(1)The subordinated notes do not have contractual interest rates but instead receive a pro rata amount of the net distributions from the excess cash flows of the respective CLO vehicle. Accordingly, weighted average borrowing rates for the subordinated notes are based on cash distributions during the period, if any.

(2)The senior notes of the consolidated CLOs had a weighted average interest rate of 1.9%. The subordinated notes of the consolidated CLOs do not have contractual interest rates but instead receive a pro rata amount of the net distributions from the excess cash flows of the respective CLO vehicle. Accordingly, weighted average borrowing rates for the subordinated notes are based on cash distributions during the period, if any.
Debt obligations of consolidated CFEsCLOs are collateralized by assets held by each respective CFECLO vehicle and assets of one CFECLO vehicle may not be used to satisfy the liabilities of another. As of September 30, 2017,March 31, 2022, the fair value of the consolidated CFECLO assets was $16.6$23.0 billion. This collateral consisted of Cash and Cash Equivalents, Held at Consolidated Entities, Investments, and Other Assets.

Insurance Debt Obligations
11.Global Atlantic's debt obligations consisted of the following:
 March 31, 2022 December 31, 2021
Financing AvailableBorrowing Outstanding
Fair Value(2)
 Financing AvailableBorrowing Outstanding
Fair Value(2)
Revolving Credit Facilities:
Global Atlantic revolving credit facility, due August 2026$800,000 $200,000 $200,000  $1,000,000 $— $— 
Notes Issued and Others:
Global Atlantic senior notes, due October 2029500,000 500,100 500,000 539,350 
Global Atlantic senior notes, due June 2031650,000 582,660 650,000 644,800 
Global Atlantic subordinated debentures, due October 2051750,000 710,625 750,000 761,475 
2,100,000 $1,993,385 1,900,000 $1,945,625 
Purchase accounting adjustments(1)
45,618 51,050 
Debt issuance costs, net of accumulated amortization(18,413)(18,675)
Fair value loss (gain) of hedged debt obligations, recognized in earnings(97,436)(24,369)
 $2,029,769  $1,908,006 
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(1)The amortization of the purchase accounting adjustments was $5.4 million and $2.0 million for the three months ended March 31, 2022 and 2021, respectively.
(2)These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR's Level III credit investments.

Debt Covenants

Borrowings of KKR (including Global Atlantic) contain various debt covenants. These covenants do not, in management's opinion, materially restrict KKR's operating business or investment strategies as of March 31, 2022. KKR (including Global Atlantic) was in compliance with such debt covenants in all material respects as of March 31, 2022.
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18. INCOME TAXES
The consolidated entities of KKR are generally treated as partnerships or disregarded entities& Co. Inc. is a domestic corporation for U.S. and non-U.S. tax purposes.  The taxes payable on thefederal income generated by partnerships and disregarded entities are generally paid by the fund investors, unitholders, principals and other third parties who beneficially own such partnerships and disregarded entities and are generally not payable by KKR.  However, certain consolidated entities are or are treated as corporations for U.S. and non-U.S. tax purposes and are thereforeis subject to U.S. federal, state and/orand local income taxes and/or non-U.S. taxes at the entity-level.entity level on its share of taxable income. In addition, KKR Group Partnership and certain consolidated entities which are treatedof its subsidiaries operate as partnerships for U.S. federal tax purposes but as taxable entities for certain state, local or non-U.S. tax purposes. Moreover, certain corporate subsidiaries of KKR, including certain Global Atlantic subsidiaries, are domestic corporations for U.S. federal income tax purposes and are subject to U.S. federal, state, and local income taxes. Income taxes reported in these consolidated financial statements include the New York City Unincorporated Business Tax or other local taxes.
taxes described in this paragraph.
The effective tax rates were 4.64%(0.3)% and 1.10%10.1% for the three months ended September 30, 2017March 31, 2022 and 2016, respectively, and 3.65% and 3.70% for the nine months ended September 30, 2017 and 2016, respectively.2021. The effective tax rate differs from the statutory rate primarily due to the following: (i)because a substantial portion of the reported net income (loss) before taxes is not attributable to KKR but rather is attributable to noncontrolling interests held in KKR’s consolidated entities by KKR HoldingsKKR's principals or by third parties, (ii) aparties.
Future realization of deferred tax assets is dependent on KKR generating sufficient taxable income before the tax benefits are expected to expire. KKR considers projections of taxable income in evaluating its ability to utilize those deferred tax assets. In projecting its taxable income, KKR begins with historical results and incorporates assumptions concerning the amount and timing of future pretax operating income. Those assumptions require significant judgment and are consistent with the plans and estimates that KKR uses to manage its business. As of March 31, 2022, $22.2 million of deferred tax assets are not considered to be more likely than not to be realized prior to the expiration of the related loss carryforwards. For that portion of the amount of the reported net income (loss) before taxes attributable to KKR is from certain entities that are not subject to U.S. federal, state or local income taxes and/or non-U.S. taxes, and (iii) certain compensation charges attributable to KKR are not deductible fortotal deferred tax purposes.asset, a valuation allowance has been recorded.

During the three and nine month periodmonths ended September 30, 2017,March 31, 2022, there were no material changeswas a decrease of $21.2 million to KKR’s uncertain tax positions and KKR believes there will be no significant increase or decreaseprimarily due to the uncertainsettlement of state tax positions within 12 monthsaudits conducted for the years ended 2010 through 2014.
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12.19. EQUITY BASED COMPENSATION
Asset Management
The following table summarizes
KKR Equity Incentive Plan Awards
For the expense associated withthree months ended March 31, 2022 and 2021 KKR recorded equity based compensation forexpense of $115.1 million and $64.5 million, respectively. For the three and nine months ended September 30, 2017March 31, 2022 and 2016,2021, $2.1 million and $0.2 million of equity based compensation related to our insurance business, respectively.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Equity Incentive Plan Units$54,921
 $50,270
 $149,840
 $148,257
KKR Holdings Principal Awards17,622
 7,425
 89,869
 21,138
Other Exchangeable Securities—
 3,460
 —
 10,306
Discretionary Compensation6,185
 397
 37,995
 6,331
Total (1)
$78,728
 $61,552
 $277,704
 $186,032
(1)Includes $6,478 of equity based charges for the three and nine months ended September 30, 2017 related to employees of equity method investees. Such amounts are included in Net Gains (Losses) from Investment Activities in the condensed consolidated statements of operations.

Under KKR's Equity Incentive Plan
Under the Equity Incentive Plan,Plans, KKR is permitted to grant equity awards representing ownership interests in KKR & Co. Inc. common stock. On March 29, 2019, the 2019 Equity Incentive Plan became effective. Following the effectiveness of the 2019 Equity Incentive Plan, KKR no longer makes further grants under the 2010 Equity Incentive Plan, and the 2019 Equity Incentive Plan became KKR's only plan for providing new equity-based awards by KKR & Co. Inc. Outstanding awards under the 2010 Equity Incentive Plan will remain outstanding, unchanged and subject to the terms of the 2010 Equity Incentive Plan and their respective equity award agreements, until the vesting, expiration or lapse of such awards in accordance with their terms. The total number of equity awards representing shares of common stock that may be issued under the 2019 Equity Incentive Plan is equivalent to 15% of the aggregate number of the shares of common stock and KKR Group Partnership Units (excluding KKR Group Partnership Units held by KKR & Co. Inc. or its wholly-owned subsidiaries), subject to annual adjustment. As of March 31, 2022, 72,237,327 shares may be issued under the 2019 Equity Incentive Plan. Equity awards granted pursuant to the Equity Plans generally consist of (i) restricted stock units ("RSUs") that convert to shares of common stock of KKR & Co. Inc. (or cash equivalent) upon vesting and (ii) restricted holdings units ("RHUs") through KKR Holdings II L.P. that are exchangeable into shares of common units.stock of KKR & Co. Inc. upon vesting and certain other conditions. Vested awards under the Equity Incentive PlanPlans dilute KKR & Co. L.P.Inc. common unitholdersstockholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR Group Partnerships.Partnership.

Service-Vesting Awards
The total number of common units that may be issued underUnder the Equity Incentive Plan is equivalent to 15% of the number of fully diluted common units outstanding,Plans, KKR grants RSUs and RHUs that are subject to annual adjustment. Equity awards have been granted under the Equity Incentive Plan and are generally subject to service basedservice-based vesting, typically over a three to five yearfive-year period from the date of grant.grant (referred to hereafter as "Service-Vesting Awards"). In certain cases, these awardsService-Vesting Awards may have a percentage of the award that vests immediately upon grant. Additionally, some but not all Service-Vesting Awards are subject to transfer restrictions and/or minimum retained ownership requirements. The transfer restriction period, if applicable, lasts for (i) one year with respect to one-half of the interests vesting on any vesting date and (ii) two years with respect to the other one-half of the interests vesting on such vesting date. While providing services to KKR, if applicable, certainsome but not all of these awards are also subject to minimum retained ownership rules requiring the award recipient to continuously hold shares of common unitstock equivalents equal to at least 15% of their cumulatively vested awards that have or had the minimum retained ownership requirement.
Holders of the Service-Vesting Awards do not participate in dividends until such awards have met their vesting requirements.
Expense associated with the vesting of these awardsService-Vesting Awards is based on the closing price of the KKR & Co. L.P.Inc. common unitsstock on the date of grant, discounted for the lack of participation rights in the expected distributionsdividends on unvested units. Beginning with the financial results reported for the first quarter of 2017, KKR intends to make quarterly distributions to common unitholders of $0.17 per common unit per quarter or $0.68 per year. Therefore, for units granted on or after January 1, 2017, the discount for lack of participation rights in the expected distributions on unvested units is based on the $0.68 annual distribution. KKR has made equal quarterly distributions to holders of its common units of $0.16 per common unit per quarter or $0.64 per year in respect of financial results reported for the first quarter of 2016 through the fourth quarter of 2016. Accordingly, for units granted subsequent to December 31, 2015 but before January 1, 2017, the discount for the lack of participation rights in the expected distributions on unvested units was based on the $0.64 annual distribution. The discount range for awards granted prior to December 31, 2015 was based on management’s estimates of future distributions that the unvested equity awards would not be entitled to receive between the grant date and the vesting date which ranged from 8% to 56%.
awards. Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8%7% annually based upon expected turnover by class of recipient.

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As of September 30, 2017,March 31, 2022, there was approximately $275.6$576.0 million of total estimated unrecognized expense related to unvested awards. That costService-Vesting Awards, which is expected to be recognized as follows:
Year Unrecognized Expense 
(in millions)
Remainder of 2017 $40.1
2018 128.7
2019 75.4
2020 23.9
2021 5.1
2022 1.5
2023 0.9
Total $275.6

over the weighted average remaining requisite service period of 1.7 years.
A summary of the status of unvested awardsService-Vesting Awards granted under the Equity Incentive PlanPlans from January 1, 20172022 through September 30, 2017March 31, 2022 is presented below:
 SharesWeighted
Average Grant
Date Fair Value
Balance, January 1, 202219,307,041 $41.21 
Granted442,156 65.26 
Vested(22,436)29.05 
Forfeitures(101,404)35.66 
Balance, March 31, 202219,625,357 $41.79 
 Units 
Weighted
Average Grant
Date Fair Value
Balance, January 1, 201737,498,333
 $13.85
Granted3,635,101
 15.67
Vested(8,326,078) 14.79
Forfeited(1,734,984) 13.72
Balance, September 30, 201731,072,372
 $13.82
Market Condition Awards
Under the Equity Incentive Plans, KKR also grants RSUs and RHUs that are subject to both a service-based vesting condition and a market price based vesting condition (referred to hereafter as "Market Condition Awards") for certain employees (other than the Co-CEO Awards discussed below). The number of Market Condition Awards that will vest depend upon (i) the market price of KKR common stock reaching certain price targets that range from $45.00 to $140.00 and (ii) the employee being employed by KKR on a certain date, which typically is five and a half years from the date of grant (with exceptions for involuntary termination without cause, death and permanent disability). The market price vesting condition is met when the average closing price of KKR common stock during 20 consecutive trading days meets or exceeds the stock price targets. Holders of the Market Condition Awards do not participate in dividends until such awards have met both their service-based and market price based vesting requirements. Additionally, these awards are subject to additional transfer restrictions and minimum retained ownership requirements after vesting.
The weighted average remaining
Due to the existence of the service requirement, the vesting period for these Market Condition Awards is explicit, and as such, compensation expense will be recognized on (i) a straight-line basis over which unvestedthe period from the date of grant through the date the award recipient is required to be employed by KKR and (ii) assumes a forfeiture rate of up to 7% annually based upon expected turnover. The fair value of the awards granted are expected to vestbased on a Monte-Carlo simulation valuation model. In addition, the grant date fair value assumes that holders of the Market Condition Awards will not participate in dividends until such awards have met all of their vesting requirements.

Below is 1.2 years.
Aa summary of the remaining vesting tranchesgrant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of awards granted under the Equity Incentive Plan is presented below:these Market Condition Awards:

Vesting DateWeighted
Average		UnitsRange
October 1, 2017Grant Date Fair Value$25.703,855,649
$19.87 - $66.80
April 1, 2018Closing KKR share price as of valuation date$42.999,848,499
$37.93 - $76.31
October 1, 2018Risk Free Rate0.53%3,262,341
0.41% - 1.40%
April 1, 2019Volatility28.07%6,816,127
28.00% - 30.00%
October 1, 2019Dividend Yield1.41%1,839,242
0.76% - 1.53%
April 1, 2020Expected Cost of Equity10.59%3,721,944
October 1, 20209.13% - 10.76%611,015
April 1, 2021638,955
October 1, 2021211,172
April 1, 202285,084
October 1, 202291,172
October 1, 202391,172
31,072,372



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As of March 31, 2022, there was approximately $374.7 million of total estimated unrecognized expense related to these unvested Market Condition Awards, which is expected to be recognized over the weighted average remaining requisite service period of 4.2 years.
A summary of the status of unvested Market Condition Awards granted under the Equity Incentive Plans from January 1, 2022 through March 31, 2022 is presented below:
 SharesWeighted
Average Grant
Date Fair Value
Balance, January 1, 202221,370,847 $25.03 
Granted350,000 66.80 
Vested— — 
Forfeitures— — 
Balance, March 31, 202221,720,847 $25.70 
As of March 31, 2022, 19.7 million of these Market Condition awards have met their market price based vesting condition.
Co-CEO Awards
On December 9, 2021, the Board of Directors approved grants of 7.5 million RHUs to each of KKR’s Co-Chief Executive Officers that are subject to both a service-based vesting condition and a market price based vesting condition (referred to hereafter as "Co-CEOs Awards"). For both Co-Chief Executive Officers, 20% of the Co-CEOs Awards are eligible to vest at each of the following KKR common stock prices targets: $95.80, $105.80, $115.80, $125.80 and $135.80. The market price based vesting condition is met when the average closing price of KKR common stock during 20 consecutive trading days meets or exceeds the stock price targets. In addition to the market price based vesting conditions, in order for the Co-CEOs Awards to vest, the Co-Chief Executive Officer is required to be employed by KKR on December 31, 2026 (with exceptions for involuntary termination without cause, death and permanent disability).

These awards will be automatically canceled and forfeited upon the earlier of the Co-Chief Executive Officer’s termination of service (except for involuntary termination without cause, death or permanent disability) or the failure to meet the market price based vesting condition by December 31, 2028 (for which continued service is required if the market price vesting condition is met after December 31, 2026). Co-CEO Awards do not participate in dividends until such awards have met both their service-based and market price based vesting requirements. Additionally, these awards are subject to additional transfer restrictions and minimum retained ownership requirements after vesting.

Due to the existence of the service requirement, the vesting period for these Co-CEO Awards is explicit, and as such, compensation expense will be recognized on a straight-line basis over the period from the date of grant through December 31, 2026 given the derived service period is less than the explicit service period. The fair value of the awards granted are based on a Monte-Carlo simulation valuation model. In addition, the grant date fair value assumes that these Co-CEO Awards will not participate in dividends until such awards have met all of their vesting requirements.

Below is a summary of the grant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of these Co-CEO Awards:

Grant Date Fair Value$48.91
Closing KKR share price as of valuation date$75.76
Risk Free Rate1.42%
Volatility28.0%
Dividend Yield0.77%
Expected Cost of Equity9.36%

As of March 31, 2022, there was approximately $689.2 million of total estimated unrecognized expense related to these unvested Co-CEO Awards, which is expected to be recognized ratably from April 1, 2022 to December 31, 2026. As of March 31, 2022, none of these Co-CEO awards have met their market price based vesting condition.

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KKR Holdings Awards


For the three months ended March 31, 2022 and 2021, KKR recorded equity based compensation expense of $19.8 million and $16.4 million, respectively.
KKR Holdings units are exchangeable for KKR Group Partnership Units and allow for their exchange into common unitsstock of KKR & Co. L.P.Inc. on a one-for one1-for-one basis. As of September 30, 2017March 31, 2022 and 2016,2021, KKR Holdings owned approximately 41.8%30.4% or 339,845,707258,726,163 units and 44.4%,32.1% or 356,686,744273,367,712 units, respectively, of outstanding KKR Group Partnership Units. Awards forIn the past, awards of KKR Holdings units that have been granted are generally subject to service basedhad service-based vesting, typically over a three to five yearfive-year period from the date of grant, although some historical awards had a percentage of the award vested immediately upon grant. They areThese awards also subject togenerally had transfer restrictions which last or had lasted for (i) one year with respect to one-half of the interests vesting on any vesting date and (ii) two years with respect to the other one-half of the interests vesting on such vesting

date. While providing services to KKR, the recipients are also subject to minimum retained ownership rules requiring them to continuously hold 25% of their vested interests. Upon separation from KKR, award recipients are subject to the terms of a confidentiality and restrictive covenants agreement that would require the forfeiture of certain vested and unvested units should the terms of the agreement be violated. Holders of KKR Holdings units are not entitled to participate in distributions made on KKR Group Partnership Units underlying their KKR Holdings units until such units are vested.

Because KKR Holdings is a partnership, As of March 31, 2022, all of the 339,845,707 KKR Holdings units (except for less than 0.5% of the outstanding KKR Holdings units) have been legally allocated, but the allocation of 10,402,858granted, and certain Holdings units remain subject to vesting. All of these KKR Holdings units hasrepresent KKR Group Partnership units that are already outstanding, and therefore their vesting and allocations as described above do not been communicatedrepresent any incremental dilution to KKR.
On October 8, 2021, as part of the transactions contemplated by the Reorganization, of the 3.3 million outstanding KKR Holdings units that remained unallocated as of September 30, 2021, KKR Holdings allocated 1,150,000 KKR Holdings units to each respective principalof KKR’s Co-CEOs, of which 70% vested immediately, on October 8, 2021, and the final allocation and terms of vesting for these unitsremaining 30% are subject to changeforfeiture if such Co-CEO is not employed by KKR on October 1, 2022 (except in the case of death or permanent disability). These KKR Holdings units (or shares of common stock to be received in respect thereof) are subject to customary one- and two-year transfer restrictions that will apply, as applicable, until October 1, 2023 and October 1, 2024. In addition, the exerciselegal vesting and delivery of judgmentcertain awards of KKR Holdings units held by Messrs. Kravis, Roberts, Bae and Nuttall will be accelerated as part of the transactions contemplated by the general partner of KKR Holdings. It was therefore determined that the grant date and service inception date had not occurred and these units do not yet meet the criteria for recognition of compensation expense.Reorganization Agreement.

The fair value of awards granted out of KKR Holdings is generally based on the closing price of KKR & Co L.P.Co. Inc. common unitsstock on the date of grant.grant discounted for the lack of participation rights in the expected distributions on unvested units. KKR determined this to be the best evidence of fair value as a KKR & Co. L.P.Inc. common unitstock is traded in an active market and has an observable market price. Additionally, a KKR Holdings unit is an instrument with terms and conditions similar to those of a KKR & Co. L.P.Inc. common unit.stock. Specifically, units in both KKR Holdings and shares of KKR & Co. L.P.Inc. represent ownership interests in KKR Group Partnership Units and, subject to any vesting, minimum retained ownership requirements and transfer restrictions, each KKR Holdings unit is exchangeable into a KKR Group Partnership Unit and then into a share of KKR & Co. L.P.Inc. common unitstock on a one-for-one1-for-one basis.

In February 2016, approximately 28.9 million KKR Holdings units were granted that were originally subject to market condition and service-based vesting that were subsequently modified in November 2016 to eliminate the market condition vesting and instead require only service-based vesting in equal annual installments over a five year period. At the date of modification, total future compensation expense amounted to $320.9 million, net of estimated forfeitures, to be recognized over the remaining vesting period of the modified awards.

The awards described above were granted from outstanding but previously unallocated units of KKR Holdings, and consequently these grants did not increase the number of KKR Holdings units outstanding or outstanding KKR common units on a fully-diluted basis. If and when vested, these awards will not dilute KKR's respective ownership interests in the KKR Group Partnerships.
KKR Holdings Awardsawards give rise to equity-based compensation in the consolidated statements of operations based on the grant-date fair value of the award discounted for the lack of participation rights in the expected distributions on unvested units. BeginningThis discount is consistent with that noted above for shares issued under the financial results reported for the first quarter of 2017, KKR intends to make quarterly distributions to common unitholders of $0.17 per common unit per quarter or $0.68 per year. Therefore, for awards granted on or after January 1, 2017, the discount for lack of participation rights in the expected distributions on unvested units is based on the $0.68 annual distribution. KKR has made equal quarterly distributions to holders of its common units of $0.16 per common unit per quarter or $0.64 per year in respect of financial results reported for the first quarter of 2016 through the fourth quarter of 2016. Accordingly, for awards granted subsequent to December 31, 2015 but before January 1, 2017, the discount for the lack of participation rights in the expected distributions on unvested units was based on the $0.64 annual distribution.

Equity Incentive Plans. Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8%7% annually based on expected turnover by class of recipient.

As of September 30, 2017,March 31, 2022, there was approximately $207.2$40.0 million of estimated unrecognized expense, related to unvested KKR Holdings awards. That costwhich is expected to be recognized as follows:ratably from April 1, 2022 to October 1, 2022.
Year Unrecognized Expense 
(in millions)
Remainder of 2017 $17.4
2018 63.0
2019 57.3
2020 52.4
2021 17.1
Total $207.2



A summary of the status of unvested awards granted under the KKR Holdings Plan from January 1, 20172022 through September 30, 2017March 31, 2022 is presented below:
 UnitsWeighted
Average Grant
Date Fair Value
Balance, January 1, 20224,600,000 $21.88 
Granted— — 
Vested— — 
Forfeitures— — 
Balance, March 31, 20224,600,000 $21.88 
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 Units 
Weighted
Average Grant
Date Fair Value
Balance, January 1, 201728,245,886
 $12.10
Granted—
 —
Vested(5,968,939) 13.97
Forfeited(1,537,807) 11.76
Balance, September 30, 201720,739,140
 $11.59
Insurance

Global Atlantic recognized $20.6 million and $7.4 million of expense related equity-based compensation and long-term incentive awards for the three months ended March 31, 2022 and 2021, respectively.
The weighted average remaining
No equity-based compensation costs were capitalized during the three months ended March 31, 2022 and 2021, respectively.

Equity Classified Awards - KKR Equity Incentive Plan Awards

On February 1, 2021, in connection with the GA Acquisition, employees of Global Atlantic were awarded a one-time grant of RSUs under the 2019 Equity Incentive Plan. These awards (i) are subject to service-based vesting period over which unvestedconditions and (ii) expense associated with the vesting of these awards are expected to vest is 2.0 years.

A summarybased on the closing price of KKR & Co. Inc. common stock on the remaining vesting tranchesdate of grant, consistent with other awards granted under the KKR Holdings2019 Equity Incentive Plan is presented below:as described above.

Vesting DateUnits
October 1, 201793,486
April 1, 2018824,999
May 1, 20184,820,000
April 1, 2019349,143
May 1, 20194,820,000
April 1, 2020191,512
May 1, 20204,820,000
May 1, 20214,820,000
20,739,140

Other Exchangeable Securities
As of OctoberOn July 1, 2016, all equity securities2021, a grant of a subsidiaryMarket Condition Award was made under the 2019 Equity Incentive Plan. This award is subject to meeting certain market price based vesting conditions of KKR common stock but has no service vesting condition. Expense associated with the grant date fair value of this award of $10.5 million was fully recognized in the three months ended September 30, 2021.

Global Atlantic recognized $2.1 million and $0.2 million of total equity-based compensation expense for the three months ended March 31, 2022 and 2021 associated with these awards, respectively.

Liability Classified Awards - Book Value Awards

On February 1, 2021, Global Atlantic adopted the Global Atlantic Financial Company Book Value Award Plan ("GA Book Value Plan") to enhance the ability of Global Atlantic to attract, motivate and retain its employees and to promote the success of the Global Atlantic business.
The GA Book Value Plan authorizes the grant of cash-settled awards ("book value awards") representing the right to receive 1 or more payments upon vesting equal to the product of an initial dollar value set by the award multiplied by a pre-determined formula as of each applicable vesting date. The predetermined formula is equal to the quotient determined by dividing the book value of 1 share of TGAFG on the applicable vesting date by the book value of a KKR Group Partnershipshare on the original grant date, subject to adjustments. Book value awards generally vest in 3 equal, annual installments, subject to continued employment.

On February 1, 2021, under the terms of the GA Merger Agreement and in accordance with applicable plan documentation, former Global Atlantic restricted share awards that were unvested immediately prior to the closing of KKR & Co. L.P. boththe GA Acquisition converted into the right to receive a number of which are exchangeable into common unitsbook value awards under the GA Book Value Plan having the same value and the same vesting schedule as the former Global Atlantic restricted share awards immediately prior to the closing of KKR & Co. L.P. onthe GA Acquisition.

An aggregate of 3,020,017 unvested former Global Atlantic restricted share awards having a one-for-one basis issuedfair value of $29.47 per share were converted to book value awards at an aggregate grant-date value of $89.0 million. On February 28, 2021, book value awards having an aggregate value of approximately $28.0 million vested as set forth in the former Global Atlantic grant agreements and resulted in a cash payment of $17.0 million to participants, net of applicable tax withholding.

Also in connection with the acquisitionGA Acquisition, on February 1, 2021, Global Atlantic employees were issued a one-time grant of Avoca ("Other Exchangeable Securities") have eitherbook value awards having an aggregate initial value of $23.0 million. These one-time book value awards vest over five (5) years, with the first 25% vesting on April 1, 2023 and the remainder vesting 25% annually on April 1 each subsequent year until fully vested, subject to continued employment. Global Atlantic is recording compensation expense over the vesting schedule of the awards, net of an estimated forfeiture rate of 4%.

On March 1, 2021, pursuant to the GA Book Value Plan, book value awards having an aggregate initial value of approximately $32 million were granted. Such book value awards generally vest annually over three years in equal increments, subject to continued employment. Global Atlantic is recording compensation expense over the vesting schedule of the awards, net of an estimated forfeiture rate of 4%.
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Global Atlantic began recognizing long-term incentive expense for the book value awards described above at the grant dates, based on their initial value, net of a 4% estimated forfeiture rate. Global Atlantic adjusts expense periodically for changes in book value until the awards are settled or forfeited. Expense recognized on forfeited awards is reversed in the period of forfeiture. The table below presents the activity related to book value awards for the three months ended March 31, 2022 and there is no unrecognized2021:
Three Months Ended March 31,
20222021
Outstanding amount as of beginning of period$145,000 $— 
Pre-acquisition awards converted to book-value awards on February 1, 2021— 89,000 
Granted20,205 53,969 
Forfeited(874)(957)
Vested and issued(39,029)(30,280)
Outstanding amount as of end of period$125,302 $111,732 
Global Atlantic recognized $18.5 million and $7.2 million of compensation expense for the three months ended March 31, 2022 and 2021 associated with Other Exchangeable Securities asthese awards, respectively. As of September 30, 2017.March 31, 2022 and December 31, 2021, the remaining unamortized compensation expenses of $108.1 million and $99.6 million are expected to be recognized over a remaining average period of 2.65 years and 2.67 years, respectively.


Discretionary CompensationGA Equity Incentive Plan Awards

KKROn June 24, 2021, Global Atlantic issued 1,000 non-voting incentive shares to a Bermuda exempted partnership owned by certain Global Atlantic employees, and certain employees of certain consolidated entitieswho are eligible to receive discretionary cash bonuses. While cash bonuses paidincentive units under Global Atlantic's Senior Management Equity Incentive Plan ("GA Equity Incentive Plan"). These incentive units represent an interest in the receipt of certain amounts based on Global Atlantic's book value, market value, and AUM, in each case as derived in part from the value of TGAFG’s fully-diluted equity shares.
On June 24, 2021, Global Atlantic granted approximately 808 incentive units under the GA Equity Incentive Plan. The book value component of the incentive units vests 20% per year on the anniversary of the GA Acquisition Date, as long as the grantee remains then employed, and will be settled in cash. The market value and AUM components of the incentive units cliff vest upon the earlier to occur of (i) the fifth anniversary of the GA Acquisition Date, or (ii) a change of control, and will be settled in a variable number of TGAFG’s non-voting common shares. TGAFG shares issued under the AUM component of the Plan are exchangeable for shares of KKR. Except in the event of termination due to death or disability, generally, unvested market value and AUM amounts are forfeited upon a termination of employment.
The GA Equity Incentive Plan is accounted for as a hybrid compensation plan, consisting of one component most employees are borne by KKRclosely aligned with a profit-sharing plan under ASC 710, Compensation - General, as well as other components within scope of ASC 718, Compensation - Stock Compensation, in all cases with obligations liability-classified. Accordingly, with regard to awards within scope of ASC 710, Global Atlantic records expense based on payouts deemed to be probable and certain consolidated entities and result in customary compensation and benefits expense, cash bonuses that are paid to certain principals are currently borne by KKR Holdings. These compensation charges are currently recordedreasonably estimable based on the amountbook value growth of cash expectedGlobal Atlantic at the grant date and at each reporting period. For award components subject to liability-classification under ASC 718, Global Atlantic records expense, net of a 0% estimated forfeiture rate, based on the fair value of awards granted, with periodic adjustments to expense for changes in fair value, over the requisite 5-year service period.
The aggregate value of the GA Equity Incentive Plan awards at the initial date of grant was $197 million, based on the intrinsic value of the book value component at the date of grant ($5 million) and the fair value of the market value and AUM components at the date of grant ($192 million, collectively), based on the projected growth in value of each component over the 5-year vesting schedule and applying a forfeiture rate of 0%. Expense will be paid by KKR Holdings.remeasured at each reporting period and adjusted as needed until the awards are forfeited or settled.


13.During the three months ended March 31, 2022, no incentive units were granted to employees and approximately 8 incentive units were forfeited. As of March 31, 2022 and December 31, 2021, there were approximately 823 and 831 incentive units outstanding under the Plan, respectively.

Global Atlantic recorded compensation expense of $17.3 million for the three months ended March 31, 2022 related to the GA Units granted under the GA Equity Incentive Plan, with a corresponding offset to other liabilities. As of March 31, 2022 and December 31, 2021, there was approximately $97.8 million and $104.1 million of unrecognized expense related to the GA Units granted under the GA Equity Incentive Plan with a weighted average service period remaining of 3.84 years and 4.09 years, respectively.
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20. RELATED PARTY TRANSACTIONS
Due from Affiliates consists of:
September 30, 2017 December 31, 2016 March 31, 2022December 31, 2021
Amounts due from portfolio companies$105,277
 $66,940
Amounts due from portfolio companies$188,394 $114,514 
Amounts due from unconsolidated investment funds371,726
 170,219
Amounts due from unconsolidated investment funds1,089,180 1,109,769 
Amounts due from related entities7,001
 13,293
Due from Affiliates$484,004
 $250,452
Due from Affiliates$1,277,574 $1,224,283 
Due to Affiliates consists of:
 March 31, 2022December 31, 2021
Amounts due to KKR Holdings - tax receivable agreement$396,127 $399,163 
Amounts due to unconsolidated investment funds61,541 63,559 
Due to Affiliates$457,668 $462,722 

81
 September 30, 2017 December 31, 2016
Amounts due to KKR Holdings in connection with the tax receivable agreement$141,891
 $128,091
Amounts due to unconsolidated investment funds237,418
 230,823
Amounts due to related entities500
 565
Due to Affiliates$379,809
 $359,479
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14.21. SEGMENT REPORTING
KKR operates through four2 reportable business segments. These segments which are differentiated primarily by theirpresented below and reflect how its chief operating decision-makers allocate resources and assess performance:
•Asset Management -the asset management business objectives andoffers a broad range of investment strategies, are presented below. These financial results represent the combined financial results of the KKR Group Partnerships on a segment basis. KKR earns the majority of its fees from subsidiaries located in the United States.
Private Markets
Through KKR’s Private Markets segment, KKR manages and sponsors private equity funds and co-investment vehicles, which invest capital for long-term appreciation, either through controlling ownership of a company or strategic minority positions. KKR also manages and sponsorsmanagement services to investment funds, vehicles and co-investment vehicles that invest capital in real assets, such as infrastructure, energyaccounts (including Global Atlantic) and real estate.
Public Markets
KKR operates and reports its combined credit and hedge funds businesses through the Public Markets segment. KKR’s credit business invests capital in leveraged credit strategies, including leveraged loans, high yield bonds and opportunistic credit, and alternative credit strategies including special situations and private credit opportunities, such as mezzanine or private credit opportunities, direct lending, and revolving credit investment strategies. KKR’s hedge funds business consists of strategic manager partnerships with third party hedge fund managers in which KKR owns minority stakes.
Capital Markets
KKR’s globalprovides capital markets business supports the firm,services to portfolio companies and third-partythird parties. This reportable segment also reflects how its business lines operate collaboratively with predominantly a single expense pool.
•Insurance - the insurance business is operated by Global Atlantic, which is a leading U.S. retirement and life insurance company that provides a broad suite of protection, legacy and savings products and reinsurance solutions to clients across individual and institutional markets. Global Atlantic primarily generates income by developingearning a spread between its investment income and implementing both traditional and non-traditional capital solutions for investments or companies seeking financing. These services include arranging debt and equity financing for transactions, placing and underwriting securities offerings and providing other typesthe cost of capital markets services.policyholder benefits.

Principal Activities

Through KKR's Principal ActivitiesKKR’s segment we manage the firm’s assets and deploy capital to support and grow our businesses.

KKR's Principal Activities segment uses its balance sheet assets to support KKR's investment management and capital markets businesses, includingprofitability measure used to make capital commitments as general partner to its funds, to seed new businesses or investments for new funds or to bridge capital selectively for its funds’ investments.

The Principal Activities segment also provides the required capital to fund the various commitments of KKR's Capital Markets business or to meet regulatory capital requirements.
Key Performance Measure - Economic Net Income (“ENI”)
ENI is used by management in making operating decisions and resource deployment decisions as well as assessing the overallassess performance of each ofacross KKR’s reportable business segments. The reportable segments for KKR’s business areis presented prior to giving effect to the allocation of income (loss) betweenamong KKR & Co. L.P. andInc., KKR Holdings and as such represents the business in total. In addition, KKR’s reportable segments are presented without giving effect toholders of other exchangeable securities, and the consolidation of the investment funds, vehicles and accounts that KKR manages.advises, manages or sponsors (including CFEs). KKR's segment profitability measure excludes: (i) equity-based compensation charges, (ii) amortization of acquired intangibles, (iii) strategic transaction-related charges and (iv) non-recurring items, if any. Strategic transaction-related items arise from corporate actions and consist primarily of (i) impairments, (ii) non-monetary gains or losses on divestitures, (iii) transaction costs from strategic acquisitions, and (iv) depreciation on real estate that KKR owns and occupies. Inter-segment transactions are not eliminated from segment results when management considers those transactions in assessing the results of the respective segments. These transactions include (i) management fees earned by KKR as the investment adviser for Global Atlantic insurance companies and (ii) interest income and expense based on lending arrangements where one or more KKR subsidiaries borrow from a Global Atlantic insurance subsidiary. Inter-segment transactions are recorded by each segment based on the definitive documents that contain arms' length terms and comply with applicable regulatory requirements. Segment operating earnings for the Asset Management and Insurance segments is further defined as follows:


ENI•Asset Management Segment Operating Earnings is athe profitability measure used to make operating decisions and to assess the performance of profitability for KKR’s reportable segmentsthe Asset Management segment and is comprised of: (i) Fee Related Earnings, (ii) Realized Performance Income, (iii) Realized Performance Income Compensation, (iv) Realized Investment Income, and (v) Realized Investment Income Compensation. Asset Management Segment Operating Earnings excludes (i) unrealized carried interest, (ii) net unrealized gains (losses) on investments, and (iii) related unrealized performance income compensation. Management fees earned by KKR as the adviser, manager, or sponsor for its investment funds, vehicles and accounts, including its Global Atlantic insurance companies are included in Asset Management Segment Operating Earnings.
•Insurance Segment Operating Earnings is the profitability measure used by management as an alternative measurementto make operating decisions and to assess the performance of the operatingInsurance segment and investment earnings of KKR and its business segments. ENI is comprised of: (i) Net Investment Income, (ii) Net Cost of total segment revenues; less total segmentInsurance, (iii) General, Administrative, and Other Expenses, (iv) Income Taxes, and (v) Net Income Attributable to Noncontrolling Interests. The non-operating adjustments made to derive Insurance Segment Operating Earnings eliminate the impact of: (i) realized (gains) losses related to asset/liability matching investments strategies, (ii) unrealized investment (gains) losses, (iii) changes in the fair value of derivatives, embedded derivatives, and fair value liabilities for fixed-indexed annuities, indexed universal life contracts and variable annuities, and (iv) the associated income tax effects of all exclusions from Insurance Segment Operating Earnings except for equity-based compensation expense. Insurance Segment Operating Earnings includes (i) realized gains and losses not related to asset/liability matching investments strategies and (ii) the investment management fee expenses and certain economic interests in KKR’s segments heldthat are earned by third parties.KKR as the investment adviser of the Global Atlantic insurance companies.




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Segment Presentation

The following tables present the financial data for KKR’s reportable segments:set forth information regarding KKR's segment results:
Three Months Ended March 31,
20222021
Asset Management
Management Fees (1)
$624,928 $439,740 
Transaction and Monitoring Fees, Net306,038 135,677 
Fee Related Performance Revenues12,051 10,296 
Fee Related Compensation(212,220)(131,785)
Other Operating Expenses(125,875)(90,161)
Fee Related Earnings604,922 363,767 
Realized Performance Income609,207 171,309 
Realized Performance Income Compensation(383,635)(109,986)
Realized Investment Income (2)
349,354 461,273 
Realized Investment Income Compensation(52,403)(69,191)
Asset Management Segment Operating Earnings1,127,445 817,172 
Insurance
Net Investment Income (1) (2)
862,414 445,898 
Net Cost of Insurance(493,649)(250,219)
General, Administrative and Other(146,002)(75,489)
  Pre-tax Insurance Operating Earnings222,763 120,190 
Income Taxes(34,106)(16,626)
Net Income Attributable to Noncontrolling Interest(72,669)(40,299)
Insurance Segment Operating Earnings115,988 63,265 
Total Segment Operating Earnings$1,243,433 $880,437 
(1) Includes intersegment management fees of $59.0 million and $22.9 million for the three months ended March 31, 2022 and 2021, respectively.
(2) Includes intersegment interest expense and income of $25.8 million for the three months ended March 31, 2022.
As of
March 31, 2022March 31, 2021
Segment Assets:
  Asset Management$31,921,809 $28,247,535 
  Insurance167,492,964 131,350,085 
Total Segment Assets$199,414,773 $159,597,620 
Three Months Ended March 31,
Noncash expenses excluded from Segment Operating Earnings20222021
Equity Based Compensation and Other
  Asset Management$113,064 $64,317 
  Insurance31,711 7,411 
Total Non-cash expenses$144,775 $71,728 
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 As of and for the Three Months Ended September 30, 2017
 
Private
Markets
 
Public
 Markets
 
Capital
Markets
 Principal Activities Total
Reportable
Segments
Segment Revenues 
  
  
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
  
  
Management Fees$153,841
 $79,113
 $—
 $—
 $232,954
Monitoring Fees14,342
 —
 —
 —
 14,342
Transaction Fees82,258
 11,469
 85,440
 —
 179,167
Fee Credits(59,854) (10,893) —
 —
 (70,747)
Total Management, Monitoring and Transaction Fees, Net190,587
 79,689
 85,440
 —
 355,716
          
Performance Income (Loss) 
  
  
  
  
Realized Incentive Fees—
 4,074
 —
 —
 4,074
Realized Carried Interest419,438
 —
 —
 —
 419,438
Unrealized Carried Interest(96,571) 36,933
 —
 —
 (59,638)
Total Performance Income (Loss)322,867
 41,007
 —
 —
 363,874
          
Investment Income (Loss) 
  
  
  
  
Net Realized Gains (Losses)—
 —
 —
 76,053
 76,053
Net Unrealized Gains (Losses)—
 —
 —
 (50,902) (50,902)
Total Realized and Unrealized—
 —
 —
 25,151
 25,151
Interest Income and Dividends—
 —
 —
 70,557
 70,557
Interest Expense—
 —
 —
 (45,613) (45,613)
Net Interest and Dividends—
 —
 —
 24,944
 24,944
Total Investment Income (Loss)—
 —
 —
 50,095
 50,095
          
Total Segment Revenues513,454
 120,696
 85,440
 50,095
 769,685
          
Segment Expenses 
  
  
  
  
Compensation and Benefits 
  
  
  
  
Cash Compensation and Benefits63,482
 16,257
 16,924
 33,958
 130,621
Realized Performance Income Compensation176,075
 1,630
 —
 —
 177,705
Unrealized Performance Income Compensation(36,379) 16,553
 —
 —
 (19,826)
Total Compensation and Benefits203,178
 34,440
 16,924
 33,958
 288,500
Occupancy and Related Charges8,537
 1,535
 760
 3,840
 14,672
Other Operating Expenses42,376
 7,672
 6,293
 14,176
 70,517
Total Segment Expenses254,091
 43,647
 23,977
 51,974
 373,689
          
Income (Loss) attributable to noncontrolling interests—
 —
 1,046
 —
 1,046
          
Economic Net Income (Loss)$259,363
 $77,049
 $60,417
 $(1,879) $394,950
          
Total Assets$2,123,892
 $1,313,920
 $458,269
 $11,451,918
 $15,347,999


 As of and for the Three Months Ended September 30, 2016
 
Private
Markets
 
Public
Markets
 
Capital
Markets
 Principal Activities Total
Reportable
Segments
Segment Revenues 
  
  
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
  
  
Management Fees$117,795
 $83,713
 $—
 $—
 $201,508
Monitoring Fees11,091
 —
 —
 —
 11,091
Transaction Fees53,223
 10,748
 47,383
 —
 111,354
Fee Credits(37,127) (10,265) —
 —
 (47,392)
Total Management, Monitoring and Transaction Fees, Net144,982
 84,196
 47,383
 —
 276,561
          
Performance Income (Loss) 
  
  
  
  
Realized Incentive Fees—
 3,659
 —
 —
 3,659
Realized Carried Interest350,469
 —
 —
 —
 350,469
Unrealized Carried Interest53,339
 17,012
 —
 —
 70,351
Total Performance Income (Loss)403,808
 20,671
 —
 —
 424,479
          
Investment Income (Loss) 
  
  
  
  
Net Realized Gains (Losses)—
 —
 —
 170,078
 170,078
Net Unrealized Gains (Losses)—
 —
 —
 136,740
 136,740
Total Realized and Unrealized—
 —
 —
 306,818
 306,818
Interest Income and Dividends—
 —
 —
 71,185
 71,185
Interest Expense—
 —
 —
 (47,506) (47,506)
Net Interest and Dividends—
 —
 —
 23,679
 23,679
Total Investment Income (Loss)—
 —
 —
 330,497
 330,497
          
Total Segment Revenues548,790
 104,867
 47,383
 330,497
 1,031,537
          
Segment Expenses 
  
  
  
  
Compensation and Benefits 
  
  
  
  
Cash Compensation and Benefits47,858
 22,022
 7,803
 24,284
 101,967
Realized Performance Income Compensation157,688
 1,463
 —
 —
 159,151
Unrealized Performance Income Compensation22,588
 6,805
 —
 —
 29,393
Total Compensation and Benefits228,134
 30,290
 7,803
 24,284
 290,511
Occupancy and Related Charges9,248
 2,570
 330
 3,729
 15,877
Other Operating Expenses32,031
 8,894
 3,552
 10,646
 55,123
Total Segment Expenses269,413
 41,754
 11,685
 38,659
 361,511
          
Income (Loss) attributable to noncontrolling interests—
 —
 760
 —
 760
          
Economic Net Income (Loss)$279,377
 $63,113
 $34,938
 $291,838
 $669,266
          
Total Assets$1,835,166
 $1,179,955
 $403,609
 $10,119,919
 $13,538,649


 As of and for the Nine Months Ended September 30, 2017
 
Private
Markets
 
Public
Markets
 
Capital
Markets
 Principal Activities Total
Reportable
Segments
Segment Revenues 
  
  
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
  
  
Management Fees$419,606
 $251,201
 $—
 $—
 $670,807
Monitoring Fees58,072
 —
 —
 —
 58,072
Transaction Fees237,392
 41,040
 300,235
 —
 578,667
Fee Credits(177,254) (33,894) —
 —
 (211,148)
Total Management, Monitoring and Transaction Fees, Net537,816
 258,347
 300,235
 —
 1,096,398
          
Performance Income (Loss) 
  
  
  
  
Realized Incentive Fees—
 8,384
 —
 —
 8,384
Realized Carried Interest890,310
 —
 —
 —
 890,310
Unrealized Carried Interest305,945
 71,762
 —
 —
 377,707
Total Performance Income (Loss)1,196,255
 80,146
 —
 —
 1,276,401
          
Investment Income (Loss) 
  
  
  
  
Net Realized Gains (Losses)—
 —
 —
 162,684
 162,684
Net Unrealized Gains (Losses)—
 —
 —
 461,111
 461,111
Total Realized and Unrealized—
 —
 —
 623,795
 623,795
Interest Income and Dividends—
 —
 —
 195,275
 195,275
Interest Expense—
 —
 —
 (134,348) (134,348)
Net Interest and Dividends—
 —
 —
 60,927
 60,927
Total Investment Income (Loss)—
 —
 —
 684,722
 684,722
          
Total Segment Revenues1,734,071
 338,493
 300,235
 684,722
 3,057,521
          
Segment Expenses 
  
  
  
  
Compensation and Benefits 
  
  
  
  
Cash Compensation and Benefits183,943
 58,991
 57,053
 105,591
 405,578
Realized Performance Income Compensation374,335
 3,354
 —
 —
 377,689
Unrealized Performance Income Compensation126,677
 30,485
 —
 —
 157,162
Total Compensation and Benefits684,955
 92,830
 57,053
 105,591
 940,429
Occupancy and Related Charges24,174
 5,140
 2,052
 11,082
 42,448
Other Operating Expenses97,255
 24,244
 15,320
 40,265
 177,084
Total Segment Expenses806,384
 122,214
 74,425
 156,938
 1,159,961
          
Income (Loss) attributable to noncontrolling interests—
 —
 3,810
 —
 3,810
          
Economic Net Income (Loss)$927,687
 $216,279
 $222,000
 $527,784
 $1,893,750
          
Total Assets$2,123,892
 $1,313,920
 $458,269
 $11,451,918
 $15,347,999


 As of and for the Nine Months Ended September 30, 2016
 
Private
Markets
 
Public
Markets
 
Capital
Markets
 Principal Activities Total
Reportable
Segments
Segment Revenues 
  
  
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
  
  
Management Fees$354,376
 $245,349
 $—
 $—
 $599,725
Monitoring Fees52,126
 —
 —
 —
 52,126
Transaction Fees114,021
 17,768
 144,214
 —
 276,003
Fee Credits(93,042) (16,230) —
 —
 (109,272)
Total Management, Monitoring and Transaction Fees, Net427,481
 246,887
 144,214
 —
 818,582
          
Performance Income (Loss) 
  
  
  
  
Realized Incentive Fees—
 9,897
 —
 —
 9,897
Realized Carried Interest749,194
 3,838
 —
 —
 753,032
Unrealized Carried Interest(131,386) (3,370) —
 —
 (134,756)
Total Performance Income (Loss)617,808
 10,365
 —
 —
 628,173
          
Investment Income (Loss) 
  
  
  
  
Net Realized Gains (Losses)—
 —
 —
 370,594
 370,594
Net Unrealized Gains (Losses)—
 —
 —
 (725,699) (725,699)
Total Realized and Unrealized—
 —
 —
 (355,105) (355,105)
Interest Income and Dividends—
 —
 —
 253,756
 253,756
Interest Expense—
 —
 —
 (144,497) (144,497)
Net Interest and Dividends—
 —
 —
 109,259
 109,259
Total Investment Income (Loss)—
 —
 —
 (245,846) (245,846)
          
Total Segment Revenues1,045,289
 257,252
 144,214
 (245,846) 1,200,909
          
Segment Expenses 
  
  
  
  
Compensation and Benefits 
  
  
  
  
Cash Compensation and Benefits142,500
 61,193
 23,374
 72,689
 299,756
Realized Performance Income Compensation317,178
 5,493
 —
 —
 322,671
Unrealized Performance Income Compensation(47,377) (1,347) —
 —
 (48,724)
Total Compensation and Benefits412,301
 65,339
 23,374
 72,689
 573,703
Occupancy and Related Charges27,212
 7,252
 1,901
 11,121
 47,486
Other Operating Expenses95,166
 28,102
 10,870
 32,404
 166,542
Total Segment Expenses534,679
 100,693
 36,145
 116,214
 787,731
          
Income (Loss) attributable to noncontrolling interests—
 —
 2,002
 —
 2,002
          
Economic Net Income (Loss)$510,610
 $156,559
 $106,067
 $(362,060) $411,176
          
Total Assets$1,835,166
 $1,179,955
 $403,609
 $10,119,919
 $13,538,649





Reconciliations of Total Segment Amounts
The following tables reconcile the most directly comparable financial measures calculatedSegment Revenues, Segment Operating Earnings, and presentedSegment Assets to their equivalent GAAP measure:
Three Months Ended March 31,
20222021
Total GAAP Revenues$1,004,017 $4,563,006 
Impact of Consolidation and Other213,400 123,448 
Asset Management Adjustments:
Capital Allocation-Based Income (GAAP)945,743 (2,684,647)
Realized Carried Interest579,767 165,142 
Realized Investment Income349,354 461,273 
Capstone Fees(15,485)(20,080)
Expense Reimbursements(41,303)(27,729)
Insurance Adjustments:
Net Premiums(372,144)(1,176,142)
Policy Fees(318,436)(201,683)
Other Income(34,744)(18,144)
Investment Gains and Losses167,102 259,168 
Derivative Gains and Losses286,721 220,581 
Total Segment Revenues (1)
$2,763,992 $1,664,193 
(1)Total Segment Revenues is comprised of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized Performance Income, (v) Realized Investment Income, and (vi) Net Investment Income.
Three Months Ended March 31,
20222021
Income (Loss) Before Tax (GAAP)$1,099,436 $4,354,106 
Impact of Consolidation and Other(1,232,320)(1,375,375)
Interest Expense69,460 57,545 
Equity-based compensation - KKR Holdings19,821 16,434 
Asset Management Adjustments:
Unrealized Carried Interest1,290,033 (2,109,018)
Net Unrealized (Gains) Losses322,269 (1,316,644)
Unrealized Carried Interest Compensation (Carry Pool)(513,987)896,907 
Strategic Corporate Transaction-Related Charges19,898 4,875 
Equity-based compensation55,111 49,761 
Equity-based compensation - Performance based57,953 14,556 
Insurance Adjustments:
Net (Gains) Losses from Investments and Derivatives48,735 289,235 
Strategic Corporate Transaction-Related Charges5,007 4,819 
Equity-based and Other Compensation31,711 7,411 
Amortization of Acquired Intangibles4,412 2,451 
Income Taxes(34,106)(16,626)
Total Segment Operating Earnings$1,243,433 $880,437 
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As of
March 31, 2022March 31, 2021
Total GAAP Assets$266,290,981 $216,445,114 
Impact of Consolidation and Reclassifications(63,737,743)(54,032,166)
Carry Pool Reclassifications(3,138,465)(2,815,328)
Total Segment Assets$199,414,773 $159,597,620 

22. EQUITY

Stockholders' Equity
Common Stock

The common stock of KKR & Co. Inc. is entitled to vote as provided by its certificate of incorporation, Delaware General Corporation Law and the rules of the NYSE. Subject to preferences that apply to shares of Series C Mandatory Convertible Preferred Stock and any other shares of preferred stock outstanding at the time on which dividends are payable, the holders of common stock are entitled to receive dividends out of funds legally available if the board of directors, in its discretion, determines to declare dividends and then only at the times and in the amounts that the board of directors may determine. The common stock is not entitled to preemptive rights and is not subject to conversion, redemption or sinking fund provisions.

Series I and Series II Preferred Stock

Except for any distribution required by Delaware law to be made upon a dissolution event, the holders of Series I preferred stock and Series II preferred stock do not have any economic rights to receive dividends. Series I preferred stock is entitled to vote on various matters that may be submitted to vote of the stockholders and the other matters as set forth in the certificate of incorporation. For matters on which common stock is entitled to vote, so long as the ratio at which KKR Group Partnership Units are exchangeable for shares of common stock remains on a 1-for-one basis, Series II preferred stock will vote together with common stock as a single class and on an equivalent basis, except Series II preferred stock will vote separately as a class on any amendment to the certificate of incorporation that changes certain terms, rights or preferences of Series II preferred stock. Upon a dissolution event, each holder of Series I preferred stock will be entitled to a payment equal to $0.01 per share of Series I preferred stock and each holder of Series II preferred stock will be entitled to a payment equal to $0.000000001 per share of Series II preferred stock.

The Series II preferred stock will become eliminated upon the closing of the merger transactions contemplated by the Reorganization Agreement, subject to the satisfaction of the conditions to closing. The Series I preferred stock will become eliminated upon the closing of the transactions contemplated to occur on the Sunset Date (as defined in the Reorganization Agreement), which is scheduled to occur not later than December 31, 2026, subject to the closing of the prior merger transactions and the satisfaction of any other conditions to closing.

Series C Mandatory Convertible Preferred Stock

On August 14, 2020, KKR & Co. Inc. issued 23,000,000 shares, or $1.15 billion aggregate liquidation preference, of its 6.00% Series C Mandatory Convertible Preferred Stock (the "Series C Mandatory Convertible Preferred Stock").

Unless converted or redeemed earlier in accordance with GAAPthe terms of the Series C Mandatory Convertible Preferred Stock, each share of Series C Mandatory Convertible Preferred Stock will automatically convert on the mandatory conversion date, which is expected to KKR’s total reportable segments: be September 15, 2023, into between 1.1662 shares and 1.4285 shares of common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of designations related to the Series C Mandatory Convertible Preferred Stock. The number of shares of common stock issuable upon conversion will be determined based on the average volume weighted average price per share of common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to September 15, 2023.
Fees and Other
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 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Fees and Other$692,877
 $687,056
 $2,340,617
 $1,426,618
Plus: Management fees relating to consolidated funds and placement fees54,012
 49,017
 153,414
 131,335
Less: Fee credits relating to consolidated funds106
 417
 3,752
 2,766
Plus: Net realized and unrealized carried interest - consolidated funds22,341
 5,956
 43,782
 15,581
Plus: Total investment income (loss)50,095
 330,497
 684,722
 (245,846)
Less: Revenue earned by oil & gas producing entities12,441
 16,191
 47,096
 47,977
Less: Reimbursable expenses27,506
 12,064
 87,131
 46,583
Less: Other9,587
 12,317
 27,035
 29,453
Total Segment Revenues$769,685
 $1,031,537
 $3,057,521
 $1,200,909
Dividends on the Series C Mandatory Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by our board of directors, or an authorized committee thereof, at an annual rate of 6.00% on the liquidation preference of $50.00 per share of Series C Mandatory Convertible Preferred Stock, and may be paid in cash or, subject to certain limitations, in shares of common stock or, subject to certain limitations, any combination of cash and shares of common stock. If declared, dividends on the Series C Mandatory Convertible Preferred Stock will be payable quarterly on March 15, June 15, September 15 and December 15 of each year to, and including, September 15, 2023, commencing on December 15, 2020.

Expenses
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Total Expenses$530,247
 $511,117
 $1,699,989
 $1,242,658
Less: Equity based compensation72,250
 61,552
 271,226
 186,032
Less: Reimbursable expenses and placement fees37,508
 18,255
 132,491
 72,887
Less: Operating expenses relating to consolidated funds, CFEs and other entities21,858
 20,141
 56,517
 85,093
Less: Expenses incurred by oil & gas producing entities10,725
 17,782
 34,826
 56,000
Less: Intangible amortization2,473
 22,112
 13,901
 35,640
Less: Other11,744
 9,764
 31,067
 19,275
Total Segment Expenses$373,689
 $361,511
 $1,159,961
 $787,731
Net Income (Loss) AttributableUpon KKR & Co. Inc.’s voluntary or involuntary liquidation, winding-up or dissolution, each holder of the Series C Mandatory Convertible Preferred Stock would be entitled to receive a liquidation preference in the amount of $50.00 per share of Series C Mandatory Convertible Preferred Stock, plus an amount equal to accumulated and unpaid dividends on such shares, whether or not declared, to, but excluding, the date fixed for liquidation, winding-up or dissolution, to be paid out of KKR & Co. Inc.’s assets legally available for distribution to its stockholders after satisfaction of debt and other liabilities owed to KKR & Co. L.P. Common UnitholdersInc.’s creditors and holders of shares of its stock ranking senior to the Series C Mandatory Convertible Preferred Stock and before any payment or distribution is made to holders of any stock ranking junior to the Series C Mandatory Convertible Preferred Stock, including, without limitation, common stock.

 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders$153,563
 $352,152
 $818,552
 $116,103
Plus: Preferred Distributions8,341
 8,201
 25,023
 13,894
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P.115,434
 284,834
 637,146
 86,659
Plus: Non-cash equity-based charges78,728
 61,552
 277,704
 186,032
Plus: Amortization of intangibles, placement fees and other, net (1)
20,464
 (48,299) 57,825
 (10,273)
Plus: Income tax (benefit)18,420
 10,826
 77,500
 18,761
Economic Net Income (Loss)$394,950
 $669,266
 $1,893,750
 $411,176
(1) Other primarily representsIn connection with the statement of operations impactissuance of the accounting convention differences for (i) direct interests in oil & natural gas properties outside of investment funds and (ii) certain interests in consolidated CLOs and other entities. On a segment basis, direct interests in oil & natural gas properties outside of investment funds are carried at fair value with changes in fair value recorded in Economic Net Income (Loss) and certain interests in consolidated CLOs and other entities are carried at cost. See Note 2 "Summary of Significant Accounting Policies" forSeries C Mandatory Convertible Preferred Stock, the GAAP accounting for these direct interests in oil and natural gas producing properties outside investment funds and interests in consolidated CLOs and other entities.

The items that reconcile KKR’s total reportable segments to the corresponding consolidated amounts calculated and presented in accordance with GAAP for net income (loss) attributable to redeemable noncontrolling interests and income (loss) attributable to noncontrolling interests are primarily attributable to the impactlimited partnership agreement of KKR Holdings L.P., KKR's consolidated funds and certain other entities.Group Partnership was amended to provide for preferred units with economic terms designed to mirror those of the Series C Mandatory Convertible Preferred Stock.


Assets
 As of September 30,
 2017 2016
Total Assets$44,305,639
 $37,984,599
Less: Impact of consolidation of funds and other entities (1)
27,524,641
 23,013,503
Less: Carry pool reclassification from liabilities1,131,071
 1,121,510
Less: Impact of KKR Management Holdings Corp.301,928
 310,937
Total Segment Assets$15,347,999
 $13,538,649
    
(1) Includes accounting basis difference for oil & natural gas properties of $19,358 and $5,966 as of September 30, 2017 and 2016, respectively.





15. EQUITY

Reorganization of India Capital Markets and Corporate NBFC

On March 30, 2017, KKR reorganized KKR’s Indian capital markets and credit asset management businesses, to create KKR India Financial Investments Pte. Ltd. or “KIFL”. KKR owns 60% of KIFL. This reorganization transaction was accounted for as a transfer of interests under common control, and the difference between KKR’s carrying value before and after the transaction was treated as a reallocation of equity interests, and no gain or loss was recognized in the consolidated financial statements. This reallocation amounted to an increase to KKR’s equity of $10.3 million and to KKR Holdings of $7.9 million.

UnitShare Repurchase Program

Since October 27, 2015, KKR has authorized a total of $750.0 million to repurchase its common units, of which $459.0 million has been spent to repurchase 31.7 million common units as of October 23, 2017. Under this common unitKKR's repurchase program, shares of common unitsstock of KKR & Co. Inc. may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing, manner, price and amount of any unit repurchases will be determined by KKR in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. In addition to the repurchases of common stock, the repurchase program will be used for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards granted pursuant to our Equity Incentive Plans representing the right to receive common stock. KKR expects that the program, which has no expiration date, will be in effect until the maximum approved dollar amount has been used to repurchase common units.used. The program does not require KKR to repurchase or retire any specific number of shares of common units,stock or equity awards, respectively, and the program may be suspended, extended, modified or discontinued at any time. See condensedAs of April 29, 2022, the remaining amount available under the repurchase program was approximately $108 million.
The following table presents KKR & Co. Inc. common stock that has been repurchased or equity awards retired under the repurchase program:
Three Months Ended March 31,
20222021
Shares of common stock repurchased5,191,174 1,501,558 
Equity awards for common stock retired— 1,325,853 

Noncontrolling Interests
Noncontrolling interests represent (i) noncontrolling interests in consolidated statementsentities and (ii) noncontrolling interests held by KKR Holdings.
Noncontrolling Interests in Consolidated Entities and Other
Noncontrolling interests in consolidated entities represent the non-redeemable ownership interests in KKR that are held primarily by:
(i)third party fund investors in KKR's consolidated funds and certain other entities;
(ii)third parties entitled to up to 1% of the carried interest received by certain general partners of KKR's funds that have made investments on or prior to December 31, 2015;
(iii)certain former principals and their designees representing a portion of the carried interest received by the general partners of KKR's private equity funds that was allocated to them with respect to private equity investments made during such former principals' tenure with KKR prior to October 1, 2009;
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(iv)certain current and former principals representing all of the capital invested by or on behalf of the general partners of KKR's private equity funds prior to October 1, 2009 and any returns thereon;
(v)third parties in KKR's Capital Markets business line;
(vi)holders of other exchangeable securities, which consist of vested restricted holdings units granted under the 2019 Equity Plan that are exchangeable into shares of common stock of KKR & Co. Inc.; and
(vii)third parties in KKR's insurance business including GA Rollover Investors, GA Co-Investors and third party investors in Global Atlantic's consolidated renewable energy entities and certain other entities.
Noncontrolling Interests held by KKR Holdings
Noncontrolling interests held by KKR Holdings consist of economic interests held by principals indirectly in KKR Group Partnership Units. Such principals receive financial benefits from KKR's business in the form of distributions received from KKR Holdings and through their direct and indirect participation in the value of KKR Group Partnership Units held by KKR Holdings. These financial benefits are not paid by KKR & Co. Inc. and are borne by KKR Holdings.
The following tables present the calculation of total noncontrolling interests:
 Three Months Ended March 31, 2022
Noncontrolling Interests in Consolidated Entities and OtherNoncontrolling Interests Held by KKR HoldingsTotal Noncontrolling Interests
Balance at the beginning of the period$32,043,699 $8,430,866 $40,474,565 
Net income (loss) attributable to noncontrolling interests (1)
1,206,337 (47,152)1,159,185 
Other comprehensive income (loss), net of tax (2)
(1,291,083)(629,986)(1,921,069)
Equity-based and other non-cash compensation63,571 19,821 83,392 
Capital contributions3,579,591 — 3,579,591 
Capital distributions(1,831,897)(41,976)(1,873,873)
Balance at the end of the period$33,770,218 $7,731,573 $41,501,791 
 Three Months Ended March 31, 2021
Noncontrolling Interests in Consolidated Entities and OtherNoncontrolling Interests Held by KKR HoldingsTotal Noncontrolling Interests
Balance at the beginning of the period$20,570,716 $6,512,382 $27,083,098 
Net income (loss) attributable to noncontrolling interests (1)
1,241,877 1,003,654 2,245,531 
Other comprehensive income (loss), net of tax (2)
(581,154)(298,234)(879,388)
Exchange of KKR Holdings Units to Common Stock (3)  
— (56,903)(56,903)
Equity-based and other non-cash compensation19,882 16,434 36,316 
Capital contributions4,009,967 25 4,009,992 
Capital distributions(987,066)(40,768)(1,027,834)
Impact of Acquisition (4)
190,405 — 190,405 
Changes in consolidation(66,488)— (66,488)
Balance at the end of the period$24,398,139 $7,136,590 $31,534,729 
(1)Refer to the table below for calculation of net income (loss) attributable to noncontrolling interests held by KKR Holdings.
(2)With respect to noncontrolling interests held by KKR Holdings, calculated on a pro rata basis based on the weighted average KKR Group Partnership Units held by KKR Holdings during the reporting period. 
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(3)Calculated based on the proportion of KKR Holdings units exchanged for KKR & Co. Inc. common stock. The exchange agreement with KKR Holdings provides for the exchange of KKR Group Partnership Units held by KKR Holdings for KKR & Co. Inc. common stock.
(4)Represents other noncontrolling interests at the GA Acquisition Date.

Net income (loss) attributable to each of KKR & Co. Inc. common stockholders, KKR Holdings and holders of other exchangeable securities, with the exception of certain tax assets and liabilities that are directly allocable to KKR & Co. Inc., is attributed based on the percentage of the weighted average KKR Group Partnership Units directly or indirectly held by them. However, primarily because of the (i) contribution of certain expenses borne entirely by KKR Holdings and holders of other exchangeable securities, (ii) the periodic exchange of KKR Holdings units and other exchangeable securities for KR & Co. Inc. common stock pursuant to the exchange agreement and (iii) the contribution of certain expenses borne entirely by KKR associated with the Equity Incentive Plans, equity allocations shown in the consolidated statement of changes in equity fordiffer from their respective pro rata ownership interests in KKR's net assets.
The following table presents net income (loss) attributable to noncontrolling interests held by KKR Holdings:

 Three Months Ended March 31,
 20222021
Net income (loss)$1,102,602 $3,915,367 
(-) Net income (loss) attributable to Redeemable Noncontrolling Interests(63)— 
(-) Net income (loss) attributable to Noncontrolling Interests in consolidated entities and other1,206,337 1,241,877 
(-) Series A and B Preferred Stock Dividends— 8,341 
(-) Series C Mandatory Convertible Preferred Stock Dividends17,250 17,250 
(+) Income tax expense (benefit) attributable to KKR & Co. Inc.(34,144)462,930 
Net income (loss) attributable to KKR & Co. Inc.
Common Stockholders and KKR Holdings		$(155,066)$3,110,829 
Net income (loss) attributable to Noncontrolling Interests held by KKR Holdings$(47,152)$1,003,654 

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23. REDEEMABLE NONCONTROLLING INTERESTS

Global Atlantic has redeemable non-controlling interests related to renewable energy entities of approximately $81.8 million and $82.5 million as of March 31, 2022 and December 31, 2021 as determined by the amounthypothetical liquidation book value ("HLBV") method, respectively. The estimated redemption value of common units repurchased duringredeemable non-controlling interests is calculated as the nine months ended September 30, 2016. There were no common units repurchaseddiscounted cash flows subsequent to the expected flip date of the respective renewable energy entity. The flip date represents the date at which the allocation of income and cash flows among the investors in the entity is adjusted, pursuant to this program during the nine months ended September 30, 2017.

Distribution Policy

Under KKR's distribution policy for its common units, KKR intendsredeemable non-controlling interest investors having achieved an agreed-upon return. The flip date of renewable energy partnerships determines when the redeemable non-controlling interests are eligible to make equal quarterly distributionsbe redeemed. Eligible redemption dates range from 2022 to holders2027. For the redeemable non-controlling interests outstanding as of its common units in an amount of $0.17 per common unit per quarter. The declarationboth March 31, 2022 and payment of any distributions are subject to the discretion of the board of directors of the general partner of KKR and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all, that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR or that any particular distribution policy will be maintained.


16. GOODWILL AND INTANGIBLE ASSETS
Goodwill
As of December 31, 2016,2021, the carryingestimated redemption value of goodwill was $89.0 million, which was allocated to Public Markets and Principal Activities inthat would be due at the amounts of $59.0 million and $30.0 million, respectively. As part of the PAAMCO Prisma transaction that occurred on June 1, 2017, goodwill of $5.5 million was included in determining the gain on the contribution of Prisma to PAAMCO Prisma. In accordance with ASC 350, the amount of goodwill included in the gain calculation was based on the relative fair values of Prisma, which was integrated in Public Markets, and the remaining portion of Public Markets. Subsequent to this transaction the remaining carrying value of goodwill in Public Markets and Principal Activitiesrespective redemption dates is $53.5 million and $30.0 million, respectively, as of September 30, 2017.$5.3 million.


Goodwill is recorded in Other Assets in the condensed consolidated statements of financial condition. All of the goodwill is currently expected to be deductible for tax purposes. See Note 8 “Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities.”
Intangible Assets
Intangible Assets, Net consists of the following:
 September 30, 2017 December 31, 2016
Finite-Lived Intangible Assets$74,524
 $251,768
Accumulated Amortization(57,086) (116,744)
Intangible Assets, Net$17,438
 $135,024
Changes in Intangible Assets, Net consists of the following: 
 Nine Months Ended
 September 30, 2017
Balance, Beginning of Period$135,024
Amortization Expense(13,891)
Foreign Exchange1,938
Other (1)
(105,633)
Balance, End of Period$17,438
  
(1) Represents the removal of intangible assets in connection with the PAAMCO Prisma transaction.

17.24. COMMITMENTS AND CONTINGENCIES
Debt Covenants
Borrowings of KKR contain various debt covenants. These covenants do not, in management’s opinion, materially restrict KKR’s operating business or investment strategies as of September 30, 2017. KKR is in compliance with its debt covenants in all material respects as of September 30, 2017.

Funding Commitments
and Others
As of September 30, 2017,March 31, 2022, KKR had unfunded commitments consisting of $2,937.4 million$11.3 billion to its active private equityinvestment funds and othervehicles. KKR has also agreed for certain of its investment vehicles. vehicles to fund or otherwise be liable for a portion of their investment losses (up to a maximum of approximately $116 million) and/or to provide them with liquidity upon certain termination events (the maximum amount of which is unknown until the scheduled termination date of the investment vehicle).
In addition to thethese uncalled commitments and funding obligations to KKR's investment funds and vehicles, KKR has entered into contractual commitments primarily with respect to (i) the purchase of investments and other assets in its Principal Activities segment, and (ii) underwriting transactions, debt financing, revolving credit facilities, and syndications in KKR's Capital Markets segment.business line. As of September 30, 2017,March 31, 2022, these commitments amounted to $93.4 million and $255.7 million, respectively.$1.5 billion. Whether these amounts are actually funded, in whole or in part, depends on the contractual terms of such commitments, including the satisfaction or waiver of any conditions to closing or funding. The unfunded commitments shown for KKR's Capital Markets segment are shown without reflectingcapital markets business has arrangements that maywith third parties, which reduce the actual amount of contractual commitments shown. Our capital market business entered into an arrangement that reduces ourits risk when underwriting certain debt transactions.transactions, and thus our unfunded commitments as of March 31, 2022 have been reduced to reflect the amount to be funded by such third parties. In the case of purchases of investments or assets in our Principal Activities segment,business line, the amount to be funded includes amounts that are intended to be syndicated to third parties, and the actual amounts to be funded may be less than shown.less.

Global Atlantic has commitments to purchase or fund investments of $2.6 billion and $2.0 billion as of March 31, 2022 and December 31, 2021, respectively. These commitments include those related to commercial mortgage loans, other lending facilities and other investments. For those commitments that represent a contractual obligation to extend credit, Global Atlantic has recorded a liability of $14.9 million for current expected credit losses as of March 31, 2022.
In addition, Global Atlantic has entered into certain forward flow agreements to purchase loans. Global Atlantic's obligations under these agreements are subject to change, curtailment, and cancellation based on various provisions including repricing mechanics, due diligence reviews, and performance or pool quality, among other factors.
Non-cancelable Operating Leases

KKR's non-cancelable operating leases consist of leases of office space around the world. There are no material rent holidays, contingent rent, rent concessions or leasehold improvement incentives associated with any of these property leases. In addition to base rentals, certain lease agreements are subject to escalation provisions and rent expense is recognized on a straight‑line basis over the term of the lease agreement.
Global Atlantic also enters into land leases for its consolidated investments in renewable energy.

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Contingent Repayment Guarantees
The partnership documents governing KKR’sKKR's carry-paying investment funds including funds relating to private equity, infrastructure, energy, real estate, mezzanine, direct lending and special situations investments,vehicles generally include a “clawback”"clawback" provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the fund for distribution to the fund investors at the end of the life of the fund. Under a clawback obligation, upon the liquidation of a fund, the general partner is required to return, typically on an after-tax basis, previously distributed carry to the extent that, due to the diminished performance of later investments, the aggregate amount of carry distributions received by the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, including the effects of any performance thresholds. Excluding carried interest received by the general partners

As of funds that were not contributed to KKR in the acquisition of the assets and liabilities of KKR & Co. (Guernsey) L.P. (formerly known as KKR Private Equity Investors, L.P.) on October 1, 2009 (the “KPE Transaction”), as of September 30, 2017, $47.3March 31, 2022, approximately $400 million of carried interest was subject to this clawback obligation, assuming that all applicable carry payingcarry-paying funds and their alternative investment vehicles were liquidated at their September 30, 2017March 31, 2022 fair values. HadAlthough KKR would be required to remit the entire amount to fund investors that are entitled to receive the clawback payment, KKR would be entitled to seek reimbursement of approximately $160 million of that amount from KKR Associates Holdings L.P., which is not a KKR subsidiary. As of March 31, 2022, KKR Associates Holdings L.P. had access to cash reserves sufficient to reimburse the full $160 million that would be due to KKR. If the investments in suchall carrying-paying funds beenwere to be liquidated at zero value the clawback obligation would have been $1,990.7 million. approximately $2.7 billion, and KKR would be entitled to seek reimbursement of approximately $1.1 billion of that amount from KKR Associates Holdings L.P. KKR will acquire control of KKR Associates Holdings L.P. when a subsidiary of KKR becomes its general partner upon the closing of the transactions contemplated to occur on the Sunset Date (as defined in the Reorganization Agreement), which is scheduled to occur not later than December 31, 2026, subject to the closing of the mergers contemplated by the Reorganization Agreement and the satisfaction of the other conditions to closing.

Carried interest is recognized in the statementconsolidated statements of operations based on the contractual conditions set forth in the agreements governing the fund as if the fund were terminated and liquidated at the reporting date and the fund’sfund's investments were realized at the then estimated fair values. Amounts earned pursuant to carried interest are earned by the general partner of those funds to the extent that cumulative investment returns are positive and where applicable, preferred return thresholds have been met. If these investment amounts earned decrease or turn negative in subsequent periods, recognized carried interest will be reversed and to the extent that the aggregate amount of carry distributions received by the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, a clawback obligation would be recorded. For funds that are consolidated, this clawback obligation, if any, is reflected as an increase in noncontrolling interests in the consolidated statements of financial condition. For funds that are not consolidated, this clawback obligation, if any, is reflected as a reduction of KKR’sKKR's investment balance as this is where carried interest is initially recorded.
Prior to the KPE Transaction in 2009, certain principals who received carried interest distributions with respect to certain private equity funds contributed to KKR had personally guaranteed, on a several basis and subject to a cap, the contingent obligations of the general partners of such private equity funds to repay amounts to fund investors pursuant to the general partners’ clawback obligations. The terms of the KPE Transaction require that principals remain responsible for any clawback obligations relating to carry distributions received prior to the KPE Transaction, up to a maximum of $223.6 million. Through investment realizations, the principals' potential exposure has been reduced to $72.2 million as of September 30, 2017. Using valuations as of September 30, 2017, $19.7 million would be due with respect to the clawback obligation required to be funded by principals. Carry distributions arising subsequent to the KPE Transaction may give rise to clawback obligations that may be allocated generally to KKR and persons who participate in the carry pool. In addition, guarantees of or similar arrangements relating to clawback obligations in favor of third party investors in an individual investment partnership by entities KKR owns may limit distributions of carried interest more generally.


Indemnifications and Other Guarantees
KKR may incur contingent liabilities for claims that may be made against it in the future. KKR enters into contracts that contain a variety of representations, warranties and covenants, including indemnifications. For example, KKR (including KFN) and certain of KKR’sKKR's investment funds and KFN have provided and provide certain indemnities relating to environmental and other matters and have provided nonrecourseand provide non-recourse carve-out guarantees for fraud, willful misconduct and other customary wrongful acts, each in connection with the financing of KKR's corporate real estate and certain real estate investments and for certain investment vehicles that KKR has made. In addition,manages. KKR's maximum exposure under these arrangements is currently unknown and KKR's liabilities for these matters would require a claim to be made against KKR has also providedin the future.
KKR provides credit support to certain of its subsidiaries’subsidiaries' obligations in connection with a limited number of investment vehicles that KKR manages. For example, KKR has guaranteed the obligations of a general partner to post collateral on behalf of its investment vehicle in connection with such vehicle’svehicle's derivative transactions, andtransactions. KKR has also agreed to be liable for certain investment losses and/or for providing liquidity in the events specified in the governing documents of another investment vehicle. KKR has also provided(i) provides credit support regarding repayment and funding obligations to third partythird-party lenders to certain of its employees, excluding its executive officers, in connection with their personal investments in KKR investment funds and in an investment vehicle that includes third party investors and invests in KKR funds and alongside KKR funds and (ii) provides credit support to a strategic partner regarding the ownershiphedge fund partnership. KKR is not a guarantor for any borrowings, credit facilities or debt securities of its business. Indian debt financing company.
KKR may also may become liable for certain fees payable to sellers of businesses or assets if a transaction does not close, subject to certain conditions, if any, specified in the acquisition agreements for such businesses or assets. KKR’s maximum exposure under these arrangements
The Global Atlantic business was formerly owned by The Goldman Sachs Group, Inc. (together with its subsidiaries, "Goldman Sachs"). In connection with the separation of Global Atlantic from Goldman Sachs in 2013, Global Atlantic entered into a tax benefit payment agreement with Goldman Sachs. Under the tax benefit payment agreement, Global Atlantic (Fin) Company ("GA FinCo") is currently unknown and KKR's liabilities for these matters would require a claimobligated to make annual payments out of available cash, guaranteed by Global Atlantic Financial Group Limited ("GAFG"), to Goldman Sachs over an approximately 25-year period totaling $214 million. As of March 31,
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2022, the present value of the remaining amount to be made against KKRpaid is $64.9 million. Although these payments are subordinated and deferrable, deferral of these payments would result in restrictions on distributions by GA FinCo and GAFG.
In lieu of funding certain investments in loan facilities to third party borrowers in cash, Global Atlantic has arranged or participated in letters of credit issued by third-party banks on behalf of the borrowers in the future.

amount of $39.7 million, as of March 31, 2022, with expiration dates between October 2022 to December 2024. Global Atlantic has available lines of credit that would allow for additional letters of credit to be issued on behalf of certain borrowers, up to $225.3 million, as of March 31, 2022. For accounting purposes, these letters of credit are considered guarantees of certain obligations of the borrowers. If a letter of credit were to be drawn, Global Atlantic would be obligated to repay the issuing third-party bank, and Global Atlantic would recognize a loan receivable from the borrowers on the consolidated statements of financial condition. Global Atlantic monitors the likelihood of these letters of credit being drawn, and any related contingent obligation. As of both March 31, 2022 and December 31, 2021, the expected credit loss on the contingent liability associated with these letters of credit was not material.
Litigation
From time to time, KKR (including Global Atlantic) is involved in various legal proceedings, lawsuits, arbitration and claims incidental to the conduct of KKR’s business. KKR’s business isKKR's businesses. KKR's asset management and insurance businesses are also subject to extensive regulation, which may result in regulatory proceedings against it.them.
In December 2017, KKR & Co. L.P. (which is now KKR & Co. Inc.) and its then Co-Chief Executive Officers were named as defendants in a lawsuit filed in Kentucky state court alleging, among other things, the violation of fiduciary and other duties in connection with certain separately managed accounts that Prisma Capital Partners LP, a former subsidiary of KKR, manages for the Kentucky Retirement Systems. Also named as defendants in the lawsuit are certain current and former trustees and officers of the Kentucky Retirement Systems, Prisma Capital Partners LP, and various other service providers to the Kentucky Retirement Systems and their related persons. KKR and other defendants’ motions to dismiss were denied by the trial court in November 2018, but in April 2019 the Kentucky Court of Appeals vacated the trial court's opinion and order denying the motions to dismiss the case for lack of standing. The decision of the Court of Appeals was appealed by plaintiffs to the Supreme Court of Kentucky. On July 9, 2020, the Supreme Court of Kentucky reversed the trial court's order and remanded the case to the trial court with direction to dismiss the complaint for lack of constitutional standing. On July 20, 2020, the Office of the Attorney General, on behalf of the Commonwealth of Kentucky, filed a motion to intervene as a plaintiff in the lawsuit and on July 21, 2020 filed a new lawsuit in the same Kentucky trial court making essentially the same allegations against the defendants, including KKR & Co. Inc. and Messrs. Kravis and Roberts. On July 29, 2020, certain private plaintiffs in the original lawsuit filed a motion to further amend their original complaint and to add new plaintiffs. On July 30, 2020, KKR and other defendants filed objections to the Attorney General’s motion to intervene. On December 28, 2020, the trial court dismissed the complaint filed by the original plaintiffs and denied their motion to amend their original complaint and add new plaintiffs, but granted the Office of the Attorney General’s motion to intervene. In January 2021, some of the attorneys for the private plaintiffs in the original lawsuit filed a new lawsuit, and a motion to intervene in the original lawsuit, on behalf of a new set of plaintiffs, who claim to be "Tier 3" members of Kentucky Retirement Systems, alleging substantially the same allegations as in the original lawsuit. The motion to intervene in the original lawsuit was denied. These "Tier 3" plaintiffs appealed the denial of their motion to intervene but then voluntarily dismissed their appeal on January 31, 2022. In addition, the Kentucky Retirement Systems had commissioned an investigation into certain matters alleged in the Attorney General's complaint. The trial court ordered that this investigation be completed by May 17, 2021, and the Attorney General was permitted to amend its complaint after reviewing the investigation's report within ten days of the Attorney General's receipt of it. On May 24, 2021, the Attorney General filed a First Amended Complaint on behalf of the Commonwealth of Kentucky. This complaint continues to name KKR & Co. L.P. and its then Co-Chief Executive Officers, as defendants, and makes similar allegations against them. KKR and the other defendants moved to dismiss the First Amended Complaint on July 30, 2021. The court held oral argument on these motions to dismiss on December 14, 2021. On July 9, 2021, the individual plaintiffs served an amended complaint, which purports to assert, on behalf of a class of beneficiaries of Kentucky Retirement Systems, direct claims for breach of fiduciary duty and civil violations under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). This complaint was removed to the U.S. District Court for the Eastern District of Kentucky, which has entered an order staying this case until the completion of the Attorney General’s lawsuit on behalf of the Commonwealth. On August 20, 2021, the same and other individual plaintiffs filed a second complaint in Kentucky state court, purportedly on behalf of Kentucky Retirement Systems' funds, alleging the same claims against KKR & Co. Inc. and Messrs. Kravis and Roberts as in the July 9th amended complaint but without the RICO or class action allegations. KKR and the other defendants have moved to dismiss the August 20th complaint. On March 24, 2022, in a separate declaratory judgment action brought by the Commonwealth of Kentucky regarding the enforceability of certain indemnification provisions available to KKR & Co. Inc. and Prisma Capital Partners LP, the Kentucky state court found that it has personal jurisdiction over KKR & Co. Inc., and this finding is currently being appealed by KKR.

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KKR (including Global Atlantic) currently is and expects to continue to become, from time to time, subject to examinations, inquiries and investigations by various U.S. and non U.S.non-U.S. governmental and regulatory agencies, including but not limited to the SEC, Department of Justice, U.S. state attorney generals, Financial Industry Regulatory Authority or FINRA, and("FINRA"), the U.K. Financial Conduct Authority, Central Bank of Ireland, Monetary Authority of Singapore, U.S. state insurance regulatory authorities, and the Bermuda Monetary Authority. Such examinations, inquiries and investigations may result in the commencement of civil, criminal or administrative proceedings or fines against KKR or its personnel.
Moreover, in the ordinary course of business, KKR (including Global Atlantic) is and can be both the defendant and the plaintiff in numerous lawsuits with respect to acquisitions, bankruptcy, insolvency and other types of proceedings.events. Such lawsuits may involve claims that adversely affect the value of certain investments owned by KKR’s funds.
KKR's funds and Global Atlantic's insurance companies. 
KKR establishes an accrued liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. No loss contingency is recorded for matters where such losses are either not probable or reasonably estimable (or both) at the time of determination. Such matters may be subject to many uncertainties, including among othersothers: (i) the proceedings may be in early stages; (ii) damages sought may be unspecified, unsupportable, unexplained or uncertain; (iii) discovery may not have been started or is incomplete; (iv) there may be uncertainty as to the outcome of pending appeals or motions; (v) there may be significant factual issues to be resolved;resolved or (vi) there may be novel legal issues or unsettled legal theories to be presented or a large number of parties. Consequently, management is unable to estimate a range of potential loss, if any, related to these matters. In addition, loss contingencies may be, in part or in whole, subject to insurance or other payments such as contributions and/or indemnity, which may reduce any ultimate loss.
KKR has included in its financial statements the reserve for regulatory, litigation and related matters that Global Atlantic includes in its financial statements, including with respect to matters arising from the conversion of life insurance policies from systems previously managed by Athene Holdings Limited to the platform of one of Global Atlantic's third party service providers, Alliance-One, a subsidiary of DXC Technology Company.
It is not possible to predict the ultimate outcome of all pending legal proceedings, and some of the matters discussed above seek or may seek potentially large and/or indeterminate amounts. As of such date, basedBased on information known by management, management has not concluded that the final resolutions of the matters above will have a material effect upon the financial statements. However, given the potentially large and/or indeterminate amounts sought or may be sought in certain of these matters and the inherent unpredictability of investigations and litigations, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on KKR’sKKR's financial results in any particular period.
Other Financing Arrangements

18. REGULATORY CAPITAL REQUIREMENTS
KKRGlobal Atlantic has registered broker-dealer subsidiaries whichfinancing arrangements with unaffiliated third parties to support the reserves of its affiliated captive reinsurers. Total fees expensed associated with these financing arrangements were $4.5 million and $4.0 million for the three months ended March 31, 2022 and 2021, respectively, and are subject toincluded in insurance expenses in the minimum net capital requirementsconsolidated statements of operations. As of both March 31, 2022 and December 31, 2021, the total capacity of the SECfinancing arrangements with third parties was $2.0 billion.
Other than the matters disclosed above, there were no outstanding or unpaid balances from the financing arrangements with unaffiliated third parties as of both March 31, 2022 and the FINRA. Additionally, KKR entities based in London and Dublin are subject to the regulatory capital requirements of the U.K. Financial Conduct Authority and the Central Bank of Ireland, respectively. In addition, KKR has an entity based in Hong Kong which is subject to the capital requirements of the Hong Kong Securities and Futures Ordinance, an entity based in Tokyo subject to the capital requirements of Financial Services Authority of Japan, and two entities based in Mumbai which are subject to capital requirements of the Reserve Bank of India and the Securities and Exchange Board of India. All of these entities have continuously operated in excess of their respective minimum regulatory capital requirements.December 31, 2021.
 The regulatory capital requirements referred to above may restrict KKR’s ability to withdraw capital from its registered broker-dealer entities. At September 30, 2017, approximately $141.6 million of cash at KKR’s registered broker-dealer entities may be restricted as to the payment of cash dividends and advances to KKR.
19.25. SUBSEQUENT EVENTS
Common Unit Distribution
Stock Dividend
A distributiondividend of $0.17$0.155 per share of common stock of KKR & Co. L.P. common unitInc. has been declared and was announced on October 26, 2017, andMay 3, 2022. This dividend will be paid on November 21, 2017May 31, 2022 to common unitholdersstockholders of record as of the close of business on November 6, 2017.May 16, 2022. KKR Holdings will receive its pro rata share of the distribution from the KKR Group Partnerships.

Partnership.
Preferred Unit Distributions

Stock Dividends
A distributiondividend of $0.421875$0.75 per share of Series AC Mandatory Convertible Preferred UnitStock has been declared asand was announced on October 26, 2017May 3, 2022 and set aside for paymentpayment. This dividend will be paid on DecemberJune 15, 20172022 to holders of record of Series AC Mandatory Convertible Preferred UnitsStock as of the close of business on DecemberJune 1, 2017.2022.

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A distribution
Yen Senior Notes
On April 26, 2022, KKR Group Finance Co. XI LLC, an indirect subsidiary of $0.406250 per Series B Preferred Unit has been declared as announced on October 26, 2017KKR & Co. Inc., completed the offering of (i) ¥36.4 billion aggregate principal amount of its 1.054% Senior Notes due 2027 (the “2027 Yen Notes”), (ii) ¥4.9 billion aggregate principal amount of its 1.244% Senior Notes due 2029 (the “2029 Yen Notes”), (iii) ¥6.2 billion aggregate principal amount of its 1.437% Senior Notes due 2032 (the “2032 Yen Notes”), (iv) ¥7.5 billion aggregate principal amount of its 1.553% Senior Notes due 2034 (the “2034 Yen Notes”), and set aside for payment on December 15, 2017 to holders(v) ¥5.5 billion aggregate principal amount of record of Series B Preferred Units as ofits 1.795% Senior Notes due 2037 (the “2037 Yen Notes” and, together with the close of business on December 1, 2017.

Investment in Marshall Wace

Due to2027 Yen Notes, the exercise of one of2029 Yen Notes, the options agreed to between Marshall Wace2032 Yen Notes and the 2034 Yen Notes, the “Yen Notes”). The Yen Notes are guaranteed by KKR & Co. Inc. and KKR KKR expectsGroup Partnership. The Yen Notes were issued pursuant to acquire an additional 5.0% interest in Marshall Wace in the fourth quarterindenture, dated April 26, 2022, as supplemented by a first supplemental indenture, dated April 26, 2022.


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ITEM 2. MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of KKR & Co. L.P.Inc., together with its consolidated subsidiaries, and the related notes included elsewhere in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2021, filed with the Securities and Exchange CommissionSEC on February 24, 201728, 2022 (our "Annual Report"), including the audited consolidated financial statements and the related notes and “Management’s"Management's Discussion and Analysis of Financial Condition and Results of Operations”Operations" contained therein. The historical condensed consolidated financial data discussed below reflects the historical results and financial position of KKR. In addition, this discussion and analysis contains forward lookingforward-looking statements and involves numerous risks and uncertainties, including those described under “Cautionary"Cautionary Note Regarding Forward-looking Statements”Statements" and “Risk Factors""Business Environment" in this report and our Annual Report and "Risk Factors" in our Annual Report, and our other quarterly reports.filings with the SEC. Actual results may differ materially from those contained in any forward lookingforward-looking statements.

The unaudited condensed consolidated financial statements and the related notes included elsewhere in this report are hereafter referred to as the "financial statements." Additionally, the condensed consolidated statements of financial condition are referred to herein as the "consolidated statements of financial condition"; the condensed consolidated statements of operations are referred to herein as the "consolidated statements of operations"; the condensed consolidated statements of comprehensive income (loss) are referred to herein as the "consolidated statements of comprehensive income (loss)"; the condensed consolidated statements of changes in equity are referred to herein as the "consolidated statements of changes in equity"; and the condensed consolidated statements of cash flows are referred to herein as the "consolidated statements of cash flows."

References herein to "KKR," "we," "us" and "our" refer to KKR & Co. Inc. and its subsidiaries, including The Global Atlantic Financial Group LLC ("TGAFG" and, together with its subsidiaries, "Global Atlantic"), unless the context requires otherwise.

Overview
 
We are a leading global investment firm that manages multipleoffers alternative asset classes including private equity, energy, infrastructure, real estate, growth equity, creditmanagement as well as capital markets and through our strategic manager partnerships, hedge funds.insurance solutions. We aim to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and drivingsupporting growth and value creation in our portfolio companies.companies and communities. We sponsor investment funds that invest our own capital alongsidein private equity, credit and real assets and have strategic partners that manage hedge funds. Our insurance subsidiaries offer retirement, life and reinsurance products under the capital we manage for fund investors and provide financing solutions and investment opportunities through our capital markets business.management of Global Atlantic.
Our asset management business offers a broad range of investment management services to our fund investors and provides capital markets services toaround the world. As of March 31, 2022, we manage $479 billion of assets for our firm, our portfolio companies and third parties.clients. Throughout our history, we have consistently been a leader in the private equity industry, having completed more than 310650 private equity investments in portfolio companies with a total transaction value in excess of $555$675 billion as of September 30, 2017. We have grownMarch 31, 2022. Since the inception of our firm by expandingin 1976, we have expanded our geographical presenceinvestment strategies and building businesses inproduct offerings from traditional private equity to areas such as leveraged credit, alternative credit, hedge funds, capital markets, infrastructure, energy, real estate, growth equity, core and growth equity.impact investments. We also provide capital markets services for our firm, our portfolio companies and third parties. Our balance sheet has providedprovides a significant source of capital in the growth and expansion of our business, and it has allowed us to further align our interests with those of our fund investors. TheseBuilding on these efforts build onand leveraging our core principles and industry expertise allowing us to leverage theand intellectual capital and synergies in our businesses, andhave allowed us to capitalize on a broader range of the opportunities we source. Additionally,
Our insurance business is operated by Global Atlantic, in which we acquired a majority controlling interest on February 1, 2021. Global Atlantic is a leading U.S. retirement and life insurance company that provides a broad suite of protection, legacy and savings products and reinsurance solutions to clients across individual and institutional markets. Global Atlantic primarily offers individuals fixed-rate annuities, fixed-indexed annuities and targeted life products through a network of banks, broker-dealers and independent marketing organizations. Global Atlantic provides its institutional clients customized reinsurance solutions, including block, flow and pension risk transfer reinsurance, as well as funding agreements. Global Atlantic primarily generates income by earning a spread between its investment income and the cost of policyholder benefits. As of March 31, 2022, Global Atlantic served approximately three million policyholders.



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Asset Management

In our asset management business, we have increased our focus on meeting the needs of our existing fund investorsfour business lines: (1) Private Markets, (2) Public Markets, (3) Capital Markets, and in developing relationships with new investors in our funds.
We conduct our business with offices throughout the world, providing us with a pre-eminent global platform for sourcing transactions, raising capital and carrying out capital markets activities. Our growth has been driven by value that we have created through our operationally focused investment approach, the expansion of our existing businesses, our entry into new lines of business, innovation in the products that we offer investors in our funds, an increased focus on providing tailored solutions to our clients and the integration of capital markets distribution activities.(4) Principal Activities.
As a global investmentan asset management firm, we earn management, monitoring, transaction,fees, including incentive fees, and carried interest for providing investment management monitoring and other services to our funds, vehicles, CLOs, managed accounts and portfolio companies, and we generate transaction-specific income from capital markets transactions. We earn additional investment income fromby investing our own capital alongside that of our fund investors and from other assets on our balance sheet and from the carriedsheet. Carried interest we receive from our funds and certain of our other investment vehicles. A carried interestvehicles entitles the sponsor of a fundus to a specified percentage of investment gains that are generated on third-party capital that is invested.
Our investment teams have deep industry knowledge and are supported by a substantial and diversified capital base,base; an integrated global investment platform,platform; the expertise of operating consultants,professionals, senior advisors and other advisorsadvisors; and a worldwide network of business relationships that provide a significant source of investment opportunities, specialized knowledge during due diligence and substantial resources for creating and realizing value for stakeholders. These teams invest capital, a substantial portion of which is of a long duration andor not subject to redemption.predetermined redemption requirements, which provides us with significant flexibility to grow investments and select exit opportunities. As of September 30, 2017,March 31, 2022, approximately 78%90% of our fee paying assets under management areAUM consists of capital that is not subject to redemption for at least 8 years from inception providing us with significant flexibilityand what we refer to grow investmentsas perpetual capital. For more information about the limitations of perpetual capital, please see "Risks Related to Our Business—AUM referred to as perpetual capital is subject to material reduction, including through withdrawal, redemption, or dividends, and select exit opportunities.termination" in our Annual Report. We believe that these aspects of our business will help us continue to expand and grow our asset management business and deliver strong investment performance in a variety of economic and financial conditions.


Business Segments
Asset Management - Private Markets
    
Through our Private Markets segment,business line, we manage and sponsor a group of private equity funds and co-investment vehicles that invest capital for long-term appreciation, either through controlling ownership of a company or strategic minority positions. OurIn addition to our traditional private equity funds that invest in large and mid-sized companies, we sponsor investment strategies include traditional privatefunds that invest in core equity, growth equity, and core private equity.impact investments. We also manage and sponsor investment funds and co-investment vehiclescompanies that invest capital in real assets, such as infrastructure, energyreal estate, and energy. Our Private Markets business line includes separately managed accounts that invest in multiple strategies, which may include our credit strategies as well as our private equity and real estate.assets strategies. These funds vehicles and accounts are managed by Kohlberg Kravis Roberts & Co. L.P., an SEC registeredSEC-registered investment adviser.adviser, or one of its subsidiaries. As of September 30, 2017, the segmentMarch 31, 2022, our Private Markets business line had $87.6$268.2 billion of AUM, and FPAUM of $61.7 billion, consisting of $47.5$152.9 billion in private equity (including growth equity, impact and $14.2core investments), $93.8 billion in real assets (including real estate, infrastructure energy and real estate)energy) and $21.5 billion in other related strategies.
    

The table below presents information as of September 30, 2017March 31, 2022, relating to our current private equity, growth equity and real asset funds and other investment vehicles in our Private Markets business line for which we have the ability to earn carried interest. This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after September 30, 2017.March 31, 2022.



 
Investment Period (1)
 Amount ($ in millions)
 Start DateEnd Date 
Commitment (2)
Uncalled
Commitments
Percentage
Committed by
General
Partner
InvestedRealized
Remaining
Cost (3)
Remaining
Fair Value
Private Markets    
 
  
 
 
 
           
Private Equity and Growth Equity    
 
  
 
 
 
Asian Fund III (4)
4/20174/2023 $9,000.0
$9,000.0
5.6%$—
$—
$—
$—
Americas Fund XII (4)
1/20171/2023 13,500.0
13,500.0
7.2%—
—
—
5.6
Health Care Strategic Growth Fund (4)
12/201612/2021 1,214.9
1,214.9
12.3%—
—
—
—
Next Generation Technology Growth Fund (4)
3/20163/2021 658.9
431.3
22.5%227.6
—
227.6
325.1
European Fund IV (4)
12/201412/2020 3,537.4
1,507.5
5.6%2,059.6
29.2
2,038.7
2,629.8
Asian Fund II (4)
4/20134/2017 5,825.0
1,012.7
1.3%5,782.0
1,469.1
4,749.0
7,070.8
North America Fund XI (4)
9/20121/2017 8,718.4
874.2
2.9%9,268.2
4,344.4
6,743.5
11,525.2
China Growth Fund11/201011/2016 1,010.0
—
1.0%1,010.0
565.0
665.3
801.4
E2 Investors (Annex Fund)8/200911/2013 195.8
—
4.9%195.8
195.7
18.1
1.7
European Fund III3/20083/2014 6,165.5
838.2
4.6%5,327.3
6,989.1
2,029.3
3,427.6
Asian Fund7/20074/2013 3,983.3
—
2.5%3,945.9
7,681.6
813.8
917.2
2006 Fund9/20069/2012 17,642.2
337.7
2.1%17,304.5
26,586.4
4,957.8
6,960.9
European Fund II11/200510/2008 5,750.8
—
2.1%5,750.8
8,467.3
—
58.4
Millennium Fund12/200212/2008 6,000.0
—
2.5%6,000.0
13,305.4
444.9
610.6
Total Private Equity and Growth Equity   83,202.2
28,716.5
 56,871.7
69,633.2
22,688.0
34,334.3
           
Co-Investment Vehicles and Other (4)
VariousVarious 6,674.1
1,830.0
Various5,042.9
2,712.0
3,686.4
4,848.5
    



 







Total Private Equity and Growth Equity   89,876.3
30,546.5
 61,914.6
72,345.2
26,374.4
39,182.8
     
 
  
 
 
 
Real Assets          
Energy Income and Growth Fund (4)
9/20139/2018 1,974.2
667.7
12.9%1,336.5
284.1
1,072.6
1,132.7
Natural Resources FundVariousVarious 887.4
2.8
Various884.6
113.4
794.9
151.9
Global Energy Opportunities (4)
VariousVarious 979.2
613.2
Various405.5
59.0
291.0
315.0
Global Infrastructure Investors (4)
9/201110/2014 1,040.2
59.9
4.8%1,011.3
844.8
604.2
775.9
Global Infrastructure Investors II (4)
10/201410/2020 3,045.4
1,820.2
4.1%1,412.3
192.9
1,221.0
1,532.5
Real Estate Partners Americas (4)
5/20135/2017 1,229.1
363.3
16.3%993.7
776.0
562.2
631.9
Real Estate Partners Americas II (4)
5/2017(5) 782.7
782.7
19.2%—
—
—
—
Real Estate Partners Europe (4)
9/20156/2020 721.2
594.7
9.2%132.6
12.0
125.4
158.1
Real Estate Credit Opportunity Partners (4)
2/20172/2019 1,090.0
918.0
4.6%172.0
—
172.0
184.4
Co-Investment Vehicles and OtherVariousVarious 1,401.9
11.8
Various1,390.1
511.9
1,387.7
1,799.8
           
Real Assets   $13,151.3
$5,834.3
 $7,738.6
$2,794.1
$6,231.0
$6,682.2
           
Unallocated Commitments   3,041.1
3,041.1
Various—
—
—
—
      
    
Private Markets Total   $106,068.7
$39,421.9
 $69,653.2
$75,139.3
$32,605.4
$45,865.0
95
Table of Contents
Investment Period (1)
Amount ($ in millions)
Start
Date		End
Date
Commitment (2)
Uncalled
Commitments		Percentage
Committed
by General
Partner		InvestedRealized
Remaining
Cost (3)
Remaining
Fair Value		Gross Accrued
Carried
Interest
         
Private Equity and Growth Equity Funds         
North America Fund XIII6/20216/2027$18,400 $18,400 3%$— $— $— $— $— 
Americas Fund XII1/20176/202113,500 1,701 6%12,275 4,712 11,219 23,039 2,183 
North America Fund XI9/20121/20178,718 425 3%9,752 17,183 3,453 8,098 920 
2006 Fund (4)
9/20069/201217,642 247 2%17,309 35,093 1,483 2,371 230 
Millennium Fund (4)
12/200212/20086,000 — 3%6,000 14,123 — 6 1 
European Fund VI3/20223/20287,063 7,063 14%— — — — — 
European Fund V3/20193/20226,357 1,637 2%4,789 732 4,640 6,330 340 
European Fund IV12/20143/20193,514 66 6%3,577 4,990 1,838 2,751 173 
European Fund III (4)
3/20083/20145,509 149 5%5,360 10,604 669 152 (24)
European Fund II (4)
11/200510/20085,751 — 2%5,751 8,507 — 34 — 
Asian Fund IV7/20207/202614,735 12,056 4%2,679 — 2,679 3,060 1 
Asian Fund III4/20177/20209,000 2,010 6%7,393 3,671 6,660 13,477 1,217 
Asian Fund II4/20134/20175,825 34 1%6,839 5,946 3,794 3,284 (316)
Asian Fund (4)
7/20074/20133,983 — 3%3,974 8,728 110 22 4 
China Growth Fund (4)
11/201011/20161,010 — 1%1,010 1,056 330 279 3 
Next Generation Technology Growth Fund II12/201912/20252,088 597 7%1,688 259 1,544 2,459 162 
Next Generation Technology Growth Fund3/201612/2019659 4 22%666 810 359 1,285 101 
Health Care Strategic Growth Fund II5/20215/20273,789 3,657 4%132 — 132 139 — 
Health Care Strategic Growth Fund12/20165/20211,331 429 11%1,032 196 924 1,384 66 
Global Impact Fund2/20193/20221,242 485 8%907 155 813 1,381 106 
Private Equity and Growth Equity Funds  136,116 48,960 91,133 116,765 40,647 69,551 5,167 
Co-Investment Vehicles and OtherVariousVarious14,236 4,995 Various9,559 7,289 6,245 9,051 1,318 
Core Investment VehiclesVariousVarious24,237 13,310 31%11,627 712 11,323 18,825 112 
  
Total Private Equity, Growth Equity and Core Funds174,589 67,265  112,319 124,766 58,215 97,427 6,597 
         
Real Assets
Energy Income and Growth Fund II6/20183/2022994 — 20%1,187 193 1,024 1,393 24 
Energy Income and Growth Fund9/20136/20181,974 — 13%1,974 932 1,156 880 — 
Natural Resources Fund (4)
VariousVarious887 — Various887 123 193 63 — 
Global Energy OpportunitiesVariousVarious915 62 Various519 166 324 221 — 
Global Infrastructure Investors IV6/20216/202716,709 16,709 2%— — — — 10 
Global Infrastructure Investors III6/20186/20217,176 1,820 4%5,621 1,175 5,026 5,567 139 
Global Infrastructure Investors II10/20146/20183,040 124 4%3,163 4,246 1,281 1,813 53 
Global Infrastructure Investors9/201110/20141,040 — 5%1,050 2,228 — — — 
Asia Pacific Infrastructure Investors1/20201/20263,792 2,753 7%1,324 285 1,161 1,291 33 
Diversified Core Infrastructure Fund12/2020(5)7,240 4,599 7%2,649 77 2,641 2,730 — 
Real Estate Partners Americas III12/20201/20254,253 2,843 5%1,410 11 1,399 1,703 43 
Real Estate Partners Americas II5/201712/20201,921 266 8%1,892 1,994 813 1,226 160 
Real Estate Partners Americas5/20135/20171,229 139 16%1,020 1,405 111 61 1 
Real Estate Partners Europe II12/20194/20242,082 766 10%1,316 — 1,316 1,618 33 
Real Estate Partners Europe9/201512/2019710 136 10%652 598 283 364 21 
Asia Real Estate Partners6/20196/20231,682 1,326 15%356 3 356 486 11 
Real Estate Credit Opportunity Partners II4/20196/2022950 413 5%560 91 560 563 10 
Real Estate Credit Opportunity Partners2/20174/20191,130 122 4%1,008 347 1,008 1,034 9 
Property Partners Americas12/2019(5)2,463 241 20%2,222 89 2,222 2,981 32 
Co-Investment Vehicles and OtherVariousVarious5,141 754 Various4,134 1,602 3,618 3,887 14 
Total Real Assets65,328 33,073 32,944 15,565 24,492 27,881 593 
Other
Unallocated Commitments (6)
3,011 3,011 Various— — — — — 
Private Markets Total  $242,928 $103,349  $145,263 $140,331 $82,707 $125,308 $7,190 


(1)The start date represents the date on which the general partner of the applicable fund commenced investment of the fund’s capital or the date of the first closing. The end date represents the earlier of (i) the date on which the general partner of the applicable fund was or will be required by the fund’s governing agreement to cease making investments on behalf of the fund, unless extended by a vote of the fund investors or (ii) the date on which the last investment was made.
(2)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner. Foreign currency commitments have been converted into U.S. dollars based on (i) the foreign exchange rate at the date of purchase for each investment and (ii) the exchange rate that prevailed on September 30, 2017, in the case of uncalled commitments.

(1)The start date represents the date on which the general partner of the applicable fund commenced investment of the fund's capital or the date of the first closing. The end date represents the earlier of (i) the date on which the general partner of the applicable fund was or will be required by the fund's governing agreement to cease making investments (other than reserved amounts) on behalf of the fund, unless extended by a vote of the fund investors, and (ii) the date on which the last investment was made.
(3)The remaining cost represents the initial investment of the general partner and limited partners, with the limited partners’ investment reduced for any return of capital and realized gains from which the general partner did not receive a carried interest.

(2)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner. Foreign currency commitments have been converted into U.S. dollars based on (i) the foreign exchange rate at the date of purchase for each investment and (ii) the exchange rate that prevailed on March 31, 2022, in the case of uncalled commitments.
(4)The “Invested” and “Realized” columns include the amounts of any realized investments that restored the unused capital commitments of the fund investors, if any.

(3)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
(5)Three years from final closing date.

(4)The "Invested" and "Realized" columns do not include the amounts of any realized investments that restored the unused capital commitments of the fund investors, if any.
(5)Open ended fund.
(6)"Unallocated Commitments" represent unallocated commitments from our strategic investor partnerships.

96
Table of Contents
The tablestable below presentpresents information as of September 30, 2017March 31, 2022, relating to the historical performance of certain of our Private Markets investment vehicles since inception, which we believe illustrates the benefits of our investment approach. The information presented under Total Investments includes all of the investments made by the specified investment vehicle, while the information presented under Realized/Partially Realized Investments includes only those investments that have been disposed of or have otherwise generated disposition proceeds or current income including dividends that have been distributed by the relevant fund. This data does not reflect additional capital raised since September 30, 2017March 31, 2022, or acquisitions or disposals of investments, changes in investment values or distributions occurring after that date. However, the information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below. Past performance is no guarantee of future results.
 AmountFair Value of Investments   
Private Markets Investment Funds
Commitment (2)
Invested
Realized (4)
UnrealizedTotal Value
Gross
IRR (5)
Net
IRR (5)
Gross Multiple of Invested
Capital (5)
($ in millions)
Legacy Funds (1)
        
1976 Fund$31 $31 $537 $— $537 39.5 %35.5 %17.1 
1980 Fund357 357 1,828 — 1,828 29.0 %25.8 %5.1 
1982 Fund328 328 1,291 — 1,291 48.1 %39.2 %3.9 
1984 Fund1,000 1,000 5,964 — 5,964 34.5 %28.9 %6.0 
1986 Fund672 672 9,081 — 9,081 34.4 %28.9 %13.5 
1987 Fund6,130 6,130 14,949 — 14,949 12.1 %8.9 %2.4 
1993 Fund1,946 1,946 4,143 — 4,143 23.6 %16.8 %2.1 
1996 Fund6,012 6,012 12,477 — 12,477 18.0 %13.3 %2.1 
Subtotal - Legacy Funds16,475 16,475 50,269 — 50,269 26.1 %19.9 %3.1 
Included Funds        
European Fund (1999)3,085 3,085 8,758 — 8,758 26.9 %20.2 %2.8 
Millennium Fund (2002)6,000 6,000 14,123 6 14,129 22.0 %16.1 %2.4 
European Fund II (2005)5,751 5,751 8,507 34 8,541 6.1 %4.5 %1.5 
2006 Fund (2006)17,642 17,309 35,093 2,371 37,464 11.9 %9.3 %2.2 
Asian Fund (2007)3,983 3,974 8,728 22 8,750 18.9 %13.7 %2.2 
European Fund III (2008)5,509 5,360 10,604 152 10,756 16.5 %11.4 %2.0 
E2 Investors (Annex Fund) (2009)196 196 200 — 200 0.6 %0.5 %1.0 
China Growth Fund (2010)1,010 1,010 1,056 279 1,335 6.7 %2.6 %1.3 
Natural Resources Fund (2010)887 887 123 63 186 (24.0)%(25.7)%0.2 
Global Infrastructure Investors (2011)1,040 1,050 2,228 — 2,228 17.6 %15.6 %2.1 
North America Fund XI (2012)8,718 9,752 17,183 8,098 25,281 24.3 %19.7 %2.6 
Asian Fund II (2013)5,825 6,839 5,946 3,284 9,230 8.6 %6.8 %1.3 
Real Estate Partners Americas (2013)1,229 1,020 1,405 61 1,466 16.4 %11.6 %1.4 
Energy Income and Growth Fund (2013)1,974 1,974 932 880 1,812 (2.9)%(5.3)%0.9 
Global Infrastructure Investors II (2014)3,040 3,163 4,246 1,813 6,059 20.1 %17.4 %1.9 
European Fund IV (2015)3,514 3,577 4,990 2,751 7,741 25.3 %19.8 %2.2 
Real Estate Partners Europe (2015)710 652 598 364 962 15.2 %10.6 %1.5 
Next Generation Technology Growth Fund (2016)659 666 810 1,285 2,095 38.9 %33.3 %3.1 
Health Care Strategic Growth Fund (2016)1,331 1,032 196 1,384 1,580 29.1 %18.3 %1.5 
Americas Fund XII (2017)13,500 12,275 4,712 23,039 27,751 40.1 %33.1 %2.3 
Real Estate Credit Opportunity Partners (2017)1,130 1,008 347 1,034 1,381 9.8 %8.5 %1.4 
Core Investment Vehicles (2017)24,237 11,627 712 18,825 19,537 25.8 %24.4 %1.7 
Asian Fund III (2017)9,000 7,393 3,671 13,477 17,148 45.0 %35.9 %2.3 
Real Estate Partners Americas II (2017)1,921 1,892 1,994 1,226 3,220 32.8 %27.4 %1.7 
Global Infrastructure Investors III (2018)7,176 5,621 1,175 5,567 6,742 12.9 %9.1 %1.2 
Global Impact Fund (2019)1,242 907 155 1,381 1,536 50.2 %37.0 %1.7 
European Fund V (2019)6,357 4,789 732 6,330 7,062 36.5 %28.8 %1.5 
Energy Income and Growth Fund II (2019)994 1,187 193 1,393 1,586 27.4 %24.5 %1.3 
Asia Real Estate Partners (2019)1,682 356 3 486 489 44.2 %19.0 %1.4 
Next Generation Technology Growth Fund II (2019)2,088 1,688 259 2,459 2,718 52.7 %41.9 %1.6 
Real Estate Credit Opportunity Partners II (2019)950 560 91 563 654 13.9 %12.5 %1.2 
Asia Pacific Infrastructure Investors (2020)3,792 1,324 285 1,291 1,576 27.2 %15.3 %1.2 
Asian Fund IV (2020) (3)
14,735 2,679 — 3,060 3,060 — — — 
Real Estate Partners Americas III (2021) (3)
4,253 1,410 11 1,703 1,714 — — — 
Real Estate Partners Europe II (2021) (3)
2,082 1,316 — 1,618 1,618 — — — 
Health Care Strategic Growth Fund II (2021) (3)
3,789 132 — 139 139 — — — 
Global Infrastructure Investors IV (2021) (3)
16,709 — — — — — — — 
North America Fund XIII (2021) (3)
18,400 — — — — — — — 
European Fund VI (2022) (3)
7,063 — — — — — — — 
Subtotal - Included Funds213,203 129,461 140,066 106,438 246,504 17.0 %13.2 %1.9 
All Funds$229,678 $145,936 $190,335 $106,438 $296,773 25.6 %18.9 %2.1 
97
Table of Contents
 Amount Fair Value of Investments       
Private Markets Investment FundsCommitment
Invested (5)
 
Realized (5)
Unrealized Total Value 
Gross
IRR (5)
Net IRR (5)
 
Multiple of Invested
Capital (5)
($ in millions)  
Total Investments 
 
  
 
  
  
 
  
Legacy Funds (1)
 
 
  
 
  
  
 
  
1976 Fund$31.4
$31.4
 $537.2
$—
 $537.2
 39.5 %35.5 % 17.1
1980 Fund356.8
356.8
 1,827.8
—
 1,827.8
 29.0 %25.8 % 5.1
1982 Fund327.6
327.6
 1,290.7
—
 1,290.7
 48.1 %39.2 % 3.9
1984 Fund1,000.0
1,000.0
 5,963.5
—
 5,963.5
 34.5 %28.9 % 6.0
1986 Fund671.8
671.8
 9,080.7
—
 9,080.7
 34.4 %28.9 % 13.5
1987 Fund6,129.6
6,129.6
 14,949.2
—
 14,949.2
 12.1 %8.9 % 2.4
1993 Fund1,945.7
1,945.7
 4,143.3
—
 4,143.3
 23.6 %16.8 % 2.1
1996 Fund6,011.6
6,011.6
 12,476.9
—
 12,476.9
 18.0 %13.3 % 2.1
Subtotal - Legacy Funds16,474.5
16,474.5
 50,269.3
—
 50,269.3
 26.1 %19.9 % 3.1
Included Funds 
 
  
 
  
  
 
  
European Fund (1999) (2)
3,085.4
3,085.4
 8,757.7
—
 8,757.7
 26.9 %20.2 % 2.8
Millennium Fund (2002)6,000.0
6,000.0
 13,305.4
610.6
 13,916.0
 21.9 %16.0 % 2.3
European Fund II (2005) (2)
5,750.8
5,750.8
 8,467.3
58.4
 8,525.7
 6.1 %4.5 % 1.5
2006 Fund (2006)17,642.2
17,304.5
 26,586.4
6,960.9
 33,547.3
 11.5 %8.9 % 1.9
Asian Fund (2007)3,983.3
3,945.9
 7,681.6
917.2
 8,598.8
 19.0 %13.7 % 2.2
European Fund III (2008) (2)
6,165.5
5,327.3
 6,989.1
3,427.6
 10,416.7
 16.9 %11.6 % 2.0
E2 Investors (Annex Fund) (2009) (2)
195.8
195.8
 195.7
1.7
 197.4
 0.2 %(0.5)% 1.0
China Growth Fund (2010)1,010.0
1,010.0
 565.0
801.4
 1,366.4
 11.5 %5.9 % 1.4
Natural Resources Fund (2010)887.4
884.6
 113.4
151.9
 265.3
 (31.2)%(33.7)% 0.3
Global Infrastructure Investors (2011) (2) 
1,040.2
1,011.3
 844.8
775.9
 1,620.7
 14.5 %12.5 % 1.6
North America Fund XI (2012)8,718.4
9,268.2
 4,344.4
11,525.2
 15,869.6
 26.5 %20.7 % 1.7
Asian Fund II (2013)5,825.0
5,782.0
 1,469.1
7,070.8
 8,539.9
 25.9 %18.7 % 1.5
Real Estate Partners Americas (2013)1,229.1
993.7
 776.0
631.9
 1,407.9
 21.1 %15.7 % 1.4
Energy Income and Growth Fund (2013)1,974.2
1,336.5
 284.1
1,132.7
 1,416.8
 3.0 %0.4 % 1.1
Global Infrastructure Investors II (2014) (2)
3,045.4
1,412.3
 192.9
1,532.5
 1,725.4
 18.5 %14.0 % 1.2
European Fund IV (2015) (2)
3,537.4
2,059.6
 29.2
2,629.8
 2,659.0
 26.5 %19.3 % 1.3
Real Estate Partners Europe (2015) (2) (3)
721.2
132.6
 12.0
158.1
 170.1
 —
—
 —
Next Generation Technology Growth Fund (2016) (3)
658.9
227.6
 —
325.1
 325.1
 —
—
 —
Health Care Strategic Growth Fund (2016) (3)
1,214.9
—
 —
—
 —
 —
—
 —
Americas Fund XII (2017) (3)
13,500.0
—
 —
5.6
 5.6
 —
—
 —
Real Estate Credit Opportunity Partners
(2017) (3)
1,090.0
172.0
—
—
184.4
 184.4
 —
—
 —
Asian Fund III (2017) (3)
9,000.0
—
 —
—
 —
 —
—
 —
Real Estate Partners Americas II (2017) (3)
782.7
—
—
—
—
 —
 —
—
 —
Subtotal - Included Funds97,057.8
65,900.1
 80,614.1
38,901.7
 119,515.8
 15.7 %11.5 % 1.8
             
All Funds$113,532.3
$82,374.6
 $130,883.4
$38,901.7
 $169,785.1
 25.6 %18.8 % 2.1
             
(1)These funds were not contributed to KKR as part of the acquisition of the assets and liabilities of KKR & Co. (Guernsey) L.P. (formerly known as KKR Private Equity Investors, L.P.) on October 1, 2009.

(2)Where commitments are euro-denominated, such amounts have been converted into U.S. dollars based on (i) the foreign exchange rate at the date of purchase for each investment and (ii) the exchange rate prevailing on March 31, 2022, in the case of unfunded commitments.
(3)The gross IRR, net IRR and gross multiple of invested capital are calculated for our investment funds that made their first investment at least 24 months prior to March 31, 2022. We therefore have not calculated gross IRRs, net IRRs and gross multiples of invested capital with respect to these funds.
 Amount Fair Value of Investments    
Private Markets Investment FundsCommitment
Invested (5)
 
Realized (5)
Unrealized Total Value 
Multiple of Invested
Capital (5)
($ in millions) 
Realized/Partially Realized Investments (4)
 
 
  
 
  
  
Legacy Funds (1)
 
 
  
 
  
  
1976 Fund$31.4
$31.4
 $537.2
$—
 $537.2
 17.1
1980 Fund356.8
356.8
 1,827.8
—
 1,827.8
 5.1
1982 Fund327.6
327.6
 1,290.7
—
 1,290.7
 3.9
1984 Fund1,000.0
1,000.0
 5,963.5
—
 5,963.5
 6.0
1986 Fund671.8
671.8
 9,080.7
—
 9,080.7
 13.5
1987 Fund6,129.6
6,129.6
 14,949.2
—
 14,949.2
 2.4
1993 Fund1,945.7
1,945.7
 4,143.3
—
 4,143.3
 2.1
1996 Fund6,011.6
6,011.6
 12,476.9
—
 12,476.9
 2.1
Subtotal - Legacy Funds16,474.5
16,474.5
 50,269.3
—
 50,269.3
 3.1
Included Funds 
 
  
 
  
  
European Fund (1999) (2)
3,085.4
3,085.4
 8,757.7
—
 8,757.7
 2.8
Millennium Fund (2002)6,000.0
5,599.4
 13,305.4
610.6
 13,916.0
 2.5
European Fund II (2005) (2)
5,750.8
5,245.4
 8,467.3
58.4
 8,525.7
 1.6
2006 Fund (2006)17,642.2
15,439.7
 26,586.4
5,159.9
 31,746.3
 2.1
Asian Fund (2007)3,983.3
3,118.2
 7,681.6
344.8
 8,026.4
 2.6
European Fund III (2008) (2)
6,165.5
3,897.0
 6,989.1
1,933.8
 8,922.9
 2.3
E2 Investors (Annex Fund) (2009) (2)
195.8
94.8
 195.7
—
 195.7
 2.1
China Growth Fund (2010)1,010.0
427.5
 565.0
179.5
 744.5
 1.7
Natural Resources Fund (2010)887.4
886.9
 113.4
151.9
 265.3
 0.3
Global Infrastructure Investors (2011) (2)
1,040.2
1,011.2
 844.8
775.9
 1,620.7
 1.6
North America Fund XI (2012)8,718.4
5,164.7
 4,344.4
5,905.4
 10,249.8
 2.0
Asian Fund II (2013)5,825.0
2,738.7
 1,469.1
3,940.7
 5,409.8
 2.0
Real Estate Partners Americas (2013)1,229.1
800.9
 776.0
440.1
 1,216.1
 1.5
Energy Income and Growth Fund (2013)1,974.2
1,336.5
 284.1
1,132.7
 1,416.8
 1.1
Global Infrastructure Investors II (2014) (2)
3,045.4
599.6
 192.9
538.1
 731.0
 1.2
European Fund IV (2015) (2)
3,537.4
—
 —
—
 —
 —
Real Estate Partners Europe (2015) (2) (3) (4)
721.2
—
 —
—
 —
 —
Next Generation Technology Growth Fund (2016) (3) (4)
658.9
—
 —
—
 —
 —
Health Care Strategic Growth Fund (2016) (3) (4)
1,214.9
—
 —
—
 —
 —
Americas Fund XII (2017) (3) (4)
13,500.0
—
 —
—
 —
 —
Real Estate Credit Opportunity Partners
(2017) (3) (4)
1,090.0
—
 —
—
 —
 —
Asian Fund III (2017) (3) (4)
9,000.0
—
 —
—
 —
 —
Real Estate Partners Americas II (2017) (3) (4)
782.7
—
 —
—
 —
 —
Subtotal - Included Funds97,057.8
49,445.9
 80,572.9
21,171.8
 101,744.7
 2.1
          
All Realized/Partially Realized Investments$113,532.3
$65,920.4
 $130,842.2
$21,171.8
 $152,014.0
 2.3
(4)An investment is considered realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been distributed by the relevant fund.

(5)IRRs measure the aggregate annual compounded returns generated by a fund's investments over a holding period. Net IRRs are calculated after giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses. Gross IRRs are calculated before giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses.
(1)These funds were not contributed to KKR as part of the KPE Transaction.
(2)The capital commitments of the European Fund, European Fund II, European Fund III, E2 Investors (Annex Fund), European Fund IV, Global Infrastructure Investors, Global Infrastructure Investors II and Real Estate Partners Europe include euro-denominated commitments of €196.5 million, €2,597.5 million, €2,882.8 million, €55.5 million, €1,626.1 million, €30.0 million, €243.8 million and €276.6 million, respectively. Such amounts have been converted into U.S. dollars based on (i) the foreign exchange rate at the date of purchase for each investment and (ii) the exchange rate prevailing on September 30, 2017 in the case of unfunded commitments.
(3)
The gross IRR, net IRR and multiple of invested capital are calculated for our investment funds that made their first investment at least 24 months prior to September 30, 2017. None of the Real Estate Partners Europe, Next Generation Technology Growth Fund, Health Care Strategic Growth Fund, Americas Fund XII, Real Estate Credit Opportunity Partners,Asian Fund III or Real Estate Partners Americas IIhas invested for at least 24 months as of September 30, 2017. We therefore have not calculated gross IRRs, net IRRs and multiples of invested capital with respect to those funds.
(4)An investment is considered partially realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been distributed by the relevant fund. In periods prior to the three months ended September 30, 2015, realized proceeds excluded current income such as dividends and interest. Realizations have not been shown for those investment funds that have either made their first investment more recently than 24 months prior to September 30, 2017 or have otherwise not had any realizations. We therefore have not calculated gross IRRs, net IRRs and multiples of invested capital with respect to the investments of those funds.
(5)IRRs measure the aggregate annual compounded returns generated by a fund’s investments over a holding period. Net IRRs are calculated after giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees. Gross IRRs are calculated before giving effect to the allocation of carried interest and the payment of any applicable management fees.

         The multiples of invested capital measure the aggregate value generated by a fund’sfund's investments in absolute terms. Each multiple of invested capital is calculated by adding together the total realized and unrealized values of a fund’sfund's investments and dividing by the total amount of capital invested by the fund. Such amounts do not give effect to the allocation of any realized and unrealized returns on a fund’s investments to the fund’s general partner pursuant to a carried interest or the payment of any applicable management fees.fees or organizational expenses.

KKRKKR's Private Markets funds may utilize third partythird-party financing facilities to provide liquidity to such funds. In such eventThe above net and gross IRRs are calculated from the time capital contributions are due from fund investors to the time fund investors receive a related distribution from the fund, and the use of such financing facilities generally decreases the amount of invested capitaltime that would otherwise be used to calculate IRRs, and multiples of invested capital, which tends to increase IRRs and multiples when fair value grows over time and decrease IRRs and multiples when fair value decreases over time. KKRKKR's Private Markets funds also generally provide in certain circumstances, which vary depending on the relevant fund documents, for a portion of capital returned to investors to be restored to unused commitments as recycled capital. For KKR's Private Markets funds that have a preferred return, we take into account recycled capital in the calculation of IRRs and multiples of invested capital because the calculation of the preferred return includes the effect of recycled capital. For KKR's Private Markets funds that do not have a preferred return, we do not take recycled capital into account in the calculation of IRRs and multiples of invested capital. The inclusion of recycled capital generally causes invested and realized amounts to be higher and IRRs and multiples of invested capital to be lower than had recycled capital not been included. The inclusion of recycled capital would reduce the composite net IRR of all Included Funds by 0.1% and the composite net IRR of all Legacy Funds by 0.5%, and would reduce the composite multiple of invested capital of Included Funds by less than 0.1 and the composite multiple of invested capital of Legacy Funds by 0.4.


Asset Management - Public Markets
 
We operate andThrough our Public Markets business line, we report our combined credit and hedge funds businesses through the Public Markets segment. platforms on a combined basis.
Our credit business advises funds, collateralized loan obligation vehicles, or CLOs, separately managed accounts, and investment companies registered under the Investment Company Act of 1940, or the Investment Company Act, including business development companies or BDCs, and alternative investments funds or AIFs, which investinvests capital in (i) leveraged credit strategies, including leveraged loans, high yield bondsa broad range of corporate debt and opportunistic credit,collateral-backed investments across asset classes and (ii) alternative credit strategies, including special situations and private credit strategies such as private credit opportunities, direct lending and revolving credit investment strategies. The funds, accounts, registered investment companies, BDCs and CLOs in our leveraged credit and alternative credit strategies, including special situations and privatecapital structures. Our credit strategies are managed by KKR Credit Advisors (US) LLC, which is an SEC‑registeredSEC-registered investment adviser, KKR Credit Advisors (Ireland) Unlimited Company, which is regulated by the Central Bank of Ireland (“CBI”), KKR Credit Advisors (EMEA) LLP, which is regulated by the Financial Conduct Authority, and KKR Credit Advisors (UK) LLP,(Singapore) Pte. Ltd., which is regulated by the United Kingdom Financial ConductMonetary Authority or FCA. Our Public Markets segmentof Singapore and also includes ourregistered with the SEC. We also jointly own with a third party FS/KKR Advisor, LLC, which is the investment adviser for FS KKR Capital Corp. (NYSE: FSK), a publicly listed business development company (a “BDC”).

Our hedge funds business whichplatform consists of strategic manager partnerships with third partythird-party hedge fund managers in which KKR owns a minority stakes.stake. Our hedge fund strategic manager partnerspartnerships offer a varietyrange of alternative investment strategies, including long/short equity, hedge fund-of-funds equity hedge funds,and energy credit hedge funds, and funds focused on natural catastrophe and weather risks.investments.
As of September 30, 2017, this segment had $65.7 billion of AUM, comprised of $21.5 billion of assets managedCredit
Our credit business pursues investments in ourtwo principal investment strategies: leveraged credit strategies, $7.6 billionand alternative credit.
Leveraged Credit. Our leveraged credit strategy is principally directed at investing in leveraged loans, high-yield bonds, opportunistic credit, structured credit and revolving credit investments. Our opportunistic credit strategy seeks to deploy capital across investment themes that take advantage of assets managedcredit market dislocations, spanning asset types and liquidity profiles. Our revolving credit strategy invests in our special situationssenior secured revolving credit facilities.
Alternative Credit. Our alternative credit strategy $11.2 billionconsists of assets managed in our private credit strategies $24.4 billion of assets managed throughand debt and equity investments sourced by our hedge fund business and $1.0 billion of assets managed in other strategies.strategic investments group (“SIG”).
•Private Credit. Our private credit strategies focus on privately or directly originated and negotiated transactions. These strategies include $3.2 billion of assets managed in our private opportunistic credit strategy, $7.0 billion of assets managed indirect lending, mezzanine debt and asset-based finance. Through our direct lending strategy, we seek to make investments in primarily senior debt financings for middle-market companies. Through our mezzanine debt strategy, investments typically consist of subordinated debt, which generates a current yield, coupled with marginal equity exposure for additional upside potential. Our asset-based finance strategy focuses on portfolios of financial loans and $1.0 billionloans backed by hard assets.
98
Table of assets managedContents
•    SIG. Our SIG strategy seeks to pursue investments in our revolvingcorporate credit strategy.
On June 1, 2017, KKR completed its previously announced transactionand asset or real estate-backed credit where market volatility or other investment themes have created the opportunity to combine Pacific Alternative Asset Management Company, LLC,generate outsized returns with downside-protected securities. These investments may include stressed or PAAMCO, with Prisma Capital Partners LP, formerly known as KKR Prisma,distressed investments (including post-restructuring equity), control-oriented opportunities, rescue financing (debt or equity investments made to create PAAMCO Prisma Holdings LLC. PAAMCO Prisma is a leading liquid alternatives investment firm, which operates independently of KKR. KKR owns 39.9% of PAAMCO Prismaaddress covenant, maturity or liquidity issues), debtor-in-possession or exit financing, and receives certain other payments from PAAMCO Prisma.
Creditevent-driven investments in debt or equity.
Performance
We generally review our performance in our credit business by investment strategy. Our leveraged credit strategies principally invest in leveraged loans and high yield bonds, or a combination of both. In certain cases, these strategies have meaningful track records and may be compared to widely-known indices. The following table presents information regarding the larger leveraged credit strategies managed by KKR from inception to September 30, 2017.March 31, 2022. The information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below. Past performance is no guarantee of any future results.result.



Leveraged Credit Strategies: Inception-to-Date Annualized Gross Performance vs. Benchmark by Strategy
Leveraged Credit StrategyInception DateGross
Returns		Net
Returns
Benchmark (1)
Benchmark
Gross
Returns
Bank Loans Plus High YieldJul 20087.12 %6.52 %
65% S&P/LSTA Loan Index, 35% BoAML HY Master II Index (2)
5.68 %
Opportunistic Credit (3)
May 200811.00 %9.30 %
50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (3)
5.92 %
Bank LoansApr 20115.22 %4.64 %
S&P/LSTA Loan Index (4)
4.16 %
High-YieldApr 20116.43 %5.85 %
BoAML HY Master II Index (5)
5.69 %
European Leveraged Loans (6)
Sep 20094.54 %4.02 %
CS Inst West European Leveraged Loan Index (7)
3.54 %
European Credit Opportunities (6)
Sept 20075.86 %5.00 %
S&P European Leveraged Loans (All Loans) (8)
4.06 %
($ in millions) Inception Date 
Gross
Returns
 
Net
Returns
 Benchmark (1) 
Benchmark
Gross
Returns
Bank Loans Plus High Yield Jul 2008 8.04% 7.40% 
65% S&P/ LSTA, 35% BoAML HY Master II Index (2)
 6.47%
Opportunistic Credit (3)
 May 2008 13.18% 11.14% 
BoAML HY Master II Index (3)
 6.79%
Bank Loans Apr 2011 5.49% 4.87% 
S&P/ LSTA Loan Index (4)
 4.24%
High Yield Apr 2011 7.28% 6.69% 
BoAML HY Master II Index (5)
 6.80%
Bank Loans Conservative Apr 2011 4.80% 4.19% 
S&P/ LSTA BB-B Loan Index (6)
 4.24%
European Leveraged Loans (7)
 Sep 2009 5.60% 5.07% 
CS Inst West European Leveraged Loan Index (8)
 4.88%
High Yield Conservative Apr 2011 6.65% 6.08% BoAML HY BB-B Constrained 6.69%
European Credit Opportunities (7)
 Sept 2007 5.80% 4.89% S&P LSTA European Leveraged Loans (All Loans) 4.44%
(1)The benchmarks referred to herein include the S&P/LSTA Leveraged Loan Index (the "S&P/LSTA Loan Index"), S&P/LSTA U.S. B/BB Ratings Loan Index (the "S&P/LSTA BB-B Loan Index"), the Bank of America Merrill Lynch High Yield Master II Index (the "BoAML HY Master II Index"), the BofA Merrill Lynch BB-B US High Yield Index (the "BoAML HY BB-B Constrained"), the Credit Suisse Institutional Western European Leveraged Loan Index (the "CS Inst West European Leveraged Loan Index"), and S&P European Leveraged Loans (All Loans). The S&P/LSTA Loan Index is a daily tradable index for the U.S. loan market that seeks to mirror the market-weighted performance of the largest institutional loans that meet certain criteria. The BoAML HY Master II Index is an index for high-yield corporate bonds. It is designed to measure the broad high-yield market, including lower-rated securities. The CS Inst West European Leveraged Loan Index contains only institutional loan facilities priced above 90, excluding TL and TLa facilities and loans rated CC, C or are in default. The S&P European Leveraged Loan Index reflects the market-weighted performance of institutional leveraged loan portfolios investing in European credits. While the returns of our leveraged credit strategies reflect the reinvestment of income and dividends, none of the indices presented in the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the indices. Furthermore, these indices are not subject to management fees, incentive allocations, or expenses.
(2)Performance is based on a blended composite of Bank Loans Plus High Yield strategy accounts. The benchmark used for purposes of comparison for the Bank Loans Plus High Yield strategy is based on 65% S&P/LSTA Loan Index and 35% BoAML HY Master II Index.
(1)
The Benchmarks referred to herein include the S&P/LSTA Leveraged Loan Index (the “S&P/LSTA Loan Index”), S&P/LSTA U.S. B/BB Ratings Loan Index (the '"S&P/ LSTA BB-B Loan Index"), the Bank of America Merrill Lynch High Yield Master II Index (the “BoAML HY Master II Index”), the BofA Merrill Lynch BB-B US High Yield Index (the “BoAML HY BB-B Constrained"), the Credit Suisse Institutional Western European Leveraged Loan Index (the “CS Inst European Leveraged Loan Index"), and S&P LSTA European Leveraged Loans (All Loans). The S&P/LSTA Loan Index is a daily tradable index for the U.S. loan market that seeks to mirror the market-weighted performance of the largest institutional loans that meet certain criteria. The S&P/ LSTA BB-B Loan Index is comprised of loans in the S&P/LSTA Loan Index, whose rating is BB+, BB, BB-, B+, B or B-. The BoAML HY Master II Index is an index for high yield corporate bonds. It is designed to measure the broad high yield market, including lower-rated securities. The BOAML HY BB-B Constrained is a subset of the BoAML HY Master II Index including all securities rated BB1 through B3, inclusive. The CS Inst European Leveraged Loan Index contains only institutional loan facilities priced above 90, excluding TL and TLa facilities and loans rated CC, C or are in default. The S&P European Leveraged Loan Index reflects the market-weighted performance of institutional leveraged loan portfolios investing in European credits. While the returns of these strategies reflect the reinvestment of income and dividends, none of the indices presented in the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the indices. Furthermore, these indices are not subject to management fees, incentive allocations or expenses.
(2)
Performance is based on a blended composite of Bank Loans Plus High Yield strategy accounts. The Benchmark used for purposes of comparison for the Bank Loans Plus High Yield strategy is based on 65% S&P/LSTA Loan Index and 35% BoAML HY Master II Index.
(3)The Opportunistic Credit strategy invests in high yield securities and corporate loans with no preset allocation. The Benchmark used for purposes of comparison for the Opportunistic Credit strategy presented herein is based on the BoAML HY Master II Index. Funds within this strategy may utilize third party financing facilities to enhance investment returns. In cases where financing facilities are used, the amounts drawn on the facility are deducted from the assets of the fund in the calculation of net asset value, which tends to increase returns when net asset value grows over time and decrease returns when net asset value decreases over time.
(4)
(3)The Opportunistic Credit strategy invests in high-yield securities and corporate loans with no preset allocation. The benchmark used for purposes of comparison for the Opportunistic Credit strategy presented herein is based on 50% S&P/LSTA Loan Index and 50% BoAML HY Master II Index. Funds within this strategy may utilize third-party financing facilities to enhance investment returns. In cases where financing facilities are used, the amounts drawn on the facility are deducted from the assets of the fund in the calculation of net asset value, which tends to increase returns when net asset value grows over time and decrease returns when net asset value decreases over time.
(4)Performance is based on a composite of portfolios that primarily invest in leveraged loans. The Benchmark used for purposes of comparison for the Bank Loans strategy is based on the S&P/LSTA Loan Index.
(5)Performance is based on a composite of portfolios that primarily invest in high yield securities. The Benchmark used for purposes of comparison for the High Yield strategy is based on the BoAML HY Master II Index.
(6)Performance is based on a composite of portfolios that primarily invest in leveraged loans rated B-/Baa3 or higher. The Benchmark used for purposes of comparison for the Bank Loans strategy is based on the S&P/LSTA BB/B Loan Index.
(7)The returns presented are calculated based on local currency.
(8)Performance is based on a composite of portfolios that primarily invest in higher quality leveraged loans. The Benchmark used for purposes of comparison for the European Senior Loans strategy is based on the CS Inst West European Leveraged Loan Index.


Our alternative credit strategies primarily invest in more illiquid instruments through private investment funds, BDCs and separately managed accounts. leveraged loans. The benchmark used for purposes of comparison for the Bank Loans strategy is based on the S&P/LSTA Loan Index.
(5)Performance is based on a composite of portfolios that primarily invest in high-yield securities. The benchmark used for purposes of comparison for the High Yield strategy is based on the BoAML HY Master II Index.
(6)The returns presented are calculated based on local currency.
(7)Performance is based on a composite of portfolios that primarily invest in higher quality leveraged loans. The benchmark used for purposes of comparison for the European Leveraged Loans strategy is based on the CS Inst West European Leveraged Loan Index.
(8)Performance is based on a composite of portfolios that primarily invest in European institutional leveraged loans. The benchmark used for purposes of comparison for the European Credit Opportunities strategy is based on the S&P European Leveraged Loans (All Loans) Index.
The following table presents information regarding our Public Markets alternative credit commingledinvestment funds where investors are subject to capital commitments from inception to September 30, 2017. SomeMarch 31, 2022. The information presented below is not intended to be representative of these funds have been investingany past or future performance for lessany particular period other than 24 months, and thus their performance is less meaningful and not includedthe period presented below. Past performance is no guarantee of any future results.result.




99
Table of Contents
Alternative Credit Strategies: Fund Performance
  AmountFair Value of Investments   
Public Markets 
Investment Funds		Inception DateCommitment
Invested (1)
Realized (1)
UnrealizedTotal
Value
Gross
IRR (2)
Net
IRR (2)
Multiple of Invested Capital (3)
Gross
Accrued
Carried Interest
($ in Millions)
Dislocation Opportunities FundMay 2020$2,967 $2,056 $177 $2,231 $2,408 N/AN/AN/A$49 
Special Situations Fund IIDec 20143,525 3,241 1,911 2,182 4,093 6.8 %4.9 %1.3 — 
Special Situations FundDec 20122,274 2,273 1,658 474 2,132 (1.5)%(3.4)%0.9 — 
Mezzanine PartnersMar 20101,023 990 1,097 203 1,300 9.2 %6.0 %1.3 (20)
Private Credit Opportunities Partners IIDec 20152,245 1,738 621 1,471 2,092 7.2 %5.6 %1.2 — 
Lending Partners IIIApr 20171,498 741 301 819 1,120 15.8 %13.0 %1.5 29 
Lending Partners IIJun 20141,336 1,179 1,149 134 1,283 3.2 %1.8 %1.1 — 
Lending PartnersDec 2011460 419 451 19 470 3.5 %1.9 %1.1 — 
Lending Partners Europe IIJun 2019837 467 47 491 538 23.2 %17.1 %1.2 2 
Lending Partners EuropeMar 2015848 662 375 258 633 (1.5)%(4.1)%1.0 — 
Other Alternative Credit VehiclesVarious14,588 6,560 4,696 4,179 8,875 N/AN/AN/A122 
All Funds $31,601 $20,326 $12,483 $12,461 $24,944   $182 
    Amount Fair Value of Investments        
Public Markets 
Investment Funds
 Inception Date Commitment 
Invested (1)
 
Realized (1)
 Unrealized Total Value 
Gross
IRR (2)
 
Net IRR (2)
 
Multiple
 of Invested
Capital (3)
($ in Millions)  
Special Situations Fund Dec-12 $2,274.3
 $2,231.6
 $690.1
 $2,024.7
 $2,714.8
 7.0 % 4.9 % 1.2
Special Situations Fund II Dec-14 3,285.8
 1,347.6
 —
 1,320.1
 1,320.1
 (1.2)% (4.2)% 1.0
Mezzanine Partners Mar-10 1,022.8
 921.9
 812.5
 488.6
 1,301.1
 12.8 % 8.0 % 1.4
Private Credit Opportunities Partners II Dec-15 732.9
 105.8
 —
 137.4
 137.4
 N/A
 N/A
 N/A
Lending Partners Dec-11 460.2
 405.3
 321.0
 195.7
 516.7
 7.7 % 6.3 % 1.3
Lending Partners II Jun-14 1,335.9
 1,136.7
 258.9
 1,158.6
 1,417.5
 15.2 % 12.8 % 1.2
Lending Partners III Apr-17 795.8
 35.8
 —
 41.9
 41.9
 N/A
 N/A
 N/A
Lending Partners Europe Mar-15 847.6
 324.1
 42.3
 344.7
 387.0
 22.3 % 14.7 % 1.2
Revolving Credit Partners May-15 510.0
 —
 27.6
 (12.0) 15.6
 
(4) 

 
(4) 

 
(4) 

Other Alternative Credit Vehicles Various 5,093.1
 3,421.0
 1,945.4
 2,696.7
 4,642.1
 N/A
 N/A
 N/A
Unallocated Commitments Various 1,400.0
 —
 —
 —
 —
 N/A
 N/A
 N/A
All Funds   $17,758.4
 $9,929.8
 $4,097.8
 $8,396.4
 $12,494.2
  
  
  

(1)Recycled capital is excluded from the amounts invested and realized.

(2)These credit funds utilize third partythird-party financing facilities to provide liquidity to such funds, and in such event IRRs are calculated from the time capital contributions are due from fund investors to the time fund investors receive a related distribution from the fund. The use of such financing facilities generally decreases the amount of invested capital that would otherwise be used to calculate IRRs, which tends to increase IRRs when fair value grows over time and decrease IRRs when fair value decreases over time. IRRs measure the aggregate annual compounded returns generated by a fund’sfund's investments over a holding period and are calculated taking into account recycled capital. Net IRRs presented are calculated after giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees. Gross IRRs are calculated before giving effect to the allocation of carried interest and the payment of any applicable management fees.
(3)The multiples of invested capital measure the aggregate value generated by a fund’sfund's investments in absolute terms. Each multiple of invested capital is calculated by adding together the total realized and unrealized values of a fund’sfund's investments and dividing by the total amount of capital invested by the investors. The use of financing facilities generally decreases the amount of invested capital that would otherwise be used to calculate multiples of invested capital, which tends to increase multiples when fair value grows over time and decrease multiples when fair value decreases over time. Such amounts do not give effect to the allocation of any realized and unrealized returns on a fund’sfund's investments to the fund’sfund's general partner pursuant to a carried interest or the payment of any applicable management fees and are calculated without taking into account recycled capital.

(4)The Revolving Credit Partners fund has been investing for over 24 months. However, the fund has not called any capital to date. As a result, the gross IRR, net IRR and multiple of invested capital performance measures are not meaningful and are not included above.



Hedge Funds

Our hedge fund platform consists of strategic partnerships with third-party hedge fund managers in which KKR owns a minority stake. This principally consists of a 39.6% interest in Marshall Wace LLP (together with its affiliates, "Marshall Wace"), a global alternative investment manager specializing in long/short equity products. We also own (i) a 39.9% interest in PAAMCO Prisma Holdings, LLC ("PAAMCO Prisma"), an investment manager focused on liquid alternative investment solutions, including hedge fund-of-fund portfolios, and (ii) a 24.9% interest in BlackGold Capital Management L.P. ("BlackGold"), a credit-oriented investment manager focused on energy and hard asset investments.
Public Markets Vehicle StructuresAUM
The table below presents information as    As of September 30, 2017, based on the investment funds, vehicles or accounts offered byMarch 31, 2022, our Public Markets segment.business line had $210.8 billion of AUM, comprised of $102.2 billion of assets managed in our leveraged credit strategies, $71.3 billion of assets managed in our private credit strategy, and $8.7 billion of assets managed in our SIG strategy, $27.0 billion of assets managed through our hedge fund platform, and $1.6 billion of assets managed in other Public Markets strategies. We manage $96.1 billion of credit investments for our Global Atlantic insurance companies, which are included in the amounts described in the preceding sentence. Our BDC has approximately $17.4 billion in assets under management, which is reflected in the AUM of our leveraged credit and private credit strategies above. We report all of the assets under management of our BDC in our AUM, but we report only a pro rata portion of the assets under management of our hedge fund partnerships based on our percentage ownership in them.
100
($ in millions)AUMFPAUMTypical 
Management
Fee Rate		Incentive Fee /
Carried
Interest		Preferred
Return		Duration
of Capital
Leveraged Credit:      
Leveraged Credit SMAs/Funds$77,825 $75,906 0.15% - 1.10%
Various (1)
Various (1)
Subject to redemptions
CLOs22,730 22,730 0.40% - 0.50%
Various (1)
Various (1)
10-14 Years (2)
Total Leveraged Credit100,555 98,636     
Alternative Credit: (3)
Private Credit57,015 51,520 
0.30% - 1.50% (4)
10.00 - 20.00%5.00 - 8.00%
8-15 Years (2)
SIG8,818 4,517 0.50% - 1.75%10.00 - 20.00%7.00 - 12.00%
7-15 Years (2)
Total Alternative Credit65,833 56,037 
Hedge Funds (5)
27,008 27,008 0.50% - 2.00%
Various (1)
Various (1)
Subject to redemptions
BDCs (6)
17,423 17,423 0.60%8.00%7.00%Indefinite
Total$210,819 $199,104     
(1)Certain funds and CLOs are subject to a performance fee in which the manager or general partner of the funds share up to 20% of the net profits earned by investors in excess of performance hurdles (generally tied to a benchmark or index) and subject to a provision requiring the funds and vehicles to regain prior losses before any performance fee is earned.
(2)Duration of capital is measured from inception. Inception dates for CLOs were between 2013 and 2022 and for separately managed accounts and funds investing in alternative credit strategies from 2009 through 2022.
(3)Our alternative credit funds generally have been sorted based uponinvestment periods of two to five years and our newer alternative credit funds generally earn management fees on invested capital throughout their primary investment strategies.  However, thelifecycle.
(4)Lower fees on uninvested capital in certain vehicles.
(5)Hedge Funds represent KKR's pro rata portion of AUM and FPAUM presented for each lineof our hedge fund partnerships.
(6)Consists of FS KKR Capital Corp. (NYSE: FSK). We report all of the assets under management of this BDC in the table includes certain investments from non-primary investment strategies, which is permitted by their investment mandates, for purposes of presenting the feesour AUM and other terms for such funds, vehicles and accounts.FPAUM.
($ in millions) AUM FPAUM 
Typical 
Management
Fee Rate
 
Incentive Fee /
Carried
Interest
 
Preferred
Return
 
Duration
of Capital
Leveraged Credit:  
  
        
Leveraged Credit SMAs/Funds $10,394
 $9,719
 0.35%-1.50% 
Various (1)
 
Various (1)
 Subject to redemptions
CLO’s 9,803
 9,803
 0.40%-0.50% 
Various (1)
 
Various (1)
 
10-14 Years (2)
Total Leveraged Credit 20,197
 19,522
        
             
Alternative Credit: (3)
            
Special Situations 8,080
 4,574
 
0.90%-1.75% (4)
 10.00-20.00% 8.00-12.00% 
8-15 Years (2)
Private Credit 8,764
 4,728
 0.50%-1.50% 10.00-20.00% 5.00-8.00% 
8-15 Years (2)
Total Alternative Credit 16,844
 9,302
        
             
Hedge Funds (5)
 24,438
 18,942
 0.50%-2.00% 
Various (1)
 
Various (1)
 Subject to redemptions
Business Development Companies (6)
 4,251
 4,251
 1.00% 10.00% 7.00% 7 years
Total $65,730
 $52,017
        
(1)Certain funds and CLOs are subject to a performance fee in which the manager or general partner of the funds share in up to 20% of the net profits earned by investors in excess of performance hurdles (generally tied to a benchmark or index) and subject to a provision requiring the funds and vehicles to regain prior losses before any performance fee is earned.
(2)Duration of capital is measured from inception. Inception dates for CLOs were between 2005 and 2016 and for separately managed accounts and funds investing in alternative credit strategies from 2009 through 2017.
(3)Our alternative credit funds generally have investment periods of 3 to 5 years and our newer alternative credit funds generally earn fees on invested capital during the investment period.
(4)Lower fees on uninvested capital in certain vehicles.
(5)Hedge Funds represent KKR's pro-rata portion of AUM and FPAUM of our strategic manager partnerships, which consist of minority stakes in other hedge fund managers.
(6)Consists of Corporate Capital Trust ("CCT") and Corporate Capital Trust II, which are BDCs sub-advised by KKR. These vehicles invest in both leveraged credit and private credit strategies. On September 21, 2017, CCT shareholders approved, among other things, a proposal for KKR Credit Advisors (US) LLC to become CCT’s sole investment adviser subject to the listing of CCT’s shares on a national securities exchange, which is pending.


Asset Management - Capital Markets
 
Our Capital Markets business line is comprised of our global capital markets business, supportswhich is integrated with KKR's other asset management business lines, and serves our firm, our funds, our portfolio companies and third-party clients by developing and implementing both traditional and non-traditional capital solutions for investments or companies seeking financing. These services include arranging debt and equity financing, placing and underwriting securities offerings, and providing other types of capital markets services.services that may result in the firm receiving fees, including underwriting, placement, transaction and syndication fees, commissions, underwriting discounts, interest payments and other compensation, which may be payable in cash or securities, in respect of the activities described above.

Our capital markets business underwrites credit facilities and arranges loan syndications and participations. When we are sole arrangers of a credit facility, we may advance amounts to the borrower on behalf of other lenders, subject to repayment. When we underwrite an offering of securities or a loan on a firm commitment basis, we commit to buy and sell an issue of securities or indebtedness and generate revenue by purchasing the securities or indebtedness at a discount or for a fee. When we act in an agency capacity or best efforts basis, we generate revenue for arranging financing or placing securities or debt with capital markets investors. We may also provide issuers with capital markets advice on security selection, access to markets, marketing considerations, securities pricing, and other aspects of capital markets transactions in exchange for a fee. When we are sole arrangersOur capital markets business also provides syndication services in respect of co-investments in transactions participated in by KKR funds or third-party clients, which may entitle the firm to receive syndication fees, management fees and/or a credit facility, we generally advance amounts to the borrower on behalf of other lenders, for which such lenders are expected to repay us promptly. KKR Capital Markets LLC is an SEC-registered broker-dealercarried interest.
The capital markets business has a global footprint, with local presence and a FINRA member, and we are also registered or authorizedlicenses to carry out certain broker-dealer activities in various countries in North America, Europe, Asia-Pacific and the Middle East. Our flagship capital markets subsidiary is KKR Capital Markets LLC, an SEC-registered broker-dealer and a member of the Financial Industry Regulatory Authority ("FINRA").






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Asset Management - Principal Activities
 
Through our Principal Activities segment,business line, we manage the firm’s own assets on our firm’s balance sheet and deploy capital to support and grow our businesses. Our Principal Activities segment uses our balance sheet assets to support our investment managementPrivate Markets, Public Markets and capital markets businesses. Credit Markets business lines.

Typically, the funds in our Private Markets and Public Markets businessesbusiness lines contractually require us, as general partner of the funds, to make sizable capital commitments from time to time.commitments. We believe ourmaking general partner commitments are indicative of the conviction we have in a given fund’s strategy, which assists us in raising new funds from limited partners.partners by demonstrating our conviction in a given fund’s strategy. Our commitments to fund capital also occurs where we are the holder of the subordinated notes or the equity tranche of investment vehicles that we sponsor, including structured transactions. We also use our balance sheet to acquirebridge investment activity during fundraising, for example by funding investments in orderfor new funds and acquiring investments to help establish a track record for fundraising purposes in new investment strategies. We may also use our own capital to seed investments for new funds, to bridge capital selectively for our funds’ investments or finance strategic acquisitions and partnerships,transactions, although the financial results of an acquired business or strategic partnership may be reported in our other segments.business lines.


Our Principal Activities segmentbusiness line also provides the required capital to fund the various commitments of our Capital Markets business line when underwriting or syndicating securities, or when providing term loan commitments for transactions involving our portfolio companies and for third parties. Our Principal Activities segmentbusiness line also holds assets that may beare utilized to satisfy regulatory requirements for our Capital Markets business line and risk retention requirements for our CLO business.certain investment vehicles.


We also make opportunistic investments through our Principal Activities segment,business line, which include co-investments alongside our Private Markets and Public Markets funds as well as make Principal Activities investments that do not involve our Private Markets or Public Markets funds.


We endeavor to use our balance sheet strategically and opportunistically to generate an attractive risk-adjusted return on equity in a manner that is consistent with our fiduciary duties, and in compliance with applicable laws.laws, and consistent with our one-firm approach.


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The chart below presents the holdings of our Principal Activities segmentbusiness line by asset class as of September 30, 2017.March 31, 2022.


kkr-20176_chartx52162a01.jpgHoldings by Asset Class (1)
kkr-20220331_g2.jpg
(1)General partner commitments in our funds are included in the various asset classes shown above. Assets and revenues of other asset managers with which KKR has formed strategic partnerships where KKR does not hold more than 50% ownership interest are not included in our Principal Activities segmentbusiness line but are reported in the financial results of our other segments.business lines. Private Equity and Other Equity includes KKRour investments in private equity funds, co-investments alongside such KKR sponsoredKKR-sponsored private equity funds, certain core private equity co-investments,investments, and other opportunistic investments. However, equityEquity investments in other asset classes, such as real estate, special situations and energy appear in these other asset classes. Other Credit consists of liquidcertain leveraged credit and specialty finance strategies.



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Insurance

Our insurance business is operated by Global Atlantic, which we acquired on February 1, 2021. As of March 31, 2022, KKR owns a 61.5% economic interest in Global Atlantic with the balance of Global Atlantic owned by third-party investors and Global Atlantic employees. Following the Global Atlantic acquisition, Global Atlantic continues to operate as a separate business with its existing brands and management team. Since the first quarter of 2021, we have presented Global Atlantic's financial results as a separate reportable segment.

Global Atlantic is a leading U.S. retirement and life insurance company that provides a broad suite of protection, legacy and savings products to customers and reinsurance solutions to clients across individual and institutional markets. Global Atlantic focuses on target markets that it believes supports issuing products that have attractive risk and return characteristics. These markets allow Global Atlantic to leverage its strength in distribution and to deploy capital opportunistically across market conditions.

Global Atlantic primarily offers individual customers fixed-rate annuities, fixed-indexed annuities, and targeted life products through a network of banks, broker-dealers, and insurance agencies. Global Atlantic provides its institutional clients customized reinsurance solutions, including block, flow and pension risk transfer ("PRT") reinsurance, as well as funding agreements. Subject to changes in asset values, Global Atlantic's assets generally increase when individual market sales and reinsurance transactions exceed run-off of in-force policies. Global Atlantic primarily generates income by earning a spread between its investment income and the cost of policyholder benefits. As of March 31, 2022, Global Atlantic served approximately three million policyholders.

The following table represents Global Atlantic’s new business volumes by business and product for the three months ended March 31, 2022 and 2021:

Three Months Ended
March 31, 2022
Three Months Ended
March 31, 2021(1)
($ in millions)
Individual channel:
Fixed-rate annuities$1,039 $1,038 
Fixed-indexed annuities904 595 
Variable annuities11 8 
Total retirement products$1,954 $1,641 
Life insurance products$7 $6 
Preneed life$65 $38 
Institutional channel:
Block$2,777 $1,079 
Flow & pension risk transfer1,699 764 
Funding agreements1,100 — 
Total institutional channel$5,576 $1,843 
_________________
Note: In Global Atlantic's individual channel, sales of annuities include all money paid into new and existing contracts. Individual channel sales of traditional life products are based on commissionable premium and individual channel sales for preneed life are based on the face amount of insurance. Traditional life sales do not include the recurring premiums that policyholders may pay over time. New business volume from our institutional channel is based on the assets assumed, net of any ceding commission, and is before any retrocession to investment vehicles that participate in qualifying reinsurance transactions sourced by Global Atlantic.
(1)For the three month period ended March 31, 2021, the results of Global Atlantic's insurance operations included in our condensed consolidated results of operations are from February 1, 2021 through March 31, 2021.


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The table below represents a breakdown of Global Atlantic’s policy liabilities by business and product type as of March 31, 2022, separated by reserves originated through its individual and institutional markets.

Reserves as of March 31, 2022
Individual market
Institutional market(4)
TotalCededTotal, netPercentage of total
($ in thousands, except percentages, if applicable)
Fixed-rate annuity$22,196,835 $43,022,317 $65,219,152 $(15,416,304)$49,802,848 47.9 %
Fixed-indexed annuity21,199,795 7,222,995 28,422,790 (3,454,255)24,968,535 20.9 %
Variable annuity3,086,313 3,715,421 6,801,734 (643,895)6,157,839 5.0 %
Indexed universal life12,188,443 — 12,188,443 (72,575)12,115,868 9.0 %
Preneed life2,857,392 — 2,857,392 — 2,857,392 2.1 %
Other life insurance(1)
2,039,329 10,361,283 12,400,612 (3,771,018)8,629,594 9.1 %
Funding agreements(2)
2,205,897 4,730,611 6,936,508 — 6,936,508 5.1 %
Closed block— 1,271,351 1,271,351 (1,219,024)52,327 0.9 %
Other corporate(3)
— 48,447 48,447 (48,088)359 — %
Total reserves$65,774,004 $70,372,425 $136,146,429 $(24,625,159)$111,521,270 100.0 %
Total general account$62,976,938 $68,099,749 $131,076,687 $(24,625,159)$106,451,528 96.3 %
Total separate account2,797,066 2,272,676 5,069,742 — 5,069,742 3.7 %
Total reserves$65,774,004 $70,372,425 $136,146,429 $(24,625,159)$111,521,270 100.0 %
_________________
(1)“Other life products” includes universal life, term and whole life insurance products.
(2)"Funding agreements” includes funding agreements associated with Federal Home Loan Bank borrowings and under our funding-agreement backed-notes program .
(3)“Other corporate” primarily includes accident & health reserves that Global Atlantic assumed as part of a reinsurance transaction in 2009.
(4)Institutional market reserves are sourced using customized reinsurance solutions such as block, flow and PRT. As of March 31, 2022, reserves sourced through for block, flow and PRT transactions were $51.1 billion, $6.8 billion, and $4.1 billion, respectively.


Business Environment
Economic and Market Conditions
Global Impact of COVID-19. The outbreak of COVID-19 continues to impact various countries throughout the world. For a description of the impact that COVID-19 had and may in the future have on our business, see "Risk Factors—Risks Related to Our Business—COVID-19 continues to impact the United States and other countries throughout the world, and it has caused and may further cause disruptions to our business and adversely affect our financial results" and "Risk Factors—Risks Related to the Assets We Manage—Our investments are impacted by various economic conditions and events outside of our control that are difficult to quantify or predict, which may have a significant impact on the valuation of our investments and, therefore, on the investment income we realize and our results of operations and financial condition" in our Annual Report.

Economic Conditions. As a global investment firm, we are affected by financial and economic conditions globally. Global and regional economic conditions, including those caused by the COVID-19 pandemic, have a substantial impact on our financial condition and results of operations, impacting the values of the investments we make, our ability to exit these investments profitably, our ability to raise capital from investors, and our ability to make new investments. Financial and economic conditions in the United States, the European Union, China, Japan, and other major economies are significant contributors to the global economy. According to Bloomberg consensus forecasts as of September 30, 2017, real GDP in

During the period ended March 31, 2022, the United States showed signs of continued domestic economic momentum, supported by strong consumer demand. Global trade, however, was a headwind for the United States, as exports fell by 5.9% at an annualized rate during the first quarter, hindered by ongoing supply chain tensions (including those due to COVID-19 and the Russian invasion of Ukraine) and more halting demand recoveries in Europe and Asia. Inflation also presented an economic
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headwind during the period, as it continued to accelerate from already elevated levels, spurred by multiple factors including high commodity prices, a tight labor market, and low residential vacancy rates. The U.S. Federal Reserve has signaled its intention to tighten monetary conditions in response to higher inflation, and in March 2022 raised interest rates for the first time since December 2018, leading to increased market volatility. The ongoing conflict in Ukraine has also contributed to higher market volatility globally. In the United States, real GDP contracted at a seasonally adjusted-1.4% seasonally-adjusted annualized rate of 2.3% forin the quarter ended September 30, 2017 compared to 3.1% forMarch 31, 2022, after expanding at a 6.9% seasonally-adjusted annualized rate in the quarter ended June 30, 2017. According to the Bureau of Labor Statistics,December 31, 2021; the U.S. unemployment rate was 4.2%3.6% as of September 30, 2017,March 31, 2022, down from 4.4%3.9% as of June 30, 2017. KeyDecember 31, 2021; the U.S. core consumer price index rose 6.5% on a year-over-year basis as of March 31, 2022, up from 5.5% on a year-over-year basis as of December 31, 2021; and the effective federal funds rate set by the U.S. Federal Reserve was 0.3% as of March 31, 2022, up from 0.1% as of December 31, 2021.

During the period ended March 31, 2022, the euro area (also known as the eurozone) economy continued to expand despite headwinds from higher energy prices and the Russian invasion of Ukraine, which are expected to weigh increasingly on the outlook for European economic growth. The economic uncertainty caused by the ongoing conflict in Ukraine is significant. The reliability of future supplies of Russian oil and financial issuesgas to Europe is under question. Importantly, a sudden disruption of energy flows could spur a contraction in European economic activity. Euro area real GDP rose by 0.2% on a seasonally-adjusted quarter-over-quarter basis in the quarter ended March 31, 2022, down from the 0.3% increase recorded in the quarter ended December 31, 2021. In addition, euro area unemployment was 6.8% as of March 31, 2022, down from 7.0% as of December 31, 2021; euro area core inflation was 2.9% on a year-over-year basis as of March 31, 2022, up from 2.6% on a year-over-year basis as of December 31, 2021; and the short-term benchmark interest rate set by the European Central Bank was 0.0% as of March 31, 2022, unchanged from December 31, 2021. As of March 31, 2022, we have no investments in any portfolio companies whose executive headquarters are located in Russia or Ukraine, and we believe that the direct exposure of our investment portfolio to Russia and Ukraine is insignificant.

During the period ended March 31, 2022, the Chinese economy faced serious headwinds from an ongoing slowdown in China’s property sector, as well as from the government’s zero-COVID policies. The government’s measures to contain COVID-19 outbreaks in Chinese cities are likely to weigh on Chinese growth throughout 2022. Furthermore, demand for China’s exports is beginning to slow, as manufacturing recovers in other parts of the world, particularly in areas with higher baseline levels of COVID-19 vaccinations and prior infections. Real GDP in China grew by 1.3% on a seasonally adjusted quarter-over-quarter basis in the quarter ended March 31, 2022, compared to growth of 1.5% reported for the United States include, but are not limitedquarter ended December 31, 2021. Estimated core inflation in China was 1.1% on a year-over-year basis as of March 31, 2022, down from 1.2% on a year-over-year basis as of December 31, 2021.

In Japan, the economic recovery from COVID-19 has slowed recently, with higher energy costs and a weaker currency presenting headwinds to whether or notGDP growth in the U.S. government will enact its proposed fiscal stimulus through tax cuts or infrastructure spending,near term. In Japan, real GDP growth for the pace and levels at whichquarter ended March 31, 2022 is estimated to have been -0.1% on a seasonally-adjusted quarter-over-quarter basis, down from 1.1% in the Federal Reserve raises interest rates and reduces its balance sheet, the U.S. debt ceilingquarter ended December 31, 2021; core inflation fell to -1.6% on a year-over-year basis as of March 31, 2022, down from -1.3% as of December 31, 2021; and the abilityshort-term benchmark interest rate set by the Bank of the U.S. government to pay its debt when due. Japan was -0.1% as of March 31, 2022, unchanged from December 31, 2021.

These and other key issues could have adverse repercussions across regional and global financial markets, which could adversely affect the valuations of our investments. For the quarter ended September 30, 2017, Bloomberg estimates suggest that Euro Area real GDP growth was 0.5% on a quarter over quarter basis, compared to actual quarter over quarter growth of 0.6% as of June 30, 2017. Euro Area core inflation was 1.1% on a year over year basis as of September 30, 2017, unchanged relative to June 30, 2017. In March 2017, the United Kingdom triggered Article 50 to formally begin the process to exit from the European Union. Continuing controversy and uncertainty surrounding key issues such as immigration, austerity, and globalization and risk of countries exiting the European Union, as well as the activities of the European Central Bank, could impair economic growth in the region and lead to financial market volatility. These and other key issues, such as heightened geopolitical risk, could have adverse repercussions across regional and global financial markets, which could adversely affect the valuations of our investments. In particular, in response to persistent inflationary pressure and central bank policy designed to combat inflation, short- and medium-term interest rates may rise, which may adversely impact equity and credit markets and in turn both increase volatility in equity and debt markets and reduce economic growth. As noted above, the U.S. Federal Reserve has recently raised interest rates and has indicated that it is prepared to take further action to manage inflation, including raising interest rates further and shrinking the size of its balance sheet. In addition, commodity prices are generally expected to rise in inflationary environments, and foreign exchange rates are often affected by countries’ monetary and fiscal responses to inflationary trends. The Russia-Ukraine conflict, including the sanctions imposed in response to Russia's invasion of Ukraine, have exacerbated and are likely to further exacerbate these issues and trends. Other key issues include (i) further developments regarding COVID-19, including the spread of variants such as Delta and Omicron, which may prolong the adverse economic impact of the pandemic on a quarter over quarter, seasonally adjusted basis, China’s real GDP grew 1.7%the U.S. and global economies, including supply chain disruptions that promote cost inflation for critical goods and labor shortages, (ii) geopolitical uncertainty such as U.S.-China relations, (iii) political uncertainty caused by, among other things, economic nationalist sentiments, tensions surrounding socioeconomic inequality issues, and partisan sentiments in the quarter ended September 30, 2017, slightly slower than the 1.8% reportedUnited States, all of which have potentially global ramifications with regards to policy, (iv) regulatory changes regarding, for the quarter ended June 30, 2017. A slowdownexample, taxation, international trade, cross-border investments, immigration, stimulus programs and rising levels of debt, (v) increased volatility and/or downturn in China's economic growth could adversely impact the valuations of our investmentsequity or credit markets, (vi) unexpected shifts in Chinacentral banks' monetary policies, and could also adversely impact the global economy, particularly other emerging markets.(vii) technological advancements and innovations that may disrupt marketplaces and businesses. For a further discussion of how market conditions may affect our businesses, see “Risk Factors- "Risk Factors—Risks Related to Our Business - Business—Difficult market and economic conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments that we manage or by reducing the ability of our funds to raise or deploy capital, each of which could negatively impact our net income and cash flow and adversely affect our financial condition”condition" in our Annual Report on Form 10-K.Report. In addition, the U.S. Congress is proposing (and after the date of this report may propose other) various significant changes in tax law, including significant changes in the way U.S. corporations like ourselves and many of our U.S. portfolio companies are taxed. If enacted, these changes could materially increase the amount of taxes we and our portfolio
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Global
companies are required to pay. See “Risk Factors—Risks Related to Our Business—Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely impact our effective tax rate and tax liability” in our Annual Report.

Equity and Credit Markets. Global equity and credit markets have a substantial effect on our financial condition and results of operations. In general, a climate of reasonable interest rates and high levels of liquidity in the debt and equity capital markets provide a positive environment for us to generate attractive investment returns, which also impacts our ability to generate incentive fees and carried interest. Periods of volatility and dislocation in the capital markets presentraise substantial risks, but also can present us with opportunities to invest at reduced valuations that position us for future growth and investment returns. Low interest rates related to monetary stimulus and economic stagnation may negatively impact expected returns on all types of investments. Higher interest rates in conjunction with slower growth or weaker currencies in some emerging market economies have caused, and may further cause, the default risk of these countries to increase, and this could impact the operations or value of our investments that operate in these regions. Areas that have ongoing central bank quantitative easing campaigns and comparatively low interest rates relative to the United States could potentially experience further currency volatility and weakness relative to the U.S. dollar.


ManyWith respect to our insurance business, fluctuations in market interest rates can expose Global Atlantic to the risk of reduced income in respect of its investment portfolio, increases in the cost of acquiring or maintaining its insurance liabilities, increases in the cost of hedging, or other fluctuations in Global Atlantic's financial, capital and operating profile which materially and adversely affect the business. Higher interest rates, periods of changes in rates and lower rates each may result in differing impacts on Global Atlantic’s business. See "Risk Factors—Risks Related to Global Atlantic— Interest rate fluctuations and sustained periods of low or high interest rates could adversely affect Global Atlantic’s business, financial condition, liquidity, results of operations, cash flows and prospects" in our Annual Report.

In our asset management business, many of our investments are in equities, so a change in global equity prices or in market volatility directly impacts the value of our investments and our profitability as well as our ability to realize investment gains and the receptiveness of fund investors to our investment products. For the quarter ended September 30, 2017,March 31, 2022, global equity markets were positive,negative, with the S&P 500 Index up 4.5%down 4.6% and the MSCI World Index updown 5.0% on a total return basis including dividends. Equity market volatility as evidenced by the Chicago Board Options Exchange Market Volatility Index or the VIX,(VIX), a measure of volatility, ended at 9.520.6 as of September 30, 2017 decreasingMarch 31, 2022, increasing from 11.217.2 as of JuneDecember 31, 2021. For the period between March 31, 2022 and April 30, 2017.2022, global equity markets were negative, with the S&P 500 down 8.7% and the MSCI World Index down 8.3% on a total return basis including dividends. Equity market volatility as evidenced by VIX, ended at 33.4 as of April 30, 2022, increasing from 20.6 as of March 31, 2022. For a further discussion of our valuation methods, see “Risk Factors-RisksFactors—Risks Related to the Assets We Manage - Manage—Our investments are impacted by various economic conditions and events outside of our control that are difficult to quantify or predict, andwhich may have a significant impact on the valuation of our investments and, therefore, on the investment income we realize and our financial condition and results of operations” in our Annual Report on Form 10-Koperations and “-Criticalfinancial condition” and see also “—Critical Accounting Policies-FairPolicies—Fair Value Measurements-LevelMeasurements—Level III Valuation Methodologies” in this report.our Annual Report. In our insurance business, a change in equity prices also impacts Global Atlantic’s equity-sensitive annuity and life insurance products, including with respect to hedging costs related to and fee-income earned on those products.


Many of our investments, particularly in asset management, are also in non-investment grade credit instruments, and, ourparticularly in insurance, in investment grade credit instruments. Our funds, and our portfolio companies and Global Atlantic also rely on credit financing and the ability to refinance existing debt. Consequently, any decrease in the value of credit instruments that we have invested in or any increase in the cost of credit financing reduces our returns and decreases our net income. In particular due

Due in part to holdings of credit instruments such as CLOs on our balance sheet, the performance of the credit markets has had an amplified impact on our financial results, as we directly bear the full extent of losses from credit instruments on our balance sheet. Credit markets can also impact valuations because a discounted cash flow analysis is generally used as one of the methodologies used to ascertain the fair value of our investments that do not have readily observable market prices. In addition, with respect to our credit instruments, tightening credit spreads are generally expected to

lead to an increase, and widening credit spreads are generally expected to lead to a decrease, in the value of these credit investments, if not offset by hedging or other factors. In addition, the significant widening of credit spreads is also typically expected to negatively impact equity markets, which in turn would negatively impact our portfolio and us as noted above. Conversely, widening credit spreads may have a positive impact on our insurance business, as the margin Global Atlantic is able to earn between crediting rates offered on its insurance products and the investment income it earns from its credit investments should increase, and tightening credit spreads may negatively impact the pricing and therefore competitiveness of Global Atlantic’s products, adversely impacting sales and growth, or may negatively impact the margins that Global Atlantic earns on sales and transactions.

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During the quarter ended September 30, 2017, US Investment GradeMarch 31, 2022, U.S. investment grade corporate bond spreads (BofAML(BofA Merrill Lynch US Corporate Index) tightenedwidened by 924 basis points and US High-YieldU.S. high-yield corporate bond spreads (BofAML HY Master II Index) tightenedwidened by 2333 basis points. The non-investment grade credit indices were down during the quarter ended March 31, 2022, with the S&P/LSTA Leveraged Loan Index down 0.1% and the BAML US High Yield Index down 4.5%. During the quarter ended March 31, 2022, 10-year government bond yields rose 83 basis points in the United States, rose 64 basis points in the United Kingdom, rose 73 basis points in Germany, rose 1 basis point in China, and rose 15 basis points in Japan. In the period between March 31, 2022 and April 30, 2022, U.S. investment grade corporate bond spreads (BofA Merrill Lynch US Corporate Index) widened by 19 basis points and U.S. high-yield corporate bond spreads (BofAML HY Master II Index) widened by 54 basis points. The non-investment grade credit indices were mixed in the period between March 31, 2022 and April 30, 2022, with the S&P/LSTA Leveraged Loan Index up 0.2% and the BAML US High Yield Index down 3.6%. In the period between March 31, 2022 and April 30, 2022, 10-year government bond yields rose 60 basis points in the United States, rose 30 basis points in the United Kingdom, rose 39 basis points in Germany, rose 5 basis points in China, and rose 1 basis point in Japan. For a further discussion of how market conditions may affect our businesses, see “Risk Factors- Factors—Risks Related to Our Business - Business—Difficult market and economic conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments that we manage or by reducing the ability of our funds to raise or deploy capital, each of which could negatively impact our net income and cash flow and adversely affect our financial condition"condition” and "Risks“Risk Factors—Risks Related to the Assets We Manage - Manage—Our investments are impacted by various economic conditions and events outside of our control that are difficult to quantify or predict, andwhich may have a significant impact on the valuation of our investments and, therefore, on the investment income we realize and our financial condition and results of operations"operations and financial condition” in our Annual Report on Form 10-K.Report.


The non-investment grade credit indices rose during the quarter ended September 30, 2017, with the S&P/LSTA Leveraged Loan Index up 1.0% and the BofAML HY Master II Index up 2.0%. For the quarter ended September 30, 2017, 10-year government bond yields rose 3 basis points in the United States, rose 6 basis points in China, fell 2 basis points in Japan and stayed flat in Germany. For further discussion of the impact of global credit markets on our financial condition and results of operations, see “Risk Factors - "Risk Factors—Risks Related to the Assets We Manage -ChangesManage—Changes in the debt financing markets may negatively impact the ability of our investment funds, their portfolio companies and strategies pursued with our balance sheet assets to obtain attractive financing for their investments or to refinance existing debt and may increase the cost of such financing or refinancing if it is obtained, which could lead to lower-yielding investments and potentially decrease our net income,” “- " "Risk Factors—Risks Related to the Assets We Manage—Our investments are impacted by various economic conditions and events outside of our control that are difficult to quantify or predict, andwhich may have a significant impact on the valuation of our investments and, therefore, on the investment income we realize and our results of operations and financial condition," "Risk Factors—Risks Related to the Assets We Manage—Our funds and our firm through our balance sheet may make a limited number of investments, or investments that are concentrated in certain issuers, geographic regions or asset types, which could negatively affect our performance or the performance of our funds to the extent those concentrated assets perform poorly" and "Risk Factors—Risks Related to Global Atlantic—Interest rate fluctuations and sustained periods of low or high interest rates could adversely affect Global Atlantic’s business, financial condition, andliquidity, results of operations”operations, cash flows and “- Because we hold interests in some of our portfolio companies both through our management of private equity funds as well as through separate investments in those funds and direct co-investments, fluctuation in the fair values of these portfolio companies may have a disproportionate impact on the investment income earned by us”prospects" in our Annual Report on Form 10-K and “-CriticalReport. For a further discussion of our valuation methods, see "—Critical Accounting Policies-FairPolicies—Fair Value Measurements-LevelMeasurements—Level III Valuation Methodologies” in this report.Methodologies."

Foreign Exchange Rates. Foreign exchange rates have a substantial impact on the valuations of our investments that are denominated in currencies other than the U.S. dollar. Currency volatility can also affect our businesses and investments whichthat deal in cross‑bordercross-border trade. The appreciation or depreciation of the U.S. dollar is expected to contribute to a decrease or increase, respectively, in the U.S. dollar value of our non‑U.S.non-U.S. investments to the extent unhedged. In addition, an appreciating U.S. dollar would be expected to make the exports of U.S. based companies less competitive, which may lead to a decline in their export revenues, if any, while a depreciating U.S. dollar would be expected to have the opposite effect. Moreover, when selecting investments for our investment funds that are denominated in U.S. dollars, an appreciating U.S. dollar may create opportunities to invest at more attractive U.S. dollar prices in certain countries outside of the U.S.,United States, while a depreciating U.S. dollar would be expected to have the opposite effect. For our investments denominated in currencies other than the U.S. dollar, the depreciation in such currencies will generally contribute to the decrease in the valuation of such investments, to the extent unhedged, and adversely affect the U.S. dollar equivalent revenues of portfolio companies with substantial revenues denominated in such currencies, while the appreciation in such currencies would be expected to have the opposite effect. For the quarter ended September 30, 2017,March 31, 2022, the euro rose 3.4%fell 2.7%, the British pound fell 2.9%, the Japanese yen fell 5.4%, and the Chinese renminbi rose 1.9%, and the British pound rose 2.9%0.3%, respectively, relative to the U.S. dollar. See “Risk Factors- Risks Related to Our Business - Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments that we manage or by reducing the ability of our funds to raise or deploy capital, each of which could negatively impact our net income and cash flow and adversely affect our financial condition” in our Annual Report on Form 10-K. For additional information regarding our foreign exchange rate risk, see “-Quantitative“Quantitative and Qualitative Disclosure About Market Risk - Risk—Exchange Rate Risk” in our Annual Report.

LIBOR Transition. On March 15, 2022, the Consolidated Appropriations Act of 2022, which includes the Adjustable Interest Rate (LIBOR) Act of 2021, was signed into law in the United States. This legislation establishes a uniform benchmark replacement mechanic for financial contracts that mature after June 30, 2023 which do not contain either clearly defined or practicable fallback provisions or are contractually silent on a benchmark replacement rate. The legislation also creates a safe harbor that shields involved parties from liability if they choose to utilize a replacement rate recommended by the Board of Governors of the Federal Reserve. For a discussion of the LIBOR transition that will impact certain debt obligations, see Note 2 "Summary of Significant Accounting Policies – Adoption of new accounting pronouncements—Reference rate reform" in our financial statements and for a discussion of the risks related to the LIBOR transition, see "Risk Factors – Risks Related to Our Business – Transition away from LIBOR as a benchmark reference for interest rates may affect the cost of capital and requires
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amending or restructuring existing debt instruments and related hedging arrangements for us, our investment funds and our portfolio companies, and may impact the value of floating rate securities or loans based on LIBOR that we or our investment funds have held, all of which may result in additional costs or adversely affect our or our funds’ liquidity, results of results of operations and financial condition" in our Annual Report on Form 10-K.10-K for the year ended December 31, 2021.


Commodity Markets. Our Private Markets portfolio contains energy real asset investments, and certain of our other Private Markets and Public Markets strategies and products, including private equity, direct lending, special situations and CLOs, also have meaningful investments in or related to the energy sector. The value of these investments is heavily influenced by the price of natural gas and oil. As noted above, the actions taken by Russia in the Ukraine starting in February 2022 have also caused volatility in the commodities markets. During the quarter ended September 30, 2017,March 31, 2022, the long-term3-year forward price of WTI crude oil increased approximately 2%16%, whileand the long-term3-year forward price of natural gas was relatively stable.increased approximately 21%. The long-term3-year forward price of WTI crude oil increased from approximately $49$63 per barrel to $50$73 per barrel, and the long-term3-year forward price of natural gas decreasedincreased from approximately $2.85$3.13 per mcf to $2.84$3.77 per mcf as of June 30, 2017December 31, 2021 and September 30, 2017,March 31, 2022, respectively.

When commodity prices decline or if a decline is not offset by other factors, we would expect the value of our energy real asset investments to be adversely impacted.impacted, to the extent unhedged. In general, we expect downward price movements to have a negative impact on the fair value of our energy portfolio, all other things being equal, given those commodity prices are an input in our valuation models. The reverse is true for upward price movements. However, because we typically use near-term commodity derivative transactions to hedge our exposures, we expect long-term oil and natural gas prices to be a more significant driver of the valuation of our energy investments in asset management than spot prices. In addition, because we hold certainto the extent energy assets onreal asset investments are directly held by our balance sheet, which had a fair value of $0.5 billion as of September 30, 2017, these price movements wouldcan have an amplified impact on our financial results, as we would directly bear the full extent of such gains or losses.losses, subject to hedging. However, as of March 31, 2022, energy investments in oil and gas assets made up only approximately 1% of our assets under management, 1% of our total GAAP assets and 1% of our total segment assets. For additional information regarding our energy real assets, see “-Critical"—Critical Accounting Policies-FairPolicies—Fair Value Measurements-LevelMeasurements—Level III Valuation Methodologies-RealMethodologies—Real Asset Investments” in this reportInvestments" and “Risk Factors - see also "Risk Factors—Risks Related to the Assets We Manage - Because we hold interestsManage—Our funds and our firm through our balance sheet may make a limited number of investments, or investments that are concentrated in somecertain issuers, geographic regions or asset types, which could negatively affect our performance or the performance of our portfolio companies both through our management of private equity funds as well as through separate investments into the extent those funds and direct co-investments,

fluctuation in the fair values of these portfolio companies may have a disproportionate impact on the investment income earned by us”concentrated assets perform poorly" in our Annual Report on Form 10-K.10-K for the year ended December 31, 2021.


Business Conditions
Our operating revenues consist of fees, performance income and investment income.
Our ability to grow our revenues depends in part on our ability to attract new capital and investors, our successful deployment of capital including from our balance sheet and our ability to realize investments at a profit.
Our ability to attract new capital and investors. Our ability to attract new capital and investors in our funds is driven, in part, by the extent to which they continue to see the alternative asset management industry generally, and our investment products specifically, as attractive means for capital appreciation or income. In addition, our ability to attract new capital and investors in our insurance business is driven, in part, by the extent to which they continue to see the life and annuity insurance industry generally, and in certain cases our re-insurance vehicles, as attractive means for capital appreciation or income. Since 2010, we have expanded into strategies such as real assets, credit, core, impact and, through hedge fund partnerships, hedge funds, and insurance. In several of our asset management strategies, our first time funds have begun raising successor funds, and we expect the cost of raising such successor funds to be lower. We have also reached out to new fund investors, including retail and high net worth investors. However, fundraising continues to be competitive. While our Asian Fund IV, European Fund V, North America Fund XIII, Real Estate Partners Americas III, Real Estate Partners Europe II, Global Infrastructure Investors IV, Next Generation Technology Growth Fund II and Health Care Strategic Growth Fund II exceeded the size of their respective predecessor funds, there is no assurance that fundraises for our other flagship investment funds or vehicles or for our newer strategies and their successor funds will experience similar success. If we are unable to successfully raise comparably sized or larger funds, our AUM, FPAUM, and associated fees attributable to new capital raised in future periods may be lower than in prior years. See "Risk Factors—Risks Related to Our Business—Our inability to raise additional or successor funds (or raise successor funds of a comparable size as our predecessor funds) could have a material adverse impact on our business" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Our ability to successfully deploy capital. Our ability to maintain and grow our revenue base is dependent upon our ability to successfully deploy the capital available to us as well as our participation in capital markets transactions. Greater competition, high valuations, increased overall cost of credit and other general market conditions may impact our ability to identify and execute attractive investments. Additionally, because we seek to make investments that have an ability to achieve our targeted returns while taking on a reasonable level of risk, we may experience periods of reduced investment activity. We
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have a long-term investment horizon and the capital deployed in any one quarter may vary significantly from the capital deployed in any other quarter or the quarterly average of capital deployed in any given year. Reduced levels of transaction activity also tends to result in reduced potential future investment gains, lower transaction fees and lower fees for our capital markets business line, which may earn fees in the syndication of equity or debt. In our insurance business, we deploy capital by investing in assets that are anticipated to generate net investment income in excess of the net cost of insurance. If we are unable to originate or source attractive investments, the success and growth in revenues of our insurance business will be adversely impacted. See “Risk Factors—Risks Related to the Assets We Manage—Changes in the debt financing markets may negatively impact the ability of our investment funds, their portfolio companies and strategies pursued with our balance sheet assets to obtain attractive financing for their investments or to refinance existing debt and may increase the cost of such financing or refinancing if it is obtained, which could lead to lower-yielding investments and potentially decrease our net income” in our Annual Report on Form 10-K for the year ended December 31, 2021.
Our ability to realize investments. Challenging market and economic conditions may adversely affect our ability to exit and realize value from our investments and result in lower-than-expected returns. Although the equity markets are not the only means by which we exit investments from our funds, the strength and liquidity of the U.S. and relevant global equity markets generally, and the initial public offering market specifically, affect the valuation of, and our ability to successfully exit, our equity positions in the portfolio companies of our funds in a timely manner. We may also realize investments through strategic sales. When financing is not available or becomes too costly, it may be more difficult to find a buyer that can successfully raise sufficient capital to purchase our investments. In addition, volatile debt and equity markets may also make the exit of our investments more difficult to execute. In our insurance business, we depend on the ability of our investments to generate their anticipated returns, through the payment of interest and dividends and interest as well as return of principal, in the amounts and at the times that we expect them to be made in order to manage our obligations to make payments to our policyholders. If policyholder behavior differs from our expectations, we may be forced to sell our investments earlier than we anticipated and during market conditions where we may realize losses on the investment. In addition, material delays in payments or impairments to our anticipated investment returns could have material adverse effects to our results of operations. For additional information about how business environment and market conditions affect Global Atlantic, see "—Global Atlantic's Investment Portfolio."

Basis of Accounting
 
We consolidate the financial results of the KKR Group PartnershipsPartnership and theirits consolidated subsidiaries,entities, which include the accounts of our investment management and capital marketsadvisers, broker-dealers, Global Atlantic’s insurance companies, the general partners of certain unconsolidated investment funds, and vehicles, general partners of certainconsolidated investment funds that are consolidated and their respective consolidated investment funds and certain other entities including certain consolidated CLOs and commercial real estate mortgage-backed securities, or "CMBS". We refer to CLOs and CMBS as collateralized financing entities or CFEs.("CFEs").


When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities, fees,revenues, expenses, investment income, cash flows and other amounts, on a gross basis. While the consolidation of a consolidatedan investment fund or entity does not have an effect on the amounts of Net Income Attributable to KKR or KKR's partners' capitalstockholders' equity that KKR reports, the consolidation does significantly impact the financial statement presentation under GAAP. This is due to the fact that the accounts of the consolidated entities are reflected on a gross basis while the allocable share of those amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts attributable to third parties are recorded are presented as noncontrolling interests on the consolidated statements of financial condition and net income (loss) attributable to noncontrolling interests on the consolidated statements of operations.

The presentation in the financial statements reflect the significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance business, and KKR operates an asset management business, each of which possess distinct characteristics. As a result, KKR developed a two-tiered presentation approach for the financial statements in this Management's Discussion and Analysis. KKR believes that these separate presentations provide a more informative view of the consolidated financial position and results of operations than traditional aggregated presentations. KKR believes that reporting Global Atlantic’s insurance operations separately is appropriate given, among other factors, the relative significance of Global Atlantic’s policy liabilities, which are not obligations of KKR (other than the insurance companies that issued them). If a traditional aggregated presentation were to be used, KKR would expect to eliminate or combine several identical or similar captions, which would condense the presentations but would reduce transparency. KKR also believes that using a traditional aggregated presentation would result in no new line items compared to the two-tier presentation included in the financial statements in this report. We acquired Global Atlantic on February 1, 2021; accordingly, the results of Global Atlantic's insurance operations included in our consolidated results of operations for the three months ended March 31, 2021 are from February 1, 2021 (the closing date of the acquisition) through March 31, 2021.
All the intercompany transactions have been eliminated.

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The summary of the significant accounting policies has been organized considering the two-tiered approach described above and includes a section for common accounting policies and an accounting policy section for each of the two tiers when a policy is specific to one of the tiers.

For a further discussion ofabout our consolidationcritical accounting policies, see "Item 1. Condensed Consolidated“Management’s Discussion and Analysis of Financial Statements (Unaudited)--SummaryCondition and Results of Operations—Critical Accounting Policies” in the 2021 Form 10-K and Note 2 "Summary of Significant Accounting Policies."Policies" in our financial statements.

Key Financial Measures Under GAAP - Asset Management
 
The following discussion of key financial measures under GAAP is based on KKR's asset management business as of March 31, 2022.

Revenues

Fees and Other
 
Fees and other consist primarily of (i) transaction fees earned in connection with successful investment transactions and from capital markets activities, (ii) management and incentive fees from providing investment management services to unconsolidated funds, CLOs, other vehicles, and separately managed accounts,accounts; (ii) transaction fees earned in connection with successful investment transactions and from capital markets activities; (iii) monitoring fees from providing services to portfolio companies,companies; (iv) carried interest allocations to general partners of unconsolidatedexpense reimbursements from certain investment funds and portfolio companies; (v) revenue earned by oil and gas-producinggas entities that are consolidatedconsolidated; and (vi) consulting fees earned by entities that employ non-employee operating consultants.fees. These fees are based on the contractual terms of the governing agreements and are recognized when earned, which coincides with the period during which the related services are performed and in the case of transaction fees, upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period when the related transaction closes. Monitoring fees also include certain expense reimbursements

Capital Allocation-Based Income (Loss)
Capital allocation-based income (loss) is earned from certain portfolio companiesthose arrangements whereby KKR serves as general partner and unconsolidated funds.
Forincludes income or loss from KKR's capital interest as well as "carried interest" which entitles KKR to a further discussiondisproportionate allocation of our fee policies, see "Item 1. Condensed Consolidated Financial Statements (Unaudited)--Summary of Significant Accounting Policies."
investment income or loss from an investment fund's limited partners.
Expenses
Compensation and Benefits
Compensation and benefitsBenefits expense includes (i) base cash compensation consisting of salaries bonuses, and wages, (ii) benefits, as well as(iii) carry pool allocations, (iv) equity-based compensation, consisting of charges associated with the vesting of equity-based awards,and (v) discretionary cash bonuses.

To supplement base cash compensation, benefits, carry pool allocations, and other performance-based income compensation. All employees and employees of certain consolidated entities receive a base salary that is paid by KKR or its consolidated entities, and is accounted for asequity-based compensation, and benefits expense. These employees are also eligible to receivewe typically pay discretionary cash bonuses, which are included in Compensation and Benefits expense in the consolidated statements of operations, based principally on performance, overall profitabilitythe level of (i) management fees and other matters. Whilefee revenues (including incentive fees), (ii) realized carried interest and (iii) realized investment income earned during the year. The amounts paid as discretionary cash bonuses, paidif any, are at our sole discretion and vary from individual to most employees are borne by KKRindividual and certain consolidated entities and result in customary compensation and benefits expense,from period to period, including having no cash bonus. We accrue discretionary cash bonuses that are paidwhen payment becomes probable and reasonably estimable which is generally in the period when we make the decision to certain employees are currently borne by KKR Holdings. Thesepay discretionary cash bonuses have historically been funded with distributions that KKR Holdings receives on KKR Group Partnership Units held by KKR Holdings but are not then passed on to holdersand is based upon a number of unvested unitsfactors, including the recognition of KKR Holdings. Because employees are not entitled to receive distributions on units that are unvested, any amounts allocated to employeesfee revenues, realized carried interest, realized investment income and other factors determined during the year.
Beginning in excess of an employee's vested equity interests are reflected as employee compensation and benefits expense. These compensation charges are currently recorded based on the amount of cash expected to be paid by KKR Holdings. Because KKR makes only fixed quarterly distributions, the distributions made on KKR Group Partnership Units underlying any unvested KKR Holdings units are generally insufficient to fund annual cash bonus compensation to the same extent as in periods prior to the fourth quarter of

2015. In addition, substantially all units in KKR Holdings have been allocated and will vest over a 5 year period, thus decreasing the amount of distributions received by KKR Holdings that are available for annual cash bonus compensation. We, therefore,2021, we expect to pay our employees by assigning a percentage range to each component of asset management segment revenues. Based on the current components and blend of our asset management segment revenues on an increasing portionannual basis, we expect to use approximately: (i) 20‐25% of fee related revenues, (ii) 60‐70% of realized carried interest and eventually allincentive fees not included in fee related performance revenues or earned from our hedge fund partnerships, and (iii) 10‐20% of realized investment income and hedge fund partnership incentive fees to pay our asset management employees. Because these ranges are applied to applicable distributable revenue components independently, and on an annual basis, the amount paid as a percentage of total distributable revenues will vary and will, for example, likely be higher in a period with relatively higher realized carried interest and lower in a period with relatively lower realized carried interest. We decide whether to pay a discretionary cash bonus and determine the percentage of applicable revenue components to pay compensation only upon the
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occurrence of the realization event. There is no contractual or other binding obligation that requires us to pay a discretionary cash bonus payments currently borneto the asset management employees, except in limited circumstances.
Assuming that we had accrued compensation of (i) 65% of the unrealized carried interest earned by KKR Holdings from other sources, including cash from our operations,the funds that allocate 40% and 43% to the carry pool and other performance-based income compensation as described below. See "Risks Related to Our Business - If we cannot retain and motivate our principals and other key personnel and recruit, retain and motivate new principals and other key personnel, our business, results and financial condition could be adversely affected"(ii) 15% of the unrealized net gains in our Annual ReportPrincipal Activities business line (in each case at the mid-point of the ranges above), KKR & Co. Inc. Stockholders’ Equity – Series I and II Preferred, Common Stock as of March 31, 2022 would have been reduced by approximately $2.33 per share, compared to our reported $24.72 per share on Form 10-K regarding the adequacysuch date, and our book value as of March 31, 2022 would have been reduced by approximately $2.26 per adjusted share, compared to our reported book value of $28.45 per adjusted share on such distributions to fund future discretionary cash bonuses.date.

Carry Pool Allocation
KKR uses three different methods, which are designed to yield comparable results, to allocate carried interest and other performance income compensation. With respect to KKR’s investmentour funds that provide for carried interest, withoutwe allocate a preferred return, KKR allocates 40% of the carried interest received from such funds to its carry pool for employees and non-employee operating consultants. In addition, for investment funds that provide for incentive fees rather than carried interest, our carry pool is supplemented by allocating 40% of the incentive fees earned from such funds to performance income compensation. Beginning with the quarter ended September 30, 2016, for investment funds that provide for carried interest with a preferred return and have accrued carried interest as of June 30, 2017, KKR also includes 40% of the management fees that would have been subject to a management fee refund as performance income compensation. Because of the different ways management fees are refunded in preferred return and non-preferred return funds that provide for carried interest, this calculation of 40% of the portion of the realized and unrealized carried interest that we earn to a carry pool established at KKR Associates Holdings L.P., which is not a KKR subsidiary, from which our asset management fees subjectemployees and certain other carry pool participants are eligible to refund for funds that havereceive a preferred returncarried interest allocation. The allocation is designeddetermined based upon a fixed arrangement between KKR Associates Holdings and us, and we do not exercise discretion on whether to allocate to compensationmake an amount comparable to the amount that would have been allocatedallocation to the carry pool hadupon a realization event. These amounts are accounted for as compensatory profit sharing arrangements in Accrued Expenses and Other Liabilities within the fund not had a preferred return. Beginningaccompanying consolidated statements of financial condition in conjunction with the quarter ending September 30, 2017, for future and current carry generating funds with no or minimal accruedrelated carried interest income and are recorded as compensation expense. Upon a reversal of June 30, 2017, KKR will allocate 43% of the carried interest income, the related carry pool allocation, if any, is also reversed. Accordingly, such compensation expense is subject to both positive and negative adjustments.
In February 2021, with the approval of a majority of our independent directors, KKR amended the percentage of carried interest that is allocable to the carry pool instead of 40%to 65% for (i) current investment funds for which no or de minimis amounts of carried interest. The incremental 3% replacesinterest was accrued as of December 31, 2020 and (ii) all future funds. For all other funds, the allocationpercentage of management fee refunds that would have been calculated for those funds and is designed, based on a historical financial analysis of certain investment funds, to allocate an amount for preferred return funds that is comparable to the management fee refunds that would have been allocatedcarried interest remains 40% or 43%, as performance income compensation for those funds.applicable. The percentage of carried interest management fee refunds, and incentive fees allocable to the carry pool may be increased above 65% only with the approval of a majority of our independent directors. To account for the difference in the carry pool allocation percentages, we expect to use a portion of realized carried interest from the older funds equal to the difference between 65% and 40% or 43%, as performance incomeapplicable, to supplement the carry pool and to pay amounts as discretionary cash bonus compensation is subjectas described above to changeour asset management employees. The amounts paid as discretionary cash bonuses, if any, are at our discretion and vary from timeindividual to time. For a discussion of how management fees are refundedindividual and from period to period, including having no cash bonus at all for preferred return funds and non-preferred funds see "--Fair Value Measurements--Recognitioncertain employees. See "—Critical Accounting Policies - Asset Management—Recognition of Carried Interest in the Statement of Operations". and "—Key Financial Measures Under GAAP - Asset Management—Expenses—Compensation and Benefits."

The amounts allocatedOn the Sunset Date (as defined in the Reorganization Agreement), KKR will acquire control of KKR Associates Holdings and will commence making decisions regarding the allocation of carry proceeds pursuant to the limited partnership agreement of KKR Associates Holdings. Until the Sunset Date, our Co-Founders will continue to make decisions regarding the allocation of carry proceeds to themselves and others, pursuant to the limited partnership agreement of KKR Associates Holdings, provided that any allocation of carry proceeds to the Co-Founders will be on a percentage basis consistent with past practice.

Equity-based Compensation
In addition to the cash-based compensation and carry pool allocations as described above, employees receive equity awards under our Equity Incentive Plans, most of which are subject to service-based vesting typically over a three to five-year period from the date of grant, and other performance-based income compensationsome of which are accounted for as compensatory profit-sharing arrangementsalso subject to the achievement of market-based conditions. Certain of these awards are subject to post-vesting transfer restrictions and recorded as compensation and benefits expense for KKR employees and general, administrative and other expense for certain non-employee consultants and service providers in the consolidated statements of operations prepared in accordance with U.S. GAAP.
minimum retained ownership requirements.
General, Administrative and Other
General, administrative and other expense consists primarily of professional fees paid to legal advisors, accountants, advisors and consultants, insurance costs, travel and related expenses, communications and information services, depreciation and amortization charges, changes in fair value of contingent consideration, expenses incurred by oil and gas-producinggas entities, (including impairment charges)CLOs and investment funds that are consolidated, and other general and operating expenses which are not borne by fund investors and are not offset by credits attributable to fund investors' noncontrolling interests in consolidated funds. General, administrative and other expense also consists of costs incurred in connection with pursuing potential investments that do not result in completed transactions a substantial("broken-deal expenses"), expense reimbursements, placement fees and other general operating expenses. A portion of whichthese general administrative and other expenses, in particular broken-deal expenses, are borne by fund investors.


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Investment Income (Loss)
Net Gains (Losses) from Investment Activities
Net gains (losses) from investment activities consist of realized and unrealized gains and losses arising from our investment activities. A large portion of our net gains (losses)activities as well as income earned from investment activities are related to our privatecertain equity method investments. Fluctuations in net gains (losses) from investment activities between reporting periods is driven primarily by changes in the fair value of our investment portfolio as well as the realization of investments. The fair value of, as well as the ability to recognize gains from, our private equity and other investments is significantly impacted by the global financial markets, which, in turn, affects the net gains (losses) from investment activities recognized in any given period. Upon the disposition of an investment, previously recognized unrealized gains and losses are reversed and an offsetting realized gain or loss is recognized in the current period. Since our investments are carried at fair value, fluctuations between periods could be significant due to changes to the inputs to our valuation process over time. For a further discussion of our fair value measurements and fair value of investments, see "—Critical Accounting Policies—Policies - Combined—Fair Value Measurements."

Dividend Income
 
Dividend income consists primarily of distributions that we and our consolidated investment funds receive from portfolio companies or real assets investments in which theywe and our consolidated investment funds invest. Dividend income is recognized primarily in connection with (i) dispositions of operations by portfolio companies, (ii) distributions of excess cash generated from operations from portfolio companiesinvestments or real assets investments, and (iii) other significant refinancings undertaken by portfolio companies.investments.


Interest Income
 
Interest income consists primarily of interest that is received on our credit instruments in which we and our consolidated investment funds, CLOs and other entities invest as well as interest on our cash balances and other investments.
 
Interest Expense
 
Interest expense is incurred from (i) debt issued by KKR, including debt issued by KFN, which was consolidated upon completion of the acquisition of KFN,(ii) credit facilities entered into by KKR, (iii) debt securities issued by consolidated CFEs, (iv) financing arrangements at our majority owned investment vehicles that have been funded with borrowings that are collateralized by the investments and assets they own and (v) financing arrangements at our consolidated funds entered into primarily with the objective of managing cash flow. KFN's debt obligations are non-recourse to KKR beyond the assets of KFN. Debt securities issued by consolidated CFEs are supported solely by the investments held at the CFE and are not collateralized by assets of any other KKR entity. Our obligations under financing arrangements at our consolidated investment funds are generally limited to our pro-ratapro rata equity interest in such funds. However, in some circumstances, we may provide limited guarantees of the obligations of our general partners in an amount equal to its pro rata equity interest in such funds. Our management companies bear no obligations with respect to financing arrangements at our consolidated funds. We also may provide other kinds of guarantees. See "—Liquidity"Liquidity."

Key Financial Measures Under GAAP - Insurance
The following discussion of key financial measures under GAAP is based on KKR's insurance business as conducted by Global Atlantic as of March 31, 2022.

Revenues
Premiums
Premiums primarily relate to payout annuities with life contingencies and whole life and term life insurance policies, recognized when due from the policyholders. Premiums are reported net of premiums ceded under reinsurance agreements.

Policy fees
Policy fees include charges assessed against policyholder account balances for mortality, administration, separate account, benefit rider and surrender fees.

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Net investment income
Net investment income reflects the income earned on our investments, net of any associated investment expenses (including management fees charged by the asset management segment) and net of ceded amounts under reinsurance agreements. Net investment income includes, amongst other things (i) interest earned on our fixed income available-for-sale and fixed-income trading investments, (ii) interest income and other related fees from our mortgage and other loan receivables, (iii) interest on funds withheld at interest receivables, (iv) proportional share of income from equity-method investments and (v) income from physical assets, such as renewable energy plants, railcars, and airplanes (net of depreciation and operating expenses).

Net investment-related gains
Net investment-related gains primarily consists of (i) realized gains and losses from the disposal of investments, including realized gains and losses on the disposal of investments not related to asset/liability matching strategies (“variable investment income”), (ii) unrealized gains and losses from investments held for trading, real estate investments accounted under investment company accounting, and investments with fair value re-measurements recognized in earnings as a result of the election of a fair-value option, (iii) unrealized gains and losses on funds withheld at interest receivable and payable, (iv) unrealized gains and losses from derivatives not designated in an hedging relationship and (v) allowances for credit losses, and other impairments of investments.

Other income

Other income is primarily comprised of expense allowances on ceded reinsurance, administration, management fees and distribution fees.

Expenses

Policy benefits and claims
Policy benefits and claims represent the current period expense associated with providing insurance benefits to policyholders, including claims and benefits paid, interest credited to policyholders, changes in policy liability reserves (including fair value reserves), amortization of cost of reinsurance liabilities, and amortization of deferred sales inducements.

Amortization of policy acquisition costs
Amortization of policy acquisition costs primarily consist of amortization of value of business acquired and deferred policy acquisition costs.

Insurance expense
Insurance expenses are primarily comprised of commissions expense, net of amounts capitalized, reinsurance ceding allowances, premium taxes, amortization of acquired intangibles and captive financing charges.

Interest expense
Interest expense is incurred from insurance segment debt issued, including related interest rate swaps, credit facilities and other financing agreements.

General, administrative and other
General, administrative and other expenses are primarily comprised of employee compensation and benefit expenses, third-party administrator ("TPA") policy servicing fees, administrative and professional services, and other operating expenses.
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Other Key Financial Measures Under GAAP
 
Income Taxes

The KKR Group Partnerships and certain of their subsidiaries operate in the United States as partnerships for U.S. federal income tax purposes and as corporate entities in non-U.S. jurisdictions. Accordingly, these entities, in some cases, are subject to New York City unincorporated business taxes, or non-U.S. income taxes. Furthermore, we hold our interest in one of the KKR Group Partnerships through KKR Management Holdings Corp., which& Co. Inc. is treated as a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local income taxes at the entity level on its share of taxable income. In addition, KKR Group Partnership and certain otherof its subsidiaries operate as partnerships for U.S. federal tax purposes but as taxable entities for certain state, local or non-U.S. tax purposes. Moreover, certain corporate subsidiaries of the KKR, Group Partnershipsincluding certain Global Atlantic subsidiaries, are treated asdomestic corporations for U.S. federal income tax purposes. Accordingly, certain subsidiaries of KKR, including KKR Management Holdings Corp.,purposes and are subject to U.S. federal, state, and local corporate income taxes at the entity level and the related tax provision attributable to KKR's share of this income is reflected in the financial statements. We also generate certain interest income to our unitholders and interest deductions to KKR Management Holdings Corp.

We use the asset and liability method to account for income taxes in accordance with GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.

taxes.
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties. We review our tax positions quarterly and adjust our tax balances as new information becomes available.
For a further discussion of our income tax policies, see Note 18 "Income Taxes" in our financial statements.
Net Income (Loss) Attributable to Noncontrolling Interests
Net income (loss) attributable to noncontrolling interests primarily represents the ownership interests that certain third parties hold in entities that are consolidated in the financial statements as well as the ownership interests in our KKR Group PartnershipsPartnership that are held by KKR Holdings.Holdings (and holders of other exchangeable securities). The allocable share of income and expense attributable to these interests is accounted for as net income (loss) attributable to noncontrolling interests. Given the consolidation of certain of our investment funds and the significant ownership interests in our KKR Group PartnershipsPartnership held by KKR Holdings, we expect a portion of net income (loss) will continue to be attributed to noncontrolling interests in our business.

For a further discussion of our noncontrolling interests policies, see "Item 1. Condensed Consolidated Financial Statements (Unaudited)--Summary of Significant Accounting Policies."Note 22 "Equity" in the financial statements.


KeySegment Operating and Non-GAAP Performance Measures
The following key segment keyand non-GAAP performance measures that follow are used by management in making operatingoperational 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 businessbusinesses. They include certain financial measures that are calculated and presented using methodologies other than in accordance with GAAP. These performance measures as described below are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P.Inc. and KKR Holdings L.P. (and holders of other exchangeable securities) and as such represent the entire KKR business in total. In addition, KKR's reportable segmentsthese performance measures are presented without giving effect to the consolidation of the investment funds and CFEscollateralized financing entities (“CFEs”) that KKR manages as well as other consolidated entities that are not subsidiaries of KKR & Co. L.P.manages.
We disclose the following financial measures in this report that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these segment and non-GAAP performance measures on a supplemental basis to our GAAP results is helpful to unitholdersstockholders in assessing the overall performance of KKR's businesses.business. These financialnon-GAAP measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP, if available. 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.GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, where applicable are included within "Financial Statements and Supplementary Data — Note 14. Segment Reporting" and later in this report under "—Segment Balance Sheet.Reconciliations to GAAP Measures."

Adjusted Units

Adjusted units are used as a measure of the total common equity ownership of KKR that is held by KKR & Co. L.P. (including equity awards issued under the KKR & Co. L.P. 2010 Equity Incentive Plan (the "Equity Incentive Plan"), but excluding preferred units), KKR Holdings and other holders of securities exchangeable into common units of KKR & Co. L.P. and represent the fully diluted common unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total common equity ownership of KKR as if all outstanding KKR Holdings units, equity awards issued under the Equity Incentive Plan and other exchangeable securities had been exchanged for common units of KKR & Co. L.P. The Series A and Series B Preferred Units are not exchangeable for common units of KKR & Co. L.P.

Adjusted Units Eligible for Distribution

Adjusted units eligible for distribution represents the portion of total adjusted units that is eligible to receive a distribution. We believe this measure is useful to unitholders as it provides insight into the calculation of amounts available for distribution on a per unit basis. Adjusted units eligible for distribution is used in the calculation of after-tax distributable earnings per unit.

After-TaxAfter-tax Distributable Earnings

After-tax distributable earnings is used by management as an operatinga non-GAAP performance measure of theKKR’s earnings, excluding mark-to-market gains (losses) of KKR. KKR believes this measurewhich is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses).derived from KKR’s reported segment results. After-tax distributable earnings excludes certain realized investment lossesis used to assess the performance of KKR’s business operations and measures the earnings potentially available for distribution to its equity holders or reinvestment into its business. After-tax distributable earnings is equal to Distributable Operating Earnings less Interest Expense, Series A and B Preferred Stock dividends (which have been redeemed), Net Income Attributable to Noncontrolling Interests and Income Taxes Paid. Series C Mandatory Convertible Preferred Stock dividends have been excluded from After-tax Distributable Earnings, because the definition of Adjusted Shares used to calculate After-tax Distributable Earnings per Adjusted Share assumes that all shares of Series C Mandatory Convertible Preferred Stock have been converted to shares of common stock. Income Taxes Paid represents the implied amount of income taxes that would be paid assuming that all pre-tax distributable earnings were allocated to KKR & Co. Inc. and taxed at the same effective rate, which assumes that all units in KKR Holdings L.P. and other exchangeable securities were exchanged for common stock of KKR & Co. Inc. Income Taxes Paid includes amounts paid pursuant to the extent unrealized losses on these investments were recognized priortax receivable agreement and the benefit of tax deductions arising from equity-based compensation, which
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reduces income taxes paid or payable during the period. Equity-based compensation expense is excluded from After-tax Distributable Earnings, because (i) KKR believes that the cost of equity awards granted to employees does not contribute to the combination with KPE on October 1, 2009.earnings potentially available for distributions to its equity holders or reinvestment into its business and (ii) excluding this expense makes KKR’s reporting metric more comparable to the corresponding metric presented by other publicly traded companies in KKR’s industry, which KKR believes enhances an investor’s ability to compare KKR’s performance to these other companies. If tax deductions from equity-based compensation were to be excluded from Income Taxes Paid, KKR’s After-tax distributableDistributable Earnings would be lower and KKR’s effective tax rate would appear to be higher, even though a lower amount of income taxes would have actually been paid or payable during the period. KKR separately discloses the amount of tax deduction from equity-based compensation for the period reported and the effect of its inclusion in After-tax Distributable Earnings for the period. KKR makes these adjustments when calculating After-tax Distributable Earnings in order to more accurately reflect the net realized earnings that are expected to be or become available for distribution to KKR’s equity holders or reinvestment into KKR’s business. However, After-tax Distributable Earnings does not represent and is not used to calculate actual distributionsdividends under KKR’s distribution policy.


The following tables present our calculations of distributable segment revenues,dividend policy, which is a fixed amount per period, and After-tax Distributable Earnings should not be viewed as a measure of KKR’s liquidity.
Book Value
Book Value is a non‐GAAP performance measure of the net assets of KKR and is used by management primarily in assessing the unrealized value of KKR’s net assets presented on a basis that (i) deconsolidates KKR’s investment funds and CFEs that KKR manages, (ii) includes the net assets that are attributable to KKR Holdings L.P., and (iii) includes KKR’s ownership of the net assets of Global Atlantic. We believe this measure is useful to stockholders as it provides additional insight into the net assets of KKR excluding those net assets that are allocated to the investors of KKR funds and other noncontrolling interest holders and to the holders of preferred stock. KKR's book value includes (x) the net impact of KKR's tax assets and liabilities as prepared under GAAP and (y) the implied amount of (1) tax assets and liabilities attributable to KKR Holdings L.P. as if it was subject to corporate income taxes and (2) the recognition of deferred tax liabilities relating to certain assets of KKR Group Partnership L.P. that is expected to occur upon the completion of the mergers contemplated by the Reorganization Agreement. Series C Mandatory Convertible Preferred Stock has been included in book value, because the definition of adjusted shares used to calculate book value per adjusted share assumes that all shares of Series C Mandatory Convertible Preferred Stock have been converted to shares of common stock. To calculate Global Atlantic book value and to make it more comparable with the corresponding metric presented by other publicly traded companies in Global Atlantic’s industry, Global Atlantic book value excludes (i) accumulated other comprehensive income and (ii) accumulated change in fair value of reinsurance balances and related assets, net of income tax.
Distributable Operating Earnings
    Distributable operating earnings is a non-GAAP performance measure that KKR believes is useful to stockholders as it provides a supplemental measure of our totaloperating performance without taking into account items that KKR does not believe arise from or relate directly to KKR's operations. Distributable Operating Earnings is presented prior to giving effect to the allocation of income (loss) among KKR & Co. Inc., KKR Holdings L.P. and other exchangeable securities, and the consolidation of the investment funds, vehicles and accounts that KKR advises, manages or sponsors (including collateralized financing entities). Distributable Operating Earnings excludes: (i) equity-based compensation charges, (ii) amortization of acquired intangibles, (iii) strategic corporate transaction-related charges and (iv) non-recurring items, if any. Strategic corporate transaction-related items arise from corporate actions and consist primarily of (i) impairments, (ii) non-monetary gains or losses on divestitures, (iii) transaction costs from strategic acquisitions, and (iv) depreciation on real estate that KKR owns and occupies. Inter-segment transactions are not eliminated from segment revenues excludingresults when management considers those transactions in assessing the results of the respective segments. These transactions include (i) management fees earned by KKR as the investment adviser for Global Atlantic insurance companies and (ii) interest income and expense based on lending arrangements where one or more KKR subsidiaries borrow from a Global Atlantic insurance subsidiary. Inter-segment transactions are recorded by each segment based on the definitive documents that contain arms’ length terms and comply with applicable regulatory requirements. Distributable Operating Earnings represents operating earnings of KKR’s Asset Management and Insurance segments, which are comprised of the following:

•Asset Management Segment Operating Earnings is the segment profitability measure used to make operating decisions and to assess the performance of the Asset Management segment and is comprised of: (i) Fee Related Earnings, (ii) Realized Performance Income, (iii) Realized Performance Income Compensation, (iv) Realized Investment Income, and (v) Realized Investment Income Compensation. Asset Management Segment Operating Earnings excludes (i) unrealized carried interest, (ii) net unrealized gains (losses) on investments, and (iii) related unrealized performance income compensation. Management fees earned by KKR as the adviser, manager or sponsor for its investment funds, vehicles and accounts, including management fees paid to KKR by Global Atlantic's insurance companies and
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management fees paid to Global Atlantic by reinsurance investment vehicles, are included in Asset Management Segment Operating Earnings.
•Insurance Segment Operating Earnings is the segment profitability measure used to make operating decisions and to assess the performance of the Insurance segment and is comprised of: (i) Net Investment Income, (ii) Net Cost of Insurance, (iii) General, Administrative, and Other Expenses, (iv) Income Taxes, and (v) Net Income Attributable to Noncontrolling Interests. The non-operating adjustments made to derive Insurance Segment Operating Earnings eliminate the impact of mark-to-market gains (losses), distributable segment expenses, which is our total segment expenses excluding the impact of mark-to-market gains (losses), and after-tax distributable earnings on common units for the three and nine months ended September 30, 2017 and 2016. Additionally, the individual components of our calculations of after-tax distributable earnings are reconciledof: (i) realized (gains) losses related to the most directly comparable GAAP measureasset/liability matching investments strategies, (ii) unrealized investment (gains) losses, (iii) changes in the tables below.

The following table presents our calculationfair value of distributable segment revenuesderivatives, embedded derivatives, and fair value liabilities for fixed-indexed annuities, indexed universal life contracts and variable annuities, and (iv) the three and nine months ended September 30, 2017 and 2016.

  Three Months Ended Nine Months Ended
($ in thousands) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Distributable Segment Revenues        
Fees and Other, Net        
Management Fees $232,954
 $201,508
 $670,807
 $599,725
Monitoring Fees 14,342
 11,091
 58,072
 52,126
Transaction Fees 179,167
 111,354
 578,667
 276,003
Fee Credits (70,747) (47,392) (211,148) (109,272)
Total Fees and Other, Net 355,716
 276,561
 1,096,398
 818,582
         
Realized Performance Income (Loss)        
Incentive Fees 4,074
 3,659
 8,384
 9,897
Carried Interest 419,438
 350,469
 890,310
 753,032
Total Realized Performance Income (Loss) 423,512
 354,128
 898,694
 762,929
         
Realized Investment Income (Loss)        
Net Realized Gains (Losses) 76,053
 170,078
 162,684
 370,594
Interest Income and Dividends 70,557
 71,185
 195,275
 253,756
Interest Expense (45,613) (47,506) (134,348) (144,497)
Total Realized Investment Income (Loss) 100,997
 193,757
 223,611
 479,853
Total Distributable Segment Revenues $880,225
 $824,446
 $2,218,703
 $2,061,364



The following table presents our calculationassociated income tax effects of distributable segment expensesall exclusions from Insurance Segment Operating Earnings except for the three and nine months ended September 30, 2017 and 2016.

  Three Months Ended Nine Months Ended
($ in thousands) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Distributable Segment Expenses        
Compensation and Benefits        
Cash Compensation and Benefits $130,621
 $101,967
 $405,578
 $299,756
Performance Income Compensation 177,705
 159,151
 377,689
 322,671
Total Compensation and Benefits 308,326
 261,118
 783,267
 622,427
Occupancy and Related Charges 14,672
 15,877
 42,448
 47,486
Other Operating Expenses 70,517
 55,123
 177,084
 166,542
Total Distributable Segment Expenses $393,515
 $332,118
 $1,002,799
 $836,455
         

The following table presents our calculation of after-tax distributable earnings for the three and nine months ended September 30, 2017 and 2016.

  Three Months Ended Nine Months Ended
($ in thousands except per unit data) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
After-tax Distributable Earnings        
Distributable Segment Revenues $880,225
 $824,446
 $2,218,703
 $2,061,364
Distributable Segment Expenses 393,515
 332,118
 1,002,799
 836,455
Income (Loss) attributable to Noncontrolling Interests 1,046
 760
 3,810
 2,002
Income taxes paid 12,869
 21,869
 54,228
 71,191
Preferred distributions 8,341
 8,201
 25,023
 13,894
After-tax Distributable Earnings $464,454
 $461,498
 $1,132,843
 $1,137,822
         
Per Adjusted Unit Eligible for Distribution $0.57
 $0.57
 $1.39
 $1.41

For a discussion of the components that drove the changes in our after-tax distributable earnings, see discussion ofequity-based compensation expense. Insurance Segment Operating Earnings includes (i) management, monitoring and transaction fees, (ii) realized performance income, (iii) realized gains and net interestlosses not related to asset/liability matching investments strategies, and dividends within(ii) the investment income and (iv)management fee expenses excluding unrealized performance income compensation, within “—Segment Analysis.”

The followingthat are reconciliationsearned by KKR as the investment adviser of the individual componentsGlobal Atlantic insurance companies.
Fee Related Earnings ("FRE")

Fee related earnings is a performance measure used to assess the Asset Management segment’s generation of profits from revenues that are measured and received on a recurring basis and are not dependent on future realization events. KKR believes this measure is useful to stockholders as it provides additional insight into the profitability of KKR’s fee generating asset management and capital markets businesses and other recurring revenue streams. FRE equals (i) Management Fees, including fees paid by the Insurance segment to the Asset Management segment and fees paid by certain insurance co-investment vehicles, (ii) Transaction and Monitoring Fees, Net and (iii) Fee Related Performance Revenues, less (x) Fee Related Compensation, and (y) Other Operating Expenses.

•Fee Related Performance Revenues refers to the realized portion of Incentive Fees from certain AUM that has an indefinite term and for which there is no immediate requirement to return invested capital to investors upon the realization of investments. Fee-related performance revenues consists of performance fees (i) to be received from our investment funds, vehicles and accounts on a recurring basis, and (ii) that are not dependent on a realization event involving investments held by the investment fund, vehicle or account.
•Fee Related Compensation refers to the compensation expense, excluding equity-based compensation, paid from (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, and (iii) Fee Related Performance Revenues.
•Other Operating Expenses represents the sum of (i) occupancy and related charges and (ii) other operating expenses.
Other Terms and Capital Metrics
Adjusted Shares

Adjusted shares represents shares of common stock of KKR & Co. Inc. outstanding under GAAP adjusted to include shares issuable upon exchange of all units of KKR Holdings L.P. and other exchangeable securities and the number of shares of common stock assumed to be issuable upon conversion of the Series C Mandatory Convertible Preferred Stock. Weighted average adjusted shares is used in the calculation of after-tax distributable earnings toAfter-tax Distributable Earnings per Adjusted Share, and Adjusted Shares is used in the most directly comparable GAAP measure.

  Three Months Ended Nine Months Ended
($ in thousands) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
         
Fees and Other $692,877
 $687,056
 $2,340,617
 $1,426,618
Plus: Management fees relating to consolidated funds and placement fees 54,012
 49,017
 153,414
 131,335
Less: Fee credits relating to consolidated funds 106
 417
 3,752
 2,766
Plus: Net realized and unrealized carried interest - consolidated funds 22,341
 5,956
 43,782
 15,581
Plus: Total investment income (loss) 50,095
 330,497
 684,722
 (245,846)
Less: Revenue earned by oil & gas producing entities 12,441
 16,191
 47,096
 47,977
Less: Reimbursable expenses 27,506
 12,064
 87,131
 46,583
Less: Other 9,587
 12,317
 27,035
 29,453
Total Segment Revenues $769,685
 $1,031,537
 $3,057,521
 $1,200,909
Less: Unrealized Carried Interest (59,638) 70,351
 377,707
 (134,756)
Less: Net Unrealized Gains (Losses) (50,902) 136,740
 461,111
 (725,699)
Total Distributable Segment Revenues $880,225
 $824,446
 $2,218,703
 $2,061,364
         


  Three Months Ended Nine Months Ended
($ in thousands) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
         
Total Expenses $530,247
 $511,117
 $1,699,989
 $1,242,658
Less: Equity based compensation 72,250
 61,552
 271,226
 186,032
Less: Reimbursable expenses and placement fees 37,508
 18,255
 132,491
 72,887
Less: Operating expenses relating to consolidated funds, CFEs and other entities 21,858
 20,141
 56,517
 85,093
Less: Expenses incurred by oil & gas producing entities 10,725
 17,782
 34,826
 56,000
Less: Intangible amortization 2,473
 22,112
 13,901
 35,640
Less: Other 11,744
 9,764
 31,067
 19,275
Total Segment Expenses $373,689
 $361,511
 $1,159,961
 $787,731
Less: Unrealized Performance Income Compensation (19,826) 29,393
 157,162
 (48,724)
Total Distributable Segment Expenses $393,515
 $332,118
 $1,002,799
 $836,455
         


calculation of Book Value per Adjusted Share.
Assets Under Management ("AUM")

Assets under management ("AUM") represent the assets managed, advised or advisedsponsored by KKR from which KKR is entitled to receive management fees or a carried interest (either currentlyperformance income (currently or upon deployment of capital)a future event), general partner capital, and assets managed, advised or advisedsponsored by our strategic manager partnershipsBDC partnership and the hedge fund and other managers in which KKR holds a minorityan ownership interest. We believe this measure is useful to unitholdersstockholders as it provides additional insight into the capital raising activities of KKR and its strategic manager partnershipshedge fund and other managers and the overall activity in their investment funds and other managed or sponsored capital. 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;funds and the Global Atlantic insurance companies; (ii) uncalled capital commitments from these funds, including uncalled capital commitments from which KKR is currently not earning management fees or carried interest;performance income; (iii) the fair value of investments in KKR's co-investment vehicles; (iv) the par value of outstanding CLOs (excluding CLOs wholly-owned by KKR);CLOs; (v) KKR's pro-ratapro rata portion of the AUM of strategic manager partnershipshedge fund and other managers in which KKR holds a minorityan ownership interest,interest; (vi) all AUM of KKR's strategic BDC partnership; and (vi)(vii) the fair value of other assets managed or sponsored by KKR. The pro-ratapro rata portion of the
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AUM of strategic manager partnershipshedge fund and other managers is calculated based on KKR’s percentage ownership interest in such entities multiplied by such entity’s respective AUM. KKR's definition of AUM (i) is not based on any definition of AUM that may be set forth in the agreements governing documents of the investment funds, vehicles, accounts or accounts that it manages orother entities whose capital is included in this definition, (ii) includes assets for which KKR does not act as an investment adviser, and (iii) is not calculated pursuant to any regulatory definitions.

Book Value

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 investments and other assets, including carried interest. 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 and to the holders of the Series A and Series B Preferred Units.

Capital Invested

Capital invested is the aggregate amount of capital invested by (i) KKR’s investment funds and Global Atlantic's insurance companies, (ii) KKR's Principal Activities segmentbusiness line as a co-investment, if any, alongside KKR’s investment funds, and (iii) theKKR's Principal Activities segmentbusiness line in connection with a syndication transaction conducted by KKR's Capital Markets segment,business line, if any. Capital invested is used as a measure of investment activity at KKR during a given period. We believe this measure is useful to unitholdersstockholders as it provides a measure of capital deployment across KKR’s business segments.lines. Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable. Capital invested excludes (i) investments in liquidcertain leveraged credit strategies, (ii) capital invested by KKR’s Principal Activities segmentbusiness line that is not a co-investment alongside KKR’s investment funds, and (iii) capital invested by theKKR’s Principal Activities segmentbusiness line that is not invested in connection with a syndication transaction by KKR’s Capital Markets segment.business line. Capital syndicated by ourKKR's Capital Markets segmentbusiness line to third parties other than KKR’s investment funds or Principal Activities segmentbusiness line is not included in capital invested. See also syndicated capital. In the fourth quarter of 2016, the capital invested metric was changed to include capital invested by KKR's Principal Activities segment and all prior periods in this report have been adjusted.


Economic Net Income (Loss) (“ENI”)

Economic net income (loss) 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, incentive fees 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. Pre-tax Economic Net Income (Loss) represents Economic Net Income (Loss) after equity-based compensation. After-tax Economic Net Income (Loss) represents Economic Net Income (Loss) after equity-based compensation, provision for income taxes and preferred distributions.

Fee Paying AUM ("FPAUM")

Fee paying AUM ("FPAUM") represents only the AUM from which KKR receivesis entitled to receive management fees. We believe this measure is useful to unitholdersstockholders as it provides additional insight into the capital base upon which KKR earns management fees. FPAUM is the sum of all of the individual fee bases that are used to calculate KKR's and its strategic manager partnerships'hedge fund and BDC partnership management fees and differs from AUM in the following respects: (i) assets and commitments from which KKR doesis not entitled to receive a management fee are excluded (i.e.(e.g., assets and commitments with respect to which it receivesis entitled to receive only carried interestperformance income or is otherwise not currently receivingentitled to receive a management fee) 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.

Uncalled Commitments
Fee Related Earnings ("FRE")

Fee related earnings    Uncalled commitments is a measure of the operating earnings of KKR and its business segments before performance income, related performance income compensation and investment income. KKR believes this measure may be useful to unitholders as it provides additional insight into the operating profitability of KKR's fee generating management companies and capital markets businesses.

Outstanding Adjusted Units

Outstanding adjusted units represents the portion of total adjusted units that would receive assets of KKR if it were to be liquidated as of a particular date. Outstanding adjusted units is used to calculate book value per outstanding adjusted unit, which we believe is useful to unitholders as it provides a measure of net assets of KKR’s reportable segments on a per unit basis.

Syndicated Capital

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

Uncalled Commitments

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 unitholdersstockholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and carry paying co-investment vehicles to make future investments. Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements.arrangements or investments we have committed to make but remain unfunded at the reporting date.


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A reconciliation
Table of Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders on a GAAP basis to ENI, FRE and After-tax Distributable Earnings is provided below. For a discussion of the components that drove the changes in our FRE, see discussion of (i) management, monitoring and transaction fees, and (ii) expenses of our Private Markets, Public Markets and Capital Markets segments excluding unrealized performance income compensation, in “—Segment Analysis.”Contents

  Three Months Ended Nine Months Ended
($ in thousands) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $153,563
 $352,152
 $818,552
 $116,103
Plus: Preferred Distributions 8,341
 8,201
 25,023
 13,894
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. 115,434
 284,834
 637,146
 86,659
Plus: Non-cash equity-based charges 78,728
 61,552
 277,704
 186,032
Plus: Amortization of intangibles, placement fees and other, net 20,464
 (48,299) 57,825
 (10,273)
Plus: Income tax (benefit) 18,420
 10,826
 77,500
 18,761
Economic Net Income (Loss) 394,950
 669,266
 1,893,750
 411,176
Plus: Income attributable to segment noncontrolling interests 1,046
 760
 3,810
 2,002
Less: Total investment income (loss) 50,095
 330,497
 684,722
 (245,846)
Less: Net performance income (loss) 205,995
 235,935
 741,550
 354,226
Plus: Expenses of Principal Activities Segment 51,974
 38,659
 156,938
 116,214
Fee Related Earnings 191,880
 142,253
 628,226
 421,012
Plus: Net interest and dividends 24,944
 23,679
 60,927
 109,259
Less: Expenses of Principal Activities Segment 51,974
 38,659
 156,938
 116,214
Plus: Realized performance income (loss), net 245,807
 194,977
 521,005
 440,258
Plus: Net realized gains (losses) 76,053
 170,078
 162,684
 370,594
Less: Income taxes paid 12,869
 21,869
 54,228
 71,191
Less: Preferred distributions 8,341
 8,201
 25,023
 13,894
Less: Income attributable to segment noncontrolling interests 1,046
 760
 3,810
 2,002
After-tax Distributable Earnings $464,454
 $461,498
 $1,132,843
 $1,137,822
         


Unaudited Condensed Consolidated Results of Operations (GAAP Basis - Unaudited)
 
The following is a discussion of our condensed consolidated results of operations for the three and nine months ended September 30, 2017March 31, 2022 and 2016.2021. You should read this discussion in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report. For a more detailed discussion of the factors that affected theour segment results of operations of our four business segments in these periods, see “—"—Analysis of Segment Analysis.”Operating Results." See "—Business Environment" for more information about factors that may impact our business, financial performance, operating results and valuations.


Three monthsThe presentation of our consolidated results of operations that follows reflects the significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance business, and KKR operates an asset management business, each of which possess distinct characteristics. As a result, KKR developed a two-tiered presentation approach, where Global Atlantic's insurance business is presented separately from KKR's asset management business. Additionally, for the quarter ended September 30, 2017 compared to three months ended September 30, 2016March 31, 2021 the results of Global Atlantic's insurance operations included in our consolidated results of operations are from February 1, 2021 (closing date of the acquisition) through March 31, 2021.

 Three Months Ended
 March 31, 2022March 31, 2021Change
 ($ in thousands)
Revenues  
Asset Management
Fees and Other$780,511 $493,311 $287,200 
Capital Allocation-Based Income (Loss)(945,743)2,684,647 (3,630,390)
(165,232)3,177,958 (3,343,190)
Insurance
Net Premiums372,144 1,176,142 (803,998)
Policy Fees318,436 201,683 116,753 
Net Investment Income812,605 444,781 367,824 
Net Investment-Related Gains (Losses)(368,680)(455,702)87,022 
Other Income34,744 18,144 16,600 
1,169,249 1,385,048 (215,799)
Total Revenues1,004,017 4,563,006 (3,558,989)
Expenses
Asset Management
Compensation and Benefits283,672 1,306,797 (1,023,125)
Occupancy and Related Charges18,149 15,200 2,949 
General, Administrative and Other234,665 166,997 67,668 
536,486 1,488,994 (952,508)
Insurance
Policy Benefits and Claims726,060 1,485,318 (759,258)
Amortization of Policy Acquisition Costs(7,733)(20,478)12,745 
Interest Expense13,219 10,672 2,547 
Insurance Expenses116,743 52,084 64,659 
General, Administrative and Other167,214 79,955 87,259 
1,015,503 1,607,551 (592,048)
Total Expenses1,551,989 3,096,545 (1,544,556)
Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities914,261 2,696,200 (1,781,939)
Dividend Income662,350 75,746 586,604 
Interest Income352,556 367,455 (14,899)
Interest Expense(281,759)(251,756)(30,003)
Total Investment Income (Loss)1,647,408 2,887,645 (1,240,237)
Income (Loss) Before Taxes1,099,436 4,354,106 (3,254,670)
Income Tax Expense (Benefit)(3,166)438,739 (441,905)
119
 Three Months Ended
 September 30, 2017 September 30, 2016 Change
 ($ in thousands)
Revenues 
  
  
Fees and Other$692,877
 $687,056
 $5,821
      
Expenses 
  
  
Compensation and Benefits368,513
 358,161
 10,352
Occupancy and Related Charges15,267
 16,405
 (1,138)
General, Administrative and Other146,467
 136,551
 9,916
Total Expenses530,247
 511,117
 19,130
      
Investment Income (Loss) 
  
  
Net Gains (Losses) from Investment Activities108,779
 735,144
 (626,365)
Dividend Income20,774
 73,105
 (52,331)
Interest Income317,134
 256,505
 60,629
Interest Expense(211,959) (255,105) 43,146
Total Investment Income (Loss)234,728
 809,649
 (574,921)
      
Income (Loss) Before Taxes397,358
 985,588
 (588,230)
      
Income Taxes18,420
 10,826
 7,594
      
Net Income (Loss)378,938
 974,762
 (595,824)
      
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests20,876
 3,121
 17,755
Net Income (Loss) Attributable to Noncontrolling Interests196,158
 611,288
 (415,130)
      
Net Income (Loss) Attributable to KKR & Co. L.P.161,904
 360,353
 (198,449)
      
Less: Net Income Attributable to Series A Preferred Unitholders5,822
 5,822
 —
Less: Net Income Attributable to Series B Preferred Unitholders2,519
 2,379
 140
      
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders$153,563
 $352,152
 $(198,589)
Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Net Income (Loss)1,102,602 3,915,367 (2,812,765)
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests(63)— (63)
Net Income (Loss) Attributable to Noncontrolling Interests1,159,185 2,245,531 (1,086,346)
Net Income (Loss) Attributable to KKR & Co. Inc.(56,520)1,669,836 (1,726,356)
Series A Preferred Stock Dividends— 5,822 (5,822)
Series B Preferred Stock Dividends— 2,519 (2,519)
Series C Mandatory Convertible Preferred Stock Dividends17,250 17,250 — 
Net Income (Loss) Attributable to KKR & Co. Inc.
Common Stockholders		$(73,770)$1,644,245 $(1,718,015)





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Fees and Other

Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Asset Management
Revenues

For the three months ended September 30, 2017March 31, 2022 and 2016, fees and other2021, revenues consisted of the following:


 Three Months Ended
 March 31, 2022March 31, 2021Change
($ in thousands)
Management Fees$398,046 $276,181 $121,865 
Fee Credits(187,745)(35,398)(152,347)
Transaction Fees466,966 165,893 301,073 
Monitoring Fees39,400 35,388 4,012 
Incentive Fees7,057 3,438 3,619 
Expense Reimbursements41,303 27,729 13,574 
Consulting Fees15,484 20,080 (4,596)
Total Fees and Other780,511 493,311 287,200 
Carried Interest(783,688)2,140,426 (2,924,114)
General Partner Capital Interest(162,055)544,221 (706,276)
Total Capital Allocation-Based Income (Loss)(945,743)2,684,647 (3,630,390)
Total Revenues - Asset Management$(165,232)$3,177,958 $(3,343,190)
  Three Months Ended
  September 30, 2017 September 30, 2016 Change
Management Fees $178,942
 $152,491
 $26,451
Transaction Fees 181,280
 113,056
 68,224
Monitoring Fees 41,848
 23,367
 18,481
Fee Credits (70,641) (46,975) (23,666)
Carried Interest 337,459
 414,864
 (77,405)
Incentive Fees 2,519
 3,800
 (1,281)
Oil and Gas Revenue 12,441
 16,191
 (3,750)
Consulting Fees 9,029
 10,262
 (1,233)
Total Fees and Other $692,877
 $687,056
 $5,821


Fees and Other


Management fees, transaction fees, monitoring feesTotal Fees and fee credits all increased inOther for the three months ended September 30, 2017March 31, 2022 increased compared to the three months ended September 30, 2016. March 31, 2021 primarily as a result of the increase in transaction fees and management fees.

For a more detailed discussion of the factors that affected our management fees, transaction fees monitoring fees and fee credits during the period, see “—"—Analysis of Asset Management Segment Analysis.”Operating Earnings."


The increase in management fees was primarily due to management fees earned from North America Fund XIII, Global Infrastructure Investors IV, and Health Care Strategic Growth Fund II, each of which entered its investment period in the second quarter of 2021. These increases were partially offset primarily by a decrease in carried interestmanagement fees earned during the three months ended September 30, 2017 was due primarily to an overall lower levelfrom Americas Fund XII as a result of appreciationentering its post-investment period in the valuesecond quarter of our private equity portfolio as compared2021, which now earns fees based on capital invested rather than capital committed and at a lower fee rate.

Management fees due from consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are funded by, and earned from, noncontrolling interests, KKR's allocated share of the net income from the consolidated investment funds and other vehicles is increased by the amount of fees that are eliminated. Accordingly, the elimination of these fees does not impact the net income (loss) attributable to the prior period.KKR or KKR stockholders' equity. For a more detailed discussion ofon the factors that affectedaffect our management fees during the period including the fees earned from unconsolidated investment funds and other vehicles see "—Analysis of Asset Management Segment Operating Earnings."

Fee credits increased compared to the prior period as a result of a higher level of transaction fees in our Private Markets and Public Markets carried interest duringbusiness lines. Fee credits owed to consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are owed to noncontrolling interests, KKR's allocated share of the period, see “—Segment Analysis -- Private Markets -- Segment Revenues -- Performance Income”net income from the consolidated investment funds and “—Segment Analysis -- Public Markets -- Segment Revenues -- Performance Income.”

Compensation and Benefits Expenses

The increase was primarily due to increased cash compensation and benefits as compared toother vehicles is decreased by the prior period as well as increased equity-based compensation relatingamount of fee credits that are eliminated. Accordingly, the elimination of these fee credits does not impact the net income (loss) attributable to KKR Holdings Units. Partially offsetting this increase wasor KKR stockholders' equity.

121
Transaction and monitoring fees are earned from KKR portfolio companies and are not eliminated upon consolidation because these fees are earned from companies which are not consolidated. Furthermore, transaction fees earned in our Capital Markets business line are not shared with fund investors. Accordingly, certain transaction fees are reflected in revenues without a decrease in carry pool allocations reflecting a lower level of appreciation in the value of our private equity portfolio duringcorresponding fee credit.

Capital Allocation-Based Income (Loss)

Capital Allocation-Based Income (Loss) for the three months ended September 30, 2017 comparedMarch 31,2022 was negative primarily due to net depreciation of the underlying investments at certain of our carry earning investment funds, most notably Americas Fund XII and Asian Fund II. Capital Allocation-Based Income (Loss) for the three months ended September 30, 2016.

General Administrative and Other Expenses

The increaseMarch 31, 2021 was primarilypositive due to the net appreciation of the underlying investments at our carry earning investment funds, most notably Americas Fund XII, North America Fund XI and 2006 Fund.

KKR generally calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (a) positive performance resulting in an increase in (i) expensesthe carried interest allocated to the general partner or (b) negative performance that are creditablewould cause the amount due to our investment funds and (ii) professional fees and other expenses incurred asKKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner. In each case, it is necessary to calculate the carried interest on cumulative results compared to the prior period. These increases were partially offset by (i)carried interest recorded to date and to make the write offrequired positive or negative adjustments. Additionally, unrealized carried interest and general partner capital interest reverse upon a realization, and unrealized carried interest and general partner capital interest can be negative if the amount of intangible assets duringrealized carried interest exceeds total unrealized carried interest generated in the three months ended September 30, 2016 in connection with the termination of management contracts for certain credit funds that were wound down while no such charge was incurred during the current period and (ii) a decrease in depreciation, depletion and amortization of our consolidated oil and gas producing entities primarily caused by a lower cost basis due to previously recorded impairments, resulting in a lower unit of production depletion rate compared to the prior period.



Investment Income (Loss) - Asset Management

Net Gains (Losses) from Investment Activities


The following is a summary ofFor additional information about net gains (losses) from investment activities:activities, see Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" in our financial statements.

 Three Months Ended
September 30,
 2017 2016
 ($ in thousands)
Private Equity Investments$151,782
 $209,855
Credit & Other Investments(11,064) (6,689)
Investments of Consolidated CFE's(39,892) 21,352
Real Assets Investments80,696
 99,503
Debt Obligations20,959
 174,625
Other Net Gains (Losses) from Investment Activities(93,702) 236,498
Net Gains (Losses) from Investment Activities$108,779
 $735,144
    

Net Gains (Losses) from Investment Activities for the three months ended March 31, 2022
The net gains from investment activities for the three months ended September 30, 2017March 31, 2022 were comprised of net realized gains of $279.6 million and net unrealized gains of $156.2 million$634.6 million.
Investment gains and net realized losses relating to our general partner capital interest in our unconsolidated funds are not reflected in our discussion and analysis of $(47.4) million. Net Gains (Losses) from Investment Activities. Our economics associated with these gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
Realized Gains and Losses from Investment Activities
For the three months ended September 30, 2017,March 31, 2022, net realized gains related primarily to the sales of our investments in Fiserv Inc. (NASDAQ: FISV) and Söderberg & Partners (financial services sector). Partially offsetting these realized gains were realized losses primarily relating to a real estate equity investment in one of our consolidated US real estate funds and certain investments held in our consolidated SIG funds.
Unrealized Gains and Losses from Investment Activities
For the three months ended March 31, 2022, net unrealized gains were driven primarily by (i) mark-to-market gains in certain consolidated entities, the most significant of which were unrealized gains in The Hut Group (retail sector) andfrom (i) Crescent Energy Company (NYSE: CRGY), (ii) the reversal of previously recognized unrealized losses relating to the sale of investments held by consolidated CLOs. Partially offsetting these unrealized gains were unrealized losses, the most significant of which were unrealized losses relating to (i) the reversal of unrealized gains on the partial sale of First Data Corporation (NYSE: FDC), PRA Health Sciences, Inc. (NASDAQ: PRAH) and US Foods Holding Corp. (NYSE: USFD)Viridor Limited (infrastructure), and (ii) losses on alternative credit assets(iii) investments held in our consolidated special situations funds and held directlyreal estate equity funds. These unrealized gains were partially offset by KKR. For the three months ended September 30, 2017, net realizedmark-to-market losses were comprised primarily of realized losses onrelated to (i) the sale ofcertain investments held byin our consolidated CLOs and SIG funds, (ii) losses on alternative credit assets in our consolidated special situations fundsOutSystems Holdings S.A (technology sector) and other consolidated credit funds. Partially offsetting these realized losses were realized gains, the most significant of which were realized gains on the partial sale of PRA Health Sciences,(iii) BridgeBio Pharma, Inc., First Data Corporation and US Foods Holding Corp. (NASDAQ: BBIO).
For a discussion of other factors that affected KKR's realized investment income for the three months ended March 31, 2022, see "--Segment Analysis."—Analysis of Asset Management Segment Operating Results."

122
Net Gains (Losses) from Investment Activities for the three months ended March 31, 2021
The net gains from investment activities for the three months ended September 30, 2016March 31, 2021 were comprised of net realized gains of $288.6$584.4 million and net unrealized gains of $446.5$2,111.8 million.
Realized Gains and Losses from Investment Activities
For the three months ended September 30, 2016,March 31, 2021, net realized gains were comprisedrelated primarily to the (i) sale of the net impactour investment in Flutter Entertainment PLC (LON: FLTR), (ii) partial sale of (i)our investment in BridgeBio Pharma, Inc., and (iii) sale of our investment in American Equity Investment Life Holding Company (NYSE: AEL). Partially offsetting these realized gains on sales of private equitywere realized losses primarily relating to certain investments held directly by KKR, including the partial sales of Walgreens Boots Alliance, Inc. (NASDAQ: WBA)in our consolidated special situations funds.

Unrealized Gains and Zimmer Biomet Holdings, Inc. (NYSE: ZBH) and (ii) realized gains on debt held at consolidated CLOs. Losses from Investment Activities
For the three months ended September 30, 2016,March 31, 2021, net unrealized gains were driven primarily by (i) mark-to-market gains in ourfrom private equity, portfoliogrowth equity and core investments held directly by KKR and certain consolidated funds, the most significant of which includes unrealized gains in First Data Corporationwere OutSystems Holdings S.A, PetVet Care Centers, LLC (healthcare sector), and USI, Inc. (financial services sector) and (ii) mark-to-market gains in assetsfor certain investments held in our consolidated energy funds, special situations funds and real assets funds.CLOs. These unrealized gains arewere partially offset by (i) mark-to-market losses from our investment in BridgeBio Pharma, Inc. and (ii) the reversal of previously recognized unrealized gains onrelating to the partial salesrealization activity described above.

For a discussion of Walgreens Boots Alliance, Inc. and Zimmer Biomet Holdings, Inc.

other factors that affected KKR's realized investment income for the three months ended March 31, 2022, see "—Analysis of Asset Management Segment Operating Results."
Dividend Income
 
During the three months ended September 30, 2017,March 31, 2022, the most significant dividends received included $6.7approximately $299.0 million from real estate, credit and other investments held directly by KKR, $5.4 million from KFN, and $4.8 million fromin our consolidated real estate funds.core plus and opportunistic equity funds and $86.6 million from our investment in Exact Group B.V. (technology sector) held in our consolidated core vehicles. During the three months ended September 30, 2016,March 31, 2021, the most significant dividends received included $36.5$26.6 million from our consolidated special situations funds, $17.8 million from credit and real estate investments held directly by KKR and $10.4 million fromin our consolidated real estate funds. funds and a dividend of $17.7 million from our investment in US Foods Holding Corp. (NYSE: USFD), which is held by a consolidated fund.

Significant dividends from portfolio companies and consolidated funds are generally not recurring quarterly dividends, and while they may occur in the future, their size and frequency are variable. For a discussion of other factors that affected KKR's dividend income, see "--Segment Analysis."—Analysis of Asset Management Segment Operating Results."


Interest Income
 
The increasedecrease in interest income during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the deconsolidation of KKR Real Estate Finance Trust Inc. (NYSE: KREF) ("KREF") in the fourth quarter of 2021, partial offset by (i) the impact of closing additional CLOs that are consolidated subsequent to March 31, 2021 and (ii) a higher level of interest earnedincome from investments held in certain of our consolidated alternative credit funds, primarily related to (i) an increase in the amount of investments held by KKR Real Estate Finance Trust Inc., our real estate investment trust or REIT, compared to the prior period, (ii) an increase in the amount of investments held at our India debt financing company, (iii) an increase in the amount of investments in our consolidated special situations funds and (iv) the impact of the consolidation of three additional CLOs subsequent to the three months ended September 30, 2016. These increases were partially offset by a decrease in interest

income at KFN primarily due to a smaller portfolio generating recurring income.capital deployed. For a discussion of other factors that affected KKR's interest income, see "--Segment Analysis."—Analysis of Asset Management Segment Operating Results."


Interest Expense
 
The decreaseincrease in interest expense was primarily due to interest expense associated with certain notes issued by consolidated CLOs during the three months ended September 30, 2016 being called for redemption. Third party CLO subordinated note holders receive the residual interest after all other payments have been made and as a result of a paydown made in August 2016, KKR recorded interest expense of $59.9 million and an incremental $8.7 million of accelerated accretion of debt discounts during the three months ended September 30, 2016. This decrease was partially offset by an increase in interest expense primarily due to (i) increased borrowings at our India debt financing company and (ii) the impact of the consolidation of three additional CLOs subsequentMarch 31, 2022 compared to the three months ended September 30, 2016.March 31, 2021 was primarily due to the (i) increase in the amount of borrowings outstanding from consolidated funds and other vehicles, (ii) impact of closing additional CLOs that are consolidated subsequent to March 31, 2021, and (iii) the impact of issuances of our senior notes subsequent to March 31, 2021. Partially offsetting these increases was the deconsolidation of KREF in the fourth quarter of 2021. For a discussion of other factors that affected KKR's interest expense, see "--Segment Analysis."—Analysis of Non-GAAP Performance Measures."
 
Income (Loss) Before Taxes



123
Expenses - Asset Management

Compensation and Benefits Expense

The decrease in income (loss) before taxes was due primarily to a lower level of net gains from investment activities as described above.

Income Taxes

The increase in income taxes is due primarily to a higherlevel of fees earned by our management companiescompensation and capital markets companies, partially offset by a lower level of carried interest gains accrued by certain general partner entities subject to corporate income taxbenefits expense during the three months ended September 30, 2017March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the reversal of previously recognized accrued carried interest compensation, partially offset by (i) higher equity-based compensation charges and (ii) a higher level of discretionary cash compensation accrued resulting from a higher level of fee revenue and realized performance income in the current period.

General, Administrative and Other

The increase in general, administrative and other expenses during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to a higher level of (i) expenses at our consolidated funds and investment vehicles, (ii) strategic corporate transaction-related charges, (iii) expenses reimbursable by our investment funds, (iv) placement fees incurred related to capital raising activities for various private markets funds and (v) professional fees, information technology and other administrative costs in connection with the overall growth of the firm.

124
Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Insurance

As discussed above, our Insurance segment consists solely of the operations of Global Atlantic, which was acquired on February 1, 2021. Accordingly, prior periods have been excluded for Insurance segment results. For the three month period ended March 31, 2021, the results of Global Atlantic's insurance operations included in our condensed consolidated results of operations are from February 1, 2021 through March 31, 2021.

Revenues

For the three months ended March 31, 2022, revenues consisted of the following:

 Three Months Ended
 March 31, 2022March 31, 2021Change
($ in thousands)
Net Premiums$372,144 $1,176,142 $(803,998)
Policy Fees318,436 201,683 116,753 
Net Investment Income812,605 444,781 367,824 
Net Investment-Related Losses(368,680)(455,702)87,022 
Other Income34,744 18,144 16,600 
Total Insurance Revenues$1,169,249 $1,385,048 $(215,799)

Net Premiums
Net premiums decreased for the three months ended March 31, 2022 as compared to the prior period primarily due to lower initial premiums related to fewer new reinsurance transactions with life contingencies assumed in the three months ended March 31, 2022 as compared to the prior period. These initial premiums are offset by a comparable increase in policy reserves reported within policy benefits and claims (as discussed below).

Policy fees
Policy fees increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the acquisition of Global Atlantic by KKR (the “GA Acquisition”) on February 1, 2021.
Net investment income
Net investment income increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021 and (ii) increased average assets under management due to growth in our Institutional segment assets as a result of new reinsurance transactions and Individual sales.
125
Net investment-related losses
The components of net investment-related losses were as follows:

 Three Months Ended
 March 31, 2022March 31, 2021Change
($ in thousands)
Equity index options$(223,366)$104,021 $(327,387)
Funds withheld payable at interest embedded derivatives1,180,435 313,230 867,205 
Funds withheld receivable embedded derivatives(33,980)55,883 (89,863)
Equity future contracts79,796 (69,583)149,379 
Interest rate contracts(150,176)(266,731)116,555 
Foreign currency forwards8,557 1,810 6,747 
Credit risk contracts(1,532)(36)(1,496)
Other— 9,938 (9,938)
Net gains on derivative instruments859,734 148,532 711,202 
Net other investment gains (losses)(1,228,414)(604,234)(624,180)
Net investment-related gains (losses)$(368,680)$(455,702)$87,022 

Net losses on derivative instruments
The increase in the fair value of embedded derivatives on funds withheld at interest payable was primarily driven by the change in fair value of the underlying investments in the funds withheld payable at interest portfolio, which is primarily comprised of fixed maturity securities (designated as trading for accounting purposes).
The increase in the fair value of equity futures and interest rate contracts were driven primarily by the performance of equity markets and interest rates. Global Atlantic purchases equity futures primarily to hedge the market risk in our variable annuity products which are accounted for in policy benefits and claims. The majority of Global Atlantic's equity futures are based on the S&P 500 Index, which decreased during the three months ended March 31, 2022, as compared to an increase during the three months ended March 31, 2021, resulting in respectively, a gain, and a loss, on equity futures contracts in the respective periods. Market interest rates increased during both the three months ended March 31, 2022 and the three months ended March 31, 2021, resulting in a loss on interest rate contracts.
The decrease in the fair value of equity index options was primarily driven by the performance of the indexes upon which call options are based. Global Atlantic purchases equity index options to hedge the market risk of embedded derivatives in indexed universal life and fixed-indexed annuity products (the change in which is accounted for in policy benefits and claims). The majority of Global Atlantic's equity index call options are based on the S&P 500 index, which decreased during the three months ended March 31, 2022, as compared to the increase during the three months ended March 31, 2021.
The decrease in the fair value of embedded derivatives on funds withheld at interest receivable was primarily due to widening of credit spreads during the three months ended March 31, 2022, as compared to the tightening of credit spreads during three months ended March 31, 2021.
126
Net other investment losses
The components of net other investment losses were as follows:
 Three Months Ended
 March 31, 2022March 31, 2021Change
($ in thousands)
Realized gains (losses) on investments not supporting asset-liability matching strategies$14,964 $— $14,964 
Realized gains (losses) on equity investments— 2,243 (2,243)
Realized gains (losses) on available-for-sale fixed maturity debt securities(243,350)(45,640)(197,710)
Credit loss allowances(29,897)(219,601)189,704 
Unrealized gains (losses) on fixed maturity securities classified as trading(1,038,446)(317,052)(721,394)
Unrealized gains (losses) on investments classified as trading or accounted under a fair-value option(2,493)(12,166)9,673 
Unrealized gains (losses) on real estate investments recognized at fair value under investment company accounting77,692 — 77,692 
Realized gains (losses) on funds withheld at interest payable portfolio(26,387)(7,378)(19,009)
Realized gains (losses) on funds withheld at interest receivable portfolio25,600 354 25,246 
Other(6,097)(4,994)(1,103)
Net other investment gains (losses)$(1,228,414)$(604,234)$(624,180)
The increase in net other investment losses were due to (i) the increase in unrealized losses on fixed maturity securities classified as trading is primarily driven by an increase in interest rates and widening credit spreads in the current period, and (ii) the increase in realized losses on available-for-sale fixed maturity debt securities is primarily due to portfolio rotations in a higher interest rate environment.
Offsetting these losses were (i) a higher credit loss allowance on mortgage and other loan receivables in the prior period primarily due to the recognition of an initial credit loan loss allowance upon the adoption of the current expected credit loss accounting standard concurrent with the GA Acquisition, and (ii) unrealized gains on real estate investments recognized at fair value under investment company accounting.
Other income

Other income increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021 and (ii) increased administration, management and distribution fees earned from an increase in the volume of ceded reinsurance.
Expenses

Policy benefits and claims
Policy benefits and claims decreased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) lower initial reserves related to fewer new reinsurance transactions with life contingencies in the three months ended March 31, 2022 as compared to the prior period, and (ii) a decrease in the value of embedded derivatives in our indexed universal life and fixed indexed annuity products, as a result of lower equity market returns (as discussed above under "–Net investment-related losses–Gains on derivatives," Global Atlantic purchases equity index options in order to hedge this risk, the fair value changes of which are accounted for in gains on derivative instruments, and generally offsetting the change in embedded derivative fair value reported in policy benefits and claims). This decrease was offset by (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) an increase in net flows from both individual and institutional channel sales, and (iii) an increase in variable annuity reserves primarily due to lower equity market returns.
127
Amortization of policy acquisition costs
Amortization of policy acquisition costs increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) a decrease in the net benefit (that is, a reduction to expense) from the amortization of the net negative insurance intangibles recognized as part of purchase accounting of the GA Acquisition, as the underlying business runs off, and (ii) growth in our individual markets channel. Offsetting these increases in expense was (i) a decrease of amortization due to realized investment losses and (ii) the impact of one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021.
Interest expense
Interest expense increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) a net increase in debt outstanding due to the issuance of new senior and subordinated notes, partially offset by the pay-down of other debt and (ii) the impact of one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021.
Insurance expenses
Insurance expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased commission expense related to increased sales in our individual market and increased reinsurance transactions and (iii) increased reinsurance ceding expense allowances paid for policy administration services as a result of an increase in reinsurance transactions.
General, administrative and other
General, administrative and other expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased employee compensation and benefits-related expenses, (iii) increased professional service fees, (iv) increased third-party administrator ("TPA") policy servicing fees, all due to growth of the business, and (v) travel returning to pre-pandemic levels.
128
Other Condensed Consolidated Results of Operations (GAAP Basis - Unaudited)
Income Tax Expense (Benefit)

For the three months ended March 31, 2022, income tax benefit was $3.2 million compared to an income tax expense of $438.7 million in the prior period. In the current period, a deferred tax benefit was generated primarily due to a net operating loss driven by net capital allocation-based losses. Our effective tax rate under GAAP for the three months ended March 31, 2022 was (0.3)%. For a discussion of factors that impacted KKR's tax provision, see Note 18 "Income Taxes" to the financial statements included elsewhere in this report. The amount of U.S. corporate income taxes we pay in future periods may be materially increased if adverse tax laws become enacted. See “—Business Environment— Economic and Market Conditions” in this report.

Net Income (Loss) Attributable to Noncontrolling Interests
 
Net incomeIncome (Loss) attributable to noncontrolling interests for the three months ended September 30, 2017March 31, 2022 relates primarily to net income (loss) attributable to (i) interests of KKR Holdings L.P.and other exchangeable securities representing its ownership interests in the KKR Group Partnerships as well as third partyPartnership, (ii) third-party limited partner interests in thoseconsolidated investment funds and (iii) interests that we consolidate. The decrease fromco-investors and rollover investors hold in Global Atlantic. Net income (loss) attributable to noncontrolling interests for the three months ended March 31, 2022 decreased compared to the prior period isprimarily due primarily to (i) a lower level of net income recorded by certaingenerated during the current period allocable to the holders of the noncontrolling interests in our consolidated fund entities that isfunds and (ii) a net loss attributable to third party limited partners as well as lower amounts attributed tointerests of KKR Holdings L.P.and other exchangeable securities in connection with a lower level of income as compared to the priorcurrent period.

Net Income (Loss) Attributable to KKR & Co. L.P.Inc.
 
The decrease    Net Loss attributable to KKR & Co. Inc. for the three months ended September 30, 2017, was due primarily to a lower level of investment and carried interest gains in the current period as compared to the prior period.


Nine months ended September 30, 2017 compared to nine months ended September 30, 2016
 Nine Months Ended
 September 30, 2017 September 30, 2016 Change
 ($ in thousands)
Revenues 
  
  
Fees and Other$2,340,617
 $1,426,618
 $913,999
      
Expenses 
  
  
Compensation and Benefits1,234,317
 780,062
 454,255
Occupancy and Related Charges44,150
 49,159
 (5,009)
General, Administrative and Other421,522
 413,437
 8,085
Total Expenses1,699,989
 1,242,658
 457,331
      
Investment Income (Loss) 
  
  
Net Gains (Losses) from Investment Activities1,085,655
 9,089
 1,076,566
Dividend Income100,144
 167,987
 (67,843)
Interest Income893,832
 753,194
 140,638
Interest Expense(597,403) (607,812) 10,409
Total Investment Income (Loss)1,482,228
 322,458
 1,159,770
      
Income (Loss) Before Taxes2,122,856
 506,418
 1,616,438
      
Income Taxes77,500
 18,761
 58,739
      
Net Income (Loss)2,045,356
 487,657
 1,557,699
      
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests64,196
 4,616
 59,580
Net Income (Loss) Attributable to Noncontrolling Interests1,137,585
 353,044
 784,541
      
Net Income (Loss) Attributable to KKR & Co. L.P.843,575
 129,997
 713,578
      
Less: Net Income Attributable to Series A Preferred Unitholders17,466
 11,515
 5,951
Less: Net Income Attributable to Series B Preferred Unitholders7,557
 2,379
 5,178
      
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders$818,552
 $116,103
 $702,449



Fees and Other

For the nine months ended September 30, 2017 and 2016, fees and other consisted of the following:

  Nine Months Ended
  September 30, 2017 September 30, 2016 Change
Management Fees $517,393
 $468,390
 $49,003
Transaction Fees 581,410
 277,776
 303,634
Monitoring Fees 145,203
 99,388
 45,815
Fee Credits (207,396) (106,506) (100,890)
Carried Interest 1,224,235
 602,695
 621,540
Incentive Fees 3,637
 6,045
 (2,408)
Oil and Gas Revenue 47,096
 47,977
 (881)
Consulting Fees 29,039
 30,853
 (1,814)
Total Fees and Other $2,340,617
 $1,426,618
 $913,999


Management fees, transaction fees, monitoring fees and fee credits all increased in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. For a more detailed discussion of the factors that affected our management fees, transaction fees, monitoring fees and fee credits during the period, see “—Segment Analysis.”

The increase in carried interest gains earned during the nine months ended September 30, 2017 was due primarily to an overall higher level of appreciation in the value of our private equity and credit portfolios. For a more detailed discussion of the factors that affected our Private Markets and Public Markets carried interest during the period, see “—Segment Analysis -- Private Markets -- Segment Revenues -- Performance Income and —Segment Analysis -- Public Markets -- Segment Revenues -- Performance Income."

Compensation and Benefits Expenses

The increaseMarch 31, 2022 was primarily due to (i) net capital allocation-based losses partially offset by a higher level of carry pool allocations reflecting higher appreciation in the value of our private equityfees and credit portfolios, (ii) an increase in cash compensation and benefits and (iii) an increase in equity-based compensation relating to KKR Holdings units during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

General Administrative and Other Expenses

The increase was primarily due to (i) an increase in placement fees incurred in connection with capital raising activity, the most significant of which relates to Asia Fund III and Lending Partners III and (ii) an increase in expenses that are creditable to investment funds. These increases were partially offset by (i) a lower level of financing costs incurred relating to debt at new consolidated CLOs for which the fair value option has been elected, (ii) the write off of intangible assets during the three months ended September 30, 2016 in connection with the termination of management contracts for certain credit funds that were wound down while no such charge was incurred during the current period and (iii) a decrease in depreciation, depletion and amortization of our consolidated oil and gas producing entities primarily caused by a lower cost basis due to previously recorded impairments, resulting in a lower unit of production depletion rate compared to the prior period.


Net Gains (Losses) from Investment Activities

The following is a summary of net gains (losses) from investment activities:
 Nine Months Ended
September 30,
 2017 2016
 ($ in thousands)
Private Equity Investments$574,884
 $(42,037)
Credit & Other Investments107,354
 (389,020)
Investments of Consolidated CFE's(16,725) 307,597
Real Assets Investments199,400
 108,085
Debt Obligations(7,190) (167,566)
Other Net Gains (Losses) from Investment Activities227,932
 192,030
Net Gains (Losses) from Investment Activities$1,085,655
 $9,089
    

The net gains from investment activities for the nine months ended September 30, 2017 were comprised of net unrealized gains of $1,088.3 million and net realized losses of $(2.7) million. For the nine months ended September 30, 2017, net unrealized gains were driven primarily by (i) mark-to-market gains in our private equity portfolio held directly by KKR, the most significant of which were unrealized gains in First Data Corporation, (ii) mark-to-market gains in certain consolidated entities, the most significant of which were unrealized gains in The Hut Group, (iii) mark-to-market gains on alternative credit assets in our consolidated special situations funds and KFN and (iv) mark-market gains and the reversal of unrealized losses on the sale of investments in our consolidated energy funds and infrastructure portfolios held directly by KKR. Offsetting these unrealized gains were unrealized losses, the most significant of which were unrealized losses relating to (i) the reversal of unrealized gains on the final sales of Galenica AG (VTX: GALN) and HCA Holdings, Inc. (NYSE: HCA) and the partial sale of US Foods Holding Corp. For the nine months ended September 30, 2017, realized losses were comprised primarily of realized losses related to (i) the sale of investments in our energy portfolio held directly by KKR, (ii) alternative credit assets in our consolidated special situations funds and (iii) the sale of investments held by our consolidated CLOs. Partially offsetting these realized losses were realized gains on sales of private equity investments held directly by KKR, including the final sale of Galenica AG and HCA Holdings, Inc. and partial sales of First Data Corporation and US Foods Holding Corp. For a discussion of other factors that affected KKR's investment income, see "--Segment Analysis."

The net gains from investment activities for the nine months ended September 30, 2016 were comprised of net realized gains of $354.1 million and net unrealized losses of $(345.0) million. For the nine months ended September 30, 2016, net realized gains were comprised primarily of the net impact of (i) realized gains on sales of private equity investments held directly by KKR, including the partial sales of Walgreens Boots Alliance, Inc., Zimmer Biomet Holdings, Inc. and HCA Holdings, Inc., (ii) realized losses on assets held at consolidated CLOs and (iii) realized gains on debt held at consolidated CLOs. For the nine months ended September 30, 2016, net unrealized losses were driven primarily by (i) mark-to-market losses in our private equity portfolio held directly by KKR including unrealized losses in First Data Corporation, (ii) mark-to-market losses on assets in our consolidated special situations funds, (iii) mark-to-market losses on debt held through consolidated CMBS and (iv) the reversal of unrealized gains on the partial sales of Walgreens Boots Alliance, Inc., Zimmer Biomet Holdings, Inc. and HCA Holdings, Inc., as well as the reversal of unrealized gains on debt realizations at our consolidated CLOs. Partially offsetting these unrealized losses were unrealized gains, the most significant of which were unrealized gains relating to investments held through consolidated CMBS structures and reversals of unrealized losses on asset realizations in our consolidated CLOs.

Dividend Income
During the nine months ended September 30, 2017, the most significant dividends received included $45.5 million from our consolidated special situations funds, $18.1 million from investments across multiple strategies held directly by KKR, $16.0 million from our consolidated real estate funds and $11.1 million from KFN. During the nine months ended September 30, 2016, the most significant dividends received included $49.0 million from our consolidated special situations funds and dividends from US Foods Holding Corp. of $23.4 million, Sedgwick Claims Management Services (financial services sector) of $12.7 million and PRA Health Sciences, Inc. of $4.1 million. Significant dividends from portfolio companies are generally not recurring quarterly dividends, and while they may occur in the future, their size and frequency are variable. For a discussion of other factors that affected KKR's dividend income, see "--Segment Analysis."


Interest Income
The increase in interest income was primarily due to a higher level of interest earned related to (i) an increase in the amount of investments held by our REIT compared to the prior period, (ii) an increase in the amount of investments held at our India debt financing company, (iii) an increase in the amount of investments in our consolidated special situations funds and (iv) the impact of the consolidation of three additional CLOs subsequent to the nine months ended September 30, 2016. These increases were partially offset by a decrease in interest income at KFN associated with the paydown of CLO 2007-1 in the second quarter of 2016. For a discussion of other factors that affected KKR's interest income, see "--Segment Analysis."
Interest Expense
The decrease in interest expense was primarily due to lower interest expense associated with certain notes issued by consolidated CLOs during the three months ended September 30, 2016 being called for redemption. Third party CLO subordinated note holders receive the residual interest after all other payments have been made and as a result of a paydown made in August 2016, KKR recorded interest expense of $59.9 million and an incremental $8.7 million of accelerated accretion of debt discounts during the three months ended September 30, 2016. The paydown of CLO 2007-1 in the second quarter of 2016 also contributed to the decrease. These decreases were partially offset by an increase in interest expense associated with (i) increased CMBS issuances by our REIT, (ii) increased borrowings at our India debt financing company and (iii) the impact of the consolidation of three additional CLOs subsequent to the nine months ended September 30, 2016. For a discussion of other factors that affected KKR's interest expense, see "--Segment Analysis."
Income (Loss) Before Taxes
The increase in income (loss) before taxes was due primarily to higherpreviously recognized accrued carried interest gains accrued in our private equity and credit portfolios and higher net gains from investment activities, partially offset by an increase in expenses, in each casecompensation as described above.

129
Income Taxes

The increase in income taxes is due primarily to a higherlevel of fees earned by our management companies and capital markets companies and carried interest gains accrued by certain general partner entities subject to corporate income tax during the nine months ended September 30, 2017 compared to the prior period.

Net Income (Loss) Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests for the nine months ended September 30, 2017 relates primarily to net income attributable to KKR Holdings L.P. representing its ownership interests in the KKR Group Partnerships as well as third party limited partner interests in those investment funds that we consolidate. The increase from the prior period is due primarily to a higher level of income recorded by certain consolidated fund entities that is attributable to third party limited partners as well as higher amounts attributed to KKR Holdings L.P. in connection with higher income recognized for the nine months ended September 30, 2017 as compared to the prior period.
Net Income (Loss) Attributable to KKR & Co. L.P.
The increase in Net income attributable to KKR & Co. L.P. was primarily due to higher carried interest gains and higher net investment gains from investment activities in the current period as compared to the prior period and to a lesser extent, increased fee income.

Condensed Consolidated Statements of Financial Condition (GAAP Basis - Unaudited)


The following table provides the condensed consolidated statementsCondensed Consolidated Statements of financial conditionFinancial Condition on a GAAP Basisbasis as of September 30, 2017March 31, 2022 and December 31, 2016.2021.
(Amounts in thousands, except per share amounts)
As ofAs of
March 31, 2022December 31, 2021
Assets
Asset Management
Cash and Cash Equivalents$8,324,897 $6,699,668 
Investments88,770,480 88,775,514 
Other Assets3,789,249 4,244,894 
100,884,626 99,720,076 
Insurance
Cash and Cash Equivalents4,590,032 3,391,934 
Investments122,799,871 123,763,675 
Other Assets38,016,452 37,409,755 
165,406,355 164,565,364 
Total Assets$266,290,981$264,285,440
Liabilities and Equity
Asset Management
Debt Obligations$36,112,872 $36,669,755 
Other Liabilities7,699,454 8,359,619 
43,812,326 45,029,374 
Insurance
Debt Obligations2,029,769 1,908,006 
Other Liabilities163,151,015 159,208,840 
165,180,784 161,116,846 
Total Liabilities$208,993,110 $206,146,220 
Redeemable Noncontrolling Interests81,793 82,491 
Stockholders' Equity
KKR & Co. Inc. Stockholders' Equity - Series A and B Preferred Stock— — 
KKR & Co. Inc. Stockholders' Equity - Series C Mandatory Convertible Preferred Stock1,115,792 1,115,792 
KKR & Co. Inc. Stockholders' Equity - Series I and II Preferred Stock, Common Stock14,598,495 16,466,372 
Noncontrolling Interests41,501,791 40,474,565 
Total Equity57,216,078 58,056,729 
Total Liabilities and Equity$266,290,981 $264,285,440 
KKR & Co. Inc. Stockholders' Equity - Common Stock
Per Outstanding Share of Common Stock		$24.72 $27.64 
KKR & Co. Inc. Stockholders’ Equity - Common Stock per Outstanding Share of Common Stock was $24.72 as of March 31, 2022, down from $27.64 as of December 31, 2021. The decrease was primarily due to the (i) unrealized losses on available-for-sale-securities from Global Atlantic that are recorded in other comprehensive income, (ii) repurchases of common stock, (iii) dividends to common stockholders and (iv) net loss attributable to KKR & Co. Inc. common stockholders during the three months ended March 31, 2022.
130
(Amounts in thousands, except common unit and per common unit amounts)
  As of As of
  September 30, 2017 December 31, 2016
     
Assets    
Cash and Cash Equivalents $2,436,566
 $2,508,902
Investments 37,251,837
 31,409,765
Other 4,617,236
 5,084,230
Total Assets 44,305,639
 39,002,897
     
Liabilities and Equity    
Debt Obligations 20,290,714
 18,544,075
Other Liabilities 4,149,491
 3,340,739
Total Liabilities 24,440,205
 21,884,814
     
Redeemable Noncontrolling Interests 570,134
 632,348
     
Equity    
Series A Preferred Units 332,988
 332,988
Series B Preferred Units 149,566
 149,566
KKR & Co. L.P. Capital - Common Unitholders 6,380,654
 5,457,279
Noncontrolling Interests 12,432,092
 10,545,902
Total Equity 19,295,300
 16,485,735
Total Liabilities and Equity $44,305,639
 $39,002,897
     
KKR & Co. L.P. Capital Per Outstanding Common Unit - Basic $13.49
 $12.06
     




Condensed Consolidated Statements of Cash Flows (GAAP Basis - Unaudited)
 
The accompanying condensedfollowing is a discussion of our consolidated cash flows for the three months ended March 31, 2022 and 2021. You should read this discussion in conjunction with the financial statements and related notes included elsewhere in this report.

The consolidated statements of cash flows include the cash flows of our consolidated entities, which include certain consolidated investment funds, CLOs and CFEscertain variable interest entities formed by Global Atlantic notwithstanding the fact that we may hold only a minority economic interest in those investment funds and CFEs.

The assets of our consolidated investment funds and CFEs, on a gross basis, can be substantially larger than the assets of our business and, accordingly, could have a substantial effect on the cash flows reflected in our condensed consolidated statements of cash flows. The primary cash flow activities of our consolidated funds and CFEs involve: (i) capital contributions from fund investors; (ii) using the capital of fund investors to make investments; (iii) financing certain investments with indebtedness; (iv) generating cash flows through the realization of investments; and (v) distributing cash flows from the realization of investments to fund investors. Because our consolidated funds and CFEs are treated as investment companies for accounting purposes, certain of these cash flow amounts are included in our cash flows from operations.


Net Cash Provided (Used) by Operating Activities
 
Our net cash provided (used) by operating activities was $(2.2)$0.9 billion and $(0.6)$(0.1) billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively. These amounts primarily included: (i) investments purchased (asset management), net of proceeds from salesinvestments (asset management) of investments net of purchases of investments of $(3.5)$(0.6) billion and $(0.8)$(1.3) billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively;2021, respectively, (ii) net realized gains (losses) on asset management investments of $(2.7)$279.6 million and $354.1$584.4 million during the nine monthsthree ended September 30, 2017March 31, 2022 and 2016, respectively;2021, respectively, (iii) change in unrealized gains (losses) on asset management investments of $1,088.3$0.6 billion and $2.1 billion during the three months ended March 31, 2022 and 2021, respectively, (iv) capital allocation-based income (loss) of $(0.9) billion and $2.7 billion during the three months ended March 31, 2022 and 2021, respectively and (v) net realized gains (losses) on insurance operations of $75.0 million and $(345.0)$(441.6) million during the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively; and (iv) carried interest allocated as a result of changes in fund fair value of $1,224.2 million and $602.7 million during the nine months ended September 30, 2017 and 2016, respectively.2021. Investment funds are for GAAP purposes, investment companies under GAAP and reflect their investments and other financial instruments at fair value.
 
Net Cash Provided (Used) by Investing Activities
 
Our net cash provided (used) by investing activities was $96.1 million$(2.0) billion and $23.2 million$(0.4) billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively. Our investing activities included: (i) a change in restrictedinvestments purchased (insurance), net of proceeds from investments (insurance) of $(2.0) billion and $(.04) billion during the three months ended March 31, 2022 and 2021, (ii) acquisitions, net of cash and cash equivalents (that primarily funds collateral requirements)acquired of $168.0 million and $33.0$(415.6) million during the ninethree months ended September 30, 2017March 31, 2021 and 2016, respectively; (ii)(iii) the purchase of fixed assets of $(70.8)$(11.9) million and $(8.2)$(27.7) million during the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively; and (iii) development of oil and natural gas properties of $(1.0) million and $(1.6) million for the nine months ended September 30, 2017 and 2016,2021, respectively.
 
Net Cash Provided (Used) by Financing Activities
 
Our net cash provided (used) by financing activities was $2.1$4.1 billion and $1.7$4.5 billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively. Our financing activities primarily included: (i) distributions to,contributions by, net of contributions by,distributions to, our noncontrolling and redeemable noncontrolling interests of $1.1$1.6 billion and $0.8$2.1 billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively;2021, respectively, (ii) proceeds received net of repayment of debt obligations of $1.3$0.03 billion and $1.6 billion during the three months ended March 31, 2022 and 2021, respectively, (iii) additions to, net of withdrawals from contractholder deposit funds of $2.4 billion and $1.0 billion during the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively; (iii) distributions to our partners2021, (iv) common stock dividends of $(230.8)$(85.7) million and $(213.5)$(77.8) million during the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively; (iv) unit repurchases(v) net delivery of $(291.9)common stock of $(55.9) million during the ninethree months ended September 30, 2016; (v) issuanceMarch 31, 2021, respectively; (vi) repurchases of Preferred Unitscommon stock of $482.6$(346.7) million and $(71.4) million during the ninethree months ended September 30, 2016;March 31, 2022 and (vi)2021, respectively; (vii) Series A and B Preferred Units distributionsStock dividends of $(25.0) million and $(13.9)$(8.3) million during the ninethree months ended September 30, 2017March 31, 2021; (viii) Series C Mandatory Convertible Preferred Stock dividends of $(17.3) million, during the three months ended March 31, 2022 and 2016.2021, respectively; and (ix) private placement share issuance of $38.5 million during three months ended March 31, 2021.



131
Analysis of Segment AnalysisOperating Results
 
The following is a discussion of the results of our four reportable business segmentson a segment basis for the three and nine months ended September 30, 2017March 31, 2022 and 2016.2021. You should read this discussion in conjunction with the information included under “—Basis of Financial Presentation—"—Key Segment and Non-GAAP Performance Measures and Other Terms and Operating and Performance Measures”Metrics" and the condensed consolidated financial statements and related notes included elsewhere in this report. See "—Business Environment" for more information about factors that may impact our business, financial performance, operating results and valuations.


Expense Allocations

Certain expenses are allocated amongIn connection with our acquisition of Global Atlantic on February 1, 2021, management reevaluated the manner in which we manage and assess the performance of our business and allocate resources. As a result, we introduced a new Insurance segment in 2021 and report segment results for two operating segments. Specifically, as described below, (i) a portion of expenses, except for broken deal expenses, originatingand reportable segments: Asset Management and Insurance. See Note 21 "Segment Reporting" in our Private Markets, Public Markets and Capital Markets segments are reflected infinancial statements.

For the Principal Activities segment and (ii) corporate expenses are allocated across all segments.

Expenses Allocated to Principal Activities

KKR allocates certain expenses to its Principal Activities segment. The Principal Activities segments incurs its own direct costs, and an allocation fromquarter ended March 31, 2021 the other segments is also made to reflect the estimated amount of costs that are necessary to operate our Principal Activities segment, which are incremental to those costs incurred directly by the Principal Activities segment. These allocable expenses consist of a portionresults of our cash compensation and benefits, occupancy and related charges and other operating expenses thatInsurance segment are initially recognized within our Private Markets, Public Markets and Capital Markets segments. Consistent with prior years, the total amount of expenses (other than its direct costs) that is allocated to Principal Activities is based on the proportion of revenue earned by Principal Activities, relative to other operating segments revenue, over the preceding four calendar years. Beginning in 2017, however, KKR has determined that this allocation percentage will not be less than the allocation percentage calculated using the cumulative amount of such revenues since 2009 (the year we completed the KPE transaction). For 2017, KKR determined that this allocation percentage is 25.7%. This allocation percentage is expected to be updated annually or more frequently if there are material changes to our business.
Below is a summaryfrom February 1, 2021 (closing date of the allocation to Principal Activities, relative to other operating segments, for the 2017 and 2016 periods.acquisition) through March 31, 2021.


2017 Allocation: 25.7%, based on cumulative revenues earned since 2009
2016 Allocation: 22.6%, based on revenues earned in 2015, 2014, 2013 and 2012Analysis of Asset Management Segment Operating Results
The 2016 allocation to Principal Activities was based on revenues earned by Principal Activities, relative to other operating segments revenue, over the preceding four calendar years. Had the allocation for 2016 been based on cumulative revenues earned by Principal Activities since 2009, consistent with our allocation methodology adopted in 2017, the expense allocation to Principal Activities would have been 28.7% and would have had the following impact on Economic Net Income across each of our reporting segments:

  Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
     
Private Markets $4,856
 $14,515
Public Markets 3,400
 10,103
Capital Markets 739
 2,188
Principal Activities (8,995) (26,806)
Total Economic Net Income $—
 $—

Once the total amount of expense to be allocated to the Principal Activities segment is estimated for each reporting period, the amount of this expense will be allocated from the Private Markets, Public Markets and Capital Markets segments based on the proportion of headcount in each of these three segments.


Allocations of Corporate Expenses

Corporate expenses are allocated to each of the Private Markets, Public Markets, Capital Markets and Principal Activities segments based on the proportion of revenues earned by each segment over the preceding four calendar years. However, to the extent that expenses allocated to Principal Activities, as described above, is based on the cumulative amount of such revenues since 2009, corporate expenses will be allocated in the same manner.

Below is a summary of the allocations percentages used for corporate expenses to each of our operating segments for the 2017 and 2016 periods.

     
  Expense Allocation
Segment 2017 2016
     
Private Markets 59.6% 61.6%
Public Markets 9.0% 10.1%
Capital Markets 5.7% 5.7%
Principal Activities 25.7% 22.6%
Total Reportable Segments 100.0% 100.0%
     
Allocation basis Cumulative revenue since 2009 Revenue earned in 2015, 2014, 2013 & 2012
     




Private Markets Segment

The following tables set forth information regarding theKKR's Asset Management segment operating results of operations and certain key operatingcapital metrics for our Private Markets segment for the three and nine months ended September 30, 2017March 31, 2022 and 2016.2021:


Three months ended September 30, 2017 compared to three months ended September 30, 2016
Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Management Fees$624,928 $439,740 $185,188 
Transaction and Monitoring Fees, Net306,038 135,677 170,361 
Fee Related Performance Revenues12,051 10,296 1,755 
Fee Related Compensation(212,220)(131,785)(80,435)
Other Operating Expenses(125,875)(90,161)(35,714)
Fee Related Earnings604,922 363,767 241,155 
Realized Performance Income609,207 171,309 437,898 
Realized Performance Income Compensation(383,635)(109,986)(273,649)
Realized Investment Income349,354 461,273 (111,919)
Realized Investment Income Compensation(52,403)(69,191)16,788 
Asset Management Segment Operating Earnings$1,127,445 $817,172 $310,273 
 Three Months Ended
 September 30, 2017 September 30, 2016 Change
 ($ in thousands)
Segment Revenues 
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
Management Fees$153,841
 $117,795
 $36,046
Monitoring Fees14,342
 11,091
 3,251
Transaction Fees82,258
 53,223
 29,035
Fee Credits(59,854) (37,127) (22,727)
Total Management, Monitoring and Transaction Fees, Net190,587
 144,982
 45,605
      
Performance Income 
  
  
Realized Incentive Fees—
 —
 —
Realized Carried Interest419,438
 350,469
 68,969
Unrealized Carried Interest(96,571) 53,339
 (149,910)
Total Performance Income322,867
 403,808
 (80,941)
      
Investment Income (Loss) 
  
  
Net Realized Gains (Losses)—
 —
 —
Net Unrealized Gains (Losses)—
 —
 —
   Total Realized and Unrealized—
 —
 —
Interest Income and Dividends—
 —
 —
Interest Expense—
 —
 —
Net Interest and Dividends—
 —
 —
Total Investment Income (Loss)—
 —
 —
      
Total Segment Revenues513,454
 548,790
 (35,336)
      
Segment Expenses 
  
  
Compensation and Benefits 
  
  
Cash Compensation and Benefits63,482
 47,858
 15,624
Realized Performance Income Compensation176,075
 157,688
 18,387
Unrealized Performance Income Compensation(36,379) 22,588
 (58,967)
Total Compensation and Benefits203,178
 228,134
 (24,956)
Occupancy and related charges8,537
 9,248
 (711)
Other operating expenses42,376
 32,031
 10,345
Total Segment Expenses254,091
 269,413
 (15,322)
      
Income (Loss) attributable to noncontrolling interests—
 —
 —
      
Economic Net Income (Loss)$259,363
 $279,377
 $(20,014)
      
Assets Under Management$87,609,800
 $75,181,600
 $12,428,200
Fee Paying Assets Under Management$61,706,500
 $44,010,300
 $17,696,200
Capital Invested$2,972,300
 $2,370,600
 $601,700
Uncalled Commitments$39,421,900
 $31,839,100
 $7,582,800


Segment Revenues

Management Monitoring and Transaction Fees Net

The net increase was primarily due to an increase infollowing table presents management fees and transaction fees. by business line:

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Management Fees
Private Markets$435,997 $286,967 $149,030 
Public Markets188,931 152,773 36,158 
Total Management Fees$624,928 $439,740 $185,188 

The increase in Private Markets management fees was primarily due to (i) Americas Fund XII entering its investment period in the first quarter of 2017, in which it earns management fees on a larger pool of capital than its predecessor fundearned from North America Fund XI,XIII, Global Infrastructure Investors IV, and Health Care Strategic Growth Fund II, each of which entered its post investment period, (ii) Asian Fund III entering its investment period in the second quarter of 2017, in which it earns management fees on a larger pool of capital than its predecessor fund Asian Fund II, which entered its post investment period and (iii) new capital raised in our Health Care Strategic Growth Fund. This net increase was2021. These increases were partially offset by decreases due to (i) North Americaa decrease in management fees earned by Americas Fund XIXII and AsianEuropean Fund II entering their post investment periods, during which they earn fees at a lower rate and based on invested capital rather than committed capital, and (ii) lower invested capitalV as a result of realizations primarilyentering their post-investment periods in our 2006 Fund, Asian Fundthe second quarter of 2021 and China Growth Fund. As investments held in our funds that pay managementthe first quarter of 2022, respectively, and now earns fees based on capital invested rather than capital are sold, ourcommitted and at a lower fee rate.
132

The increase in Public Markets management fees was primarily attributable to greater overall FPAUM at (i) Global Atlantic, (ii) our opportunistic credit, private credit and dislocation opportunities strategies and (iii) our hedge fund partnership, Marshall Wace.

Transaction and Monitoring Fees, Net

The following table presents transaction and monitoring fees, net by business line:

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Transaction and Monitoring Fees, Net
Private Markets$40,686 $22,462 $18,224 
Public Markets10,096 1,030 9,066 
Capital Markets255,256 112,185 143,071 
Total Transaction and Monitoring Fees, Net$306,038 $135,677 $170,361 

Our Capital Markets business line earns transaction fees, which are expected to decline unless offset by new fee-paying capital raised.not shared with fund investors. The increase in transaction fees was primarily due to an increase in the number and average size of capital markets transactions for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. Overall, we completed 87 capital markets transactions for the three months ended March 31, 2022, of which 11 represented equity offerings and 76 represented debt offerings, as compared to 57 transactions for the three months ended March 31, 2021, of which 11 represented equity offerings and 46 represented debt offerings. We earned fees in connection with underwriting, syndication and other capital markets services. While each of the capital markets transactions that we undertake in this business line is separately negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.

    Our capital markets fees are generated in connection with our Private Markets and Public Markets business lines as well as from third-party companies. For the three months ended March 31, 2022, approximately 19% of our transaction fees in our Capital Markets business line were earned from unaffiliated third parties as compared to approximately 26% for the three months ended March 31, 2021. Our transaction fees are comprised of fees earned from North America, Europe, and the Asia-Pacific region. For the three months ended March 31, 2022, approximately 37% of our transaction fees were generated outside of North America as compared to approximately 32% for the three months ended March 31, 2021. Our Capital Markets business line is dependent on the overall capital markets environment, which is influenced by equity prices, credit spreads, and market volatility. Our Capital Markets business line does not generate monitoring fees.

Our Private Markets and Public Markets business lines separately earn transaction and monitoring fees from portfolio companies, and under the terms of the management agreements with certain of our investment funds, we are required to share all or a portion of such fees with our fund investors.

The increase in Private Markets transaction and monitoring fees, net, was primarily attributable to an increase in both the number and size ofnet transaction fee-generating investments.fees. During the three months ended September 30, 2017,March 31, 2022, there were 1428 transaction fee-generating investments that paid an average fee of $5.9$7.3 million compared to 1319 transaction fee-generating investments payingthat paid an average fee of $4.1$2.0 million during the three months ended September 30, 2016. The majorityMarch 31, 2021. For the three months ended March 31, 2022, approximately 47% of these transaction fees were paid by companies located in North America.America, 31% were paid from companies in the Asia-Pacific region, and 22% were paid from companies in Europe. Transaction fees vary by investment based upon a number of factors, the most significant of which are transaction size, the particular discussionsagreements as to the amount of the fees, the complexity of the transaction, and KKR’sKKR's role in the transaction. Additionally, transaction fees are generally not earned with respect to energy and real estate investments.





133
Fee Related Performance Revenues

The following table presents fee related performance revenues by business line:
Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Fee Related Performance Revenues
Private Markets$2,317 $1,552 $765 
Public Markets9,734 8,744 990 
Total Fee Related Performance Revenues$12,051 $10,296 $1,755 

Fee related performance revenues earned in our Private Markets and Public Markets business lines represent realized incentive fees that (i) are measured and received from an investment fund, vehicle or account on a recurring basis, and (ii) do not require the realization of the investments held by the investment fund, vehicle or account. These incentive fees are primarily earned from our BDC and our investment in KKR Real Estate Select Trust Inc. ("KREST"). Fee related performance revenues were higher for the three months ended March 31, 2022 compared to the prior period primarily due to investment performance.

Fee Related Compensation

The increase in fee credits isrelated compensation for the three months ended March 31, 2022 compared to the prior period was primarily due primarily to a higher level of transaction fees. Recurring monitoring fees increased $3.3 million, which was primarilycompensation recorded in connection with the resulthigher level of anrevenues included within fee related earnings.

Other Operating Expenses

The increase in the number of portfolio companies paying fees. For the three months ended September 30, 2017 we had 50 portfolio companies paying an average monitoring fee of $0.3 million compared to 42 portfolio companies paying an average monitoring fee of $0.3 millionother operating expenses for the three months ended September 30, 2016. There were no termination paymentsMarch 31, 2022 compared to the prior period was primarily due to a higher level of (i) professional fees, information technology and other administrative costs in connection with the overall growth of the firm and (ii) placement fees related to capital raising activities.

Fee Related Earnings

The increase in fee related earnings for the three months ended September 30, 2017 and 2016. These termination payments may occur in the future; however, they are infrequent in nature and are generally correlated with the initial public offering ("IPO") and other realization activity in our private equity portfolio, and may be smaller in size and number in the future compared to current and prior periods.
Performance Income
The net decrease is attributable to a lower level of carried interest primarily reflecting a lower level of net appreciation in value of our private equity portfolio in the current periodMarch 31, 2022 compared to the prior period.period was primarily due to a higher level of management fees and transaction fees, partially offset by a higher level of fee related compensation and other operating expenses, as described above.

Realized carried interest for the three months ended September 30, 2017, consisted primarily of realized gains from the sale of Capsugel (manufacturing sector) and partial sales of PRA Health Sciences, Inc. and US Foods Holding Corp.Performance Income

Realized carried interest for the three months ended September 30, 2016 consisted primarily of realized gains from the sale or partial sale of Walgreens Boots Alliance, Inc., Alliance Tire Group B.V. (manufacturing sector) and Zimmer Biomet Holdings, Inc.








The following table presents realized performance income by investment vehicle for the three months ended September 30, 2017 and 2016:business line:

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Realized Performance Income
Private Markets$603,823 $166,418 $437,405 
Public Markets5,384 4,891 493 
Total Realized Performance Income$609,207 $171,309 $437,898 

134
 Three Months Ended September 30,
 2017 2016
   ($ in thousands)  
 Realized Carried InterestUnrealized Carried Interest
Total
Carried Interest
 Realized Carried InterestUnrealized Carried Interest
Total
Carried
Interest
North America Fund XI$90,394
$48,982
$139,376
 $14,845
$139,705
$154,550
Co-Investment Vehicles and Other16,255
51,948
68,203
 705
25,985
26,690
European Fund III4,500
38,143
42,643
 —
22,529
22,529
European Fund IV—
24,365
24,365
 —
1,339
1,339
Asian Fund II—
21,801
21,801
 —
86,365
86,365
Asian Fund—
21,268
21,268
 95,883
(71,490)24,393
Global Infrastructure Investors II—
7,155
7,155
 —
—
—
Next Generation Technology Growth—
5,885
5,885
 —
943
943
Global Infrastructure Investors—
3,145
3,145
 16,845
(10,383)6,462
Real Estate Partners Americas10,365
(7,439)2,926
 —
1,970
1,970
Millennium Fund—
2,370
2,370
 —
(15,889)(15,889)
E2 Investors—
—
—
 —
(234)(234)
European Fund—
—
—
 —
(2,102)(2,102)
European Fund II2,142
(2,146)(4) 63,721
(62,304)1,417
2006 Fund295,782
(301,978)(6,196) 155,612
(64,174)91,438
China Growth Fund—
(7,597)(7,597) 2,858
5,265
8,123
Management Fee Refunds—
(2,473)(2,473) —
(4,186)(4,186)
Total (1)
$419,438
$(96,571)$322,867
 $350,469
$53,339
$403,808
Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Private Markets
Core Investment Vehicles$262,219 $80,937 $181,282 
North America Fund XI119,942 44,881 75,061 
Americas Fund XII83,016 — 83,016 
European Fund IV68,688 — 68,688 
2006 Fund33,458 19,960 13,498 
Co-Investment Vehicles and Other12,444 15,533 (3,089)
Real Estate Partners Europe— 3,478 (3,478)
European Fund III— 353 (353)
Total Realized Carried Interest (1)
579,767 165,142 414,625 
Incentive Fees24,056 1,276 22,780 
Total Realized Performance Income$603,823 $166,418 $437,405 

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Public Markets
Total Realized Carried Interest (1)
$— $— $— 
Incentive Fees5,384 4,891 493 
Total Realized Performance Income$5,384 $4,891 $493 
(1)The above table excludestables exclude any funds for which there was no realized carried interest during eitherboth of the periods presented.

UnrealizedRealized performance income includes (i) realized carried interest reflectsfrom our carry earning funds and (ii) incentive fees not included in Fee Related Performance Revenues.

Realized carried interest in our Private Markets business line for the difference between totalthree months ended March 31, 2022 consisted primarily of (i) realized performance income from our core investment vehicles and (ii) realized proceeds from dividends received from our investment in Internet Brands, Inc. (technology sector) and sales of our investments in Hensoldt AG (FRA: HAG) and Resource Environmental Solutions, LLC (energy sector).

Realized carried interest in our Private Markets business line for the three months ended March 31, 2021 consisted primarily of (i) realized performance income from our core investment vehicles, (ii) dividends received from our investment in Internet Brands, Inc. and (iii) realized gains from the partial sale of our investments in BridgeBio Pharma, Inc. and Academy Sports & Outdoors Inc. (NASDAQ: ASO).

During the three months ended March 31, 2022 and March 31, 2021, there was no realized carried interest earned in our Public Markets business line.

Incentive fees earned in our Private Markets and Public Markets business lines consist of incentive fees earned from (i) our hedge fund partnerships, (ii) investment management agreements with KKR sponsored investment vehicles and (iii) investment management agreements involving third party asset management firm not involving a hedge fund partnership. In Private Markets, the increase in incentive fees for the three months ended March 31, 2022 compared to the prior period was primarily attributable to incentive fees earned this period from certain levered multi-asset investment vehicles.

Realized Performance Income Compensation

The increase in realized performance income compensation for the three months ended March 31, 2022 compared to the prior period was primarily due to a higher level of compensation recorded in connection with the higher level of realized performance income.
135
Realized Investment Income

The following table presents realized investment income in our Principal Activities business line:

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Realized Investment Income
Net Realized Gains (Losses)$76,136 $373,120 $(296,984)
Interest Income and Dividends273,218 88,153 185,065 
Total Realized Investment Income$349,354 $461,273 $(111,919)
The decrease in realized investment income is primarily due to a lower level of net realized gains partially offset by a higher level of interest income and dividends. The amount of realized investment income depends on the transaction activity of our funds and balance sheet, which can vary from period to period.
    For the three months ended March 31, 2022, net realized gains were comprised of realized gains primarily from the sale of our Private Markets investments in Fiserv, Inc. and Hensoldt AG. Partially offsetting these realized gains were realized losses, the most significant of which was a realized loss of an alternative credit investment and real estate equity investment.
    For the three months ended March 31, 2021, net realized gains were comprised of realized gains primarily from the partial sales of our Private Markets investments in Flutter Entertainment PLC and BridgeBio Pharma Inc. Partially offsetting these realized gains were realized losses, the most significant of which was a realized loss on the sale of an investment in our special situations funds.
    For the three months ended March 31, 2022, interest income and dividends were comprised of (i) $218.9 million of dividend income primarily from levered multi-asset investment vehicles and our investments in Exact Holdings B.V. and Internet Brands, Inc., and (ii) $54.3 million of interest income, primarily from our investments in CLOs.
    For the three months ended March 31, 2021, interest income and dividends were comprised primarily of (i) $44.5 million of dividend income primarily from our investments in Internet Brands, Inc. and US Foods Holding Corp. as well as distributions received from our real estate investments including our investment in KREF and (ii) $43.7 million of interest income primarily from our investments in CLOs. See "—Analysis of Non-GAAP Performance Measures—Non-GAAP Balance Sheet Measures."
    We expect realized performance income and realized investment income to be greater than $600 million in the second quarter of 2022 relating to realized carried interest and realized carried interest. investment income from completed, or signed and expected to be completed sales, partial sales or secondary sales subsequent to March 31, 2022 with respect to certain private equity portfolio companies and other investments. Some of these transactions are not complete, and are subject to the satisfaction of closing conditions, including but not limited to regulatory approvals; there can be no assurance if or when any of these transactions will be completed.
Prior to the acquisition of KKR Capstone on January 1, 2020, (i) KKR Capstone's financial results were consolidated with KKR's financial results in accordance with GAAP, and as such the fees and expenses attributable to KKR Capstone were included in KKR's consolidated revenues and expenses, and (ii) KKR Capstone's financial results were excluded from KKR's non-GAAP financial measures, because KKR presented its non-GAAP financial measures prior to the effect to the consolidation of certain entities that were not subsidiaries of KKR. Following the acquisition of KKR Capstone on January 1, 2020, after-tax distributable earnings includes the net income (loss) from KKR Capstone within realized investment income (loss).
For the quarter ended March 31, 2022, total fees attributable to KKR Capstone were $15.5 million, total expenses attributable to KKR Capstone were $18.7 million and income taxes and other income attributable to Capstone were $(0.2) million. For KKR Capstone-related adjustments in reconciling Asset Management segment revenues to GAAP revenues see "—Analysis of Non-GAAP Performance Measures—Reconciliations to GAAP Measures".
136
Realized Investment Income Compensation
The recognitiondecrease in realized investment income compensation for the three months ended March 31, 2022 compared to the prior period is primarily due to a lower level of compensation recorded in connection with the lower level of realized carried interest resultsinvestment income.
Other Operating and Capital Measures
The following table presents certain key operating and capital metrics as of March 31, 2022 and December 31, 2021:
As of
March 31, 2022December 31, 2021Change
($ in millions)
Assets Under Management$479,032 $470,555 $8,477 
Fee Paying Assets Under Management$371,176 $357,389 $13,787 
Uncalled Commitments$114,836 $111,822 $3,014 

The following table presents one of our key capital metrics for the three months ended March 31, 2022 and 2021:
Three Months Ended
March 31, 2022March 31, 2021Change
($ in millions)
Capital Invested$21,376 $6,892 $14,484 


Assets Under Management

Private Markets

The following table reflects the changes in our Private Markets AUM from December 31, 2021 to March 31, 2022:
($ in millions)
December 31, 2021$257,048 
New Capital Raised17,295 
Distributions and Other(4,283)
Change in Value(1,847)
March 31, 2022$268,213 

AUM for the reversalPrivate Markets business line was $268.2 billion at March 31, 2022, an increase of accumulated unrealized carried interest, generally resulting$11.2 billion, compared to $257.0 billion at December 31, 2021.

The increase was primarily attributable to new capital raised by Global Atlantic, European Fund VI, and IndiGrid, an asset management firm that KKR owns in minimal impact on total performance income. Additionally, because unrealized carried interest can be reversed uponIndia. Partially offsetting these increases were distributions to fund investors, primarily as a realization event,result of realized proceeds, most notably from North America Fund XI, Americas Fund XII, and European Fund IV and to a lesser extent a decrease in periods where there is significant realized carried interest, unrealized carried interest can be negative even in periods of portfolio appreciation.

investment value from Americas Fund XII, Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, and Asian Fund II.
For the three months ended September 30, 2017,March 31, 2022, the value of our traditional private equity investment portfolio increased 3.9%decreased 5%. This was comprised of a 2.6% increase26% decrease in the share prices of various publicly held or publicly indexed investments and a 4.6%3% increase in value of our privately held investments. Additionally,investments, as discussed further below. See "—Business Environment" for more information about certain factors that impact our infrastructure investment portfolio, which is comprised predominately of private investments, increased 6.6%. business, financial performance, operating results and valuations.

The most significant increasesdecreases in share prices of various publicly held or publicly indexed investments were gainsdecreases in Gardner DenverApplovin Corporation (NASDAQ: APP), Max Healthcare Institute Limited (NSE: MAXHEALTH), and PHC Holdings Inc. (NYSE: GDI), China International Capital Corporation Limited (HK: 3908) and Pets At Home Group Plc (LSE: PETS)(TYO: 6523). These increasesdecreases were partially offset by decreasedincreases in share prices of various publicly held investments, the most significant of which were losseswas an increase in Laureate Education, Inc. (NASDAQ: LAUR), First Data CorporationCrescent Energy Company, Hensoldt AG and Beijing Capital Grand Limited (HK: 1329). Our privatelyUS Foods Holdings Corp. The prices of publicly held investments contributedor publicly indexed companies may experience volatile changes following the remainderreporting period.
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The most significant increases in value the most significant of which were gains relating to Internet Brands, Inc. (technology sector), Colonial Pipeline Company (infrastructure sector) and United Group (telecom sector). The unrealized gains on our privately held investments related to Internet Brands, Inc., Viridor Limited, and Wella Co. (consumer products sector). These increases in value were partially offset by unrealized lossesdecreases in value relating primarily to Optiv Inc. (technologyMagnetti Marelli (industrial sector), AcademyOutsystems Holdings S.A., and Koki Holdings Co., Ltd. (retail sector) and Sundrop Farms Holding Ltd. (agriculture(industrial sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance, (ii) an increase in the value of market comparables, and (ii) individual company performance.with respect to Internet Brands, an increase in valuation reflecting an agreement to monetize a portion of the company. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) an unfavorable business outlook and (ii) a decrease in the value of market comparables, both influenced by economic outlook and market environment.

For the three months ended March 31, 2021, the value of our traditional private equity investment portfolio increased 19%. This was comprised of a 21% increase in value of our privately held investments and a 10% increase in share prices of various publicly held or publicly indexed investments.

The most significant increases in value of our privately held investments related to AppLovin Corporation, OneStream Software, LLC (technology sector), and OutSystems Holdings S.A. These increases in value were partially offset by decreases in value relating primarily to Colonial Enterprises, Inc. (infrastructure), Goodpack Limited (packaging sector), and Channel Control Merchants (retail sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance or, in certain cases, an unfavorable business outlook and (ii) a decrease in the value of market comparables.
Subsequent to September 30, 2017, realization activity such as dividends and agreements to sell, including partial sales and secondary sales, are expected, with respect to certain private equity portfolio companies, the most significant of which are

Alliant Insurance Services (financial services sector), Gland Pharma (manufacturing sector), Visma AS (technology sector) and Groupe SMCP S.A.S. (retail sector). These transactions have been consummated subsequent to September 30, 2017, and represent distributable earnings of approximately $130 million. Some or all of these transactions are subject to the satisfaction of closing conditions prior to their completion, and there can be no assurance if or when any of these transactions will be completed.

For the three months ended September 30, 2016, the value of our private equity investment portfolio increased 5.8%. This was comprised of a 7.0% increase in the share prices of various publicly held or publicly indexed investments and a 5.1% increase in the value of our privately held investments. The most significant increase in share prices of various publicly held or publicly indexed investments were gains in First Data Corporation, PRA Health Sciences, Inc. and Qingdao Haier Co., Ltd. (CH: 600690). These increases were partially offset by decreased share prices of various publicly held investments, the most significant of which were Walgreens Boots Alliance, Inc., US Foods Holding Corp. and Fujian Sunner Development Co. Ltd. (SZ:002299). Our privately held investments contributed the remainder of the change in value, the most significant of which were gains relating to Sedgwick Claims Management Services (financial services sector), Panasonic Healthcare Co., Ltd. (healthcare sector), and GenesisCare (healthcare sector). The unrealized gains on our privately held investments were partially offset by unrealized losses the most significant of which were Aricent Inc. (technology sector), Crosby and Acco Material Handling Solutions (manufacturing sector) and OEG Management Partners (energy sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) in the case of Sedgwick Claims Management Services and GenesisCare, valuations that reflect agreements to sell all or a portion of these investments, (ii) an increase in the value of market comparables and (iii) individual company performance.transactional activity in the quarter related to new rounds of funding. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance or, in certain cases, an unfavorable business outlook and (ii) a decrease in the value of market comparables.comparables, both influenced from the impact of COVID-19 on the economic outlook and overall market environment.

Segment Expenses
Compensation and Benefits

The net decrease was due primarily to lower performance income compensation resulting from a lower levelmost significant increases in share prices of carried interest gainsvarious publicly held or publicly indexed investments were increases in our private equity portfolio in the current period as described above as well as a greater amount of compensationMax Healthcare Institute Limited, Fiserv, Inc. and benefits expense allocated to Principal Activities as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments.Academy Sports & Outdoor Inc. These decreasesincreases were partially offset by increased cash compensationdecreases in share prices of various publicly held investments, the most significant of which were decreases in BridgeBio Pharma, Inc. and benefits.Laureate Education, Inc. (NASDAQ: LAUR).

Occupancy and Other Operating Expenses

The increase is primarily due to an increase in professional fees and expenses that are creditable to our investment funds which include expenses for unconsummated transactions, also known as broken-deal expenses. Partially offsetting these increases was a decrease relating to a greater amount of other operating expenses allocated to Principal Activities as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments.

Economic Net Income (Loss)
The decrease was primarily due to lower levels of performance income gains in the current period compared to the prior period, partially offset by higher management and transaction fees and a decrease in compensation and benefits in the current period.

Assets Under Management

The following table reflects the changes in our Private Markets AUM from June 30, 2017 to September 30, 2017:
 ($ in thousands)
June 30, 2017$84,984,000
New Capital Raised4,287,200
Distributions(3,798,300)
Change in Value2,136,900
September 30, 2017$87,609,800


AUM for the Private Markets segment was $87.6 billion at September 30, 2017, an increase of $2.6 billion, compared to $85.0 billion at June 30, 2017. The increase was primarily attributable to new capital raised primarily in two new strategic investor partnerships and our Real Estate Credit Opportunity Partners fund, and to a lesser extent, an increase in the value of our Private Markets portfolio. Our strategic investor partnerships include separately managed accounts that provide for investments to be made in multiple funds and across investment strategies and for the reinvestment or recycling of investment proceeds. Those strategic investor partnerships also generally provide for the netting of investment returns over negotiated periods of time among funds and other investments, which may give rise to the clawback of previously recognized carried interest or incentive fees. These increases were offset by distributions to Private Markets fund investors primarily as a result of realizations, most notably in our 2006 Fund, North America Fund XI and certain carry co-investment vehicles.
The increase in the value of our Private Markets portfolio was driven primarily by net gains of $0.8 billion in our North America Fund XI and $0.3 billion in each of our European Fund III and European Fund IV.  The drivers of the overall change in value for Private Markets were consistent with those noted in the Performance Income commentary above. See “-- Private Markets - Segment Revenues - Performance Income.”


Certain investments included in our AUM are denominated in currencies other than the U.S. dollar. Those investments expose our AUM to the risk that the value of the investments will be affected by changes in exchange rates between the currency in which the investments are denominated and the currency in which the investments are made. Our policy isWe generally seek to minimizereduce these risks in certain cases by employing hedging techniques,transactions in connection with certain investments, including using foreign currency options and foreign exchange forward contracts to reduce exposure to changes in exchange rates when a meaningful amount of capital has been invested in currencies other than the currencies in which the investments are denominated. We do not, however, hedge our currency exposure in all currencies or for all investments. See “-Quantitative"Quantitative and Qualitative Disclosures about Market Risk -- Risk—Exchange Rate Risk”Risk" and “Risk Factors-Risks"Risk Factors—Risks Related to the Assets We Manage--WeManage—We make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States” ofStates" in our Annual Report on Form 10-K for the year ended December 31, 2016.2021.
Public Markets
Fee-PayingThe following table reflects the changes in our Public Markets AUM from December 31, 2021 to March 31, 2022: 
($ in millions)
December 31, 2021$213,507 
New Capital Raised8,935 
Distributions and Other(4,280)
Redemptions(1,933)
Change in Value(5,410)
March 31, 2022$210,819 
AUM in our Public Markets business line totaled $210.8 billion at March 31, 2022, a decrease of $2.7 billion compared to $213.5 billion at December 31, 2021.

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The decrease was primarily attributable to (i) a decline in investment value in assets managed across our credit portfolio, including for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, (ii) distributions to fund investors at certain liquid and alternative credit funds, (iii) payments to Global Atlantic policyholders and (iv) redemptions at our hedge fund partnerships. Partially offsetting these decreases was new capital raised by our hedge fund partnerships, Global Atlantic and across various liquid and alternative credit funds.

Fee Paying Assets Under Management
 
Private Markets

The following table reflects the changes in our Private Markets FPAUM from June 30, 2017December 31, 2021 to September 30, 2017:March 31, 2022:
($ in millions)
December 31, 2021$154,855 
New Capital Raised22,907 
Distributions and Other(2,813)
Net Changes in Fee Base of Certain Funds(1,318)
Change in Value(1,559)
March 31, 2022$172,072 
 ($ in thousands)
June 30, 2017$62,008,900
New Capital Raised1,202,900
Distributions and Other(1,968,700)
Change in Value463,400
September 30, 2017$61,706,500


FPAUM in our Private Markets segmentbusiness line was $61.7$172.1 billion at September 30, 2017, a decreaseMarch 31, 2022, an increase of $0.3$17.2 billion, compared to $62.0$154.9 billion at June 30, 2017. December 31, 2021.

The decreaseincrease was due primarily attributable to new capital raised by European Fund VI, Global Atlantic, and IndiGrid, an asset management firm that KKR owns in India. Partially offsetting this increase were (i) distributions to fund investors, primarily related to realizations in our 2006 Fund andas a result of realized proceeds, most notably from North America Fund XI. These decreases were partially offset by newXI, (ii) payments to Global Atlantic policyholders (iii) a decrease in investment value for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies and (iv) net change in fee base of European Fund V as a result of entering its post investment period, during which we earn fees on invested capital raised in our Americas Fund XII (relating to one of our strategic investor partnerships) and Health Care Strategic Growth Fund, and capital deployed in our North America Fund XI. rather than committed capital.

Uncalled capital commitments from Private Markets investment funds from which KKR is currently not earning management fees amounted to approximately 9.0$28.7 billion at September 30, 2017,March 31, 2022, which includes capital commitments reserved for follow-on investments for funds that have completed their investment periods. This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.0%. We will not begin earning fees on this capital until it is deployed or the related investment period commences, neither of which is guaranteed to occur and which may not occur for an extended period of time.  If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.
Public Markets
The following table reflects the changes in our Public Markets FPAUM from December 31, 2021 to March 31, 2022: 
($ in millions)
December 31, 2021$202,534 
New Capital Raised7,445 
Distributions and Other(3,591)
Redemptions(1,933)
Change in Value(5,351)
March 31, 2022$199,104 
FPAUM in our Public Markets business line was $199.1 billion at March 31, 2022, a decrease of $3.4 billion, compared to $202.5 billion at December 31, 2021.

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The decrease was primarily attributable to (i) a decline in investment value in assets managed across our credit portfolio, including for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, (ii) distributions to fund investors at certain alternative credit funds, (iii) payments to Global Atlantic policyholders and (iv) redemptions at our hedge fund partnerships. Partially offsetting these decreases was new capital raised by our hedge fund partnerships, Global Atlantic and across various liquid and alternative credit funds.

Uncalled capital commitments from Public Markets investment funds from which KKR is currently not earning management fees amounted to approximately $7.3 billion at March 31, 2022. This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 0.9%. We will not begin earning fees on this capital until it is deployed or the related investment period commences, neither of which is guaranteed.guaranteed to occur. If and when such management fees are earned, which will occur over an extended period of time, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.


Uncalled Commitments
Private Markets

As of March 31, 2022, our Private Markets business line had $103.5 billion of remaining uncalled capital commitments that could be called for investments in new transactions as compared to $101.5 billion as of December 31, 2021. The increase was primarily attributable to new commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.

Public Markets

As of March 31, 2022, our Public Markets business line had $11.4 billion of remaining uncalled capital commitments that could be called for investments in new transactions as compared to $10.3 billion as of December 31, 2021. The increase was primarily attributable to new commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.

Capital Invested
Private Markets
    For the three months ended March 31, 2022, Private Markets had $13.4 billion of capital invested as compared to $4.0 billion for the three months ended March 31, 2021. The increase was driven primarily by a $0.4$6.9 billion increase in capital invested in our real assets strategies and a $2.5 billion increase in capital invested in our private equity platformstrategies (including core and a $0.2 billion increase in capital invested in our real assets and other platforms.growth equity (including impact) investments). Generally, the portfolio companies acquired through our private equity funds have higher transaction values and result in higher capital invested relative to transactions in our real assets funds. The number of large private equity investments made in any quarter is volatile and consequently, a significant amount of capital invested in one quarter or a few quarters may not be indicative of a similar level of capital deployment in future quarters. During the three months ended September 30, 2017, 64%March 31, 2022, 36% of capital deployed in private equity (including core and growth equity (including impact) investments) was in

transactions in North America, 27%34% was in the Asia-Pacific region, and 9%30% was in Europe. As of October 26, 2017, our Private
Public Markets business had announced transactions that were subject to closing conditions which aggregated approximately $3.1 billion. Some or all of these transactions are subject to the satisfaction of closing conditions prior to their completion, and there can be no assurance if or when any of these transactions will be completed.
Uncalled Commitments
As of September 30, 2017, our Private Markets segment had $39.4 billion of remaining uncalled capital commitments that could be called for investments in new transactions. The increase from September 30, 2016 is due primarily to new capital raised in our Asian Fund III, two new strategic investor partnerships and Americas Fund XII, partially offset by capital called from fund investors to fund investments during the period. 



Nine months ended September 30, 2017 compared to nine months ended September 30, 2016
 Nine Months Ended
 September 30, 2017 September 30, 2016 Change
 ($ in thousands)
Segment Revenues 
  
  
Management, Monitoring and Transaction Fees, Net 
  
  
Management Fees$419,606
 $354,376
 $65,230
Monitoring Fees58,072
 52,126
 5,946
Transaction Fees237,392
 114,021
 123,371
Fee Credits(177,254) (93,042) (84,212)
Total Management, Monitoring and Transaction Fees, Net537,816
 427,481
 110,335
      
Performance Income 
  
  
Realized Incentive Fees—
 —
 —
Realized Carried Interest890,310
 749,194
 141,116
Unrealized Carried Interest305,945
 (131,386) 437,331
Total Performance Income1,196,255
 617,808
 578,447
      
Investment Income (Loss) 
  
  
Net Realized Gains (Losses)—
 —
 —
Net Unrealized Gains (Losses)—
 —
 —
   Total Realized and Unrealized—
 —
 —
Interest Income and Dividends—
 —
 —
Interest Expense—
 —
 —
Net Interest and Dividends—
 —
 —
Total Investment Income (Loss)—
 —
 —
      
Total Segment Revenues1,734,071
 1,045,289
 688,782
      
Segment Expenses 
  
  
Compensation and Benefits 
    
Cash Compensation and Benefits183,943
 142,500
 41,443
Realized Performance Income Compensation374,335
 317,178
 57,157
Unrealized Performance Income Compensation126,677
 (47,377) 174,054
Total Compensation and Benefits684,955
 412,301
 272,654
Occupancy and related charges24,174
 27,212
 (3,038)
Other operating expenses97,255
 95,166
 2,089
Total Segment Expenses806,384
 534,679
 271,705
      
Income (Loss) attributable to noncontrolling interests—
 —
 —
      
Economic Net Income (Loss)$927,687
 $510,610
 $417,077
      
Assets Under Management$87,609,800
 $75,181,600
 $12,428,200
Fee Paying Assets Under Management$61,706,500
 $44,010,300
 $17,696,200
Capital Invested$11,079,800
 $5,475,300
 $5,604,500
Uncalled Commitments$39,421,900
 $31,839,100
 $7,582,800

Segment Revenues
Management, Monitoring and Transaction Fees, Net
The net increase was primarily due to an increase in transaction fees, partially offset by a corresponding increase in fee credits and an increase in management fees. The increase in transaction fees was primarily attributable to an increase in both the number and size of transaction fee-generating investments. During the nine months ended September 30, 2017, there were 38 transaction fee-generating investments that paid an average fee of $6.2 million compared to 33 transaction fee-generating investments paying an average fee of $3.5 million during the nine months ended September 30, 2016. Approximately 44% of these transaction fees were paid by companies located in North America, 37% were paid from companies located in the Asia-Pacific region and 19% were paid from companies in Europe. Transaction fees vary by investment based upon a number of factors, the most significant of which are transaction size, the particular discussions as to the amount of the fees, the complexity of the transaction and KKR’s role in the transaction. The increase in fee credits is due primarily to a higher level of transaction fees. The increase in management fees was primarily due to (i) Americas Fund XII entering its investment period in the first quarter of 2017, in which it earns management fees on a larger pool of capital than its predecessor fund North America Fund XI, which entered its post investment period, (ii) Asian Fund III entering its investment period in the second quarter of 2017, in which it earns management fees on a larger pool of capital than its predecessor fund Asian Fund II, which entered its post investment period and (iii) new capital raised in our Health Care Strategic Growth Fund. This net increase was partially offset by decreases due to (i) North America Fund XI and Asian Fund II entering their post investment periods during the first nine months of 2017, in which they earn fees at a lower rate and based on invested capital rather than committed capital, and (ii) lower invested capital as a result of realizations primarily in our 2006 Fund, China Growth Fund and Asian Fund. Recurring monitoring fees increased $5.3 million which was primarily the result of an increase in the number of portfolio companies paying fees. For the nine months ended September 30, 2017, we had 53 portfolio companies that were paying an average monitoring fee of $0.8 million compared with 49 portfolio companies that were paying an average monitoring fee of $0.8 million for the nine months ended September 30, 2016. For the nine months ended September 30, 2017, we also received termination payments of $16.0 million in connection with the IPO of Gardner Denver Holdings, Inc. compared to $15.3 million of termination payments received in the nine months ended September 30, 2016, in connection with the IPO of US Foods Holding Corp. These termination payments may occur in the future; however, they are infrequent in nature and are generally correlated with the IPO and other realization activity in our private equity portfolio, and may be smaller in size and number in the future compared to current and prior periods.
Performance Income
The net increase is attributable to a higher level of net carried interest gains in the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily reflecting a higher level of appreciation in the value of our private equity portfolio in the current period compared to the prior period.
Realized carried interest for the nine months ended September 30, 2017, consisted primarily of realized gains from the sale of Capsugel (manufacturing sector) and the partial sales of US Foods Holding Corp. and PRA Health Sciences, Inc.

Realized carried interest for the nine months ended September 30, 2016 consisted primarily of realized gains from the sale or partial sale of Walgreens Boots Alliance, Inc., Alliance Tire Group B.V. and HCA Holdings, Inc.







The following table presents performance income by investment vehicle for the nine months ended September 30, 2017 and 2016:
 Nine Months Ended September 30,
 2017 2016
   ($ in thousands)  
 Realized Carried InterestUnrealized Carried Interest
Total
Carried Interest
 Realized Carried InterestUnrealized Carried Interest
Total
Carried
Interest
North America Fund XI$129,576
$333,354
$462,930
 $61,898
$146,192
$208,090
2006 Fund511,935
(347,899)164,036
 351,115
(329,865)21,250
Co-Investment Vehicles and Other23,088
137,510
160,598
 7,245
6,829
14,074
European Fund III83,045
42,260
125,305
 35,231
92,783
128,014
Asian Fund II29,351
93,419
122,770
 —
168,145
168,145
European Fund IV—
68,274
68,274
 —
(197)(197)
Asian Fund17,846
15,771
33,617
 126,820
(41,251)85,569
Global Infrastructure Investors II—
25,453
25,453
 —
(272)(272)
Global Infrastructure Investors14,772
9,012
23,784
 16,845
7,079
23,924
Real Estate Partners Americas12,050
(60)11,990
 —
5,035
5,035
Next Generation Technology Growth—
8,165
8,165
 —
943
943
Millennium Fund28,266
(22,140)6,126
 59,707
(84,129)(24,422)
European Fund—
—
—
 1,503
(4,395)(2,892)
E2 Investors—
(306)(306) —
1,328
1,328
China Growth Fund20,130
(23,315)(3,185) 2,858
9,845
12,703
European Fund II20,251
(25,940)(5,689) 85,972
(98,410)(12,438)
Management Fee Refunds—
(7,613)(7,613) —
(11,046)(11,046)
Total (1)
$890,310
$305,945
$1,196,255
 $749,194
$(131,386)$617,808
(1)The above table excludes any funds for which there was no carried interest during either of the periods presented.
Unrealized carried interest reflects the difference between total carried interest and realized carried interest. The recognition of realized carried interest results in the reversal of accumulated unrealized carried interest, generally resulting in minimal impact on total performance income. Additionally, because unrealized carried interest can be reversed upon a realization event, in periods where there is significant realized carried interest, unrealized carried interest can be negative even in periods of portfolio appreciation.

For the ninethree months ended September 30, 2017,March 31, 2022, Public Markets had $8.0 billion of capital invested as compared to $2.9 billion for the value of our private equity investment portfolio increased 15.9%. This was comprised of a 24.9% increase in the share prices of various publicly held or publicly indexed investments and an 11.2% increase in value of our privately held investments. Additionally, our infrastructure investment portfolio, which is comprised predominately of private investments, increased 20.0%. The most significant increases in share prices of various publicly held or publicly indexed investments were gains in Gardner Denver Holdings, Inc., First Data Corporation and Qingdao Haier Co., Ltd. These increases were partially offset by decreased share prices of various publicly held investments, the most significant of which were losses in Fujian Sunner Development Co. Ltd., Laureate Education, Inc. and US Foods Holding Corp. Our privately held investments contributed the remainder of the change in value, the most significant of which were gains relating to Internet Brands, Inc. (technology sector), Weld North (education sector) and Colonial Pipeline Company (infrastructure sector). The unrealized gains on our privately held investments were partially offset by unrealized losses relating primarily to Academy Ltd. (retail sector), Toys R Us, Inc. (retail sector) and Santanol Pty Ltd (forestry sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) an increase in the value of market comparables and (ii) individual company performance. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance or, in certain cases, an unfavorable business outlook and (ii) a decrease in the value of market comparables.
For the ninethree months ended September 30, 2016, the value of our private equity investment portfolio increased 8.9%. This was comprised of a 1.7% increase in the share prices of various publicly held or publicly indexed investments and a 14.5% increase in value of our privately held investments. The most significant increases in share prices of various publicly held or

publicly indexed investments were gains in US Foods Holding Corp., PRA Health Sciences, Inc. and HCA Holdings, Inc. These increases were partially offset by decreased share prices of various publicly held investments, the most significant of which were losses in First Data Corporation, Walgreens Boots Alliance, Inc. and Qingdao Haier Co., Ltd. Our privately held investments contributed the remainder of the change in value, the most significant of which were gains relating to Panasonic Healthcare Co., Ltd., Sedgwick Claims Management Services and Alliance Tire Group B.V. (manufacturing sector). The unrealized gains on our privately held investments were partially offset by unrealized losses relating primarily to Aricent Group (technology sector), OEG Management Partners Limited (energy sector) and MMI Holdings Limited (technology sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) in the case of Sedgwick Claims Management Services and Alliance Tire Group B.V., valuations that reflect agreements to sell all or a portion of these investments, (ii) an increase in the value of market comparables and (iii) individual company performance. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance or, in certain cases, an unfavorable business outlook and (ii) a decrease in the value of market comparables.
Segment Expenses
Compensation and Benefits
The net increase was due primarily to higher performance income compensation resulting from a higher level of gains in our private equity portfolio in the current period compared to the prior period as described above as well as increased cash compensation and benefits. These increases were partially offset by a greater amount of compensation and benefits expense allocated to Principal Activities as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments.

Occupancy and Other Operating Expenses

The decrease is primarily due to a decrease in expenses that are creditable to our investment funds, which includes broken-deal expenses, as well as a decrease relating to a greater amount of other operating expenses allocated to Principal Activities as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments. These decreases were partially offset by an increase in professional fees.

Economic Net Income (Loss)
March 31, 2021. The increase was primarily due to a higher level of performance income in the current period compared to the prior period and higher fees partially offset by an increase in compensation and benefits as described above.

Assets Under Management

The following table reflects the changes in(i) capital deployed under our Private Markets AUM from December 31, 2016 to September 30, 2017:
 ($ in thousands)
December 31, 2016$73,815,500
New Capital Raised15,367,500
Distributions and Other(9,166,800)
Change in Value7,593,600
September 30, 2017$87,609,800

AUM for the Private Markets segment was $87.6 billion at September 30, 2017, an increase of $13.8 billion, compared to $73.8 billion at December 31, 2016. The increase was primarily attributable to (i) new capital raised primarily in our Asian Fund III, two new strategic investor partnerships and our Real Estate Credit Opportunity Partners fundinvestment management agreements with Global Atlantic's insurance companies and (ii) to a lesser extent, an increase in the value of our Private Markets portfolio. These increases were partially offset by (i) distributions to Private Markets fund investors primarily as a result of realizations most notably in our 2006 Fund, North America Fund XI and European Fund III and (ii) a decrease of $0.8 billion reflecting expired commitments that are no longer eligible to be called for investments. Our flagship private equity funds like our Asian Fund III, which represents $9.0 billion of AUM at September 30, 2017, are raised only episodically toward the end of the investment period of their predecessor funds or when their predecessor funds' capital becomes largely invested or allocated for investment.

The increase in the value of our Private Markets portfolio was driven primarily by net gains of $2.4 billion in our North America Fund XI, $0.9 billion in each of our 2006 Fund and European Fund III and $0.6 billion in each of our Asian Fund II and European Fund IV.  The drivers of the overall change in value for Private Markets were consistent with those noted in the Performance Income commentary above. See “-- Private Markets - Segment Revenues -Performance Income.”

Fee-Paying Assets Under Management
The following table reflects the changes in our Private Markets FPAUM from December 31, 2016 to September 30, 2017:
 ($ in thousands)
December 31, 2016$52,204,800
New Capital Raised14,653,000
Distributions and Other(3,719,400)
Net Changes in Fee Base of Certain Funds(2,418,800)
Change in Value986,900
September 30, 2017$61,706,500

FPAUM in our Private Markets segment was $61.7 billion at September 30, 2017, an increase of $9.5 billion, compared to $52.2 billion at December 31, 2016. The increase was primarily attributable to new capital raised in our Asian Fund III (which reached its $8.5 billion limit on fee paying limited partner capital during the second quarter of 2017) and capital invested in our Asian Fund II and North America Fund XI. These increases were partially offset by (i) distributions and other activity primarily relating to realizations in our 2006 Fund and European Fund III and (ii) net changes in the fee base of our Asian Fund II as a result of it entering into its post investment period, during which it earns fees based on invested capital rather than committed capital.

Capital Invested
The increase was driven primarily by a $4.1 billion increase in capital invested indeployed across our private equity platform, which includes an increase in core private equity of $1.0 billion consisting of an investment in USI, Inc. made by us and one of our investment funds, and a $1.5 billion increase in capital invested in our real assets and other platforms. Generally,credit strategies. During the portfolio companies acquired through our private equity funds have higher transaction values and result in higher capital invested relative to transactions in our real assets funds. The number of large private equity investments made in any quarter is volatile and consequently, a significant amountthree months ended March 31, 2022, 86% of capital invested in one quarter or a few quarters may not be indicative of a similar level of capital deployment in future quarters. During the nine months ended September 30, 2017, 38% of capital deployed in private equity, excluding core private equity, was in transactions in North America, 9% was in Europe, and 5% was in the Asia-Pacific region, 38% was in North America and 24% was in Europe.region.
Uncalled Commitments
140
As
Analysis of September 30, 2017, our Private Markets segment had $39.4 billion of remaining uncalled capital commitments that could be called for investments in new transactions. The increase from September 30, 2016 is due primarily to new capital raised in our Asian Fund III, two new strategic investor partnerships and Americas Fund XII, partially offset by capital called from fund investors to fund investments during the period. Insurance Segment Operating Results




Public Markets Segment

The following tables set forth information regarding theKKR's insurance segment operating results of operations and certain key operating metrics for our Public Markets segment for the threeas of and nine months ended September 30, 2017 and 2016.

Three months ended September 30, 2017 compared to three months ended September 30, 2016
  Three Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $79,113
 $83,713
 $(4,600)
Monitoring Fees —
 —
 —
Transaction Fees 11,469
 10,748
 721
Fee Credits (10,893) (10,265) (628)
Total Management, Monitoring and Transaction Fees, Net 79,689
 84,196
 (4,507)
       
Performance Income  
  
  
Realized Incentive Fees 4,074
 3,659
 415
Realized Carried Interest —
 —
 —
Unrealized Carried Interest 36,933
 17,012
 19,921
Total Performance Income 41,007
 20,671
 20,336
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) —
 —
 —
Net Unrealized Gains (Losses) —
 —
 —
   Total Realized and Unrealized —
 —
 —
Interest Income and Dividends —
 —
 —
Interest Expense —
 —
 —
Net Interest and Dividends —
 —
 —
Total Investment Income (Loss) —
 —
 —
       
Total Segment Revenues 120,696
 104,867
 15,829
       
Segment Expenses  
  
  
Compensation and Benefits  
  
  
Cash Compensation and Benefits 16,257
 22,022
 (5,765)
Realized Performance Income Compensation 1,630
 1,463
 167
Unrealized Performance Income Compensation 16,553
 6,805
 9,748
Total Compensation and Benefits 34,440
 30,290
 4,150
Occupancy and related charges 1,535
 2,570
 (1,035)
Other operating expenses 7,672
 8,894
 (1,222)
Total Segment Expenses 43,647
 41,754
 1,893
       
Income (Loss) attributable to noncontrolling interests —
 —
 —
       
Economic Net Income (Loss) $77,049
 $63,113
 $13,936
   
  
  
Assets Under Management $65,729,700
 $55,920,200
 $9,809,500
Fee Paying Assets Under Management $52,016,500
 $49,143,500
 $2,873,000
Capital Invested $1,639,200
 $1,484,400
 $154,800
Uncalled Commitments $7,828,600
 $6,428,200
 $1,400,400

Segment Revenues
Management, Monitoring and Transaction Fees, Net
The net decrease was primarily due to a decrease in management fees. The decrease in management fees was primarily due to a reduction in management fees from KKR Prisma as a result of the PAAMCO Prisma transaction that closed in the second quarter of 2017. KKR reports its investment in PAAMCO Prisma using the equity method of accounting, and on a segment basis, KKR reflects its allocation of the net income of PAAMCO Prisma as management fees and realized incentive fees.  Accordingly, the management fees and other revenues and expenses of Prisma that had been reported on a gross basis prior to the closing of the transaction on June 1, 2017 are reflected on a net basis as part of our allocation of the net income of PAAMCO Prisma after June 1, 2017 resulting in a decrease in our reported gross management fees when compared to the prior period. See "-- Business Segments - Public Markets." This decrease was partially offset by capital invested in our Special Situations Fund II, Lending Partners II Fund, Lending Partners III Fund and Lending Partners Europe Fund as well as an increase in management fees from our strategic manager partnerships. 

Performance Income
The net increase was primarily attributable to a higher level of net carried interest gains in the three months ended September 30, 2017, compared to the three months ended September 30, 2016. The carried interest gains in the current period were primarily the result of net increases in the value of our credit portfolio, the most significant of which was in our mezzanine strategy.

Segment Expenses
Compensation and Benefits
The increase was primarily due to higher net performance income compensation in connection with a higher level of net carried interest gains for the three months ended September 30, 2017, as compared to three months ended September 30, 2016, as described above, partially offset by decreased cash compensationMarch 31, 2022 and benefits due primarily to the PAAMCO Prisma transaction which closed on June 1, 2017. KKR reports its investment in PAAMCO Prisma using the equity method of accounting. Accordingly, the compensation expenses of Prisma that had been reported on a gross basis prior to the closing of the transaction on June 1, 2017 are reflected as part of our allocation of the net income of PAAMCO Prisma after June 1, 2017 resulting in a decrease in our reported cash compensation and benefits expense when compared to the prior period. See "-- Business Segments - Public Markets."2021:

Occupancy and Other Operating Expenses
Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Net Investment Income$862,414 $445,898 $416,516 
Net Cost of Insurance(493,649)(250,219)(243,430)
General, Administrative and Other(146,002)(75,489)(70,513)
Pre-tax Insurance Operating Earnings222,763 120,190 102,573 
Income Taxes(34,106)(16,626)(17,480)
Net Income Attributable to Noncontrolling Interests(72,669)(40,299)(32,370)
Insurance Segment Operating Earnings$115,988 $63,265 $52,723 

The decrease was primarily driven by lowerInsurance segment operating expenses as a result of having transferred certain leased office space and otherearnings

Insurance segment operating expenses as part of the PAAMCO Prisma transaction. See "-- Business Segments - Public Markets."
Economic Net Income (Loss)
The increase is primarily attributable to the increase in performance income, partially offset by the increase in compensation and benefits expense as described above.
Assets Under Management
The following table reflects the changes in our Public Markets AUM from June 30, 2017 to September 30, 2017: 
 ($ in thousands)
June 30, 2017$63,499,000
New Capital Raised3,392,200
Distributions(1,273,400)
Redemptions(559,500)
Change in Value671,400
September 30, 2017$65,729,700

AUM in our Public Markets segment totaled $65.7 billion at September 30, 2017, an increase of $2.2 billion compared to AUM of $63.5 billion at June 30, 2017. The increase was primarily due to new capital raised across multiple strategies, most

notably $1.4 billion in two new strategic investor partnerships, $0.7 billion in our CLOs and $0.7 billion with our strategic manager partnerships. The increases due to change in value were driven primarily by $0.2 billion in our European CLOs, $0.1 billion with our strategic manager partnerships and $0.1 billion in our European liquid credit mandates. Partially offsetting these increases were redemptions and distributions from certain investment vehicles, most notably with our strategic manager partnerships and our CLOs. For the three months ended September 30, 2017, new capital raised has outpaced redemptions with our strategic manager partnerships. 

Fee-Paying Assets Under Management
The following table reflects the changes in our Public Markets FPAUM from June 30, 2017 to September 30, 2017: 
 ($ in thousands)
June 30, 2017$50,637,300
New Capital Raised2,950,000
Distributions(1,752,100)
Redemptions(559,500)
Change in Value740,800
September 30, 2017$52,016,500
FPAUM in our Public Markets segment was $52.0 billion at September 30, 2017, an increase of $1.4 billion compared to FPAUM of $50.6 billion at June 30, 2017. The increase was primarily due to new capital raised across multiple strategies most notably $0.7 billion with our strategic manager partnerships, $0.7 billion in our CLOs, $0.5 billion in our Special Situations II Fund and $0.2 billion in our Lending Partners III Fund. New capital raised includes capital that was raised in previous periods but began earning fees upon deployment of capital. Partially offsetting these increases were redemptions and distributions from certain investment vehicles including $1.1 billion across multiple alternative credit strategies, $0.5 billion at our strategic manager partnerships and $0.4 billion from our CLOs. For the three months ended September 30, 2017, new capital raised has outpaced redemptions with our strategic manager partnerships. Uncalled capital commitments from investment funds from which KKR is currently not earning management fees amounted to approximately $5.4 billion.  This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period.  The average annual management fee rate associated with this capital is approximately 1.1%.  We will not begin earning fees on this capital until it is deployed or the related investment period commences, neither of which is guaranteed.  If and when such management fees are earned, which will occur over an extended period of time, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.
Capital Invested
Capital investedearnings increased for the three months ended September 30, 2017,March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, and (ii) higher net investment income resulting from an increase in average assets under management due to growth of the business. The increase was offset in part by (i) higher net cost of insurance, primarily due to the growth in both our individual market and institutional market channels, (ii) corresponding increase in general and administrative expenses and (iii) an increase in income tax expense.

Net investment income

Net investment income increased for the three months ended September 30, 2016. March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased average assets under management due to growth in our Institutional segment assets as a result of new reinsurance transactions and new Individual sales, and (iii) increased variable investment income from net realized gains from the sale of real estate investments.
Net cost of insurance
Net cost of insurance increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) growth in our Institutional segment as a result of new reinsurance transactions and (iii) new Individual sales.
General, administrative and other expenses

General and administrative expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased employee compensation and benefits related expenses, (iii) increased professional service fees, (iv) increased third-party administrator ("TPA") policy servicing fees, all due to growth of the business, and (v) travel returning to pre-pandemic levels.
Income taxes

Insurance segment income tax expense reflects the annual estimated effective tax rate for the insurance segment on an operating basis, including the benefit of investment tax credits.

141
Net income (loss) attributable to non-controlling interests

Net income (loss) attributable to non-controlling interests increased for the three months ended March 31, 2022 as compared to the prior period proportional to the increase in insurance segment operating earnings for the comparable period. Net income (loss) attributable to non-controlling interests represent the proportionate interest in the insurance segment operating earnings attributable to rollover and other co-investors in Global Atlantic.
Analysis of Non-GAAP Performance Measures

The following is a discussion of our Non-GAAP performance measures for the three months ended March 31, 2022 and 2021:

Three Months Ended
March 31, 2022March 31, 2021Change
($ in thousands)
Asset Management Segment Operating Earnings$1,127,445 $817,172 $310,273 
Insurance Segment Operating Earnings115,988 63,265 52,723 
Distributable Operating Earnings1,243,433 880,437 362,996 
Interest Expense(69,460)(57,545)(11,915)
Preferred Dividends— (8,341)8,341 
Net Income Attributable to Noncontrolling Interests(7,616)(3,192)(4,424)
Income Taxes Paid(197,842)(151,120)(46,722)
After-tax Distributable Earnings$968,515 $660,239 $308,276 
For the quarter ended March 31, 2021 the results of our Insurance Segment above are from February 1, 2021 (closing date of the acquisition) through March 31, 2021.
Distributable Operating Earnings
The increase in distributable operating earnings for the three months ended March 31, 2022 compared to the prior period is primarily due to a higher level of net capital deployed primarily in our direct lending strategy.Asset Management segment operating earnings and Insurance segment operating earnings. For a discussion of the Asset Management and Insurance segment operating earnings, see "—Analysis of Asset Management Segment Operating Results and Analysis of Insurance Segment Operating Results."


Uncalled CommitmentsInterest Expense
As of September 30, 2017, our Public Markets segment had $7.8 billion of uncalled capital commitments that could be called for investments in new transactions.    The increase from September 30, 2016in interest expense for the three months ended March 31, 2022 compared to the prior period is due primarily to new capital raised primarilydebt issuances by KKR's financing subsidiaries subsequent to March 31, 2021.
Income Taxes Paid
    The increase in two new strategic investor partnerships and Lending Partners III Fund, partially offset by capital called from limited partners to fund investments duringincome taxes paid for the period.


Ninethree months ended September 30, 2017March 31, 2022 compared to nine months ended September 30, 2016

  Nine Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $251,201
 $245,349
 $5,852
Monitoring Fees —
 —
 —
Transaction Fees 41,040
 17,768
 23,272
Fee Credits (33,894) (16,230) (17,664)
Total Management, Monitoring and Transaction Fees, Net 258,347
 246,887
 11,460
       
Performance Income  
  
  
Realized Incentive Fees 8,384
 9,897
 (1,513)
Realized Carried Interest —
 3,838
 (3,838)
Unrealized Carried Interest 71,762
 (3,370) 75,132
Total Performance Income 80,146
 10,365
 69,781
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) —
 —
 —
Net Unrealized Gains (Losses) —
 —
 —
   Total Realized and Unrealized —
 —
 —
Interest Income and Dividends —
 —
 —
Interest Expense —
 —
 —
Net Interest and Dividends —
 —
 —
Total Investment Income (Loss) —
 —
 —
       
Total Segment Revenues 338,493
 257,252
 81,241
     
  
Segment Expenses  
    
Compensation and Benefits  
    
Cash Compensation and Benefits 58,991
 61,193
 (2,202)
Realized Performance Income Compensation 3,354
 5,493
 (2,139)
Unrealized Performance Income Compensation 30,485
 (1,347) 31,832
Total Compensation and Benefits 92,830
 65,339
 27,491
Occupancy and related charges 5,140
 7,252
 (2,112)
Other operating expenses 24,244
 28,102
 (3,858)
Total Segment Expenses 122,214
 100,693
 21,521
       
Income (Loss) attributable to noncontrolling interests —
 —
 —
       
Economic Net Income (Loss) $216,279
 $156,559
 $59,720
   
  
  
Assets Under Management $65,729,700
 $55,920,200
 $9,809,500
Fee Paying Assets Under Management $52,016,500
 $49,143,500
 $2,873,000
Capital Invested $3,825,900
 $3,049,400
 $776,500
Uncalled Commitments $7,828,600
 $6,428,200
 $1,400,400

Segment Revenues
Management, Monitoring and Transaction Fees, Net
The net increasethe prior period was primarily due to an increase in transaction fees, partially offset by a corresponding increase in fee credits, and an increase in management fees. the higher level of Asset Management segment operating earnings.
After-tax Distributable Earnings
The increase in transaction fees was driven primarily by a $18.5 million breakup fee received inafter-tax distributable earnings for the ninethree months ended September 30, 2017 in connection with a terminated transaction, compared to no such breakup fees in the nine months ended September 30, 2016. The net amount of this fee attributable to us after credits to our limited partners was $4.6 million. The increase in management fees related primarily to capital invested in our Special Situations Fund II, Lending Partners II Fund, and Lending Partners Europe Fund as well as an increase in management fees with our strategic manager partnerships. These increases were partially offset by a reduction in management fees from KKR Prisma as a result of the PAAMCO Prisma transaction that closed in the second quarter of 2017. KKR reports its investment in PAAMCO Prisma using the equity method of accounting, and on a segment basis, KKR reflects its allocation of the net income of PAAMCO Prisma as management fees and realized incentive fees.  Accordingly, the management fees and other revenues and expenses of Prisma that had been reported on a gross basis prior to the closing of the transaction on June 1, 2017 are reflected on a net basis as part of our allocation of the net income of PAAMCO Prisma after June 1, 2017 resulting in a decrease in our reported gross management fees whenMarch 31, 2022 compared to the prior period.

Performance Income
The net increaseperiod was primarily attributable to higher net carried interest gains in the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. The carried interest gains in the current period were primarily the result of increases in the value of our private credit portfolio, with the most significant carried interest gains arising in our mezzanine and direct lending strategies. In the prior period, net carried interest losses were experienced in our mezzanine strategy.

Segment Expenses
Compensation and Benefits
The increase was primarily due to higher net performance income compensation in connection with higher net carried interest gains for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, as described above. These increases were partially offset by decreased cash compensation and benefits due primarily to (i) a greater amounthigher level of compensation and benefits expense allocated to Principal Activities as a result of an increase in the proportion of revenue earned by Principal Activities relative to otherdistributable operating segments and (ii) the PAAMCO Prisma transaction which closed on June 1, 2017. KKR reports its investment in PAAMCO Prisma using the equity method of accounting. Accordingly, the compensation expenses of Prisma that had been reported on a gross basis prior to the closing of the transaction on June 1, 2017 are reflected as part of our allocation of the net income of PAAMCO Prisma after June 1, 2017 resulting in a decrease in our reported cash compensation and benefits expense when compared to the prior period.
Occupancy and Other Operating Expenses
The decrease was primarily driven by lower operating expenses as a result of having transferred certain leased office space and other operating expenses as part of the PAAMCO Prisma transaction. See "-- Business Segments - Public Markets."
Economic Net Income (Loss)
The increase is primarily attributable to the increase in performance income and transaction and management fees,earnings, partially offset by an increase in compensationincome taxes paid and benefitsinterest expense, as described above.


Assets Under Management

The following table reflects the changesamount of tax benefit from equity-based compensation included in our Public Markets AUM from December 31, 2016 to September 30, 2017: 
 ($ in thousands)
December 31, 2016$55,740,200
New Capital Raised7,608,900
Impact of Other Transactions3,811,400
Distributions(2,516,200)
Redemptions(2,029,600)
Change in Value3,115,000
September 30, 2017$65,729,700

AUM in our Public Markets segment totaled $65.7 billion at September 30, 2017, an increase of $10.0 billion compared to AUM of $55.7 billion at December 31, 2016. The increase for the period was primarily due to new capital raised across multiple strategies most notably $1.4 billion in two new strategic investor partnerships, $1.3 billion in our liquid credit strategies, $1.9 billion with our strategic manager partnerships, $1.3 billion in our CLOs and $0.8 billion in our Lending Partners III Fund. The "Impact of Other Transactions" represents the closing of the PAAMCO Prisma transaction. This resulted in a net increase of approximately $3.8 billion reflecting the excess of our pro-rata portion of the AUM of PAAMCO Prisma over the historical AUM of Prisma Capital Partners, our former hedge funds solutions platform. For the nine months ended September 30, 2017, new capital raised outpaced our redemptions with our strategic manager partnerships. The increases due to change in value were driven primarily by our strategic manager partnerships, our domestic private credit strategies and our European liquid credit and European CLOs. Partially offsetting these increases were redemptions and distributions from certain investment vehicles across multiple strategies, primarily with our strategic manager partnerships, our private credit strategies and our CLOs.
Fee-Paying Assets Under Management
The following table reflects the changes in our Public Markets FPAUM from December 31, 2016 to September 30, 2017: 
 ($ in thousands)
December 31, 2016$49,268,600
New Capital Raised7,630,100
Impact of Other Transactions(1,600,000)
Distributions(3,794,600)
Redemptions(2,029,600)
Change in Value2,542,000
September 30, 2017$52,016,500
FPAUM in our Public Markets segment was $52.0 billion at September 30, 2017, an increase of $2.7 billion compared to FPAUM of $49.3 billion at December 31, 2016. The increase was primarily due to new capital raised across multiple strategies, most notably $1.9 billion with our strategic manager partnerships, $1.3 billion in our liquid credit strategies, $1.3 billion in our CLOs, $0.8 billion in our Special Situations Fund II and $0.5 billion in our Lending Partners Fund III. New capital raised includes capital that was raised in previous periods but began earning fees upon deployment of capital. For the nine months ended September 30, 2017, new capital raised has outpaced redemptions with our strategic manager partnerships. Change in value was driven primarily by $0.9 billion with our strategic manager partnerships, $0.6 billion in our liquid credit strategies and $0.5 billion in our European CLOs. Partially offsetting these increases were redemptions and distributions from certain investment vehicles across multiple strategies driven by $1.4 billion with our strategic manager partnerships, $2.3 billion from our private credit strategies and $1.0 billion from our CLOs. The "Impact of Other Transactions" represents the closing of the PAAMCO Prisma transaction. This resulted in a net decrease of approximately $1.6 billion reflecting the excess of our historical FPAUM of Prisma Capital Partners, our former hedge funds solutions platform, over our pro-rata portion of the FPAUM of PAAMCO Prisma. FPAUM excludes assets under advisement of PAAMCO Prisma.
Capital Invested
Capital invested increased for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2017. The increase is primarily due to a higher level of net capital deployed in our direct lending and special situations strategies.


Uncalled Commitments
As of September 30, 2017, our Public Markets segment had $7.8 billion of uncalled capital commitments that could be called for investments in new transactions. The increase from September 30, 2016 is due to new capital raised primarily in two new strategic investor partnerships and Lending Partners III Fund, partially offset by capital called from limited partners to fund investments during the period.







Capital Markets
The following tables set forth information regarding the results of operations and certain key operating metrics for our Capital Markets segment for the three and nine months ended September 30, 2017 and 2016.

Three months ended September 30, 2017 compared to three months ended September 30, 2016
  Three Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $—
 $—
 $—
Monitoring Fees —
 —
 —
Transaction Fees 85,440
 47,383
 38,057
Fee Credits —
 —
 —
Total Management, Monitoring and Transaction Fees, Net 85,440
 47,383
 38,057
       
Performance Income  
  
  
Realized Incentive Fees —
 —
 —
Realized Carried Interest —
 —
 —
Unrealized Carried Interest —
 —
 —
Total Performance Income —
 —
 —
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) —
 —
 —
Net Unrealized Gains (Losses) —
 —
 —
   Total Realized and Unrealized —
 —
 —
Interest Income and Dividends —
 —
 —
Interest Expense —
 —
 —
Net Interest and Dividends —
 —
 —
Total Investment Income (Loss) —
 —
 —
       
Total Segment Revenues 85,440
 47,383
 38,057
       
Segment Expenses  
  
  
Compensation and Benefits  
  
  
Cash Compensation and Benefits 16,924
 7,803
 9,121
Realized Performance Income Compensation —
 —
 —
Unrealized Performance Income Compensation —
 —
 —
Total Compensation and Benefits 16,924
 7,803
 9,121
Occupancy and related charges 760
 330
 430
Other operating expenses 6,293
 3,552
 2,741
Total Segment Expenses 23,977
 11,685
 12,292
       
Income (Loss) attributable to noncontrolling interests 1,046
 760
 286
       
Economic Net Income (Loss) $60,417
 $34,938
 $25,479
       
Syndicated Capital $533,300
 $537,000
 $(3,700)
       

Segment Revenues
Management, Monitoring and Transaction Fees, Net

Transaction fees increased due primarily to an increase in both the number and size of capital markets transactionsincome taxes paid for the three months ended September 30, 2017, comparedMarch 31, 2022 and 2021 was $11.8 million and $43.0 million, respectively, and its inclusion in after-tax distributable earnings had the effect of increasing this measure by 1% and 7%, respectively.





142
Non-GAAP Balance Sheet Measures
Book Value
The following table presents our calculation of book value as of March 31, 2022 and December 31, 2021:
As of
 March 31, 2022December 31, 2021
 ($ in thousands)
(+)Cash and Short-term Investments$4,830,014 $4,869,203 
(+)Investments17,987,229 17,763,542 
(+)
Net Unrealized Carried Interest (1)
4,194,193 4,967,401 
(+)
Other Assets (2)
4,910,373 4,706,108 
(+)Global Atlantic Book Value3,425,241 3,372,498 
(-)Debt Obligations - KKR (excluding KFN and Global Atlantic)5,804,287 5,836,267 
(-)Debt Obligations - KFN948,517 948,517 
(-)Tax Liabilities, Net2,583,489 2,697,317 
(-)Other Liabilities1,020,430 774,711 
(-)Noncontrolling Interests29,950 33,058 
Book Value$24,960,377 $25,388,882 
Book Value Per Adjusted Share$28.45 $28.77 
Adjusted Shares877,397,862 882,589,036 
(1)The following table provides net unrealized carried interest by business line:
As of
March 31, 2022December 31, 2021
($ in thousands)
Private Markets Business Line$4,088,533 $4,856,843 
Public Markets Business Line105,660 110,558 
Total$4,194,193 $4,967,401 
(2)Other Assets include KKR's ownership interest in FS/KKR Advisor and minority ownership interests in hedge fund partnerships.
Book value per adjusted share decreased (1)% from December 31, 2021. The decrease was primarily attributable to (i) a reduction in net unrealized carried interest from our carried interest eligible investment funds, most notably Americas Fund XII and Asian Fund II, (ii) repurchases of our common stock, and (iii) payment of dividends during the period. Partially offsetting these decreases was the positive impact of our after-tax distributable earnings recognized during the period.
With respect to book value relating to the three months ended September 30, 2016. Overall, we completed 48 capital markets transactionsAsset Management business, for the three months ended September 30, 2017, of which 2 represented equity offerings and 46 represented debt offerings, as compared toMarch 31, transactions for2022, the three months ended September 30, 2016, of which 2 represented equity offerings and 29 represented debt offerings. We earned fees in connection with underwriting, syndication and other capital markets services. While eachvalue of the capital markets transactionsAsset Management segment balance sheet portfolio remained flat and KKR's traditional private equity portfolio decreased by 5%. For a further discussion, see "—Unaudited Consolidated Results of Operations (GAAP Basis) - Asset Management—Unrealized Gains and Losses from Investment Activities." For a discussion of the changes in KKR's private equity portfolio, see "—Analysis of Asset Management Segment Operating Results—Assets Under Management." For a discussion of factors that we undertakeimpacted KKR's after-tax distributable earnings, see "—Analysis of Non-GAAP Performance Measures— After-tax Distributable Earnings" and for more information about the factors that may impact our business, financial performance, operating results and valuations, see "—Business Environment."
143
The following table presents the holdings of our investments in thisthe Asset Management segment is separately negotiated, our fee ratesby asset class as of March 31, 2022. To the extent investments are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, andrealized at values below their cost in future periods, after-tax distributable earnings would be adversely affected by the amount of fees that we collect for like transactions generally correlates with overall transaction sizes. Our capital markets fees are sourced from our Private Markets and Public Markets businesses as well as third party companies. For the three months ended September 30, 2017, approximately 38% of our transaction fees were earned from unaffiliated third parties as compared to approximately 11% for the three months ended September 30, 2016. Our transaction fees are comprised of fees earned from North America, Europe, and Asia-Pacific, including India. For the three months ended September 30, 2017, approximately 21% of our transaction fees were sourced outside of the United States as compared to approximately 11% for the three months ended September 30, 2016. Our capital markets business is dependent on the overall capital markets environment, which is influenced by equity prices, credit spreads and volatility. Our capital markets business does not generate management or monitoring fees.

Segment Expenses
Compensation and Benefits and Other Operating Expenses
Segment expenses have increased compared to the prior period primarily due to higher compensation and benefits expense as a result of higher transactions fees. The increase in other operating expenses as compared to the prior period is primarily attributable to increased professional fees in connection with increased transaction costs.

Economic Net Income (Loss)
The increase is primarily attributable to the increase in transaction fees, partially offset by the increase in compensation and benefits expense as described above.

Syndicated Capital
Syndicated capital for the three months ended September 30, 2017 is essentially flat as compared to the three months ended September 30, 2016. Overall, we completed one syndication transaction for the three months ended September 30, 2017, as compared to two syndication transactions for the three months ended September 30, 2016.




Nine months ended September 30, 2017 compared to nine months ended September 30, 2016
       
  Nine Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $—
 $—
 $—
Monitoring Fees —
 —
 —
Transaction Fees 300,235
 144,214
 156,021
Fee Credits —
 —
 —
Total Management, Monitoring and Transaction Fees, Net 300,235
 144,214
 156,021
       
Performance Income  
  
  
Realized Incentive Fees —
 —
 —
Realized Carried Interest —
 —
 —
Unrealized Carried Interest —
 —
 —
Total Performance Income —
 —
 —
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) —
 —
 —
Net Unrealized Gains (Losses) —
 —
 —
Total Realized and Unrealized —
 —
 —
Interest Income and Dividends —
 —
 —
Interest Expense —
 —
 —
Net Interest and Dividends —
 —
 —
Total Investment Income (Loss) —
 —
 —
       
Total Segment Revenues 300,235
 144,214
 156,021
       
Segment Expenses  
  
  
Compensation and Benefits  
  
  
Cash Compensation and Benefits 57,053
 23,374
 33,679
Realized Performance Income Compensation —
 —
 —
Unrealized Performance Income Compensation —
 —
 —
Total Compensation and Benefits 57,053
 23,374
 33,679
Occupancy and related charges 2,052
 1,901
 151
Other operating expenses 15,320
 10,870
 4,450
Total Segment Expenses 74,425
 36,145
 38,280
       
Income (Loss) attributable to noncontrolling interests 3,810
 2,002
 1,808
       
Economic Net Income (Loss) $222,000
 $106,067
 $115,933
       
Syndicated Capital $2,167,600
 $1,213,500
 $954,100
       

Segment Revenues
Management, Monitoring and Transaction Fees, Net
Transaction fees increased due to an increase in both the number and size of capital markets transactions for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Overall, we completed 144 capital markets transactions for the nine months ended September 30, 2017 of which 20 represented equity offerings and 124 represented debt offerings, as compared to 82 transactions for the nine months ended September 30, 2016 of which 11 represented equity offerings and 71 represented debt offerings. We earned fees in connection with underwriting, syndication and other capital markets services. While each of the capital markets transactions that we undertake in this segment is separately negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the amount of fees that we collect for like transactions generally correlates with overall transaction sizes. Our capital markets fees are sourced from our Private Markets and Public Markets businesses as well as third party companies. For the nine months ended September 30, 2017 approximately 28% of our transaction fees were earned from third parties as compared to approximately 15% for the nine months ended September 30, 2016. Our transaction fees are comprised of fees earned from North America, Europe, Asia-Pacific and India. For the nine months ended September 30, 2017 approximately 36% of our transaction fees were sourced outside of the United States as compared to approximately 31% for the nine months ended September 30, 2016. Our capital markets business is dependent on the overall capital markets environment, which is influenced by equity prices, credit spreads and volatility. Our capital markets business does not generate management or monitoring fees.

Segment Expenses
Compensation and Benefits and Other Operating Expenses
Segment expenses have increased compared to the prior period primarily due to higher compensation and benefits expense as a result of higher transactions fees. The increase in other operating expenses as compared to the prior period is primarily attributable to increased professional fees in connection with increased transaction costs.
Economic Net Income (Loss)
The increase is primarily attributable to the increase in transaction fees, which is partially offset by the increase in compensation and benefits expense as described above.

Syndicated Capital
The increase is primarily due to an increase in both the number and average size of syndication transactions in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Overall, we completed ten syndication transactions for the nine months ended September 30, 2017 as compared to eight syndications for the nine months ended September 30, 2016.







Principal Activities
The following tables set forth information regarding the results of operations and certain key operating metrics for our Principal Activities segment for the three and nine months ended September 30, 2017 and 2016.

Three months ended September 30, 2017 compared to three months ended September 30, 2016
  Three Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $—
 $—
 $—
Monitoring Fees —
 —
 —
Transaction Fees —
 —
 —
Fee Credits —
 —
 —
Total Management, Monitoring and Transaction Fees, Net —
 —
 —
       
Performance Income  
  
  
Realized Incentive Fees —
 —
 —
Realized Carried Interest —
 —
 —
Unrealized Carried Interest —
 —
 —
Total Performance Income —
 —
 —
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) 76,053
 170,078
 (94,025)
Net Unrealized Gains (Losses) (50,902) 136,740
 (187,642)
   Total Realized and Unrealized 25,151
 306,818
 (281,667)
Interest Income and Dividends 70,557
 71,185
 (628)
Interest Expense (45,613) (47,506) 1,893
Net Interest and Dividends 24,944
 23,679
 1,265
Total Investment Income (Loss) 50,095
 330,497
 (280,402)
       
Total Segment Revenues 50,095
 330,497
 (280,402)
       
Segment Expenses  
  
  
Compensation and Benefits  
  
  
Cash Compensation and Benefits 33,958
 24,284
 9,674
Realized Performance Income Compensation —
 —
 —
Unrealized Performance Income Compensation —
 —
 —
Total Compensation and Benefits 33,958
 24,284
 9,674
Occupancy and related charges 3,840
 3,729
 111
Other operating expenses 14,176
 10,646
 3,530
Total Segment Expenses 51,974
 38,659
 13,315
       
Income (Loss) attributable to noncontrolling interests —
 —
 —
       
Economic Net Income (Loss) $(1,879) $291,838
 $(293,717)
       


Segment Revenues
Investment Income
The net decrease is primarily due to a lower level of net realized and unrealized gainssuch loss, if any, during the three months ended September 30, 2017, compared toperiod in which the prior period.realization event occurs.
For the three months ended September 30, 2017, net realized gains were primarily comprised of gains from the sale of private markets investments including the sales or partial sales of First Data Corporation, Sentio Healthcare Properties (real estate sector), and Capsugel. Net unrealized losses were primarily attributable the reversal of unrealized gains on the sale of the Private Markets investments mentioned above offset by mark-to-market gains on various Private Markets investments including The Hut Group, Veresen Midstream (infrastructure sector) and Gardner Denver Holdings, Inc.
As of March 31, 2022
($ in thousands)
Investments (1)
CostFair ValueFair Value as a Percentage of
Total Investments
Private Equity$2,074,296 $4,394,266 24.4 %
Core Private Equity2,699,724 5,477,426 30.5 %
Growth299,662 855,865 4.8 %
Private Equity, Core & Growth Total5,073,682 10,727,557 59.6 %
Energy917,409 977,350 5.4 %
Real Estate2,092,721 2,523,561 14.0 %
Infrastructure672,591 838,403 4.7 %
Real Assets Total3,682,721 4,339,314 24.1 %
Leveraged Credit1,079,195 1,049,791 5.8 %
Alternative Credit838,108 979,936 5.4 %
Credit Total1,917,303 2,029,727 11.3 %
Other980,869 890,631 5.0 %
Total Investments$11,654,575 $17,987,229 100.0 %
As of September 30, 2017, $305.1 million of investments in CLOs and our $325.0 million investment in our REIT, were carried at cost. As of September 30, 2017, the cumulative net unrealized gain or loss relating to changes in fair value for these investments was a $16.9 million loss for CLOs and a $16.9 million gain for the real estate investment trust.
For the three months ended September 30, 2016, net realized gains were comprised primarily of the sales or partial sales of private equity investments, the most significant of which were Walgreens Boots Alliance, Inc. and Zimmer Biomet Holdings, Inc. These gains were partially offset by losses from the sale of certain alternative credit investments. Net unrealized gains were primarily attributable to the mark to market gains on First Data Corporation and certain energy investments offset by the reversal of unrealized gains on the sale or partial sales of Walgreens Boots Alliance, Inc. and Zimmer Biomet Holdings, Inc.
For the three months ended September 30, 2017, net interest and dividends were comprised of (i) $42.6 million of interest income which consists primarily of interest that is received from our Public Markets investments including CLOs and other credit investments and to a lesser extent our capital markets business and our cash balances, (ii) $27.9 million of dividend income from distributions received primarily through our private equity investments and real estate investments including our investment in our REIT and (iii) $45.6 million of interest expense primarily relating to the senior notes outstanding for KKR and KFN.
For the three months ended September 30, 2016, net interest and dividends were comprised of (i) $43.8 million of interest income which consists primarily of interest that is received from our Public Markets investments including CLOs and to a lesser extent our cash balances and other assets, (ii) $27.3 million of dividend income from distributions received primarily through our private equity investments, real estate funds and Public Markets investments and (iii) $47.5 million of interest expense primarily relating to the senior notes outstanding for KKR and KFN.

Segment Expenses
Compensation and Benefits
The increase was primarily due to a greater amount of compensation and benefits expenses allocated from the other operating segments to Principal Activities, as well as a greater amount of corporate compensation allocated to Principal Activities, in each case as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments as well as an increase in the absolute amount of compensation recorded.  See "-Segment Analysis" for a discussion of expense allocations among segments.
Occupancy and Other Operating Expenses
The increase was primarily due to a greater amount of other operating expenses allocated from the other operating segments to Principal Activities, as well as a greater amount of corporate other operating expenses allocated to Principal Activities, in each case as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments.
Economic Net Income (Loss)
The decrease in economic net income for the three months ended September 30, 2017 was primarily driven by the decrease in net investment income as described above.

Nine months ended September 30, 2017 compared to nine months ended September 30, 2016
       
  Nine Months Ended
  September 30, 2017 September 30, 2016 Change
  ($ in thousands)
Segment Revenues      
Management, Monitoring and Transaction Fees, Net  
  
  
Management Fees $—
 $—
 $—
Monitoring Fees —
 —
 —
Transaction Fees —
 —
 —
Fee Credits —
 —
 —
Total Management, Monitoring and Transaction Fees, Net —
 —
 —
       
Performance Income  
  
  
Realized Incentive Fees —
 —
 —
Realized Carried Interest —
 —
 —
Unrealized Carried Interest —
 —
 —
Total Performance Income —
 —
 —
       
Investment Income (Loss)  
  
  
Net Realized Gains (Losses) 162,684
 370,594
 (207,910)
Net Unrealized Gains (Losses) 461,111
 (725,699) 1,186,810
Total Realized and Unrealized 623,795
 (355,105) 978,900
Interest Income and Dividends 195,275
 253,756
 (58,481)
Interest Expense (134,348) (144,497) 10,149
Net Interest and Dividends 60,927
 109,259
 (48,332)
Total Investment Income (Loss) 684,722
 (245,846) 930,568
       
Total Segment Revenues 684,722
 (245,846) 930,568
       
Segment Expenses  
  
  
Compensation and Benefits  
  
  
Cash Compensation and Benefits 105,591
 72,689
 32,902
Realized Performance Income Compensation —
 —
 —
Unrealized Performance Income Compensation —
 —
 —
Total Compensation and Benefits 105,591
 72,689
 32,902
Occupancy and related charges 11,082
 11,121
 (39)
Other operating expenses 40,265
 32,404
 7,861
Total Segment Expenses 156,938
 116,214
 40,724
       
Income (Loss) attributable to noncontrolling interests —
 —
 —
       
Economic Net Income (Loss) $527,784
 $(362,060) $889,844
       

Segment Revenues
Investment Income
The net increase is primarily due to unrealized gains during the nine months ended September 30, 2017, compared to unrealized losses in the prior period, partially offset by a decrease in net interest and dividends of $49.6 million.
For the nine months ended September 30, 2017, net realized gains were primarily comprised of gains from the sale of private equity investments including the sales or partial sales of HCA Holdings, Inc., Galenica AG and First Data Corporation partially offset by losses on the sale of Fortune Creek Partnership (energy sector) and the restructurings of Algeco Scotsman (industrial sector) and Aurora Eaglebine (energy sector). Net unrealized gains were primarily attributable to mark-to-market gains on various Private Markets investments including First Data Corporation, an oil field services investment in our special situations strategy, and Veresen Midstream. These increases were partially offset primarily by unrealized losses due to the reversal of unrealized gains on the sales of private equity investments mentioned above.
As of September 30, 2017, $305.1 million of investments in CLOs and our $325.0 million investment in our REIT, were carried at cost. As of September 30, 2017, the cumulative net unrealized gain or loss relating to changes in fair value for these investments was a $16.9 million loss for CLOs and a $16.9 million gain for our REIT.
For the nine months ended September 30, 2016, net realized gains were primarily comprised of gains from the sale of private equity investments including the sales or partial sales of Walgreens Boots Alliance, Inc., HCA Holdings, Inc. and Zimmer Biomet Holdings, Inc., offset by the loss from the redemption of limited partner interests in a fund managed by BlackGold Capital Management, as well as certain CLOs being called and the sale of certain alternative credit investments. As of September 30, 2016, KKR no longer holds any limited partner interests in BlackGold Capital Management, although we continue to own an interest in the general partner and management company. Net unrealized losses were primarily attributable to mark-to-market losses on various Private Markets investments including First Data Corporation and to a lesser extent Walgreens Boots Alliance, Inc., mark-to-market losses on various alternative credit investments and unrealized losses on energy investments, and reversals of unrealized gains on the sales of private equity investments.
For the nine months ended September 30, 2017, net interest and dividends were comprised of (i) $117.2 million of interest income which consists primarily of interest that is received from our Public Markets investments including CLOs and other credit investments and to a lesser extent our capital markets business and our cash balances, (ii) $78.1 million of dividend income from distributions received primarily through our private equity investments and real estate investments including our investment in our REIT and (iii) $134.4 million of interest expense primarily relating to the senior notes outstanding for KKR and KFN.
For the nine months ended September 30, 2016, net interest and dividends were comprised of (i) $139.8 million of interest income which consists primarily of interest that is received from our Public Markets investments including CLOs and to a lesser extent our cash balances and other assets, (ii) $113.9 million of dividend income from distributions received primarily through our private equity investments, real estate funds and Public Markets investments and (iii) $144.5 million of interest expense primarily relating to the senior notes outstanding for KKR and KFN.
The net decrease in net interest and dividends is due primarily to the lower amount of capital invested in CLOs described above, as well as a lower level of dividends in the 2017 period, partially offset by lower interest expense due to the redemption and paydown of KFN's 8.375% senior notes due 2041 and other debt after the third quarter of 2016, a portion of which was replaced with debt bearing a lower rate of interest.
Segment Expenses
Compensation and Benefits
The increase was primarily due to a greater amount of compensation and benefits expenses allocated from the other operating segments to Principal Activities, as well as a greater amount of corporate compensation allocated to Principal Activities, in each case as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments as well as an increase in the absolute amount of compensation recorded.  See "-Segment Analysis" for a discussion of expense allocations among segments.
Occupancy and Other Operating Expenses
The increase was primarily due to a greater amount of other operating expenses allocated from the other operating segments to Principal Activities, as well as a greater amount of corporate other operating expenses allocated to Principal

Activities, in each case as a result of an increase in the proportion of revenue earned by Principal Activities relative to other operating segments.
Economic Net Income (Loss)
The increase in economic net income for the nine months ended September 30, 2017 was primarily driven by the net investment income in the current period as described above.

Segment Balance Sheet
Our segment balance sheet is the balance sheet of KKR & Co. L.P. and its subsidiaries on a segment basis which includes, but is not limited to, our investment management companies, broker-dealer companies, general partners of our investment funds and KFN. Our segment balance sheet excludes the assets and liabilities of our investment funds and CFEs and other consolidated entities that are not subsidiaries of KKR & Co. L.P.
Investments
(1)Investments is a term used solely for purposes of financial presentation of a portion of KKR's balance sheet and includes majority ownership of subsidiaries that operate KKR's asset management and otherinsurance businesses, including the general partner interests of KKR's investment funds. Investments presented are principally the assets measured at fair value that are held by KKR's asset management segment, which, among other things, does not include the underlying investments held by Global Atlantic and Marshall Wace.

144
Cash and Short-Term Investments
As of March 31, 2022
($ in thousands)
Top 20 Investments: (1)
CostFair Value
PetVet Care Centers, LLC$243,211 $1,216,055 
USI, Inc.531,425 1,094,073 
Heartland Dental, LLC320,656 833,705 
Fiserv, Inc. (NASDAQ: FISV)309,988 697,578 
Exact Group B.V.213,362 478,966 
Arnott's Biscuits Limited250,841 452,008 
Crescent Energy Company (NYSE: CRGY)561,818 439,388 
1-800 Contacts Inc.300,178 360,214 
Teaching Strategies, LLC307,162 307,162 
Resolution Life Group Holdings, L.P.262,191 304,136 
Roompot B.V.193,578 258,973 
KKR Real Estate Finance Trust Inc. (NYSE: KREF)231,563 238,625 
ERM Worldwide Group Limited228,710 228,710 
Viridor Limited154,390 226,392 
AppLovin Corporation (NASDAQ: APP)15,495 218,854 
GenesisCare Pty Ltd.177,059 177,059 
Veresen Midstream92,674 154,228 
The Bay Clubs Company, LLC139,001 152,901 
Atlantic Aviation FBO Inc.127,914 145,279 
Kokusai Electric Corporation10,206 143,540 
Total Top 20 Investments$4,671,422 $8,127,846 
Cash and short-term(1)This list of investments represent cash and liquid short-termidentifies the twenty largest companies or assets based on their fair values as of March 31, 2022. It does not deduct fund or vehicle level debt, if any, incurred in connection with funding the investment. This list excludes (i) investments expected to be syndicated, (ii) investments expected to be transferred in connection with a new fundraising, (iii) investments in high-grade, short-duration cash management strategies usedfunds and other entities that are owned by one or more third parties and established for the purpose of making investments and (iv) the portion of any investment that may be held through collateralized loan obligations or levered multi-asset investment vehicles, if any. For additional information about the asset classes of the investments held on KKR's balance sheet see "—Our Business—Principal Activities" for the "Holdings by Asset Class" pie chart. The fair value figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying investment, if applicable.

With respect to generate additional yield on our excess liquidity and is used by managementKKR's book value relating to its insurance business, KKR includes Global Atlantic's book value, which consists of KKR's pro rata equity interest 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 equivalentsGlobal Atlantic on a GAAP basis, excluding (i) accumulated other comprehensive income and (ii) accumulated change in fair value of reinsurance embedded derivative balances and related assets, net of deferred acquisition costs and income tax. KKR believes this presentation of Global Atlantic's book value is comparable with the corresponding metric presented by other publicly traded companies in Global Atlantic's industry. As of March 31, 2022, KKR's pro rata interest in Global Atlantic's book value was $3.4 billion. For more information about the composition and credit quality of Global Atlantic's investments on a consolidated basis, please see "—Global Atlantic's Investment Portfolio" below.
Global Atlantic's Investment Portfolio
As of March 31, 2022, 96% and 86% of Global Atlantic's AFS fixed maturity securities were considered investment grade under ratings from the Securities Valuation Office of the National Association of Insurance Commissioners ("NAIC") and nationally recognized statistical rating organizations ("NRSROs"), respectively. As of December 31, 2021, 97% and 87% of Global Atlantic's AFS fixed maturity securities were considered investment grade under ratings from NAIC and nationally recognized statistical rating organizations ("NRSROs"), respectively. Securities where a rating by an NRSRO was not available are considered investment grade if they have an NAIC designation of “1” or “2.” The three largest asset categories in Global Atlantic's AFS fixed-maturity security portfolio as of March 31, 2022 were Corporate, RMBS and CMBS securities, comprising 31%, 6% and 5% of Global Atlantic's investment portfolio, respectively. Within these categories, 95%, 97% and 99% of Global Atlantic's Corporate, RMBS and CMBS securities, respectively, were investment grade according to NAIC ratings and 95%, 39% and 52% of its Corporate, RMBS and CMBS securities, respectively, were investment grade according to NRSRO ratings as of March 31, 2022. The three largest asset categories in Global Atlantic's available-for-sale fixed-maturity security portfolio as of December 31, 2021 were Corporate, RMBS and CMBS securities, comprising 34%, 6% and 5% of Global Atlantic's investment portfolio, respectively. Within these categories, 95%, 96% and 99% of Global Atlantic's Corporate, RMBS and
145
CMBS securities, respectively, were investment grade according to NAIC ratings and 95%, 38% and 62% of its Corporate, RMBS and CMBS securities, respectively, were investment grade according to NRSRO ratings as of December 31, 2021. NRSRO and NAIC ratings have different methodologies. Global Atlantic believes the NAIC ratings methodology, which considers the likelihood of recovery of amortized cost as opposed to the recovery of all contractual payments including the principal at par, as the more appropriate way to view the ratings quality of its AFS fixed maturity portfolio since a large portion of its holdings were purchased at a significant discount to par value. The portion of Global Atlantic's AFS fixed maturity portfolio consisting of floating rate assets was 39% and 36% as of March 31, 2022 and December 31, 2021, respectively.
Within the funds withheld receivable at interest portfolio, 96% of the fixed maturity securities were investment grade by NAIC designation as of both March 31, 2022 and December 31, 2021.
Trading fixed maturity securities back funds withheld payable at interest where the investment performance is ceded to reinsurers under the terms of the respective reinsurance agreements.
Credit quality of AFS fixed maturity securities
The Securities Valuation Office of the NAIC evaluates the AFS fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities to one of six credit quality categories called “NAIC designations.” Using an internally developed rating is permitted by the NAIC if no rating is available. These designations are generally similar to the credit quality designations of NRSROs for marketable fixed maturity securities, except for certain structured securities as described below. NAIC designations of “1,” highest quality, and “2,” high quality, include fixed maturity securities generally considered investment grade by NRSROs. NAIC designations “3” through “6” include fixed maturity securities generally considered below investment grade by NRSROs.
Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was assigned based on the following criteria: (i) the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by three or more NRSROs. If the lowest two NRSROs’ ratings are equal, then such rating will be the assigned rating. NRSROs’ ratings available for the periods presented were S&P, Fitch, Moody’s, DBRS, Inc. and Kroll Bond Rating Agency, Inc. If no rating is available from a rating agency, then an internally developed rating is used.
Substantially all of the AFS fixed maturity securities portfolio, 96% and 97% as of March 31, 2022 and December 31, 2021, respectively, were invested in investment grade assets with a NAIC rating of 1 or 2.
The portion of the AFS fixed maturity securities portfolio that was considered below investment grade by NAIC designation was 4% and 3% as of March 31, 2022 and December 31, 2021, respectively. Pursuant to Global Atlantic's investment guidelines, Global Atlantic actively monitors the percentage of its portfolio that is held in investments rated NAIC 3 or lower and must obtain an additional approval from Global Atlantic's management investment committee before making a significant investment in an asset rated NAIC 3 or lower.
As of March 31, 2022 and December 31, 2021, the non-rated AFS fixed-maturity securities include $145.5 million and $118.8 million, respectively, of private placement securities for which Global Atlantic has not sought individual ratings from the NRSROs.
Corporate fixed maturity securities
Global Atlantic maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. As of March 31, 2022 and December 31, 2021, 58% and 60%, respectively, of the AFS fixed maturity securities portfolio was invested in corporate fixed maturity securities.
As of both March 31, 2022 and December 31, 2021, 95% of the total fair value of corporate fixed maturity securities is rated NAIC investment grade and 95% is rated NRSROs investment grade.         
Residential mortgage-backed securities
As of both March 31, 2022 and December 31, 2021, 11% of the AFS fixed maturity securities portfolio was invested in RMBS. RMBS are securities constructed from pools of residential mortgages and backed by payments from those pools. Excluding limitations on access to lending and other extraordinary economic conditions, Global Atlantic would expect prepayments of principal on the underlying loans to accelerate with decreases in market interest rates and diminish with increases in market interest rates.
146
The NAIC designations for RMBS, including prime, sub-prime, alt-A, and adjustable rate mortgages with variable payment options ("Option ARM"), are based upon a comparison of the bond’s amortized cost to the NAIC’s loss expectation for each security. Accordingly, an investment in the same security at a lower cost may result in a higher quality NAIC designation in recognition of the lower likelihood the investment would result in a realized loss. Prime residential mortgage lending includes loans to the most creditworthy borrowers with high quality credit profiles. Alt-A is a classification of mortgage loans where the risk profile of the borrower is between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.
As of March 31, 2022 and December 31, 2021, 94% and 93%, respectively, of RMBS securities that are below investment grade as rated by the NRSRO, carry an NAIC 1 ("highest quality") designation.
As of March 31, 2022, Alt-A, Option ARM, Re-Performing and Sub-prime represent 33%, 30%, 14% and 12% of the total RMBS portfolio ($7.2 billion), respectively. As of December 31, 2021, Alt-A, Option ARM, Re-Performing and Sub-prime represent 33%, 30%, 14% and 12% of the total RMBS portfolio ($7.7 billion), respectively.
Unrealized gains and losses for AFS fixed maturity securities
Global Atlantic's investments in AFS fixed maturity securities are reported at fair value with changes in fair value recorded in other comprehensive income as unrealized gains or losses, net of taxes and offsets. Unrealized gains and losses can be created by changes in interest rates or by changes in credit spreads.
As of March 31, 2022 and December 31, 2021, Global Atlantic had gross unrealized losses on below investment grade AFS fixed maturity securities of $222.9 million and $80.3 million based on NRSRO rating and $22.9 million and $13.5 million based on NAIC ratings, respectively.        
Mortgage and other loan receivables - Credit quality indicators
Mortgage and other loan receivables consist of commercial and residential mortgage loans, and other loan receivables. As of March 31, 2022 and December 31, 2021, 25% and 23%, respectively, of Global Atlantic's total investments consisted of mortgage and other loan receivables. Global Atlantic invests in U.S. mortgage loans, comprised of first lien and mezzanine real estate loans, residential mortgage loans, consumer loans, and other loan receivables.
Global Atlantic's commercial mortgage loans may also be rated based on NAIC designations, with designations “CM1” and “CM2” considered to be investment grade. As of both March 31, 2022 and December 31, 2021, 96% of the commercial mortgage loan portfolio was rated investment grade based on NAIC designation. 100% of the commercial mortgage loan portfolio is in current status.
As of March 31, 2022, 95% of the residential mortgage loan portfolio is in current status, and approximately $213.1 million is over 90 days past due (representing 2% of the total residential mortgage portfolio).
The loan-to-value ratio is expressed as a resultpercentage of the inclusioncurrent amount of liquid short-term investments inthe loan relative to the value of the underlying collateral. Approximately 84% of the commercial mortgage loans has a loan-to-value ratio of 70% or less and a 0.2% has loan-to-value ratio over 90%.
Changing economic conditions affect Global Atlantic’s valuation of commercial mortgage loans. Changing vacancies and rents are incorporated into the discounted cash flow analysis that Global Atlantic performs for monitored loans and short-term investments. may contribute to the establishment of (or increase or decrease in) a commercial mortgage loan valuation allowance for losses. In addition, Global Atlantic continuously monitors its commercial mortgage loan portfolio to identify risk. Areas of emphasis are properties that have exposure to specific geographic events or have deteriorating credit.
The impactweighted average loan-to-value ratio for residential mortgage loans was 66% and 68% as of March 31, 2022 and December 31, 2021, respectively.
Global Atlantic's residential mortgage loan portfolio is comprised mainly of re-performing loans that these liquid short-term investments have on cashwere purchased at a discount after they were modified and cash equivalents on a GAAP basis is reflectedreturned to performing status, as well as prime jumbo loans and mortgage loans backed by single family rental properties. Global Atlantic has also extended financing to counterparties in the consolidated statementsform of cash flows within cash flows from operating activities. Accordingly, the exclusionrepurchase agreements secured by mortgage loans, including performing and non-performing mortgage loans.
Global Atlantic’s consumer loan portfolio is primarily comprised of these investments from cashhome improvement loans, solar panel loans, student loans and cash equivalents on aauto loans.
147
Reconciliations to GAAP basis has no impact on cash provided (used) by operating activities, investing activities or financing activities.Measures
    
The following tables present informationreconcile the most directly comparable financial measures calculated and presented in accordance with respectGAAP to our segment balance sheetKKR's non-GAAP financial measures for the three months ended March 31, 2022 and 2021:
Revenues
 Three Months Ended
 March 31, 2022March 31, 2021
 ($ in thousands)
Total GAAP Revenues$1,004,017 $4,563,006 
Impact of Consolidation and Other213,400 123,448 
Asset Management Adjustments:
Capital Allocation-Based Income (GAAP)945,743 (2,684,647)
Realized Carried Interest579,767 165,142 
Realized Investment Income349,354 461,273 
Capstone Fees(15,485)(20,080)
Expense Reimbursements(41,303)(27,729)
Insurance Adjustments:
Net Premiums(372,144)(1,176,142)
Policy Fees(318,436)(201,683)
Other Income(34,744)(18,144)
Investment Gains and Losses167,102 259,168 
Derivative Gains and Losses286,721 220,581 
Total Segment Revenues (1)
$2,763,992 $1,664,193 
(1)Total Segment Revenues is comprised of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized Performance Income, (v) Realized Investment Income, and (vi) Net Investment Income.













148
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders
Three Months Ended
 March 31, 2022March 31, 2021
 ($ in thousands)
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders (GAAP)$(73,770)$1,644,245 
Preferred Stock Dividends17,250 25,591 
Net Income (Loss) Attributable to Noncontrolling Interests1,159,122 2,245,531 
Income Tax Expense (Benefit)(3,166)438,739 
Income (Loss) Before Tax (GAAP)$1,099,436 $4,354,106 
Impact of Consolidation and Other(1,239,936)(1,378,567)
Equity-based Compensation - KKR Holdings19,821 16,434 
Preferred Stock Dividends— (8,341)
Income Taxes Paid(197,842)(151,120)
Asset Management Adjustments:
Unrealized Carried Interest1,290,033 (2,109,018)
Net Unrealized (Gains) Losses322,269 (1,316,644)
Unrealized Carried Interest Compensation (Carry Pool)(513,987)896,907 
Strategic Corporate Transaction-Related Charges19,898 4,875 
Equity-based Compensation55,111 49,761 
Equity-based Compensation - Performance based57,953 14,556 
Insurance Adjustments:
Net (Gains) Losses from Investments and Derivatives48,735 289,235 
Strategic Corporate Transaction-Related Charges5,007 4,819 
Equity-based and Other Compensation31,711 7,411 
Amortization of Acquired Intangibles4,412 2,451 
Income Taxes(34,106)(16,626)
After-tax Distributable Earnings$968,515 $660,239 
Interest Expense69,460 57,545 
Preferred Stock Dividends— 8,341 
Net Income Attributable to Noncontrolling Interests7,616 3,192 
Income Taxes Paid197,842 151,120 
Distributable Operating Earnings$1,243,433 $880,437 
Insurance Segment Operating Earnings(115,988)(63,265)
Realized Performance Income(609,207)(171,309)
Realized Performance Income Compensation383,635 109,986 
Realized Investment Income(349,354)(461,273)
Realized Investment Income Compensation52,403 69,191 
Fee Related Earnings$604,922 $363,767 
Insurance Segment Operating Earnings115,988 63,265 
Realized Performance Income609,207 171,309 
Realized Performance Income Compensation(383,635)(109,986)
Realized Investment Income349,354 461,273 
Realized Investment Income Compensation(52,403)(69,191)
Depreciation and Amortization7,565 6,164 
Adjusted EBITDA$1,250,998 $886,601 

149
KKR & Co. Inc. Stockholders' Equity - Common Stock
As of
March 31, 2022December 31, 2021
($ in thousands)
KKR & Co. Inc. Stockholders' Equity - Series I and II Preferred Stock, Common Stock$14,598,495 $16,466,372 
Series C Mandatory Convertible Preferred Stock1,115,792 1,115,792 
Impact of Consolidation and Other (1)
(997,841)(1,048,569)
KKR Holdings and Other Exchangeable Securities7,955,606 8,595,510 
Accumulated Other Comprehensive Income (AOCI) and Other (Insurance)2,288,325 259,777 
Book Value$24,960,377 $25,388,882 
(1)    Includes an adjustment to book value to reflect the implied amount of (1) tax assets and liabilities attributable to KKR Holdings L.P. as if it was subject to corporate income taxes and (2) the recognition of deferred tax liabilities relating to certain assets of KKR Group Partnership L.P. that is expected to occur upon the completion of the mergers contemplated by the Reorganization Agreement. The impact of this adjustment was a reduction to book value of $1,333 million and $1,396 million as of September 30, 2017March 31, 2022 and December 31, 2016:2021, respectively.

  As of As of
  September 30, 2017 December 31, 2016
  ($ in thousands, except per unit amounts)
Cash and Short-term Investments $3,623,773
 $3,387,673
Investments 8,123,514
 6,958,873
Unrealized Carry (1)
 1,474,693
 1,213,692
Other Assets 1,964,794
 1,611,678
Corporate Real Estate 161,225
 161,225
Total Assets $15,347,999
 $13,333,141
     
Debt Obligations - KKR (ex-KFN) $2,000,000
 $2,000,000
Debt Obligations - KFN 639,767
 398,560
Preferred Shares - KFN 373,750
 373,750
Other Liabilities 596,079
 244,676
Total Liabilities 3,609,596
 3,016,986
     
Noncontrolling Interests 20,849
 19,564
Preferred Units 500,000
 500,000
     
Book Value $11,217,554
 $9,796,591
     
Book Value Per Outstanding Adjusted Unit $13.80
 $12.15
     
(1) Unrealized Carry
    
Private Markets $1,347,729
 $1,141,610
Public Markets 126,964
 72,082
Total $1,474,693
 $1,213,692
  

 






The following table presents theprovides a reconciliation of KKR's GAAP Shares of Common Stock Outstanding to Adjusted Shares:
 As of
 March 31, 2022December 31, 2021
GAAP Shares of Common Stock Outstanding590,472,444 595,663,618 
Adjustments:
KKR Holdings Units258,726,163 258,726,163 
Other Exchangeable Securities (1)
1,376,655 1,376,655 
Common Stock - Series C Mandatory Convertible Preferred Stock (2)
26,822,600 26,822,600 
Adjusted Shares (3)
877,397,862 882,589,036 
Unvested Shares of Common Stock and Other Exchangeable Securities (4)
39,551,313 39,000,561 
(1)Consists of vested restricted holdings units granted under our 2019 Equity Incentive Plan, which are exchangeable for shares of our segment balance sheet by asset class asKKR & Co. Inc. common stock on a one-for-one basis.
(2)Assumes that all shares of September 30, 2017. To the extent investmentsSeries C Mandatory Convertible Preferred Stock have been converted into shares of KKR & Co. Inc. common stock on our segment balance sheet, for example in energy, direct lending, CLOs and specialty finance, are realized at values below their cost, after-tax distributable earnings would be adversely affected by the amount of such loss, if any, during the period in which the realization event occurs.
  As of September 30, 2017
       
Investments Cost 
Carrying
Value
 
Carrying Value as a Percentage of
Total Investments
       
Private Equity Co-Investments and Other Equity $2,281,693
 $2,697,619
 33.2%
Private Equity Funds 1,026,481
 1,348,599
 16.6%
Private Equity Total 3,308,174
 4,046,218
 49.8%
       
Energy 933,568
 549,607
 6.8%
Real Estate (1)
 744,935
 795,042
 9.8%
Infrastructure 285,695
 370,318
 4.6%
Real Assets Total 1,964,198
 1,714,967
 21.2%
       
Special Situations 810,251
 820,148
 10.1%
Direct Lending 100,188
 97,111
 1.2%
Mezzanine 34,681
 39,052
 0.5%
Alternative Credit Total 945,120
 956,311
 11.8%
CLOs (1)
 951,194
 578,587
 7.1%
Liquid Credit 143,349
 152,699
 1.9%
Specialty Finance 283,898
 209,755
 2.6%
Credit Total 2,323,561
 1,897,352
 23.4%
       
Other 439,839
 464,977
 5.6%
       
Total Investments $8,035,772
 $8,123,514
 100.0%
       
  As of September 30, 2017
Significant Investments: (2)
 Cost 
Carrying
Value
 Carrying Value as a Percentage of
Total Investments
First Data Corporation (NYSE: FDC) $956,454
 $1,279,098
 15.7%
USI, Inc. (financial services sector) 500,111
 503,711
 6.2%
KKR Real Estate Finance Trust Inc. (NYSE: KREF) 324,997
 325,000
 4.0%
PortAventura Entertainment S.A. (hotels/leisure sector) 233,132
 255,821
 3.1%
Natural Gas Midstream Investment (infrastructure sector) 150,330
 209,728
 2.6%
Total Significant Investments 2,165,024
 2,573,358
 31.6%
       
Other Investments 5,870,748
 5,550,156
 68.4%
Total Investments $8,035,772
 $8,123,514
 100.0%
       
(1) Includes approximately $305.1 million and $325.0 million of CLOs and our ownership of KKR Real Estate Finance Trust Inc., respectively, that are not held for investment purposes and are held at cost.
(2) The significant investments include the top five investments (other than investments expected to be syndicated or transferred in connection with new fundraising) based on their carrying values as of September 30, 2017. The carrying value figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying investment, if applicable.

The following tables provide reconciliations of KKR’s GAAP Condensed Consolidated Statements of Financial Condition to Total Reportable Segments Balance Sheet as of September 30, 2017March 31, 2022 and December 31, 2016.2021.
(3)Amounts exclude unvested equity awards granted under our Equity Incentive Plans.
As of September 30, 2017
(Amounts in thousands)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS) 1 2 3 4 5 TOTAL REPORTABLE SEGMENTS BALANCE SHEET
               
Assets              
Cash and Cash Equivalents$2,436,566
 —
 —
 1,187,207
 —
 —
 $3,623,773
Cash and Short-term Investments
Investments37,251,837
 (26,522,559) (1,131,071) (1,474,693) —
 —
 8,123,514
Investments
   —
 —
 1,474,693
 —
 —
 1,474,693
Unrealized Carry
Other Assets4,617,236
 (1,002,082) —
 (1,348,432) —
 (301,928) 1,964,794
Other Assets
   —
 —
 161,225
 —
 —
 161,225
Corporate Real Estate
Total Assets$44,305,639
 (27,524,641) (1,131,071) —
 —
 (301,928) $15,347,999
 
               
Liabilities and Equity              
Debt Obligations$20,290,714
 (17,650,947) —
 (639,767) —
 —
 $2,000,000
Debt Obligations - KKR (ex-KFN)
   —
 —
 639,767
 —
 —
 639,767
Debt Obligations - KFN
   —
 —
 373,750
 —
 —
 373,750
Preferred Shares - KFN
Other Liabilities4,149,491
 (2,245,511) (1,131,071) —
 —
 (176,830) 596,079
Other Liabilities
Total Liabilities24,440,205
 (19,896,458) (1,131,071) 373,750
 —
 (176,830) 3,609,596
 
               
Redeemable Noncontrolling Interests570,134
 (570,134) —
 —
 —
 —
 —
 
               
Equity              
Series A Preferred Units332,988
 —
 —
 (332,988) —
 —
 —
 
Series B Preferred Units149,566
 —
 —
 (149,566) —
 —
 —
 
KKR & Co. L.P. Capital - Common Unitholders6,380,654
 166,480
 —
 (17,446) 4,812,964
 (125,098) 11,217,554
Book Value
Noncontrolling Interests12,432,092
 (7,224,529) —
 (373,750) (4,812,964) —
 20,849
Noncontrolling Interests
   —
 —
 500,000
 —
 —
 500,000
Preferred Units
Total Liabilities and Equity$44,305,639
 (27,524,641) (1,131,071) —
 —
 (301,928) $15,347,999
 
               
               
               
1IMPACT OF CONSOLIDATION OF INVESTMENT VEHICLES AND OTHER ENTITIES
2CARRY POOL RECLASSIFICATION 
3OTHER RECLASSIFICATIONS 
4NONCONTROLLING INTERESTS HELD BY KKR HOLDINGS L.P. AND OTHER 
5EQUITY IMPACT OF KKR MANAGEMENT HOLDINGS CORP. 
(4)Represents equity awards granted under our Equity Incentive Plans. The issuance of common stock of KKR & Co. Inc. pursuant to equity awards under our Equity Incentive Plans dilutes KKR common stockholders and KKR Holdings pro rata in accordance with their respective ownership interests in the KKR business. Excludes market condition awards that did not meet their market-price based vesting conditions as of March 31, 2022 and December 31, 2021.






As of December 31, 2016
(Amounts in thousands)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS) 1 2 3 4 5 TOTAL REPORTABLE SEGMENTS BALANCE SHEET
               
Assets              
Cash and Cash Equivalents$2,508,902
 —
 —
 878,771
 —
 —
 $3,387,673
Cash and Short-term Investments
Investments31,409,765
 (22,249,206) (987,994) (1,213,692) —
 —
 6,958,873
Investments
   —
 —
 1,213,692
 —
 —
 1,213,692
Unrealized Carry
Other Assets5,084,230
 (2,118,364) —
 (1,039,996) —
 (314,192) 1,611,678
Other Assets
   —
 —
 161,225
 —
 —
 161,225
Corporate Real Estate
Total Assets$39,002,897
 (24,367,570) (987,994) —
 —
 (314,192) $13,333,141
 
               
Liabilities and Equity              
Debt Obligations$18,544,075
 (16,145,515) —
 (398,560) —
 —
 $2,000,000
Debt Obligations - KKR (ex-KFN)
   —
 —
 398,560
 —
 —
 398,560
Debt Obligations - KFN
   —
 —
 373,750
 —
 —
 373,750
Preferred Shares - KFN
Other Liabilities3,340,739
 (1,945,039) (987,994) —
 —
 (163,030) 244,676
Other Liabilities
Total Liabilities21,884,814
 (18,090,554) (987,994) 373,750
 —
 (163,030) 3,016,986
 
               
Redeemable Noncontrolling Interests632,348
 (632,348) —
 —
 —
 —
   
               
Equity              
Series A Preferred Units332,988
 —
 —
 (332,988) —
 —
   
Series B Preferred Units149,566
 —
 —
 (149,566) —
 —
   
KKR & Co. L.P. Capital - Common Unitholders5,457,279
 118,635
 —
 (17,446) 4,389,285
 (151,162) 9,796,591
Book Value
Noncontrolling Interests10,545,902
 (5,763,303) —
 (373,750) (4,389,285) —
 19,564
Noncontrolling Interests
   —
 —
 500,000
 —
 —
 500,000
Preferred Units
Total Liabilities and Equity$39,002,897
 (24,367,570) (987,994) —
 —
 (314,192) $13,333,141
 
               
               
               
1IMPACT OF CONSOLIDATION OF INVESTMENT VEHICLES AND OTHER ENTITIES 
2CARRY POOL RECLASSIFICATION 
3OTHER RECLASSIFICATIONS 
4NONCONTROLLING INTERESTS HELD BY KKR HOLDINGS L.P. AND OTHER 
5EQUITY IMPACT OF KKR MANAGEMENT HOLDINGS CORP. 


The following tables provide reconciliations of KKR’s GAAP Common Units Outstanding to Adjusted Units, Adjusted Units Eligible for Distribution and Outstanding Adjusted Units:
 As ofAs of
 September 30, 2017December 31, 2016
GAAP Common Units Outstanding - Basic473,134,387
452,380,335
Adjustments: 
 
Unvested Common Units (1)
31,116,886
37,519,436
Other Exchangeable Securities (2)
3,987,713
4,600,320
GAAP Common Units Outstanding - Diluted508,238,986
494,500,091
Adjustments: 
 
KKR Holdings Units (3)
339,845,707
353,757,398
Adjusted Units848,084,693
848,257,489
Adjustments:  
Unvested Common Units(31,116,886)(37,519,436)
Adjusted Units Eligible for Distribution816,967,807
810,738,053
Adjustments:  
Vested Other Exchangeable Securities (2)
(3,987,713)(4,600,320)
Outstanding Adjusted Units812,980,094
806,137,733
(1)Represents equity awards granted under the Equity Incentive Plan. The issuance of common units of KKR & Co. L.P. pursuant to awards under the Equity Incentive Plan dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business. Year-end 2016 equity awards were granted before December 31, 2016 (except for awards to our named executive officers), rather than, as has been historical practice, after the end of the year. As a result, adjusted units increased in the fourth quarter of 2016, rather than in the first quarter of 2017.

(2)Represents securities in a subsidiary of a KKR Group Partnership and of KKR & Co. L.P. that are exchangeable into KKR & Co. L.P. common units issued in connection with the acquisition of Avoca.

(3)Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.

Liquidity
 
We manage our liquidity and capital requirements by (i) focusing on our cash flows before the consolidation of our funds and CFEs and the effect of changes in short term assets and liabilities, which we anticipate will be settled for cash within one year.year, and (ii) seeking to maintain access to sufficient liquidity through various sources. The overall liquidity framework and cash management approach of our insurance business are also based on seeking to build an investment portfolio that is cash flow matched, providing cash inflows from insurance assets that meet our insurance companies' expected cash outflows to pay their liabilities. Our primary cash flow activities on a segment basis typically involve: (i) generating cash flow from operations; (ii) generating income from investment activities, by investing in investments that generate yield (namely interest and dividends), as well as through the sale of investments and other assets; (iii) funding capital commitments that we have made to, and advancing capital to, our funds and CLOs; (iv) developing and funding new investment strategies, investment products, and other growth initiatives, including acquisitions of other investments, assets, and businesses; (v) underwriting and funding commitments in our capital markets business; (vi) distributing cash flow to our unitholders, certain holders of certain exchangeable securitiesstockholders and holders of our Series A and Series B Preferred Units;preferred stock; and (vii) paying borrowings, interest payments, and repayments under credit agreements, our senior and subordinated notes, and other borrowing arrangements. See "-Liquidity - "—Liquidity—Liquidity Needs - Distributions.Needs—Dividends."

150
See "—Business Environment" for more information on factors that may impact our business, financial performance, operating results and valuations.

Sources of Liquidity
 
Our primary sources of liquidity consist of amounts received from: (i) our operating activities, including the fees earned from our funds, portfolio companies, and capital markets transactions; (ii) realizations on carried interest from our investment funds; (iii) interest and dividends from investments that generate yield, including our investments in CLOs; (iv) in our insurance business, cash inflows in respect of new premiums, policyholder deposits, reinsurance transactions and funding agreements, including through memberships in Federal Home Loan Banks; (v) realizations on and sales of investments and other assets, including the transfers of investments or other assets for fund formations (including CLOs and (v)other investment vehicles); and (vi) borrowings, including advances under our revolving credit facilities, debt offerings, committed repurchase agreements, uncommitted financing, and other borrowing arrangements. In addition, we may generate cash proceeds from salesissuances of our equity securities.
 
Many of our investment funds provide carried interest. With respect to our private equity funds, carried interest is distributed to the general partner of a private equity fund with a clawback provision only after all of the following are met: (i) a realization event has occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle has achieved positive overall investment returns since its inception, in excess of performance hurdles where applicable;applicable, and is accruing carried interest; and (iii) with respect to investments with a fair value below cost, cost has been returned to fund investors in an amount sufficient to reduce remaining cost to the

investments' fair value. As of September 30, 2017,March 31, 2022, certain of our funds had met the first and second criteria, as described above, but did not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will not be distributed in cash to us as the general partner of an investment fund upon a realization event. For a fund that has a fair value above cost, overall, and is otherwise accruing carried interest, but has one or more investments where fair value is below cost, the shortfall between cost and fair value for such investments is referred to as a "netting hole." When netting holes are present, realized gains on individual investments that would otherwise allow the general partner to receive carried interest distributions are instead used to return invested capital to our funds' limited partners in an amount equal to the netting hole. Once netting holes have been filled with either (a) return of capital equal to the netting hole for those investments where fair value is below cost or (b) increases in the fair value of those investments where fair value is below cost, then realized carried interest will be distributed to the general partner upon a realization event. A fund that is in a position to pay cash carry refers to a fund for which carried interest is expected to be paid to the general partner upon the next material realization event, which includes funds with no netting holes as well as funds with a netting hole that is sufficiently small in size such that the next material realization event would be expected to result in the payment of carried interest. Strategic investor partnerships with fund investors may require netting across the various funds in which they invest, which may reduce the carried interest we otherwise would have earned if such fund investors were to have invested in our funds without the existence of athe strategic investor partnership. See "Risk Factors—Risks Related to Our Business—Strategic investor partnerships have longer investment periods and invest in multiple strategies, which may increase the possibility of a 'netting hole,' which will result in less carried interest for us, as well as clawback liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2021.
 
As of September 30, 2017,March 31, 2022, netting holes in excess of $50 million existed at fivenone of our private equity funds, which were our European Fund IV, European Fund III, Millennium Fund, Asian Fund II and North America Fund XI which had netting holes of approximately $149 million, $108 million, $82 million, $63 million and $62 million, respectively.funds. In accordance with the criteria set forth above, other funds currently have and may in the future develop netting holes, and netting holes for those and other funds may otherwise increase or decrease in the future.


We have access to funding under various credit facilities, other borrowing arrangements and other sources of liquidity that we have entered into with major financial institutions or which we receive from the capital markets. The following describes these sources of liquidity.
Revolving Credit Agreements, Senior Notes, KFN Debt Obligations & KFN Securities


For a discussion of KKR'sour debt obligations, including our debt securities, revolving credit agreements senior notes, KFN debt obligations and KFN securities,loans, see Note 1017 "Debt Obligations" to the audited financial statements included in our Annual Report on Form 10-K. The information presented below supplements and updates, and should be read in conjunction with, such information. No amounts were borrowed under our corporate credit agreement with HSBC Bank USA for the three and nine months ended September 30, 2017. With respect to the KCM Credit Agreement, no amounts were borrowed and repaid for the three months ended September 30, 2017. For the nine months ended September 30, 2017, $847 million was borrowed and repaid. Asfinancial statements.










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KCM Short-Term Credit Agreement

On June 29, 2017, KKR Capital Markets entered into a 364-day revolving credit agreement (the “KCM Short-Term Credit Agreement”) with a major financial institution for use in KKR’s capital markets business. This financial institution also provides the existing KCM Credit Agreement. The KCM Short-Term Credit Agreement provides for revolving borrowings of up to $750 million, expires on June 28, 2018, and ranks pari passu with the KCM Credit Agreement. Borrowings under the KCM Short-Term Credit Agreement may only be used to facilitate the settlement of debt transactions syndicated by KKR’s capital markets business. Obligations under the KCM Short-Term Credit Agreement are limited solely to entities involved in KKR’s capital markets business, and liabilities under the KCM Short-Term Credit Agreement are non-recourse to other parts of KKR. For the three and nine months ended September 30, 2017, $145 million was borrowed and repaid under the KCM Short-Term Credit Agreement.

Preferred Units

For a discussion of KKR's Series A and Series B Preferred Units, see Note 15 "Equity" to the audited financial statements and "--Liquidity Needs--Preferred Units" in the management's discussion and analysis of financial condition and results of operations, each of which is included in our Annual Report on Form 10-K.



Common Units

On May 16, 2014, KKR & Co. L.P. filed a registration statement with the Securities and Exchange Commission for the sale by us from time to time of up to 5,000,000 common units of KKR & Co. L.P. to generate cash proceeds (a) up to (1) the amount of withholding taxes, social benefit payments or similar payments payable by us in respect of awards granted pursuant to the Equity Incentive Plan, and (2) the amount of cash delivered in respect of awards granted pursuant to the Equity Incentive Plan that are settled in cash instead of common units; and (b) to the extent the net proceeds from the sale of common units exceeds the amounts due under clause (a), for general corporate purposes. This registration statement expired on June 4, 2017 with 4,173,039 common units issued and sold.

Liquidity Needs
 
We expect that our primary liquidity needs will consist of cash required to:


•continue to support and grow our Asset Management business lines, including seeding new strategies, funding our capital commitments made to existing and future funds, co-investmentspay the costs related to fundraising and any net capital requirementslaunching of our capital markets companiesnew strategies, and otherwise supporting investment vehicles which we sponsor;sponsor

•to grow and expand our businesses generally, including by acquiring or launching new, complementary or adjacent businesses;
 
warehouse investments in portfolio companies•seed or otherwarehouse investments for the benefit of onenew strategies or more of our funds, vehicles, accounts orincluding CLOs, pending the contribution of committed capital by the investors in such vehicles,funds, and advancing capital to themour funds for operational or other needs;


•pay interest expense;

•service debt obligations, including the payment of obligations upon maturity or redemption, as well as any contingent liabilities that may give rise to future cash payments;payments, including funding requirements to levered investment vehicles or structured transactions;


•fund cash operating expenses and contingencies, including litigation matters; matters and guarantees; 


•pay corporate income taxes and other taxes;

•pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance or funding agreement activity;

•pay amounts that may become due under our tax receivable agreement with KKR Holdings; 


make•pay cash distributionsdividends in accordance with our distributiondividend policy for our common unitsstock or the terms of our preferred units;  stock;  


•underwrite commitments, advance loan proceeds and fund syndication commitments within our capital markets business;business, and fund any net capital or regulatory requirements of our capital markets companies;


make future purchase price payments•post or return collateral in connection with our proprietary investments, such as our strategic manager partnership with Marshall Wace, to the extent not paid by newly issued common units;respect of derivative contracts;


•support and acquire other assets for our Principal Activities segment,business line, including other businesses, investments and assets;assets, some of which may be required to satisfy risk retention requirements for CLOs (to the extent they may apply); and


•repurchase KKR & Co. L.P.KKR's common unitsstock or retire equity awards pursuant to the unitshare repurchase program announced on October 27, 2015 and subsequently increased on February 9, 2017.or repurchase or redeem other securities issued by KKR.


KKR & Co. L.P. Unit Repurchase Program

On October 27, 2015, KKR announced the authorizationFor a discussion of a program providing for the repurchase by KKR of up to $500 million in the aggregate of its outstanding common units. On February 9, 2017, KKR announced the authorization of an incremental $250 million under this unit repurchase program. Under this unitKKR's share repurchase program, units may be repurchased from time to timesee Note 22 "Equity" in open market transactions, in privately negotiated transactions or otherwise. The timing, manner, price and amountour financial statements.





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Table of any unit repurchases will be determined by KKR in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. KKR expects that the program, which has no expiration date, will be in effect until the maximum approved dollar amount has been used to repurchase common units. The program does not require KKR to repurchase any specific number of common units, and the program may be suspended, extended, modified or discontinued at any time. Since inception of the unit repurchase program through October 23, 2017, KKR has repurchased and canceled approximately 31.7 million outstanding common units for approximately $459 million. There is $291 million remaining as of October 23, 2017 under the current repurchase program. No units were repurchased during the first nine months of 2017.Contents


In addition to the purchases of common units above, (1) cash may be used to pay the amount of withholding taxes, social benefit payments or similar payments payable by KKR in respect of awards granted pursuant to the Equity Incentive Plan and (2) cash may be delivered in respect of certain awards granted pursuant to the Equity Incentive Plan and Other Exchangeable Securities. During the first nine months of 2017, KKR canceled equity awards representing 3.1 million common units to satisfy tax and cash-settlement obligations of $58.0 million in connection with their vesting. See "--Item 2. Unregistered Sales of Equity Securities and Use of Proceeds."

Capital Commitments

The agreements governing our active investment funds generally require the general partners of the funds to make minimum capital commitments to such funds, which usuallygenerally range from 2% to 8% of a fund's total capital commitments at final closing; however, the size of our general partner commitment toclosing, but may be greater for certain funds (i) where we are pursuing newer strategies, may exceed this range. (ii) where third party investor demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy for our Principal Activities business line, including core investments and exposure to the Asia-Pacific region.

The following table presents our uncalled commitments to our active investment funds and other vehicles as of September 30, 2017:March 31, 2022:
Uncalled
Commitments
Private Markets($ in millions)
Core Investment Vehicles$4,196 
European Fund VI1,000 
North America Fund XIII500 
Global Infrastructure Investors IV464 
Asian Fund IV376 
Diversified Core Infrastructure250 
Asia Real Estate Partners196 
Asia Pacific Infrastructure Investors174 
Asian Fund III144 
Real Estate Partners Americas III143 
Health Care Strategic Growth Fund II137 
Americas Fund XII93 
Global Infrastructure Investors III85 
Real Estate Partners Europe II76 
Next Generation Technology Growth Fund II57 
Health Care Strategic Growth Fund49 
European Fund V42 
Global Impact Fund39 
Real Estate Partners Americas II26 
Real Estate Credit Opportunity Partners II22 
Other Private Markets Vehicles2,051 
Total Private Markets Commitments10,120 
Public Markets
Dislocation Opportunities fund123 
Special Situations Fund II25 
Lending Partners Europe II24 
Lending Partners III13 
Private Credit Opportunities Partners II10 
Lending Partners Europe9 
Other Public Markets Vehicles999 
Total Public Markets Commitments1,203 
Total Uncalled Commitments$11,323 



153
 
Uncalled
Commitments
Private Markets($ in thousands)
Americas Fund XII$975,000
Asian Fund III500,000
Health Care Strategic Growth Fund150,000
Real Estate Partners Americas II150,000
Next Generation Technology Growth Fund97,100
Energy Income and Growth86,400
European Fund IV79,800
Global Infrastructure Investors II74,200
Real Estate Partners Europe58,300
Real Estate Credit Opportunity Partners45,000
Other Private Markets Vehicles332,500
Total Private Markets Commitments2,548,300
  
Public Markets 
Special Situations Fund II173,700
Lending Partners Europe26,700
Lending Partners III24,700
Other Public Markets Vehicles164,000
Total Public Markets Commitments389,100
  
Total Uncalled Commitments$2,937,400
Other Commitments

In addition to the uncalled commitments to our investment funds as shown above, KKR has entered into contractual commitments primarily with respect to (i) the purchase of investments and other assets in its Principal Activities segment, and (ii) underwriting transactions, debt financing, revolving credit facilities, and equity syndications in our Capital Markets segment.business line. As of September 30, 2017,March 31, 2022, these commitments amounted to $93.4 million and $255.7 million, respectively. $1.5 billion.
Whether these amounts are actually funded, in whole or in part, depends on the contractual terms of such commitments, including the satisfaction or waiver of any conditions to closing or funding. The unfunded commitments shown for our Capital Markets segment are shown without reflecting arrangements that may reduce the actual amount of contractual commitments shown. Our capital marketmarkets business entered into an arrangement that reduceshas arrangements with third parties, which reduce our risk under certain circumstances when underwriting certain debt transactions.transactions, and thus our unfunded commitments as of March 31, 2022 have been reduced to reflect the amount to be funded by such third parties. In the case of purchases of investments or assets in our Principal Activities segment,business line, the amount to be funded includes amounts that are intended to be syndicated to third parties, and the actual amounts to be funded may be less than shown.




Prisma Capital Partners
As of September 30, 2017, no amounts were due underless. For more information about our capital markets business line's risks, see "Risks Related to Our Business—Our capital markets activities expose us to risks, and our risk management strategy may not be effective or sufficient" in our Annual Report on Form 10-K for the contingent consideration arrangement in connection with the acquisition of the equity interests of Prisma on October 1, 2012. The final measurement date for such contingent consideration was June 30, 2017. On June 1, 2017, KKR completed its previously announced transaction to combine Pacific Alternative Asset Management Company, LLC, or PAAMCO, with Prisma Capital Partners LP, formerly known as KKR Prisma. See "--Overview - Business Segments - Public Markets."

Investment in Marshall Wace

On November 2, 2015, KKR entered into a long-term strategic relationship with Marshall Wace and its affiliates and acquired a 24.9% interest in Marshall Wace through a combination of cash and common units. Subject to the exercise of a put option by Marshall Wace or a call option by KKR, at subsequent closings to occur in the second, third and fourth years following the initial closing described above, and subject to satisfaction or waiver of certain closing conditions, including regulatory approvals, KKR may at each such closing subscribe (or be required to subscribe) for an incremental 5% equity interest, for ultimate aggregate ownership of up to 39.9% of Marshall Wace. The exercise of such options would require the use of cash and/or KKR common units. KKR's investment in Marshall Wace is accounted for using the equity method of accounting.

Due to the exercise of one of the options agreed to between Marshall Wace and KKR, KKR expects to acquire an additional 5.0% interest in Marshall Wace in the fourth quarter of 2017. The acquisition is expected to be completed with a combination of cash and common units.

year ended December 31, 2021.
Tax Receivable Agreement

We and certain intermediate holding companies that are taxable corporations for U.S. federal, state and local income tax purposes, may be required to acquire KKR Group Partnership Units from time to time pursuant to our exchange agreement with KKR Holdings. KKR Management Holdings, L.P. made an election under Section 754 of the Internal Revenue Code that will remain in effect for each taxable year in which an exchange of KKR Group Partnership Units for common units occurs, which mayis expected to result in an increase in our intermediate holding companies' share of the tax basis of the assets of the KKR Group PartnershipsPartnership at the time of an exchange of KKR Group Partnership Units. Certain of these exchanges are expected to result in an increase in our intermediate holding companies' share of the tax basis of the tangible and intangible assets of the KKR Group Partnerships, primarily attributable to a portion of the goodwill inherent in our business that would not otherwise have been available. This increase in tax basis may increase depreciation and amortization deductions for tax purposes and therefore reduce the amount of income tax our intermediate holding companies would otherwise be required to pay in the future. This increase in tax basis may also decrease gain (or increase loss) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

We have entered into a tax receivable agreement with KKR Holdings, which requires our intermediate holding companiesus to pay to KKR Holdings, or to current and former principalslimited partners who have exchanged KKR Holdings units for KKRKKR's common unitsstock as transferees of KKR Group Partnership Units, 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the intermediate holding companieswe realize as a result of the increase in tax basis described above, as well as 85% of the amount of any such savings the intermediate holding companieswe realize as a result of increases in tax basis that arise due to future payments under the tax receivable agreement. We expect our intermediate holding companiesAs of March 31, 2022, an undiscounted payable of $396.1 million has been recorded in due to benefit fromaffiliates in the remaining 15% of cash savings, if any, in income tax that they realize. A terminationfinancial statements representing management's best estimate of the agreement or a change of control could give riseamounts currently expected to similar payments based on tax savings that we would be deemed to realize in connection with such events. In the event that other of our current or future subsidiaries become taxable as corporations and acquire KKR Group Partnership Units in the future, or if we become taxable as a corporation for U.S. federal income tax purposes, we expect that each will become subject to a tax receivable agreement with substantially similar terms.

These payment obligations are obligations of our intermediate holding companies and not the KKR Group Partnerships. As such, cash payments received by common unitholders may vary from those received by holders of KKR Group Partnership Units held by KKR Holdings and its current and former principals to the extent payments are made to those partiesowed under the tax receivable agreement. Payments made under the tax receivable agreement are required to be made within 90 daysAs of the filingMarch 31, 2022, approximately $60.4 million of the tax returns of our intermediate holding companies, which may result in a timing difference between the tax savings received by KKR's intermediate holdings companies and the cash payments made to the selling holders of KKR Group Partnership Units.


For the three and nine months ended September 30, 2017 and 2016, nocumulative cash payments have been made under the tax receivable agreement. As
Following the closing of September 30, 2017, $4.2 millionthe merger transactions contemplated by the Reorganization Agreement, there will be no more exchanges of cumulative incomeKKR Group Partnership Units held by KKR Holdings. Additionally, the tax savings have been realized. See "-Liquidity-Other Liquidity Needs- Contractual Obligations, Commitments and Contingencies"receivable agreement will terminate upon the closing of the mergers contemplated by the Reorganization Agreement, except that the obligations of KKR to make payments under the tax receivable agreement will remain outstanding until paid in full for a discussioncertain exchanges that took place prior to the termination of amounts payable and cumulative cashthe tax receivable agreement. Although our employees who hold restricted holdings units under our 2019 Equity Plan (which includes limited partner interests in KKR Holdings II) will be entitled to exchange those interests for common stock pursuant to the exchange agreement, there will be no payments madedue for any of those exchanges under thisthe tax receivable agreement.


DistributionsDividends
A distributiondividend of $0.17$0.155 per share of our common unitstock has been declared whichand will be paid on November 21, 2017May 31, 2022 to holders of record of our common unitsstock as of the close of business on November 6, 2017. Under KKR's current distribution policy for its common units, KKR intends to make equal quarterly distributions to holdersMay 16, 2022.
A dividend of common units in an amount$0.75 per share of $0.17 per common unit per quarter, beginning with the financial results reported for the first quarter of 2017.
A distribution of $0.421875 per Series AC Mandatory Convertible Preferred UnitStock has been declared and set aside for payment on DecemberJune 15, 20172022 to holders of record of Series AC Mandatory Convertible Preferred UnitsStock as of the close of business on DecemberJune 1, 2017. A distribution2022.
When KKR & Co. Inc. receives distributions from KKR Group Partnership, other equityholders in KKR Group Partnership including KKR Holdings receive their pro rata share of $0.406250 per Series B Preferred Unit has been declared and set aside for payment on December 15, 2017 to holders of record of Series B Preferred Units as of the close of business on December 1, 2017. such distributions from KKR Group Partnership.
The declaration and payment of dividends to our common stockholders will be at the sole discretion of our board of directors, and our dividend policy may be changed at any future distributions on preferred or common units aretime. The declaration of dividends is subject to the discretion of theour board of directors based on a number of factors, including KKR’s future financial performance and other considerations that the general partnerboard deems relevant, and compliance with the terms of KKR & Co. L.P.Inc.'s certificate of incorporation and applicable law. For U.S. federal income tax purposes, any dividends we pay (including dividends on our preferred stock) generally will be treated as qualified dividend income for U.S. individual stockholders to the termsextent paid out of its limited partnership agreement.our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. There can be no assurance that future distributionsdividends will be made as intended or at all that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR & Co. L.P. or that any particular distributiondividend policy for our common unitsstock will be maintained. Furthermore, the declaration and payment of distributions by the KKR Group PartnershipsPartnership and our other subsidiaries may also be subject to legal, contractual and regulatory restrictions, including restrictions contained in our debt agreements and the terms of the preferred units of the KKR Group Partnerships.Partnership.
When KKR & Co. L.P. receives distributions from the KKR Group Partnerships (the holding companies
154
Other Liquidity Needs
We may also be requiredFrom time to time, we fund various underwriting, syndicationssyndication and fronting commitments in our capital markets business in connection with the arranging or underwriting of loans, securities or other financial instruments, for which has increased in significance in the first nine monthswe may draw all or substantially all of 2017 and may continue to be significant in future quarters.our availability for borrowings under our available credit facilities. We generally expect thatthese borrowings by our Capital Markets business line to be repaid promptly as these commitments will beare syndicated to third parties or otherwise fulfilled or terminated, although we may in some instances elect to retain a portion of the commitments for our own investment.


For more information about our Capital Markets business line's risks, see "Risks Related to Our Business—Our capital markets activities expose us to risks, and our risk management strategy may not be effective or sufficient" in our Annual Report on Form 10-K for the year ended December 31, 2021.
Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we (including Global Atlantic) and our consolidated funds and CFEs enter into contractual arrangements that may require future cash payments. The following table sets forth information relatingContractual arrangements include (1) commitments to anticipated future cash paymentsfund the purchase of investments or other assets (including obligations to fund capital commitments as the general partner of September 30, 2017 excluding consolidated fundsour investment funds) or to fund collateral for derivative transactions or otherwise, (2) obligations arising under our senior notes, subordinated notes, and CFEsother indebtedness, (3) commitments by our capital markets business to underwrite transactions or to lend capital, (4) obligations arising under insurance policies written, (5) other contractual obligations, including servicing agreements with a reconciliationthird-party administrators for insurance policy administration, and (6) commitments to fund the business, operations or investments of such amounts to the anticipated future cash payments of KKR including consolidated funds and CFEs.our subsidiaries.

  Payments due by Period
Types of Contractual Obligations <1 Year 1-3 Years 3-5 Years >5 Years Total
  ($ in millions)
Uncalled commitments to investment funds (1)
 $2,937.4
 $—
 $—
 $—
 $2,937.4
Debt payment obligations (2)
 —
 500.0
 —
 2,139.8
 2,639.8
Interest obligations on debt (3)
 143.2
 282.5
 218.8
 2,027.3
 2,671.8
Underwriting commitments (4)
 137.3
 —
 —
 —
 137.3
Lending commitments (5)
 118.4
 —
 —
 —
 118.4
Purchase commitments (6)
 77.6
 15.5
 0.3
 —
 93.4
Lease obligations 51.7
 95.0
 31.9
 17.0
 195.6
Corporate real estate (7)
 —
 292.5
 —
 —
 292.5
Total Contractual Obligations of KKR 3,465.6
 1,185.5
 251.0
 4,184.1
 9,086.2
Plus: Uncalled commitments of consolidated funds (8)
 2,285.1
 —
 —
 —
 2,285.1
Plus: Debt payment obligations of consolidated funds and CFEs (9)
 740.7
 1,475.2
 606.4
 14,101.2
 16,923.5
Plus: Interest obligations of consolidated funds and CFEs (10)
 567.1
 1,132.6
 1,054.2
 2,257.8
 5,011.7
Total Consolidated Contractual Obligations $7,058.5
 $3,793.3
 $1,911.6
 $20,543.1
 $33,306.5

(1)These uncalled commitments represent amounts committed by us to fund a portion of the purchase price paid for each investment made by our investment funds which are actively investing. Because capital contributions are due on demand, the above commitments have been presented as falling due within one year. However, given the size of such commitments and the pace at which our investment funds make investments, we expect that the capital commitments presented above will be called over a period of several years. See "—Liquidity—Liquidity Needs."

(2)Amounts include (i) 2020 Senior Notes, 2043 Senior Notes and 2044 Senior Notes of $2.0 billion gross of unamortized discount, (ii) KFN 2032 Senior notes of $0.4 billion gross of unamortized discount and (iii) KFN Junior Subordinated Notes of $0.2 billion, gross of unamortized discount. KFN's debt obligations are non-recourse to KKR beyond the assets of KFN.

(3)These interest obligations on debt represent estimated interest to be paid over the maturity of the related debt obligation, which has been calculated assuming the debt outstanding at September 30, 2017 is not repaid until its maturity. Future interest rates are assumed to be those in effect as of September 30, 2017, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.

(4)Represents various commitments in our capital markets business in connection with the underwriting of loans, securities and other financial instruments. These commitments are shown net of amounts syndicated.

(5)Represents obligations in our capital markets business to lend under various revolving credit facilities.

(6)Represents commitments of KKR and KFN to fund the purchase of various investments.

(7)Represents the purchase price due upon delivery of a new KKR office being constructed, all or a portion of which represents construction financing obtained by the developer and may be refinanced upon delivery of the completed office.


(8)Represents uncalled commitments of our consolidated funds excluding KKR's portion of uncalled commitments as the general partner of the respective funds.

(9)Amounts include (i) financing arrangements entered into by our consolidated funds with the objective of providing liquidity to the funds of $2.5 billion, (ii) debt securities issued by our consolidated CLOs of $9.4 billion and (iii) debt securities issued by our consolidated CMBS entities of $5.0 billion. Debt securities issued by consolidated CLOs and CMBS entities are supported solely by the investments held at the CLO and CMBS vehicles and are not collateralized by assets of any other KKR entity. Obligations under financing arrangements entered into by our consolidated funds are generally limited to our pro-rata equity interest in such funds. Our management companies bear no obligations to repay any financing arrangements at our consolidated funds.

(10)The interest obligations on debt of our consolidated funds and CFEs represent estimated interest to be paid over the maturity of the related debt obligation, which has been calculated assuming the debt outstanding at September 30, 2017 is not repaid until its maturity. Future interest rates are assumed to be those in effect as of September 30, 2017, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.
The commitment table above excludes contractual amounts owed under the tax receivable agreement because the ultimate amount and timing of the amounts due are not presently known. As of September 30, 2017, a payable of $141.9 million has been recorded in due to affiliates in the condensed consolidated financial statements representing management's best estimate of the amounts currently expected to be owed under the tax receivable agreement. As of September 30, 2017, approximately $24.0 million of cumulative cash payments have been made under the tax receivable agreement. See "—Liquidity Needs—Tax Receivable Agreement."

We may incur contingent liabilities for claims that may be made against us in the future. We enter into contracts that contain a variety of representations, warranties and covenants, including indemnifications. For example, certain of our investment funds and KFNKKR have provided certain indemnities relating to environmental and other matters and have provided nonrecourse carve-out guarantees for violations of bankruptcy remoteness restrictions and for fraud, willful misconduct and other customary wrongful acts, each in connection with the financing of (i) certain real estate investments that we have made.made, including KKR's corporate real estate, and (ii) certain investment vehicles we manage or sponsor. KKR has also (i) provided credit support regarding repayment and funding obligations to third party lenders on behalf of certain employees, excluding executive officers, in connection with their personal investments in KKR investment funds and a levered multi-asset investment vehicle and (ii) provided credit support to one of our hedge fund partnerships. We have also indemnified employees and non-employees against potential liabilities, in connection with their service as described under "Certain Relationships and Related Transactions, and Director Independence—Indemnification of Directors, Officers and Others" in our Annual Report on Form 10-K for the year ended December 31, 2021. In addition, we have also provided credit support to certain of our subsidiaries’subsidiaries' obligations in connection with a limited number ofcertain investment vehicles or partnerships that we manage. For example, KKR has guaranteed the obligations of a general partner to post collateral on behalf of its investment vehicle in connection with such vehicle’svehicle's derivative transactions,transactions. KKR has also agreed to cause various of its general partners to fund their capital commitments to their funds and to be liable for such general partners' compliance with certain covenants, including limitations on their incurrence of certain kinds of indebtedness. We expect to continue to guarantee, from time to time, the obligations of our subsidiaries' funding obligations to our investment vehicles. These include KKR's obligations to fund its capital commitments to various levered multi-asset investment vehicles, which are special purpose entities that invest in various funds and co-investments sponsored by KKR. In addition, we have also agreed for certain of our investment vehicles, including certain levered multi-asset investment vehicles, to fund or otherwise be liable for certaina portion of their investment losses (up to a maximum of approximately $116 million) and/or for providingto provide them with liquidity inupon certain termination events (the maximum amount of which is unknown until the events specified inscheduled termination date of the governing documents of another investment vehicle. Our maximum exposure under these arrangements is currently unknown as our liabilities for these matters would require a claim to be made against us in the future.vehicle).

The partnership documents governing our carry-paying funds including funds and vehicles relating to private equity, mezzanine, infrastructure, energy, direct lending and special situations investments, generally include a "clawback" provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the fund for distribution to the fund investors at the end of the life of the fund. Under aSee Note 24 "Commitments and Contingencies—Contingent Repayment Guarantees" to our financial statements included elsewhere in this report for further information on KKR's potential clawback obligation, upon the liquidation of a fund, the general partner is required to return, typically on an after-tax basis, previously distributed carry to the extent that, due to the diminished performance of later investments, the aggregate amount of carry distributions received by the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, including the effects of any performance thresholds. Excluding carried interest received by the general partners of funds that were not contributed to us in the KPE Transaction, as of September 30, 2017, $47.3 million of carried interest was subject to this clawback obligation, assuming that all applicable carry paying funds were liquidated at their September 30, 2017 fair values. Had the investments in such funds been liquidated at zero value, the clawback obligation would have been $1,990.7 million. Carried interest is recognized in the statement of operations based on the contractual conditions set forth in the agreements governing the fund as if the fund were terminated and liquidated at the reporting date and the fund's investments were realized at the then estimated fair values. Amounts earned pursuant to carried interest are earned by the general partner of those funds to the extent that cumulative investment returns are positive and where applicable, preferred return thresholds have been met. If these investment amounts earned decrease or turn negative in subsequent periods, recognized carried interest will be reversed and to the extent that the aggregate amount of carry distributions received by the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, a clawback obligation would be recorded. For funds that are consolidated, this clawback obligation, if any, is reflected as an increase in noncontrolling interests in the consolidated statements of financial condition. For funds that are not consolidated, this clawback obligation, if any, is reflected as a reduction of our investment balance as this is where carried interest is initially recorded.obligations.


Prior to the KPE Transaction in 2009, certain principals who received carried interest distributions with respect to certain private equity funds contributed to us had personally guaranteed, on a several basis and subject to a cap, the contingent obligations of the general partners of such private equity funds to repay amounts to fund investors pursuant to the general partners' clawback obligations. The terms of the KPE Transaction require that principals remain responsible for any clawback obligations relating to carry distributions received prior to the KPE Transaction, up to a maximum of $223.6 million. Through investment realizations, the principals' potential exposure has been reduced to $72.2 million as of September 30, 2017. Using valuations as of September 30, 2017, $19.7 million would be due with respect to the clawback obligation required to be funded by principals. Carry distributions arising subsequent to the KPE Transaction may give rise to clawback obligations that may be allocated generally to us and to persons who participate in the carry pool. In addition, guarantees of or similar arrangements relating to clawback obligations in favor of third party investors in an individual investment partnership by entities we own may limit distributions of carried interest more generally. 

Off Balance Sheet Arrangements
 
OtherWe do not have any off-balance sheet financings or liabilities other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any off-balance sheet financings or liabilities.business.


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Critical Accounting Policies
Estimates
The preparation of our condensed consolidated financial statements in accordance with GAAP requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of fees, expenses and investment income. Our management bases these estimates and judgments on available information, historical experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates, judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or changes in our analyses. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are included in the condensed consolidated financial statements in the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying estimates, judgments or assumptions.

The followingFor a further discussion details certain ofabout our critical accounting policies. policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the 2021 Form 10-K and Note 2 "Summary of Significant Accounting Policies" in our financial statements.

Recently Issued Accounting Pronouncements
For a full discussion of all criticalrecently issued accounting policies, pleasepronouncements, see the notes to the condensed consolidated financial statements "--Item 1. Condensed Consolidated Financial Statements (Unaudited)--SummaryNote 2 "Summary of Significant Accounting Policies." Policies" in our financial statements.

Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Except for certain of KKR's equity method investments and debt obligations, KKR's investments and other financial instruments are recorded at fair value or at amounts whose carrying values approximate fair value. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation techniques are applied. These valuation techniques involve varying levels of management estimation and judgment, the degree of which is dependent on a variety of factors.

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type ofInvestments and other financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:


Level I
Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date. The types of financial instruments included in this category are publicly-listed equities, credit investments and securities sold short.


We classified 7.3% of total investments measured and reported at fair value as Level I at September 30, 2017.
Level II
Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments included in this category are credit investments, investments and debt obligations of consolidated CLO entities, convertible debt securities indexed to publicly-listed securities, less liquid and restricted equity securities and certain over-the-counter derivatives such as foreign currency option and forward contracts.

We classified 38.3% of total investments measured and reported at fair value as Level II at September 30, 2017.
Level III
Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments generally included in this category are private portfolio companies, real assets investments, credit investments, equity method investments for which the fair value option was elected and investments and debt obligations of consolidated CMBS entities.

We classified 54.4% of total investments measured and reported at fair value as Level III at September 30, 2017. The valuation of our Level III investments at September 30, 2017March 31, 2022 represents management's best estimate of the amounts that we would anticipate realizing on the sale of these investments in an orderly transaction at such date.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset.
A significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant adjustment to the transactions or quoted prices may be necessary to estimate fair value.
The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described above may cause transfers between Levels I, II, and III, which we recognize at the beginning of the reporting period.
Investments and other financial instruments that have readily observable market prices (such as those traded on a securities exchange) are stated at the last quoted sales price as of the reporting date. We do not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably affect the quoted price.

Management’s determination of fair value is based upon the methodologies and processes described below and may incorporate assumptions that are management’s best estimates after consideration of a variety of internal and external factors.
Level II Valuation Methodologies
Credit Investments: These instruments generally have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that KKR and others are willing to pay for an instrument. Ask prices represent the lowest price that KKR and others are willing to accept for an instrument. For financial assets and liabilities whose inputs are based on bid-ask prices obtained from third party pricing services, fair value may not always be a predetermined point in the bid-ask range. KKR’s policy is generally to allow for mid-market pricing and adjusting to the point within the bid-ask range that meets KKR’s best estimate of fair value.


Investments and Debt Obligations of Consolidated CLO Vehicles: Investments of consolidated CLO vehicles are valued using the same valuation methodology as described above for credit investments. Under ASU 2014-13, KKR measures CLO debt obligations on the basis of the fair value of the financial assets of the CLO.
Securities indexed to publicly-listed securities: The securities are typically valued using standard convertible security pricing models. The key inputs into these models that require some amount of judgment are the credit spreads utilized and the volatility assumed. To the extent the company being valued has other outstanding debt securities that are publicly-traded, the implied credit spread on the company’s other outstanding debt securities would be utilized in the valuation. To the extent the company being valued does not have other outstanding debt securities that are publicly-traded, the credit spread will be estimated based on the implied credit spreads observed in comparable publicly-traded debt securities. In certain cases, an additional spread will be added to reflect an illiquidity discount due to the fact that the security being valued is not publicly-traded. The volatility assumption is based upon the historically observed volatility of the underlying equity security into which the convertible debt security is convertible and/or the volatility implied by the prices of options on the underlying equity security.

Restricted Equity Securities: The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

Derivatives: The valuation incorporates observable inputs comprising yield curves, foreign currency rates and credit spreads.
Level III Valuation Methodologies
Financial assets and liabilities categorized as Level III consist primarily of the following:
Private Equity Investments: We generally employ two valuation methodologies when determining the fair value of a private equity investment. The first methodology is typically a market comparables analysis that considers key financial inputs and recent public and private transactions and other available measures. The second methodology utilized is typically a discounted cash flow analysis, which incorporates significant assumptions and judgments. Estimates of key inputs used in this methodology include the weighted average cost of capital for the investment and assumed inputs used to calculate terminal values, such as exit EBITDA multiples. In certain cases the results of the discounted cash flow approach can be significantly impacted by these estimates. Other inputs are also used in both methodologies. Also, as discussed in greater detail under "—Business Environment" in this report and "Risk Factors—Risks Related to the Assets We Manage—Our investments and financial instruments are impacted by various economic conditions and events outside of our control that are difficult to quantify or predict, butwhich may have a significant adverse impact on the valuevaluation of our investments" in our Annual Reportinvestments and, therefore, on Form 10-K,the carried interest and investment income we realize. Additionally, a change in interest rates could have a significant impact on valuations. In addition, when a definitive agreement has been executed to sell an investment, KKR generally considers a significant determinant
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Upon completion of the valuations conducted using these methodologies, a weighting is ascribed to each method, and an illiquidity discount is typically applied where appropriate. The ultimate fair value recorded for a particular investment will generally be within a range suggested by the two methodologies, except that the value may be higher or lower than such range in the case of investments being sold pursuant to an executed definitive agreement.
When determining the weighting ascribed to each valuation methodology, we consider, among other factors, the availability of direct market comparables, the applicability of a discounted cash flow analysis, the expected hold period and manner of realization for the investment, and in the case of investments being sold pursuant to an executed definitive agreement, we estimated probability of such a sale being completed. These factors can result in different weightings among investments in the portfolio and in certain instances may result in up to a 100% weighting to a single methodology. Across the total Level III private equity investment portfolio (including core equity investments), and including investments in both consolidated and unconsolidated investment funds, approximately 78%50% of the fair value is derived from investments that are valued based exactly 50% on market comparables and 50% on a discounted cash flow analysis. Less than 5% of the fair value of this Level III private equity investment portfolio is derived from investments that are valued either based 100% on market comparables or 100% on a discounted cash flow analysis. As of September 30, 2017,March 31, 2022, the overall weights ascribed to the market comparables methodology, the discounted cash flow methodology, and a methodology based on pending sales for this portfolio of Level III private equity investments were 43%36%, 48%51%, and 9%13%, respectively.
    
When an illiquidity discountThere is to be applied, we seek to take a uniform approach across our portfolio and generally apply a minimum 5% discount to all private equity investments. We then evaluate such private equity investments to determine if

factors exist that could make it more challenging to monetize the investment and, therefore, justify applying a higher illiquidity discount. These factors generally include (i) whether we are unable to freely sell the portfolio company or conduct an initial public offering of the portfolio company due to the consent rights of a third party or similar factors, (ii) whether the portfolio company is undergoing significant restructuring activity or similar factors and (iii) characteristics about the portfolio company regarding its size and/or whether the portfolio company is experiencing, or expected to experience, a significant decline in earnings. These factors generally make it less likely that a portfolio company would be sold or publicly offeredinherent uncertainty involved in the near term at a price indicated by using just a market multiples and/or discounted cash flow analysis,valuation of Level III investments, and these factors tend to reducethere is no assurance that, upon liquidation, KKR will realize the number of opportunities to sell an investment and/or increase the time horizon over which an investment may be monetized. Depending on the applicability of these factors, we determine the amount of any incremental illiquidity discount to be applied above the 5% minimum, and during the time we hold the investment, the illiquidity discount may be increased or decreased, from time to time, based on changes to these factors. The amount of illiquidity discount applied at any time requires considerable judgment about what a market participant would consider and is based on the facts and circumstances of each individual investment. Accordingly, the illiquidity discount ultimately considered by a market participant upon the realization of any investment may be higher or lower than that estimated by usvalues reflected in our valuations.

In the case of growth equity investments, enterprise values Our valuations may be determined using the market comparables analysis and discounted cash flow analysis described above. A scenario analysis may also be conducted to subject the estimated enterprise values to a downside, base and upside case, which involves significant assumptions and judgments. A milestone analysis may also be conducted to assess the current level of progress towards value drivers that we have determined to be important, which involves significant assumptions and judgments. The enterprise value in each case may then be allocated across the investment’s capital structure to reflect the terms of the security and subjected to probability weightings.  In certain cases,differ significantly from the values of growth equity investments may be based on recent or expected financings.
Real Assets Investments: Real asset investments in infrastructure, energy and real estate are valued using one or more of the discounted cash flow analysis, market comparables analysis and direct income capitalization, which in each case incorporates significant assumptions and judgments. Infrastructure investments are generally valued using the discounted cash flow analysis. Key inputs used in this methodology can include the weighted average cost of capital and assumed inputs used to calculate terminal values, such as exit EBITDA multiples. Energy investments are generally valued using a discounted cash flow analysis. Key inputs used in this methodology that require estimates include the weighted average cost of capital. In addition, the valuations of energy investments generally incorporate both commodity prices as quoted on indices and long-term commodity price forecasts, which may be substantially different from, and are currently higher than, commodity prices on certain indices for equivalent future dates. Certain energy investments do not include an illiquidity discount. Long-term commodity price forecasts are utilized to capture the value of the investments across a range of commodity prices within the energy investment portfolio associated with future development and to reflect a range of price expectations. Real estate investments are generally valued using a combination of direct income capitalization and discounted cash flow analysis. Key inputs used in such methodologies that require estimates include an unlevered discount rate and current capitalization rate, and certain real estate investments do not include a minimum illiquidity discount. The valuations of real assets investments also use other inputs.
On a segment basis, our energy real asset investments in oil and gas producing properties as of September 30, 2017 had a fair value of approximately $550 million. Based on this fair value, we estimate that an immediate, hypothetical 10% decline in the fair value of these energy investments from one or more adverse movements to the investments' valuation inputs would result in a decline in investment income of $55.0 million and a decline in net income attributable to KKR & Co. L.P. of $32.0 million, after deducting amounts that are attributable to noncontrolling interests held by KKR Holdings L.P. As of September 30, 2017, if we were to value our energy investments using only the commodity prices as quoted on indices and did not use long-term commodity price forecasts, and also held all other inputs to their valuation constant, we estimate that investment income would have been approximately $34 million lower, resulting in a lower amount of net income attributable to KKR & Co. L.P. of approximately 58.2% ofused had an active market for the overall decrease in investment income, after deducting amountsinvestments existed, and it is reasonably possible that are attributable to noncontrolling interests held by KKR Holdings L.P.

These hypothetical declines relate only to investment income. There wouldthe difference could be no currentmaterial. See "—Business Environment" for more information on factors that may impact on KKR's carried interest since all of the investment funds which hold these types of energy investments have investment values that are either below their cost or not currently accruing carried interest. Additionally, there would be no impact on fees since fees earned from investment funds which hold investments in oilour business, financial performance, operating results and gas producing properties are based on either committed capital or capital invested.

For GAAP purposes, where KKR holds energy investments consisting of working interests in oil and gas producing properties directly and not through an investment fund, such working interests are consolidated based on the proportion of the working interests held by us. Accordingly, we reflect the assets, liabilities, revenues, expenses, investment income and cash

flows of the consolidated working interests on a gross basis and changes in the value of these energy investments are not reflected as unrealized gains and losses in the consolidated statements of operations. Accordingly, a change in fair value for these investments does not result in a decrease in net gains (losses) from investment activities, but may result in an impairment charge reflected in general, administrative and other expenses. For segment purposes, these directly held working interests are treated as investments and changes in value are reflected in our segment results as unrealized gains and losses.

Credit Investments: Credit investments are valued using values obtained from dealers or market makers, and where these values are not available, credit investments are generally valued by us based on ranges of valuations determined by an independent valuation firm. Valuation models are based on discounted cash flow analyses, for which the key inputs are determined based on market comparables, which incorporate similar instruments from similar issuers.
Other Investments:  With respect to other investments including equity method investments for which the fair value election has been made, we generally employ the same valuation methodologies as described above for private equity investments when valuing these other investments.
Investments and Debt Obligations of Consolidated CMBS Vehicles: Under ASU 2014-13, we measure CMBS investments on the basis of the fair value of the financial liabilities of the CMBS. Debt obligations of consolidated CMBS vehicles are valued based on discounted cash flow analyses. The key input is the expected yield of each CMBS security using both observable and unobservable factors, which may include recently offered or completed trades and published yields of similar securities, security-specific characteristics (e.g. securities ratings issued by nationally recognized statistical rating organizations, credit support by other subordinate securities issued by the CMBS and coupon type) and other characteristics.
valuations.
Key unobservable inputs that have a significant impact on our Level III investment valuations as described above are included in Note 510 "Fair Value Measurements" of thein our financial statements included elsewhere in this report. We utilize several unobservable pricing inputs and assumptions in determining the fair value of our Level III investments. These unobservable pricing inputs and assumptions may differ by investment and in the application of our valuation methodologies. Our reported fair value estimates could vary materially if we had chosen to incorporate different unobservable pricing inputs and other assumptions or, for applicable investments, if we only used either the discounted cash flow methodology or the market comparables methodology instead of assigning a weighting to both methodologies. For valuations determined for periods other than at year end, various inputs may be estimated prior to the end of the relevant period.
statements.
Level III Valuation Process
The valuation process involved for Level III measurements is completed on a quarterly basis and is designed to subject the valuation of Level III investments to an appropriate level of consistency, oversight, and review.

For Private Markets investments classified as Level III, investment professionals prepare preliminary valuations based on their evaluation of financial and operating data, company specific developments, market valuations of comparable companies and other factors. KKR begins its procedures to determine the fair values of its Level III assets approximately one month prior to the end of a reporting period, and KKR follows additional procedures to ensure that its determinations of fair value for its Level III assets are appropriate as of the relevant reporting date. These preliminary valuations are reviewed by an independent valuation firm engaged by KKR to perform certain procedures in order to assess the reasonableness of KKR’sKKR's valuations annually for all Level III investments in Private Markets and quarterly for investments other than certain investments, which have values less than pre-setpreset value thresholds and which in the aggregate comprise less than 5%1% of the total value of KKR’sKKR's Level III Private Markets investments. The valuations of certain real asset investments are determined solely by an independent valuation firmfirms without the preparation of preliminary valuations by our investment professionals, and instead such independent valuation firm reliesfirms rely on valuation information available to it as a broker or valuation firm. For credit investments and debt obligations of consolidated CMBS vehicles,in Public Markets, an independent valuation firm is generally engaged quarterly by KKR to assist with respect tothe valuations of most investments classified as Level III. The valuation firm either provides a value, or provides a valuation range from which KKR’sKKR's investment professionals select a point in the range to determine the preliminary valuation, or performs certain procedures in order to assess the reasonableness and provide positive assurance of KKR’sKKR's valuations. After reflecting any input from the independent valuation firm, the valuation proposals are submitted to their respectivefor review and approval by KKR's valuation sub-committees.committees. As of September 30, 2017,March 31, 2022, less than 6%3% of the total value of our Level III credit investments arewere not valued with the engagement of an independent valuation firm.

For Level III investments in Asset Management, KKR has a global valuation committee comprisedthat is responsible for coordinating and implementing the firm's valuation process to ensure consistency in the application of senior employees including investment professionalsvaluation principles across portfolio investments and professionals from business operations functions, and includes one of our Co-Presidents and Co-Chief Operating Officers and our Chief Financial Officer, General Counsel and Chief Compliance Officer.between periods. The global valuation committee is assisted by the asset class-specific valuation sub-committees and investment professionals for each business strategy. All preliminary Level III valuations are reviewed and approved by the valuation sub-committeescommittees that exist for private equity (including core equity investments and certain impact investments), growth equity (including certain impact investments), real estate, energy, and infrastructure and credit, as applicable. For periods prior to the completion of the PAAMCO Prisma transaction, when Level III valuations were required to be performed on hedge fund investments, acredit. The asset class-specific valuation sub-committee for hedge funds reviewed these valuations. The valuation

sub-committeescommittees are responsible for the review and approval of all preliminary Level III valuations in their respective business linesasset classes on a quarterly basis. The members of thethese valuation sub-committeescommittees are comprised of investment professionals, including the heads of each respective strategy, and professionals from business operations functions such as legal, compliance and finance, who are not primarily responsible for the management of the investments.

The global valuation committee provides general oversight of the valuation sub-committees. The global valuation committee is responsible All Level III valuations for coordinating and implementing the firm’s valuation process to ensure consistencyinvestments in the application of valuation principles across portfolio investments and between periods. All valuationsAsset Management are also subject to approval by the global valuation committee.committee, which is comprised of senior employees including investment professionals and professionals from business operations functions, and includes one of KKR's Co-Chief Executive Officers and its Chief Financial Officer, General Counsel and Chief Compliance Officer. When valuations are approved by the global valuation committee after reflecting any input from it, the valuations of Level III investments, as well as the valuations of Level I and Level II investments, are presented to the audit committeeAudit Committee of the boardBoard of directors of the general partnerDirectors of KKR & Co. L.P.Inc. and are then reported to the boardBoard of directors.Directors.
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Level III investments held by Global Atlantic are valued on the basis of pricing services, reputable broker-dealers or internal models. Global Atlantic performs a quantitative and qualitative analysis and review of the information and prices received from independent pricing services as well as broker-dealers to verify that it represents a reasonable estimate of fair value. For all the internally developed models, Global Atlantic seeks to verify the reasonableness of fair values by analyzing the inputs and other assumptions used. As of March 31, 2022, approximately 66% of these investments were priced via external sources, while approximately 34% were valued on the basis of internal models. When valuations are approved by Global Atlantic's management, the valuations of its Level III investments, as well as the valuations of Level I and Level II investments, are presented to the Audit Committee of the Board of Directors of KKR & Co. Inc. and are then reported to the Board of Directors.
As of September 30, 2017,March 31, 2022, upon completion by, where applicable, an independent valuation firmfirms of certain limited procedures requested to be performed by them on certain Level III investments, the independent valuation firmfirms concluded that the fair values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were reasonable. The limited procedures did not involve an audit, review, compilation or any other form of examination or attestation under generally accepted auditing standards and were not conducted on all Level III investments. We are responsible for determining the fair value of investments in good faith, and the limited procedures performed by an independent valuation firm are supplementary to the inquiries and procedures that we are required to undertake to determine the fair value of the commensurate investments.
As described above, Level II and Level III investments were valued using internal models with significant unobservable inputs, and our determinations of the fair values of these investments may differ materially from the values that would have resulted if readily observable inputs had existed. Additional external factors may cause those values, and the values of investments for which readily observable inputs exist, to increase or decrease over time, which may create volatility in our earnings and the amounts of assets and partners' capitalstockholders' equity that we report from time to time.
Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount of investment income that is recognized for investments held directly in Asset Management and through our consolidated funds as described below. We estimate that an immediate 10% decrease in the fair value of investments held directly and through consolidated investment funds generally would result in a commensurate change in the amount of net gains (losses) from investment activities for investments held directly and through investment funds and a more significant impact to the amount of carried interest recognized, regardless of whether the investment was valued using observable market prices or management estimates with significant unobservable pricing inputs. With respect to consolidated investment funds, the impact that the consequential decrease in investment income would have on net income attributable to KKR would generally be significantly less than the amount described above, given that a majority of the change in fair value of our consolidated funds would be attributable to noncontrolling interests and therefore we are only impacted to the extent of our carried interest and our balance sheet investments. With respect to Insurance, a decrease in investment income for certain assets where investment gains and losses are recognized through the statement of operations would impact KKR only to the extent of our economic ownership interest in Global Atlantic.
As of September 30, 2017,March 31, 2022, there were no investments which represented greater than 5%of total investments on a GAAP basis. On a segmentnon-GAAP basis, as of September 30, 2017,March 31, 2022, investments which represented greater than 5% of total reportable segmentsnon-GAAP investments consisted of First Data CorporationPetVet Care Centers, LLC and USI, Inc. (financial services sector) valued at $1,279.1$1,216.1 million and $503.7$1,094.1 million, respectively. Our investment income on a GAAP basis and our book value can be impacted by volatility in the public markets related to our holdings of publicly traded securities, including our sizable holdings of First DataFiserv, Inc., Crescent Energy Company, KREF, and AppLovin Corporation. For the quarter ended September 30, 2017, the reduction in the stock price of First Data Corporation reduced economic net income on a segment basis by approximately $27 million. For the nine months ended September 30, 2017, the increase in the stock price of First Data Corporation increased economic net income on a segment basis by approximately $355 million. See "--Business"—Business Environment" for a discussion onof factors that may impact the impactvaluations of global equity markets on our investments, financial conditionresults, operating results and "--Segmentvaluations, and "—Non-GAAP Balance Sheet"Sheet Measures" for additional information regarding our largest holdings on a segment basis in our Annual Report on Form 10-K.non-GAAP basis.

Recognition
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Investment income consists primarily of the net impact of: (i) realized and unrealized gains and losses on investments, (ii) dividends, (iii) interest income, (iv) interest expense and (v) foreign exchange gains and losses relating to mark-to-market activity on foreign exchange forward contracts, foreign currency options, foreign denominated debt and debt securities issued by consolidated CFEs. Unrealized gains or losses resulting from the aforementioned activities are included in net gains (losses) from investment activities. Upon disposition of an instrument that is marked-to-market, previously recognized unrealized gains or losses are reversed and a realized gain or loss is recognized. While this reversal generally does not significantly impact the

net amounts of gains (losses) that we recognize from investment activities, it affects the manner in which we classify our gains and losses for reporting purposes.
Certain of our investment funds are consolidated. When a fund is consolidated, the portion of our funds' investment income that is allocable to our carried interests and capital investments is not shown in the condensed consolidated financial statements. For funds that are consolidated, all investment income (loss), including the portion of a funds' investment income (loss) that is allocable to KKR's carried interest, is included in investment income (loss) on the consolidated statements of operations. The carried interest that KKR retains in net income (loss) attributable to KKR & Co. L.P. is reflected as an adjustment to net income (loss) attributable to noncontrolling interests. However, because certain of our funds remain consolidated and because we hold a minority economic interest in these funds' investments, our share of the investment income is less than the total amount of investment income presented in the condensed consolidated financial statements for these consolidated funds.
Recognition of Carried Interest in the Statement of Operations
Carried interest entitles the general partner of a fund to a greater allocable share of the fund's earnings from investments relative to the capital contributed by the general partner and correspondingly reduces noncontrolling interests' attributable share of those earnings. Carried interest is earned by the general partner of those funds to the extent that cumulative investment returns are positive and where applicable, preferred return thresholds have been met. If these investment returns decrease or turn negative in subsequent periods, recognized carried interest will be reversed and reflected as losses in the statement of operations. For funds that are not consolidated, amounts earned pursuant to carried interest are included in fees and other in the consolidated statements of operations. Amounts earned pursuant to carried interest at consolidated funds are eliminated from fees and other upon consolidation of the fund and are included as investment income (loss) in net gains (losses) from investment activities along with all of the other investment gains and losses at the consolidated fund.
Carried interest is recognized in the statement of operations based on the contractual conditions set forth in the agreements governing the fund as if the fund were terminated and liquidated at the reporting date and the fund's investments were realized at the then estimated fair values. Due to the extended durations of our private equity funds, we believe that this approach results in income recognition that best reflects our periodic performance in the management of those funds. Amounts earned pursuant to carried interest are earned by the general partner of those funds to the extent that cumulative investment returns are positive and where applicable, preferred return thresholds have been met. If these investment amounts earned decrease or turn negative in subsequent periods, recognized carried interest will be reversed and to the extent that the aggregate amount of carry distributions received by the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, a clawback obligation would be recorded. For funds that are not consolidated, this clawback obligation, if any, is reflected as a reduction of our investment balance as this is where carried interest is initially recorded. For funds that are consolidated, this clawback obligation, if any, is reflected as an increase in noncontrolling interests in the consolidated statements of financial condition.

Prior to January 1, 2016, most of our historical private equity funds that provide for carried interest do not have a preferred return. For these funds, the management company is required to refund up to 20% of any management fees earned from its limited partners in the event that the fund recognizes carried interest. At such time as the fund recognizes carried interest in an amount sufficient to cover 20% of the management fees earned or a portion thereof, a liability due to the fund’s limited partners is recorded and revenue is reduced for the amount of the carried interest recognized, not to exceed 20% of the management fees earned. The refunds to the limited partners are paid, and liabilities relieved, at such time that the underlying investment is sold and the associated carried interest is realized. In the event that a fund’s carried interest is not sufficient to cover all or a portion of the amount that represents 20% of the earned management fees, such management fees would be retained and not returned to the funds’ limited partners.

Most of our newer investment funds that provide for carried interest, however, have a preferred return. In this case, the management company does not refund the management fees earned from the limited partners of the fund as described above. Instead, the management fee is effectively returned to the limited partners through a reduction of the realized gain on which carried interest is calculated. To calculate the carried interest, KKR calculates whether a preferred return has been achieved based on an amount that includes all of the management fees paid by the limited partners as well as the other capital contributions and expenses paid by them to date. To the extent the fund has exceeded the preferred return at the time of a realization event, and subject to any other conditions for the payment of carried interest like netting holes, carried interest is distributed to the general partner. Until the preferred return is achieved, no carried interest is recorded. Thereafter, the general partner is entitled to a catch up allocation such that the general partner’s carried interest is paid in respect of all of the fund’s net gains, including the net gains used to pay the preferred return, until the general partner has received the full percentage amount of carried interest that the general partner is entitled to under the terms of the fund. In general, investment funds that entitle the

management company to receive an incentive fee have a preferred return and are calculated on a similar basis that takes into account management fees paid.

Recently Issued Accounting Pronouncements
For a full discussion of recently issued accounting pronouncements, please see the notes to the condensed consolidated financial statements "--Item 1. Condensed Consolidated Financial Statements (Unaudited)--Summary of Significant Accounting Policies."


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There was no material change into our market risks during the three and nine months ended September 30, 2017.March 31, 2022. For additional information,a discussion of our market risks in general, please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 24, 2017.2021. In addition, for a discussion of current market conditions and uncertainties, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Environment."

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that the information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’sSEC's rules and forms and such information is accumulated and communicated to management, including the Co-Chief Executive Officers and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired controls.control objectives.
As of the period ended September 30, 2017, weWe carried out an evaluation, under the supervision and with the participation of our management, including the Co-Chief Executive Officers and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.procedures as of March 31, 2022. Based upon that evaluation, our Co-Chief Executive Officers and Chief Financial Officer have concluded that, as of the period ended September 30, 2017,March 31, 2022, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) occurred during the three or nine months ended September 30, 2017March 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. II —OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
The section entitled “Litigation”"Litigation" appearing in Note 17 “Commitments24 "Commitments and Contingencies” ofContingencies" to our financial statements included elsewhere in this report is incorporated herein by reference.

ITEM 1A.  RISK FACTORS.
For a discussionOther than as set forth in "Management's Discussion and Analysis of our potential risksFinancial Condition and uncertainties, seeResults of Operations—Business Environment" in this report, there were no material changes to the information under the heading “Risk Factors”risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on February 24, 2017.2021.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Common UnitShare Repurchases in the ThirdFirst Quarter of 20172022

    As of April 29, 2022, there is approximately $108 million remaining under KKR's share repurchase program.
As announced on October 27, 2015 and February 9, 2017,    Under our current repurchase program, KKR is authorized to repurchase up to $750 million in the aggregate of its outstanding common units. Under this unit repurchase program, units may be repurchasedstock from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing, manner, price and amount of any unitcommon stock repurchases will be determined by KKR in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. KKR expects that the program, which has no expiration date, will continue to be in effect until the maximum approved dollar amount has been used to repurchase common units.used. The program does not require KKR to repurchase any specific number of shares of common units,stock, and the program may be suspended, extended, modified or discontinued at any time.

    In addition to the repurchases of common stock described above, subsequent to May 3, 2018, the repurchase program has been used for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards issued pursuant to our Equity Incentive Plans representing the right to receive shares of common stock. From October 27, 2015 through March 31, 2022, KKR has paid approximately $573 million in cash to satisfy tax withholding and cash settlement obligations in lieu of issuing shares of common stock or its equivalent upon the vesting of equity awards representing 22.5 million shares of common stock. Of these amounts, equity awards representing 11.0 million shares of common stock or its equivalent were retired for $190 million prior to May 3, 2018 and did not count against the amounts remaining under the repurchase program.
The table below sets forth the information with respect to purchasesrepurchases made by or on behalf of KKR & Co. L.P.Inc. or any “affiliated purchaser”"affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common units duringstock for the thirdperiods presented. During the first quarter of 2017.

Issuer Purchases of Common Units
(amounts in thousands, except unit and per unit amounts)
        
 Total Number of Units Purchased Average Price Paid Per Units Cumulative Number of Units Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs
Month #1
(July 1, 2017 to
July 31, 2017)
—
 $—
 31,674,162
 $291,225
Month #2
(August 1, 2017 to
August 31, 2017)
—
 $—
 31,674,162
 $291,225
Month #3
(September 1, 2017 to
September 30, 2017)
—
 $—
 31,674,162
 $291,225
Total through September 30, 2017—
      
Purchases subsequent to September 30, 2017:       
(October 1, 2017 to
October 26, 2017)
—
 $—
 31,674,162
 $291,225
Total through October 26, 2017—
      
        

In addition to the purchases2022, 5.2 million shares of common units above, (1) cash may be used to pay the amount of withholding taxes, social benefit payments or similar payments payable by KKR in respect of awards granted pursuant to the Equity Incentive Planstock were repurchased, and (2) cash may be delivered in respect of certain awards granted pursuant to the Equity Incentive Plan and Other Exchangeable Securities. During 2017, KKR canceledno equity awards representing 3.1 million common units to satisfy tax and cash-settlement obligationswere retired. From inception of $58.0 millionthe repurchase program in connection with their vesting, bringing cumulative cancellations of equity awards representing 8.2 million common units to satisfy tax and cash-settlement obligations2015 through March 31, 2022, we have repurchased or retired a total of approximately $136.973.5 million since October 27, 2015.shares of common stock under the program at an average price of approximately $26.51 per share.

Issuer Purchases of Common Stock
(amounts in thousands, except share and per share amounts)
Total Number of Shares PurchasedAverage Price Paid Per ShareCumulative Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
Month #1
(January 1, 2022 to
January 31, 2022)		2,757,477 $68.45 59,503,848 $301,241 
Month #2
(February 1, 2022 to
February 28, 2022)		2,103,042 $65.57 61,606,890 $163,349 
Month #3
(March 1, 2022 to
March 31, 2022)		330,655 $60.49 61,937,545 $143,349 
Total through March 31, 20225,191,174 
(1) Amounts have been reduced by retirements of equity awards occurring after May 3, 2018. On May 6, 2020, KKR announced the increase to the total available amount under the repurchase program to $500 million. On December 27, 2021, KKR announced the increase to the total available amount under the repurchase program to $500 million.
Other Equity Securities
During the thirdfirst quarter of 2017, 3,163,2862022, no KKR Group Partnership Units were exchanged by (i) KKR Holdings and (ii) holdersfor shares of other exchangeable securities issuedour common stock. As of May 3, 2022, limited partners of KKR Holdings have elected to exchange their interests in connection with the acquisition of Avoca forKKR Holdings representing approximately 0.5 million KKR Group Partnership Units into an equal number of shares of our common units.stock. This resultedexchange, if it occurs, would result in an increase in our ownership of the KKR Group PartnershipsPartnership and a corresponding decrease in the ownership of the KKR Group PartnershipsPartnership by KKR Holdings andHoldings. There can be no assurance that the other exchangeable security holders. In October 2017, an additional 1,688,292 common units were issued to one or more holdersexchange will occur as requested.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.SECURITIES

Not applicable.

ITEM 4.  MINE SAFETY DISCLOSURES.
Not applicable.

ITEM 5. OTHER INFORMATION.INFORMATION

Over the last twelve months ending March 31, 2022, new capital raised totaled approximately $132 billion, which is comprised of $41 billion in private equity (including growth equity, impact and core), $47 billion in real assets, $33 billion in credit and $11 billion in other investment strategies.
On November 2, 2017, the conflicts committee of the board of directors of our Managing Partner consented to the allocation by KKR Holdings of 2,500,000 KKR Holdings units to each of our Co-Chief Executive Officers, Henry Kravis and George Roberts. The KKR Holdings units will vest in five equal annual installments, beginning on October 1, 2018, in each case, subject to continued service through each vesting date (including full continued vesting upon death or disability and an additional two years of vesting following retirement). KKR Holdings units are exchangeable for our common units on a one-for-one basis, subject to vesting and minimum retained ownership requirements.

The KKR Holdings units allocated to our Co-Chief Executive Officers are outstanding but previously unallocated units, and consequently these allocations will not increase the number of KKR Holdings units outstanding that can be converted into our common units or outstanding KKR common units on a fully-diluted basis. If and when vested, these KKR Holdings units would not dilute our ownership interests in the KKR Group Partnerships.

ITEM 6. EXHIBITS.

The following is a list of all exhibits filed or furnished as part of this report:
Exhibit No.Description of Exhibit
31.110.1†
10.2†
31.1
31.2
31.3
32.1
32.2
32.3
101Interactive data files pursuant to Rule 405 of Regulation S-T:S-T, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Financial Condition as of September 30, 2017March 31, 2022 and December 31, 2016,2021, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017March 31, 2022 and September 30, 2016,March 31, 2021, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017March 31, 2022 and September 30, 2016;March 31, 2021; (iv) the Condensed Consolidated Statements of Changes in Equity for the ninethree months ended September 30, 2017March 31, 2022 and September 30, 2016,March 31, 2021, (v) the Condensed Consolidated Statements of Cash Flows for the ninethree months ended September 30, 2017March 31, 2022 and September 30, 2016,March 31, 2021, and (vi) the Notes to the Condensed Consolidated Financial Statements.
104Cover page interactive data file, formatted in Inline XBRL and contained in Exhibit 101.


†    Certain information contained in this agreement has been omitted because it is not material and is the type that the registrant treats as private or confidential.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
KKR & CO. L.P.INC.
By: KKR Management LLC
Its General PartnerBy:/s/ ROBERT H. LEWIN
Robert H. Lewin
By:/s/ William J. Janetschek
William J. Janetschek
Chief Financial Officer
(principal financial and accounting officer of KKR Management LLC and authorized signatory)officer)
DATE:November 3, 2017May 6, 2022





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