Exhibit 99.1
KKR & Co. L.P. Announces Fourth Quarter and Full Year 2013 Results
Strong Investment Returns Drive Record Economic Net Income
GAAP net income (loss) attributable to KKR & Co. L.P. was $277.9 million and $691.2 million for the quarter and year ended December 31, 2013, respectively, up from $96.7 million and $560.8 million in the comparable periods of 2012.
Assets under management (“AUM”) totaled $94.3 billion as of December 31, 2013, up from $75.5 billion as of December 31, 2012. Fee paying assets under management (“FPAUM”) totaled $77.4 billion as of December 31, 2013, up from $60.8 billion as of December 31, 2012.
Total distributable earnings were $510.4 million for the quarter ended December 31, 2013, down from $546.3 million for the quarter ended December 31, 2012. Total distributable earnings were $1,455.9 million for the year December 31, 2013, up from $1,449.4 million in the comparable period of 2012.
Economic net income (“ENI”) was $789.6 million and $2,195.6 million for the quarter and year ended December 31, 2013, respectively, up from $347.7 million and $2,130.9 million in the comparable periods of 2012. Return on equity was 27.4% for the year ended December 31, 2013.
After-tax ENI was $1.08 and $2.99 per adjusted unit for the quarter and year ended December 31, 2013, respectively, up from $0.48 and $2.90 per adjusted unit in the comparable periods on 2012.
Fee related earnings (“FRE”) were $120.1 million and $412.3 million for the quarter and year ended December 31, 2013, respectively, up from $86.0 million and $319.8 million in the comparable periods of 2012.
Book value was $7.8 billion on a total reportable segment basis as of December 31, 2013 or $10.83 per adjusted unit.
KKR & Co. L.P. declares a fourth quarter distribution of $0.48 per common unit, bringing year-to-date distributions for 2013 to $1.40 per common unit, up from $1.22 per common unit for 2012.
KKR & Co. L.P. announced a transaction to acquire KKR Financial Holdings LLC (“KFN”).
NEW YORK--(BUSINESS WIRE)--February 6, 2014--KKR & Co. L.P. (NYSE:KKR) today reported its fourth quarter and full year 2013 results.
For the fourth quarter and year ended December 31, 2013, the carrying value of our private equity investment portfolio appreciated 8.4% and 20.2%, respectively.
AUM and FPAUM were $94.3 billion and $77.4 billion, respectively, as of December 31, 2013, both up from September 30, 2013.
We recently held our final close for our North America Fund XI L.P., Real Estate Partners Americas L.P., and Special Situations Fund L.P. Including general partner, employee and affiliate commitments, our North America Fund XI L.P. closed with $9.0 billion of commitments, Real Estate Partners Americas L.P. closed with $1.5 billion of commitments, and the Special Situations Fund L.P. closed with $2.0 billion of commitments.
On December 16, 2013, KKR announced the signing of a definitive merger agreement where KKR will acquire KFN through a stock-for-stock merger. KFN is a specialty finance company with a portfolio of assets spanning a complementary range of strategies, principally leveraged credit through ownership of subordinated and mezzanine notes across a number of CLOs; special situations; and Private Markets strategies including natural resources, commercial real estate and private equity. KFN is externally managed by KKR. The merger, which is subject to KFN shareholder approval, customary regulatory approvals and other customary closing conditions, is expected to close in the first half of 2014.
In the near term, we expect to close on the acquisition of Avoca Capital (Unlimited) and its affiliates (“Avoca”), a European credit investment manager. The addition of Avoca provides KKR with a leading presence in the European leveraged credit markets and will enable us to expand our credit platform to offer a full spectrum of credit opportunities globally for our fund investors. As of December 31, 2013, Avoca had $8.4 billion in assets under management, which are not included in either AUM or FPAUM.
“Our investment performance, cash flow generation, and balance sheet income translated into $1.5 billion in total distributable earnings, a 27% return on equity, and a distribution of $1.40 per unit for 2013, our highest annual distribution as a public company,” said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “We continued to see progress across our capital raising, investment performance, monetization and strategic initiatives."
_______________________________________________________________________________________________________
Note: Certain financial measures, including FRE, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, book value, cash and short-term investments and adjusted units, are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Exhibits A and B for a reconciliation of such measures to financial results prepared in accordance with GAAP.
GAAP RESULTS
GAAP results for the quarter and year ended December 31, 2013 included net income attributable to KKR & Co. L.P. of $277.9 million and $691.2 million, respectively, and net income attributable to KKR & Co. L.P. per common unit of $0.89 and $2.30, respectively, on a diluted basis. For the quarter and year ended December 31, 2012, net income attributable to KKR & Co. L.P. was $96.7 million and $560.8 million, respectively, and net income attributable to KKR & Co. L.P. per common unit were $0.36 and $2.21, respectively, on a diluted basis. The increase quarter over quarter was primarily due to (i) an increase in management fees attributable to new capital raised; (ii) higher transaction fees; (iii) a higher level of total investment income; and (iv) an increase in KKR & Co. L.P.’s ownership percentage in the KKR business. The year over year increase was primarily due to (i) an increase in management fees attributable to new capital raised; (ii) higher transaction fees; (iii) the acquisition of Prisma; and (iv) an increase in KKR & Co. L.P.’s ownership percentage in the KKR business.
SEGMENT RESULTS
Private Markets
AUM was $61.2 billion as of December 31, 2013, an increase of $1.5 billion, or 2.5%, compared to AUM of $59.7 billion as of September 30, 2013. The increase was primarily attributable to appreciation in the fair value of our private equity portfolio and to a lesser extent new capital raised from fund investors. The increase was partially offset by distributions to the limited partners of our private equity funds arising from realizations.
FPAUM was $50.2 billion as of December 31, 2013, an increase of $0.3 billion, or 0.6%, compared to FPAUM of $49.9 billion as of September 30, 2013. The increase was primarily attributable to new capital raised from fund investors largely offset by distributions to the limited partners of our private equity funds arising from realizations.
FRE was $30.5 million for the quarter ended December 31, 2013, a decrease of $1.9 million, or 5.9%, compared to FRE of $32.4 million for the quarter ended December 31, 2012. The decrease was primarily driven by higher compensation expense due to additional headcount and higher other operating expenses. The decrease was partially offset by higher management fees resulting from new capital raised and higher transaction fees.
FRE was $158.3 million for the year ended December 31, 2013, an increase of $7.3 million, or 4.8%, compared to FRE of $151.0 million for the year ended December 31, 2012. The increase was primarily driven by higher management fees resulting from new capital raised and higher transaction fees. The increase was partially offset by higher compensation expense due to additional headcount and higher other operating expenses.
ENI was $368.6 million for the quarter ended December 31, 2013, an increase of $190.8 million, or 107.3%, compared to ENI of $177.8 million for the quarter ended December 31, 2012. The increase was primarily attributable to higher net carried interest resulting from a higher level of appreciation in our private equity portfolio.
ENI was $952.5 million for the year ended December 31, 2013, an increase of $120.8 million, or 14.5%, compared to ENI of $831.7 million for the year ended December 31, 2012. The increase was primarily attributable to higher net carried interest resulting from a lower level of management fee refunds and the increase in FRE discussed above.
Public Markets
AUM was $33.1 billion as of December 31, 2013, an increase of $2.6 billion, or 8.5%, compared to AUM of $30.5 billion as of September 30, 2013. FPAUM was $27.2 billion as of December 31, 2013, an increase of $3.5 billion, or 14.8%, compared to FPAUM of $23.7 billion as of September 30, 2013. For both AUM and FPAUM, the increases were primarily attributable to net new capital raised from fund investors.
FRE was $63.6 million for the quarter ended December 31, 2013, an increase of $34.2 million, or 116.3%, compared to FRE of $29.4 million for the quarter ended December 31, 2012. The increase was principally attributable to higher incentive fees earned and higher management fees related to new capital raised from fund investors. The increase was partially offset by higher operating expenses.
FRE was $155.4 million for the year ended December 31, 2013, an increase of $74.9 million, or 93.0%, compared to FRE of $80.5 million for the year ended December 31, 2012. The increase was primarily attributable to (i) higher management fees related to new capital raised from fund investors,(ii) the acquisition of Prisma and (iii) higher incentive fees earned. The increase was partially offset by higher operating expenses primarily related to one-time expenses incurred in connection with the launch of a closed-end fund in 2013.
ENI was $73.3 million for the quarter ended December 31, 2013, an increase of $35.9 million, or 96.0%, compared to ENI of $37.4 million for the quarter ended December 31, 2012. The increase was primarily driven by the increase in FRE discussed above.
ENI was $191.4 million for the year ended December 31, 2013, an increase of $88.5 million, or 86.0%, compared to ENI of $102.9 million for the year ended December 31, 2012. The increase was primarily driven by the increase in FRE discussed above and to a lesser extent higher net carried interest due to certain credit investment vehicles beginning to earn carry in 2013.
Capital Markets and Principal Activities
FRE was $26.0 million for the quarter ended December 31, 2013, an increase of $1.8 million, or 7.4%, compared to FRE of $24.2 million for the quarter ended December 31, 2012. FRE was $98.7 million for the year ended December 31, 2013, an increase of $10.4 million, or 11.8%, compared to FRE of $88.3 million for the year ended December 31, 2012. The increases in both comparable periods were primarily driven by a higher level of overall capital markets transaction activity, partially offset by higher compensation expense.
ENI was $347.8 million for the quarter ended December 31, 2013, an increase of $215.2 million, or 162.3%, compared to ENI of $132.6 million for the quarter ended December 31, 2012. The increase was primarily attributable to a higher level of investment income from our principal investments.
ENI was $1,051.7 million for the year ended December 31, 2013, a decrease of $144.5 million, or 12.1%, compared to ENI of $1,196.2 million for the year ended December 31, 2012. The decrease was primarily due to a lower level of investment income from our principal investments, partially offset by the increase in FRE discussed above. While the fair value of our principal investments increased during the year ended December 31, 2013, the level of appreciation was lower than in 2012.
CAPITAL AND LIQUIDITY
As of December 31, 2013, KKR had $2.2 billion of cash and short-term investments on a total reportable segment basis and $1.0 billion of outstanding debt obligations. KKR’s availability for borrowings was $750.0 million (which is reduced by an outstanding letter of credit), which does not include a $500.0 million revolving credit facility for use in its capital markets business that was undrawn as of December 31, 2013.
As of December 31, 2013, KKR’s portion of total uncalled commitments to its investment funds was $1.2 billion, consisting of the following (amounts in thousands):
Uncalled Commitments | |||||
Private Markets | |||||
North America Fund XI | $ | 324,800 | |||
Energy Income and Growth Fund | 227,500 | ||||
Real Estate Partners Americas | 123,200 | ||||
European Fund III | 121,500 | ||||
Asian Fund II | 72,400 | ||||
2006 Fund | 61,700 | ||||
Infrastructure | 19,900 | ||||
Natural Resources | 11,100 | ||||
China Growth Fund | 6,400 | ||||
Asian Fund | 3,700 | ||||
E2 Investors (Annex Fund) | 900 | ||||
Co-Investment Vehicles | 39,200 | ||||
Total Private Markets Commitments | 1,012,300 | ||||
Public Markets | |||||
Special Situations Vehicles | 125,900 | ||||
Mezzanine Fund | 21,200 | ||||
Direct Lending Vehicles | 12,600 | ||||
Total Public Markets Commitments | 159,700 | ||||
Total Uncalled Commitments | $ | 1,172,000 | |||
DISTRIBUTION
A distribution of $0.48 per common unit has been declared, comprised of (i) $0.12 per common unit from after-tax FRE, (ii) $0.22 per common unit from realized cash carry, and (iii) $0.14 per common unit from net realized principal investment income. The distribution will be paid on March 4, 2014 to unitholders of record as of the close of business on February 18, 2014. Please refer to the distribution policy presented later in this release.
CONFERENCE CALL
A conference call to discuss KKR’s financial results will be held on Thursday, February 6, 2014 at 10:00 a.m. EST. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Investors Center section of KKR’s website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. A replay of the live broadcast will be available on KKR’s website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 35363339 beginning approximately two hours after the broadcast.
From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm. In addition, you may automatically receive email alerts and other information about KKR by enrolling your email address at the “Email Alerts” area of the Investor Center on the website.
ABOUT KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $94.3 billion in assets under management as of December 31, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR) and “KKR”, as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate. For additional information, please visit KKR’s website at www.kkr.com.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, FRE, total distributable earnings, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, committed dollars invested and syndicated capital, uncalled commitments, core interest expense, cash and short-term investments, net realized principal investment income and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships such as Prisma, Nephila, Avoca or KFN; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on February 22, 2013, and other filings with the SEC, which are available at www.sec.gov.
KKR | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED) | ||||||||||||||||
(Amounts in thousands, except common unit and per common unit amounts) | ||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
Revenues | ||||||||||||||||
Fees | $ | 224,902 | $ | 177,621 | $ | 762,546 | $ | 568,442 | ||||||||
Expenses | ||||||||||||||||
Compensation and Benefits | 405,687 | 261,454 | 1,266,592 | 1,280,854 | ||||||||||||
Occupancy and Related Charges | 15,684 | 14,569 | 61,720 | 58,205 | ||||||||||||
General, Administrative and Other | 158,920 | 82,249 | 438,826 | 259,729 | ||||||||||||
Total Expenses | 580,291 | 358,272 | 1,767,138 | 1,598,788 | ||||||||||||
Investment Income (Loss) | ||||||||||||||||
Net Gains (Losses) from Investment Activities | 3,227,327 | 874,507 | 7,826,082 | 7,871,673 | ||||||||||||
Dividend Income | 325,507 | 677,590 | 695,521 | 940,888 | ||||||||||||
Interest Income | 122,509 | 98,929 | 474,759 | 358,598 | ||||||||||||
Interest Expense | (26,923 | ) | (16,407 | ) | (99,616 | ) | (69,164 | ) | ||||||||
Total Investment Income (Loss) | 3,648,420 | 1,634,619 | 8,896,746 | 9,101,995 | ||||||||||||
Income (Loss) Before Taxes | 3,293,031 | 1,453,968 | 7,892,154 | 8,071,649 | ||||||||||||
Income Taxes | 12,401 | 5,628 | 37,926 | 43,405 | ||||||||||||
Net Income (Loss) | 3,280,630 | 1,448,340 | 7,854,228 | 8,028,244 | ||||||||||||
Net Income (Loss) Attributable to | ||||||||||||||||
Redeemable Noncontrolling Interests | 36,263 | 16,412 | 62,255 | 34,963 | ||||||||||||
Net Income (Loss) Attributable to | ||||||||||||||||
Noncontrolling Interests | 2,966,454 | 1,335,200 | 7,100,747 | 7,432,445 | ||||||||||||
Net Income (Loss) Attributable to KKR & Co. L.P. | $ | 277,913 | $ | 96,728 | $ | 691,226 | $ | 560,836 | ||||||||
Distributions Declared per KKR & Co. L.P. Common Unit | $ | 0.48 | $ | 0.70 | $ | 1.40 | $ | 1.22 | ||||||||
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit | ||||||||||||||||
Basic | $ | 0.96 | $ | 0.39 | $ | 2.51 | $ | 2.35 | ||||||||
Diluted (a) | $ | 0.89 | $ | 0.36 | $ | 2.30 | $ | 2.21 | ||||||||
Weighted Average Common Units Outstanding | ||||||||||||||||
Basic | 288,045,501 | 249,303,558 | 274,910,628 | 238,503,257 | ||||||||||||
Diluted (a) | 312,340,336 | 268,192,128 | 300,254,090 | 254,093,160 | ||||||||||||
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(a) | KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit given that the exchange of these units would proportionally increase KKR & Co. L.P.’s interests in KKR’s business and would have an anti-dilutive effect on earnings per common unit as a result of certain tax benefits KKR & Co. L.P. is assumed to receive upon the exchange. | |
KKR | ||||||||||||||||||||
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION | ||||||||||||||||||||
TOTAL REPORTABLE SEGMENTS (UNAUDITED) | ||||||||||||||||||||
(Amounts in thousands, except unit and per unit amounts) | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||||
Fees | ||||||||||||||||||||
Management and incentive fees: | ||||||||||||||||||||
Management fees | $ | 175,246 | $ | 173,245 | $ | 144,355 | $ | 665,630 | $ | 529,107 | ||||||||||
Incentive fees | 36,695 | 1,225 | 12,350 | 72,359 | 43,845 | |||||||||||||||
Management and incentive fees | 211,941 | 174,470 | 156,705 | 737,989 | 572,952 | |||||||||||||||
Monitoring and transaction fees: | ||||||||||||||||||||
Monitoring fees | 26,282 | 33,010 | 32,988 | 120,267 | 116,565 | |||||||||||||||
Transaction fees | 104,475 | 129,127 | 76,840 | 336,686 | 240,108 | |||||||||||||||
Fee credits | (47,014 | ) | (61,782 | ) | (37,991 | ) | (166,612 | ) | (105,730 | ) | ||||||||||
Net monitoring and transaction fees | 83,743 | 100,355 | 71,837 | 290,341 | 250,943 | |||||||||||||||
Total fees | 295,684 | 274,825 | 228,542 | 1,028,330 | 823,895 | |||||||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 95,945 | 92,229 | 76,001 | 343,772 | 272,811 | |||||||||||||||
Occupancy and related charges | 14,264 | 15,674 | 13,763 | 56,327 | 55,068 | |||||||||||||||
Other operating expenses | 65,342 | 60,884 | 52,799 | 215,883 | 176,205 | |||||||||||||||
Total expenses | 175,551 | 168,787 | 142,563 | 615,982 | 504,084 | |||||||||||||||
Fee Related Earnings | 120,133 | 106,038 | 85,979 | 412,348 | 319,811 | |||||||||||||||
Investment income (loss) | ||||||||||||||||||||
Realized carried interest | 250,500 | 81,532 | 168,320 | 690,027 | 475,707 | |||||||||||||||
Unrealized carried interest | 347,239 | 278,004 | 100,616 | 754,423 | 956,203 | |||||||||||||||
Gross carried interest | 597,739 | 359,536 | 268,936 | 1,444,450 | 1,431,910 | |||||||||||||||
Less: allocation to KKR carry pool | (241,397 | ) | (145,512 | ) | (107,514 | ) | (582,949 | ) | (581,206 | ) | ||||||||||
Less: management fee refunds (a) | (8,564 | ) | (7,767 | ) | (8,712 | ) | (30,282 | ) | (143,723 | ) | ||||||||||
Net carried interest | 347,778 | 206,257 | 152,710 | 831,219 | 706,981 | |||||||||||||||
Realized other investment income (loss) | 250,856 | 102,766 | 366,878 | 657,139 | 866,776 | |||||||||||||||
Unrealized other investment income (loss) | 72,825 | 200,706 | (256,642 | ) | 301,262 | 244,346 | ||||||||||||||
Total other investment income (loss) | 323,681 | 303,472 | 110,236 | 958,401 | 1,111,122 | |||||||||||||||
Total investment income (loss) | 671,459 | 509,729 | 262,946 | 1,789,620 | 1,818,103 | |||||||||||||||
Income (Loss) before noncontrolling interests | ||||||||||||||||||||
in Income of consolidated entities | 791,592 | 615,767 | 348,925 | 2,201,968 | 2,137,914 | |||||||||||||||
Income (Loss) attributable to | ||||||||||||||||||||
noncontrolling interests | 1,943 | 2,020 | 1,245 | 6,387 | 7,043 | |||||||||||||||
Economic Net Income (Loss) | $ | 789,649 | $ | 613,747 | $ | 347,680 | $ | 2,195,581 | $ | 2,130,871 | ||||||||||
Provision for Income Taxes | 16,048 | 11,950 | 10,632 | 61,601 | 102,420 | |||||||||||||||
Economic Net Income (Loss), After Taxes (b) | $ | 773,601 | $ | 601,797 | $ | 337,048 | $ | 2,133,980 | $ | 2,028,451 | ||||||||||
Economic Net Income (Loss), After Taxes per Adjusted Unit (b) | $ | 1.08 | $ | 0.84 | $ | 0.48 | $ | 2.99 | $ | 2.90 | ||||||||||
Assets Under Management | $ | 94,320,300 | $ | 90,169,200 | $ | 75,527,500 | $ | 94,320,300 | $ | 75,527,500 | ||||||||||
Fee Paying Assets Under Management | $ | 77,397,500 | $ | 73,611,900 | $ | 60,846,000 | $ | 77,397,500 | $ | 60,846,000 | ||||||||||
Committed Dollars Invested and Syndicated Capital | $ | 2,943,500 | $ | 2,848,700 | $ | 1,715,700 | $ | 8,506,000 | $ | 4,354,900 | ||||||||||
Uncalled Commitments | $ | 22,463,900 | $ | 22,718,400 | $ | 16,071,900 | $ | 22,463,900 | $ | 16,071,900 | ||||||||||
Other Information | ||||||||||||||||||||
Fee Related Earnings | $ | 120,133 | $ | 106,038 | $ | 85,979 | $ | 412,348 | $ | 319,811 | ||||||||||
Plus: depreciation and amortization | 3,658 | 3,601 | 3,580 | 14,648 | 12,499 | |||||||||||||||
Fee Related EBITDA | $ | 123,791 | $ | 109,639 | $ | 89,559 | $ | 426,996 | $ | 332,310 | ||||||||||
Total Distributable Earnings (b) | $ | 510,351 | $ | 251,137 | $ | 546,290 | $ | 1,455,878 | $ | 1,449,396 | ||||||||||
GAAP interest expense | $ | 26,923 | $ | 25,056 | $ | 16,407 | $ | 99,616 | $ | 69,164 | ||||||||||
Less: interest expense related to debt obligations | ||||||||||||||||||||
from investment financing arrangements | 9,919 | 8,841 | 7,014 | 33,954 | 31,050 | |||||||||||||||
Core Interest Expense (b) | $ | 17,004 | $ | 16,215 | $ | 9,393 | $ | 65,662 | $ | 38,114 | ||||||||||
Economic Net Income (Loss), | ||||||||||||||||||||
After Taxes and Equity-based Charges (b) | $ | 743,473 | $ | 570,570 | $ | 321,850 | $ | 2,019,271 | $ | 1,965,574 | ||||||||||
Return on Equity (c) | 27.4 | % | 31.0 | % | ||||||||||||||||
(a) | As of December 31, 2013, there is no carried interest subject to management fee refunds, which may reduce carried interest in future periods. | |
(b) | See definitions for economic net income (loss), after taxes, adjusted units, total distributable earnings, core interest expense and economic net income (loss), after taxes and equity-based charges under “Notes to Reportable Segments.” | |
(c) | Return on equity measures the amount of net income generated as a percentage of capital invested in KKR’s business. Return on equity is calculated by dividing Economic Net Income (Loss), After Taxes and Equity-based Charges by the average book value during the period. | |
KKR | |||||||||||||||||
SUPPLEMENTAL STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION (SAMPLE) | |||||||||||||||||
TOTAL REPORTABLE SEGMENTS (UNAUDITED) | |||||||||||||||||
(Amounts in thousands, except unit and per unit amounts) | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
Segment Revenues | |||||||||||||||||
Fees | $ | 295,684 | $ | 274,825 | $ | 228,542 | $ | 1,028,330 | $ | 823,895 | |||||||
Gross Carried Interest - net of Management Fee Refunds | 589,175 | 351,769 | 260,224 | 1,414,168 | 1,288,187 | ||||||||||||
Investment Income (Loss) | 323,681 | 303,472 | 110,236 | 958,401 | 1,111,122 | ||||||||||||
Total Segment Revenues | 1,208,540 | 930,066 | 599,002 | 3,400,899 | 3,223,204 | ||||||||||||
Segment Expenses | |||||||||||||||||
Allocation to Carry Pool | 241,397 | 145,512 | 107,514 | 582,949 | 581,206 | ||||||||||||
Compensation and benefits | 95,945 | 92,229 | 76,001 | 343,772 | 272,811 | ||||||||||||
Equity-based Charges | 30,128 | 31,227 | 15,198 | 114,709 | 62,877 | ||||||||||||
Occupancy and Related Charges | 14,264 | 15,674 | 13,763 | 56,327 | 55,068 | ||||||||||||
Other Operating Expenses | 65,342 | 60,884 | 52,799 | 215,883 | 176,205 | ||||||||||||
Total Segment Expenses | 447,076 | 345,526 | 265,275 | 1,313,640 | 1,148,167 | ||||||||||||
Income (Loss) attributable to noncontrolling interests | 1,943 | 2,020 | 1,245 | 6,387 | 7,043 | ||||||||||||
Economic Net Income (Loss) After Equity-based Charges | $ | 759,521 | $ | 582,520 | $ | 332,482 | $ | 2,080,872 | $ | 2,067,994 | |||||||
Provision for Income Taxes | 16,048 | 11,950 | 10,632 | 61,601 | 102,420 | ||||||||||||
Economic Net Income (Loss), | |||||||||||||||||
After Taxes and Equity-based Charges | $ | 743,473 | $ | 570,570 | $ | 321,850 | $ | 2,019,271 | $ | 1,965,574 | |||||||
Economic Net Income (Loss), | |||||||||||||||||
After Taxes and Equity-based Charges Per Adjusted Unit | $ | 1.04 | $ | 0.80 | $ | 0.46 | $ | 2.82 | $ | 2.81 | |||||||
Weighted Average Adjusted Units (Fully Diluted Basis) | 716,807,180 | 715,781,663 | 704,805,537 | 714,835,941 | 699,988,443 | ||||||||||||
Return on Equity | 27.4 | % | 31.0 | % | |||||||||||||
KKR | ||||||||||||||||||||
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION | ||||||||||||||||||||
PRIVATE MARKETS SEGMENTS (UNAUDITED) | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||||
Fees | ||||||||||||||||||||
Management and incentive fees: | ||||||||||||||||||||
Management fees | $ | 118,781 | $ | 119,410 | $ | 104,804 | $ | 459,496 | $ | 423,921 | ||||||||||
Incentive fees | - | - | - | - | - | |||||||||||||||
Management and incentive fees | 118,781 | 119,410 | 104,804 | 459,496 | 423,921 | |||||||||||||||
Monitoring and transaction fees: | ||||||||||||||||||||
Monitoring fees | 26,282 | 33,010 | 32,988 | 120,267 | 116,565 | |||||||||||||||
Transaction fees | 53,507 | 54,968 | 41,231 | 150,118 | 96,454 | |||||||||||||||
Fee credits | (39,509 | ) | (46,597 | ) | (37,721 | ) | (136,662 | ) | (97,362 | ) | ||||||||||
Net monitoring and transaction fees | 40,280 | 41,381 | 36,498 | 133,723 | 115,657 | |||||||||||||||
Total fees | 159,061 | 160,791 | 141,302 | 593,219 | 539,578 | |||||||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 66,994 | 65,400 | 53,383 | 231,911 | 192,765 | |||||||||||||||
Occupancy and related charges | 12,110 | 13,367 | 12,075 | 48,045 | 48,562 | |||||||||||||||
Other operating expenses | 49,466 | 37,586 | 43,463 | 154,982 | 147,253 | |||||||||||||||
Total expenses | 128,570 | 116,353 | 108,921 | 434,938 | 388,580 | |||||||||||||||
Fee Related Earnings | 30,491 | 44,438 | 32,381 | 158,281 | 150,998 | |||||||||||||||
Investment income (loss) | ||||||||||||||||||||
Realized carried interest | 250,500 | 81,532 | 168,320 | 690,027 | 475,707 | |||||||||||||||
Unrealized carried interest | 330,113 | 263,982 | 86,976 | 692,085 | 917,048 | |||||||||||||||
Gross carried interest | 580,613 | 345,514 | 255,296 | 1,382,112 | 1,392,755 | |||||||||||||||
Less: allocation to KKR carry pool | (234,547 | ) | (139,903 | ) | (102,058 | ) | (558,014 | ) | (565,543 | ) | ||||||||||
Less: management fee refunds | (8,564 | ) | (7,767 | ) | (8,712 | ) | (30,282 | ) | (143,723 | ) | ||||||||||
Net carried interest | 337,502 | 197,844 | 144,526 | 793,816 | 683,489 | |||||||||||||||
Realized other investment income (loss) | - | - | - | - | - | |||||||||||||||
Unrealized other investment income (loss) | 824 | 3,357 | 1,158 | 1,897 | 599 | |||||||||||||||
Total other investment income (loss) | 824 | 3,357 | 1,158 | 1,897 | 599 | |||||||||||||||
Total investment income (loss) | 338,326 | 201,201 | 145,684 | 795,713 | 684,088 | |||||||||||||||
Income (Loss) before noncontrolling interests | ||||||||||||||||||||
in Income of consolidated entities | 368,817 | 245,639 | 178,065 | 953,994 | 835,086 | |||||||||||||||
Income (Loss) attributable to | ||||||||||||||||||||
noncontrolling interests | 256 | 433 | 292 | 1,498 | 3,390 | |||||||||||||||
Economic Net Income (Loss) | $ | 368,561 | $ | 245,206 | $ | 177,773 | $ | 952,496 | $ | 831,696 | ||||||||||
Assets Under Management | $ | 61,242,900 | $ | 59,678,300 | $ | 49,127,600 | $ | 61,242,900 | $ | 49,127,600 | ||||||||||
Fee Paying Assets Under Management | $ | 50,156,300 | $ | 49,889,500 | $ | 41,173,000 | $ | 50,156,300 | $ | 41,173,000 | ||||||||||
Committed Dollars Invested | $ | 2,122,600 | $ | 1,805,800 | $ | 1,220,800 | $ | 5,840,900 | $ | 3,026,300 | ||||||||||
Uncalled Commitments | $ | 20,101,600 | $ | 21,103,800 | $ | 14,271,100 | $ | 20,101,600 | $ | 14,271,100 | ||||||||||
KKR | ||||||||||||||||||||
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION | ||||||||||||||||||||
PUBLIC MARKETS SEGMENTS (UNAUDITED) | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||||
Fees | ||||||||||||||||||||
Management and incentive fees: | ||||||||||||||||||||
Management fees | $ | 56,465 | $ | 53,835 | $ | 39,551 | $ | 206,134 | $ | 105,186 | ||||||||||
Incentive fees | 36,695 | 1,225 | 12,350 | 72,359 | 43,845 | |||||||||||||||
Management and incentive fees | 93,160 | 55,060 | 51,901 | 278,493 | 149,031 | |||||||||||||||
Monitoring and transaction fees: | ||||||||||||||||||||
Monitoring fees | - | - | - | - | - | |||||||||||||||
Transaction fees | 9,431 | 20,534 | 1,974 | 40,314 | 14,495 | |||||||||||||||
Fee credits | (7,505 | ) | (15,185 | ) | (270 | ) | (29,950 | ) | (8,368 | ) | ||||||||||
Net monitoring and transaction fees | 1,926 | 5,349 | 1,704 | 10,364 | 6,127 | |||||||||||||||
Total fees | 95,086 | 60,409 | 53,605 | 288,857 | 155,158 | |||||||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 17,082 | 18,606 | 16,097 | 77,378 | 50,705 | |||||||||||||||
Occupancy and related charges | 1,800 | 1,906 | 1,479 | 6,863 | 5,606 | |||||||||||||||
Other operating expenses (a) | 12,567 | 19,670 | 6,596 | 49,210 | 18,350 | |||||||||||||||
Total expenses | 31,449 | 40,182 | 24,172 | 133,451 | 74,661 | |||||||||||||||
Fee Related Earnings (a) | 63,637 | 20,227 | 29,433 | 155,406 | 80,497 | |||||||||||||||
Investment income (loss) | ||||||||||||||||||||
Realized carried interest | - | - | - | - | - | |||||||||||||||
Unrealized carried interest | 17,126 | 14,022 | 13,640 | 62,338 | 39,155 | |||||||||||||||
Gross carried interest | 17,126 | 14,022 | 13,640 | 62,338 | 39,155 | |||||||||||||||
Less: allocation to KKR carry pool | (6,850 | ) | (5,609 | ) | (5,456 | ) | (24,935 | ) | (15,663 | ) | ||||||||||
Less: management fee refunds | - | - | - | - | - | |||||||||||||||
Net carried interest | 10,276 | 8,413 | 8,184 | 37,403 | 23,492 | |||||||||||||||
Realized other investment income (loss) | - | - | - | - | - | |||||||||||||||
Unrealized other investment income (loss) | 36 | (4 | ) | 30 | 116 | 20 | ||||||||||||||
Total other investment income (loss) | 36 | (4 | ) | 30 | 116 | 20 | ||||||||||||||
Total investment income (loss) | 10,312 | 8,409 | 8,214 | 37,519 | 23,512 | |||||||||||||||
Income (Loss) before noncontrolling interests | ||||||||||||||||||||
in Income of consolidated entities | 73,949 | 28,636 | 37,647 | 192,925 | 104,009 | |||||||||||||||
Income (Loss) attributable to | ||||||||||||||||||||
noncontrolling interests | 625 | 202 | 292 | 1,560 | 1,079 | |||||||||||||||
Economic Net Income (Loss) | $ | 73,324 | $ | 28,434 | $ | 37,355 | $ | 191,365 | $ | 102,930 | ||||||||||
Assets Under Management | $ | 33,077,400 | $ | 30,490,900 | $ | 26,399,900 | $ | 33,077,400 | $ | 26,399,900 | ||||||||||
Fee Paying Assets Under Management | $ | 27,241,200 | $ | 23,722,400 | $ | 19,673,000 | $ | 27,241,200 | $ | 19,673,000 | ||||||||||
Committed Dollars Invested | $ | 690,900 | $ | 326,400 | $ | 226,400 | $ | 1,553,000 | $ | 784,800 | ||||||||||
Uncalled Commitments | $ | 2,362,300 | $ | 1,614,600 | $ | 1,800,800 | $ | 2,362,300 | $ | 1,800,800 | ||||||||||
Gross Dollars Invested | $ | 1,481,100 | $ | 1,498,000 | $ | 365,600 | $ | 4,213,300 | $ | 1,678,700 | ||||||||||
(a) | For the quarter ended September 30, 2013 and for the year ended December 31, 2013, other operating expenses include $9.7 million of one-time expenses incurred in connection with the launch of a closed-end fund. | |
KKR | ||||||||||||||||
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION | ||||||||||||||||
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENTS (UNAUDITED) | ||||||||||||||||
(Amounts in thousands) | ||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||
Fees | ||||||||||||||||
Management and incentive fees: | ||||||||||||||||
Management fees | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
Incentive fees | - | - | - | - | - | |||||||||||
Management and incentive fees | - | - | - | - | - | |||||||||||
Monitoring and transaction fees: | ||||||||||||||||
Monitoring fees | - | - | - | - | - | |||||||||||
Transaction fees | 41,537 | 53,625 | 33,635 | 146,254 | 129,159 | |||||||||||
Fee credits | - | - | - | - | - | |||||||||||
Net monitoring and transaction fees | 41,537 | 53,625 | 33,635 | 146,254 | 129,159 | |||||||||||
Total fees | 41,537 | 53,625 | 33,635 | 146,254 | 129,159 | |||||||||||
Expenses | ||||||||||||||||
Compensation and benefits | 11,869 | 8,223 | 6,521 | 34,483 | 29,341 | |||||||||||
Occupancy and related charges | 354 | 401 | 209 | 1,419 | 900 | |||||||||||
Other operating expenses | 3,309 | 3,628 | 2,740 | 11,691 | 10,602 | |||||||||||
Total expenses | 15,532 | 12,252 | 9,470 | 47,593 | 40,843 | |||||||||||
Fee Related Earnings | 26,005 | 41,373 | 24,165 | 98,661 | 88,316 | |||||||||||
Investment income (loss) | ||||||||||||||||
Realized carried interest | - | - | - | - | - | |||||||||||
Unrealized carried interest | - | - | - | - | - | |||||||||||
Gross carried interest | - | - | - | - | - | |||||||||||
Less: allocation to KKR carry pool | - | - | - | - | - | |||||||||||
Less: management fee refunds | - | - | - | - | - | |||||||||||
Net carried interest | - | - | - | - | - | |||||||||||
Realized other investment income (loss) | 250,856 | 102,766 | 366,878 | 657,139 | 866,776 | |||||||||||
Unrealized other investment income (loss) | 71,965 | 197,353 | (257,830 | ) | 299,249 | 243,727 | ||||||||||
Total other investment income (loss) (a) | 322,821 | 300,119 | 109,048 | 956,388 | 1,110,503 | |||||||||||
Total investment income (loss) | 322,821 | 300,119 | 109,048 | 956,388 | 1,110,503 | |||||||||||
Income (Loss) before noncontrolling interests | ||||||||||||||||
in Income of consolidated entities | 348,826 | 341,492 | 133,213 | 1,055,049 | 1,198,819 | |||||||||||
Income (Loss) attributable to | ||||||||||||||||
noncontrolling interests | 1,062 | 1,385 | 661 | 3,329 | 2,574 | |||||||||||
Economic Net Income (Loss) | $ | 347,764 | $ | 340,107 | $ | 132,552 | $ | 1,051,720 | $ | 1,196,245 | ||||||
Syndicated Capital | $ | 130,000 | $ | 716,500 | $ | 268,500 | $ | 1,112,100 | $ | 543,800 | ||||||
(a) | Amount is net of (i) interest expense and (ii) certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income that is not included in “Compensation and benefits” and “Other operating expenses” above and on both page 6 and page 7. |
KKR | |||||||||||||||
BALANCE SHEETS | |||||||||||||||
TOTAL REPORTABLE SEGMENTS (UNAUDITED) | |||||||||||||||
(Amounts in thousands, except per unit amounts) | |||||||||||||||
As of December 31, 2013 | |||||||||||||||
Capital | |||||||||||||||
Markets and | |||||||||||||||
Private | Public | Principal | Total | ||||||||||||
Markets | Markets | Activities | Reportable | ||||||||||||
Segment | Segment | Segment | Segments | ||||||||||||
Cash and short-term investments | $ | 177,547 | $ | 19,571 | $ | 1,963,979 | $ | 2,161,097 | |||||||
Investments | - | - | 4,980,265 | (a) | 4,980,265 | ||||||||||
Unrealized carry | 1,116,996 | 62,342 | - | 1,179,338 | |||||||||||
Other assets | 305,890 | 278,978 | 77,489 | 662,357 | |||||||||||
Total assets | $ | 1,600,433 | $ | 360,891 | $ | 7,021,733 | $ | 8,983,057 | |||||||
Debt obligations | $ | - | $ | - | $ | 1,000,000 | $ | 1,000,000 | |||||||
Other liabilities | 77,374 | 18,622 | 53,200 | 149,196 | |||||||||||
Total liabilities | 77,374 | 18,622 | 1,053,200 | 1,149,196 | |||||||||||
Noncontrolling interests | 1,302 | 1,071 | 68,888 | 71,261 | |||||||||||
Book value | $ | 1,521,757 | $ | 341,198 | $ | 5,899,645 | $ | 7,762,600 | |||||||
Book value per adjusted unit | $ | 10.83 | |||||||||||||
As of December 31, 2012 | |||||||||||||||
Capital | |||||||||||||||
Markets and | |||||||||||||||
Private | Public | Principal | Total | ||||||||||||
Markets | Markets | Activities | Reportable | ||||||||||||
Segment | Segment | Segment | Segments | ||||||||||||
Cash and short-term investments | $ | 358,237 | $ | 28,690 | $ | 1,147,360 | $ | 1,534,287 | |||||||
Investments | - | - | 4,758,157 | 4,758,157 | |||||||||||
Unrealized carry | 730,292 | 24,939 | - | 755,231 | |||||||||||
Other assets | 207,047 | 280,472 | 62,119 | 549,638 | |||||||||||
Total assets | $ | 1,295,576 | $ | 334,101 | $ | 5,967,636 | $ | 7,597,313 | |||||||
Debt obligations | $ | - | $ | - | $ | 500,000 | $ | 500,000 | |||||||
Other liabilities | 78,724 | 16,433 | 24,275 | 119,432 | |||||||||||
Total liabilities | 78,724 | 16,433 | 524,275 | 619,432 | |||||||||||
Noncontrolling interests | 1,339 | 739 | 18,619 | 20,697 | |||||||||||
Book value | $ | 1,215,513 | $ | 316,929 | $ | 5,424,742 | $ | 6,957,184 | |||||||
Book value per adjusted unit | $ | 9.87 |
(a) | See Capital Markets and Principal Activities segment schedule of investments that follows. | |
KKR | |||||||||
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS (UNAUDITED) | |||||||||
(Amounts in thousands, except percentage amounts) | |||||||||
As of December 31, 2013 | |||||||||
Investment | Cost | Fair Value | Fair Value as a Percentage of Investments | ||||||
Co-investments in Portfolio Companies of | |||||||||
Private Equity Investment Vehicles | $ | 1,544,331 | $ | 2,130,058 | 42.8 | % | |||
Private Equity Investment Vehicles | |||||||||
KKR 2006 Fund L.P. | 330,066 | 389,879 | 7.8 | % | |||||
KKR European Fund III L.P. | 244,292 | 312,279 | 6.3 | % | |||||
KKR North America Fund XI L.P. | 96,340 | 106,079 | 2.1 | % | |||||
KKR Asian Fund L.P. | 89,978 | 101,380 | 2.0 | % | |||||
KKR European Fund II L.P. | 39,013 | 43,052 | 0.9 | % | |||||
KKR Millenium Fund L.P. | 47,430 | 39,793 | 0.8 | % | |||||
KKR E2 Investors, L.P. | 14,209 | 27,707 | 0.6 | % | |||||
Co-Investments | 16,249 | 17,064 | 0.3 | % | |||||
KKR China Growth Fund L.P. | 3,452 | 4,303 | 0.1 | % | |||||
KKR European Fund L.P. | 47,664 | 4,273 | 0.1 | % | |||||
KKR Asian Fund II L.P. | 2,624 | 2,563 | 0.1 | % | |||||
931,317 | 1,048,372 | 21.1 | % | ||||||
Private Equity Total | 2,475,648 | 3,178,430 | 63.9 | % | |||||
Real Assets | |||||||||
Energy Income and Growth | 207,661 | 211,301 | 4.2 | % | |||||
Real Estate Fund | 79,363 | 108,487 | 2.2 | % | |||||
Infrastructure Fund | 36,778 | 38,420 | 0.8 | % | |||||
Co-Investments | 11,241 | 13,117 | 0.3 | % | |||||
Natural Resources | 12,842 | 8,147 | 0.2 | % | |||||
Real Assets Total | 347,885 | 379,472 | 7.7 | % | |||||
Private Markets Total | 2,823,533 | 3,557,902 | 71.6 | % | |||||
Public Markets Investment Vehicles | |||||||||
Liquid Credit | 187,262 | 198,784 | 4.0 | % | |||||
Special Situations | 125,795 | 138,881 | 2.8 | % | |||||
Credit Relative Value | 122,000 | 136,643 | 2.7 | % | |||||
Long/Short Equities | 100,000 | 121,098 | 2.4 | % | |||||
Direct Lending | 56,720 | 63,163 | 1.3 | % | |||||
Mezzanine Fund | 20,380 | 24,659 | 0.5 | % | |||||
Public Markets Total | 612,157 | 683,228 | 13.7 | % | |||||
Other | 715,477 | 739,135 | 14.7 | % | |||||
Total Investments | $ | 4,151,167 | $ | 4,980,265 | 100.0 | % | |||
Significant Aggregate Investments: (a) | |||||||||
Alliance Boots GmbH | $ | 228,769 | $ | 640,717 | 12.9 | % | |||
HCA Inc. | 70,117 | 287,324 | 5.8 | % | |||||
First Data Corporation | 327,211 | 265,062 | 5.3 | % | |||||
626,097 | 1,193,103 | 24.0 | % | ||||||
Other investments | 3,525,070 | 3,787,162 | 76.0 | % | |||||
Total Investments | $ | 4,151,167 | $ | 4,980,265 | 100.0 | % |
(a) | The significant aggregate investments include investments in portfolio companies with individual fair values of 5% or more of the Capital Markets and Principal Activities segment investments balance as of December 31, 2013. The fair value figures include the co-investment and the limited partner and/or general partner interests in the underlying portfolio company. | |
KKR | ||||||||||||||
ASSETS UNDER MANAGEMENT* (UNAUDITED) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Private | Public | Total | ||||||||||||
Quarter Ended December 31, 2013 | ||||||||||||||
September 30, 2013 | $ | 59,678,300 | $ | 30,490,900 | $ | 90,169,200 | ||||||||
New Capital Raised | 1,294,100 | 2,523,800 | 3,817,900 | |||||||||||
Distributions | (3,088,900 | ) | (735,100 | ) | (b) | (3,824,000 | ) | |||||||
Foreign Exchange | 10,700 | - | 10,700 | |||||||||||
Change in Value | 3,348,700 | 797,800 | 4,146,500 | |||||||||||
December 31, 2013 | $ | 61,242,900 | $ | 33,077,400 | $ | 94,320,300 | ||||||||
Year Ended December 31, 2013 | ||||||||||||||
December 31, 2012 | $ | 49,127,600 | $ | 26,399,900 | $ | 75,527,500 | ||||||||
New Capital Raised | 13,613,100 | 7,580,400 | 21,193,500 | |||||||||||
Distributions | (9,197,900 | ) | (2,687,600 | ) | (c) | (11,885,500 | ) | |||||||
Net Changes in Fee Base of Certain Funds (a) | (272,300 | ) | - | (272,300 | ) | |||||||||
Foreign Exchange | 32,800 | - | 32,800 | |||||||||||
Change in Value | 7,939,600 | 1,784,700 | 9,724,300 | |||||||||||
December 31, 2013 | $ | 61,242,900 | $ | 33,077,400 | $ | 94,320,300 | ||||||||
KKR | ||||||||||||||
FEE PAYING ASSETS UNDER MANAGEMENT* (UNAUDITED) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Private |
| Public | Total | |||||||||||
Quarter Ended December 31, 2013 | ||||||||||||||
September 30, 2013 | $ | 49,889,500 | $ | 23,722,400 | $ | 73,611,900 | ||||||||
New Capital Raised | 1,469,800 | 3,473,700 | 4,943,500 | |||||||||||
Distributions | (1,327,000 | ) | (591,100 | ) | (b) | (1,918,100 | ) | |||||||
Foreign Exchange | 65,300 | - | 65,300 | |||||||||||
Change in Value | 58,700 | 636,200 | 694,900 | |||||||||||
December 31, 2013 | $ | 50,156,300 | $ | 27,241,200 | $ | 77,397,500 | ||||||||
Year Ended December 31, 2013 | ||||||||||||||
December 31, 2012 | $ | 41,173,000 | $ | 19,673,000 | $ | 60,846,000 | ||||||||
New Capital Raised | 13,200,600 | 7,927,500 | 21,128,100 | |||||||||||
Distributions | (3,860,800 | ) | (1,875,900 | ) | (c) | (5,736,700 | ) | |||||||
Net Changes in Fee Base of Certain Funds (a) | (654,700 | ) | - | (654,700 | ) | |||||||||
Foreign Exchange | 172,700 | - | 172,700 | |||||||||||
Change in Value | 125,500 | 1,516,600 | 1,642,100 | |||||||||||
December 31, 2013 | $ | 50,156,300 | $ | 27,241,200 | $ | 77,397,500 | ||||||||
* | Exclude those assets managed by entities where KKR holds less than a 50% ownership interest. | |
(a) | Represents the impact of certain funds entering the post-investment period. | |
(b) | Includes $327.3 million of redemptions by fund investors. | |
(c) | Includes $1,021.8 million of redemptions by fund investors. | |
KKR | ||||||||||||||||||||||||
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED) | ||||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
(Amounts in millions, except percentages) | ||||||||||||||||||||||||
Investment Period | Amount | |||||||||||||||||||||||
Percentage | ||||||||||||||||||||||||
Committed | ||||||||||||||||||||||||
Commencement | Uncalled | by General | Remaining | Remaining Fair | ||||||||||||||||||||
Date | End Date | Commitment | Commitments | Partner | Invested | Realized | Cost | Value | ||||||||||||||||
Private Markets | ||||||||||||||||||||||||
Private Equity Funds | ||||||||||||||||||||||||
Asian Fund II | 4/2013 | 4/2019 | $ | 5,825.0 | $ | 5,615.1 | 1.3% | $ | 209.9 | $ | - | $ | 209.9 | $ | 201.1 | |||||||||
North America Fund XI | 9/2012 | 9/2018 | 8,718.4 | 5,903.3 | 2.9% | 2,815.1 | 3.9 | 2,815.1 | 3,079.3 | |||||||||||||||
China Growth Fund | 11/2010 | 11/2016 | 1,010.0 | 674.5 | 1.0% | 335.5 | 32.6 | 318.0 | 399.9 | |||||||||||||||
E2 Investors (Annex Fund) | 8/2009 | 11/2013 | 209.5 | 13.6 | 4.5% | 195.9 | - | 195.9 | 426.3 | |||||||||||||||
European Fund III | 3/2008 | 3/2014 | 6,241.1 | 1,689.4 | 4.6% | 4,551.7 | 653.5 | 4,194.4 | 5,660.0 | |||||||||||||||
Asian Fund | 7/2007 | 4/2013 | 3,983.3 | 134.1 | 2.5% | 3,849.2 | 1,693.6 | 2,979.1 | 5,128.3 | |||||||||||||||
2006 Fund | 9/2006 | 9/2012 | 17,642.2 | 1,205.4 | 2.1% | 16,436.8 | 11,719.7 | 9,770.5 | 15,094.9 | |||||||||||||||
European Fund II | 11/2005 | 10/2008 | 5,750.8 | - | 2.1% | 5,750.8 | 4,513.2 | 2,220.4 | 3,960.0 | |||||||||||||||
Millennium Fund | 12/2002 | 12/2008 | 6,000.0 | - | 2.5% | 6,000.0 | 10,119.1 | 1,837.9 | 3,181.2 | |||||||||||||||
European Fund | 12/1999 | 12/2005 | 3,085.4 | - | 3.2% | 3,085.4 | 8,720.0 | - | 51.6 | |||||||||||||||
Total Private Equity Funds | 58,465.7 | 15,235.4 | 43,230.3 | 37,455.6 | 24,541.2 | 37,182.6 | ||||||||||||||||||
Co-Investment Vehicles | Various | Various | 3,166.3 | 974.5 | Various | 2,191.8 | 2,418.8 | 1,583.3 | 2,044.3 | |||||||||||||||
Total Private Equity | 61,632.0 | 16,209.9 | 45,422.1 | 39,874.4 | 26,124.5 | 39,226.9 | ||||||||||||||||||
Real Assets | ||||||||||||||||||||||||
Energy Income and Growth Fund | 9/2013 | 9/2018 | 1,413.5 | 1,269.4 | 17.9% | 144.1 | 6.1 | 137.6 | 140.7 | |||||||||||||||
Natural Resources Fund | Various | Various | 876.1 | 303.1 | Various | 573.0 | 73.2 | 519.4 | 327.8 | |||||||||||||||
Global Energy Opportunities | Various | Various | 861.0 | 716.6 | Various | 144.4 | 0.7 | 144.4 | 132.3 | |||||||||||||||
Infrastructure Fund | Various | Various | 1,042.4 | 388.6 | 4.8% | 653.8 | 24.3 | 653.8 | 710.3 | |||||||||||||||
Infrastructure Co-Investments | Various | Various | 1,356.0 | 251.5 | Various | 1,104.5 | 226.8 | 1,104.5 | 1,319.5 | |||||||||||||||
Real Estate Partners Americas | 5/2013 | 12/2016 | 1,229.1 | 962.5 | 16% | 266.6 | - | 266.6 | 368.4 | |||||||||||||||
Real Assets | 6,778.1 | 3,891.7 | 2,886.4 | 331.1 | 2,826.3 | 2,999.0 | ||||||||||||||||||
Private Markets Total | 68,410.1 | 20,101.6 | 48,308.5 | 40,205.5 | 28,950.8 | 42,225.9 | ||||||||||||||||||
Public Markets | ||||||||||||||||||||||||
Special Situations Vehicles | Various | Various | 3,519.1 | 1,703.7 | Various | 1,815.4 | 729.2 | 1,452.7 | 1,660.7 | |||||||||||||||
Mezzanine Fund | 3/2010 | 8/2015 | 987.0 | 464.1 | 4.6% | 522.9 | 146.6 | 464.9 | 545.3 | |||||||||||||||
Direct Lending Vehicles | Various | Various | 748.8 | 194.5 | Various | 554.3 | 27.3 | 554.3 | 596.6 | |||||||||||||||
Public Markets Total | 5,254.9 | 2,362.3 | 2,892.6 | 903.1 | 2,471.9 | 2,802.6 | ||||||||||||||||||
Grand Total | $ | 73,665.0 | $ | 22,463.9 | $ | 51,201.1 | $ | 41,108.6 | $ | 31,422.7 | $ | 45,028.5 | ||||||||||||
(a) | Reflects investment vehicles for which KKR has the ability to earn carried interest. | |
KKR | ||||||||||||||||||||
DISTRIBUTION CALCULATION (UNAUDITED) | ||||||||||||||||||||
(Amounts in thousands, except unit and per unit amounts) | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||||
Cash Revenues | ||||||||||||||||||||
Fees | $ | 295,684 | $ | 274,825 | $ | 228,542 | $ | 1,028,330 | $ | 823,895 | ||||||||||
Realized cash carry | 250,500 | 81,532 | 168,320 | 690,027 | 475,707 | |||||||||||||||
Net realized principal investment income | 250,856 | 102,766 | 366,878 | 657,139 | 866,776 | |||||||||||||||
Total Cash Revenue | 797,040 | 459,123 | 763,740 | 2,375,496 | 2,166,378 | |||||||||||||||
Cash Expenses | ||||||||||||||||||||
Realized cash carry allocated to carry pool | 100,200 | 32,613 | 67,328 | 276,011 | 190,283 | |||||||||||||||
Compensation and benefits | 95,945 | 92,229 | 76,001 | 343,772 | 272,811 | |||||||||||||||
Occupancy and related charges | 14,264 | 15,674 | 13,763 | 56,327 | 55,068 | |||||||||||||||
Other operating expenses | 65,342 | 60,884 | 52,799 | 215,883 | 176,205 | |||||||||||||||
Total Cash Expenses | 275,751 | 201,400 | 209,891 | 891,993 | 694,367 | |||||||||||||||
Cash income (loss) before noncontrolling interests and local taxes | 521,289 | 257,723 | 553,849 | 1,483,503 | 1,472,011 | |||||||||||||||
Less: local income taxes | (8,995 | ) | (4,566 | ) | (6,314 | ) | (21,238 | ) | (15,572 | ) | ||||||||||
Less: noncontrolling interests | (1,943 | ) | (2,020 | ) | (1,245 | ) | (6,387 | ) | (7,043 | ) | ||||||||||
Total distributable earnings | 510,351 | 251,137 | 546,290 | 1,455,878 | 1,449,396 | |||||||||||||||
Less: estimated current corporate income taxes | (26,809 | ) | (30,140 | ) | (23,078 | ) | (98,814 | ) | (66,733 | ) | ||||||||||
Distributable Earnings, net of taxes | 483,542 | 220,997 | 523,212 | 1,357,064 | 1,382,663 | |||||||||||||||
Less: Undistributed net realized principal investment income | (150,514 | ) | (61,660 | ) | (44,497 | ) | (394,285 | ) | (544,395 | ) | ||||||||||
Distributed Earnings | $ | 333,028 | $ | 159,337 | $ | 478,715 | $ | 962,779 | $ | 838,268 | ||||||||||
Distribution per KKR & Co. L.P. common unit | $ | 0.48 | $ | 0.23 | $ | 0.70 | $ | 1.40 | $ | 1.22 | ||||||||||
Components of Distribution per KKR & Co. L.P. common unit | ||||||||||||||||||||
After-tax FRE | $ | 0.12 | $ | 0.10 | $ | 0.08 | $ | 0.42 | $ | 0.32 | ||||||||||
Realized Cash Carry | $ | 0.22 | $ | 0.07 | $ | 0.15 | $ | 0.60 | $ | 0.43 | ||||||||||
Distributed Net Realized Principal Investment Income | $ | 0.14 | $ | 0.06 | $ | 0.47 | $ | 0.38 | $ | 0.47 | ||||||||||
Adjusted Units (Reduced for Unvested Common Units) | 692,512,345 | 689,795,274 | 685,916,967 | |||||||||||||||||
Payout Ratio | 68.9 | % | 72.1 | % | 91.5 | % | 70.9 | % | 60.6 | % | ||||||||||
DISTRIBUTION POLICY |
KKR intends to make quarterly cash distributions in amounts that in the aggregate are expected to constitute substantially all of the cash earnings of its investment management business and 40% of the net cash income from realized principal investments, in each case in excess of amounts determined by KKR to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and its investment funds and to comply with applicable law and any of its debt instruments or other obligations. For purposes of KKR’s distribution policy, its distributions are expected to consist of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) a percentage of net realized principal investment income. This amount is expected to be reduced by (i) corporate and applicable local taxes, if any, (ii) non-controlling interests, and (iii) amounts determined by KKR to be necessary or appropriate for the conduct of its business and other matters as discussed above. |
The declaration and payment of any distributions are subject to the discretion of the board of directors of the general partner of KKR & Co. L.P., which may change the distribution policy at any time, and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all or that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR & Co. L.P. When KKR & Co. L.P. receives distributions from the KKR Group Partnerships (the holding companies of the KKR business), KKR Holdings receives its pro rata share of such distributions from the KKR Group Partnerships. |
KKR
Notes to Reportable Segments (Unaudited)
The segment key performance measures that follow are used by management in making operating and resource deployment decisions as well as assessing the overall performance of each of KKR’s reportable business segments. The reportable segments for KKR’s business are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total. In addition, KKR’s reportable segments are presented without giving effect to the consolidation of the funds that KKR manages.
KKR discloses the following financial measures in this earnings release that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholders in assessing the overall performance of KKR’s businesses. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included elsewhere within this earnings release.
Fee related earnings (“FRE”) is comprised of segment fees less segment expenses (other than certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income). This measure is used by management as an alternative measurement of the operating earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the operating profitability of our fee generating management companies and capital markets businesses. The components of FRE on a segment basis differ from the equivalent GAAP amounts on a consolidated basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of fees and expenses of certain consolidated entities; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of charges relating to carry pool allocations; (v) the exclusion of non-cash equity charges and other non-cash compensation charges borne by KKR Holdings or incurred under the KKR & Co. L.P. 2010 Equity Incentive Plan; (vi) the exclusion of certain reimbursable expenses; and (vii) the exclusion of certain non-recurring items.
Economic net income (loss) (“ENI”) is a measure of profitability for KKR’s reportable segments and is used by management as an alternative measurement of the operating and investment earnings of KKR and its business segments. We believe this measure is useful to unitholders as it provides additional insight into the overall profitability of KKR’s businesses inclusive of investment income and carried interest. ENI is comprised of: (i) FRE plus (ii) segment investment income (loss), which is reduced for carry pool allocations, management fee refunds, interest expense and certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income; less (iii) certain economic interests in KKR’s segments held by third parties. ENI differs from net income (loss) on a GAAP basis as a result of: (i) the exclusion of the items referred to in FRE above; (ii) the exclusion of investment income (loss) relating to noncontrolling interests; and (iii) the exclusion of income taxes.
Net realized principal investment income refers to net cash income from (i) realized investment gains and losses excluding certain realized investment losses from principal investments during the second quarter of 2013 to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009, (ii) dividend income and (iii) interest income net of interest expense less certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income in each case generated by KKR’s principal investments held on or through KKR’s balance sheet in our Capital Markets and Principal Activities segment. This is a term to describe a portion of KKR’s quarterly distribution.
Total distributable earnings is the sum of (i) FRE, (ii) carry distributions received from KKR’s investment funds which have not been allocated as part of its carry pool and (iii) net realized principal investment income; less (i) applicable local income taxes, if any, and (ii) noncontrolling interests. We believe this measure is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses), and also assess amounts available for distribution to KKR unitholders. However, total distributable earnings is not a measure that calculates actual distributions under KKR’s current distribution policy.
Assets under management (“AUM”) represent the assets from which KKR is entitled to receive fees or a carried interest and general partner capital. We believe this measure is useful to unitholders as it provides additional insight into KKR’s capital raising activities and the overall activity in its investment funds and vehicles. KKR calculates the amount of AUM as of any date as the sum of: (i) the fair value of the investments of KKR’s investment funds plus uncalled capital commitments from these funds; (ii) the fair value of investments in KKR’s co-investment vehicles; (iii) the net asset value of certain of KKR's fixed income products; (iv) the value of outstanding structured finance vehicles; and (v) the fair value of other assets managed by KKR. KKR’s definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds, vehicles or accounts that it manages or calculated pursuant to any regulatory definitions.
Fee paying AUM (“FPAUM”) represents only those assets under management from which KKR receives fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. This relates to KKR’s capital raising activities and the overall activity in its investment funds and vehicles, for only those funds and vehicles where KKR receives fees (i.e., excluding vehicles that receive only carried interest or general partner capital). FPAUM is the sum of all of the individual fee bases that are used to calculate KKR’s fees and differs from AUM in the following respects: (i) assets from which KKR does not receive a fee are excluded (i.e., assets with respect to which it receives only carried interest) and (ii) certain assets, primarily in its private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair value of underlying investments.
Committed dollars invested is the aggregate amount of capital commitments that have been invested by KKR’s investment funds and carry-yielding co-investment vehicles and is used as a measure of investment activity for KKR and its business segments during a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR’s investment of committed capital. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KKR is entitled to a fee or carried interest and (ii) capital invested by KKR’s investment funds and vehicles.
Gross dollars invested is the aggregate amount of capital that has been invested by all of KAM’s investment vehicles in our private credit non-liquid strategies and is used as a measure of investment activity for KAM in a given period. We believe this measure is useful to unitholders as it provides additional insight into KAM’s investment of capital across its private credit non-liquid strategies for all the investment vehicles which it manages. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KAM is entitled to a fee or carried interest and (ii) internal and proprietary capital invested by KAM’s investment funds and vehicles.
Syndicated capital is generally the aggregate amount of capital in transactions originated by KKR investment funds and carry-yielding co-investment vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital invested in such transactions by KKR investment funds and carry-yielding co-investment vehicles, which is instead reported in committed dollars invested and (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds and vehicles. Syndicated capital is used as a measure of investment activity for KKR and its business segments during a given period, and we believe that this measure is useful to unitholders as it provides additional insight into levels of syndication activity in KKR’s Capital Markets and Principal Activities segment and across its investment platform.
Uncalled commitments are used as a measure of unfunded capital commitments that KKR’s investment funds and carry-paying co-investment vehicles have received from partners to contribute capital to fund future investments. We believe this measure is useful to unitholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and vehicles to make future investments.
Adjusted units are used as a measure of the total equity ownership of KKR that is held by KKR & Co. L.P. and KKR Holdings and represent the fully diluted unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total equity ownership of KKR as if all outstanding KKR Holdings units had been exchanged for common units of KKR & Co. L.P.
Core interest expense is used by management as an alternative measurement of interest expense incurred by KKR on a segment basis and excludes interest expense related to debt obligations from investment financing arrangements related to certain of KKR’s private equity funds, investment vehicles and principal investments. These financing arrangements are not direct obligations of the general partners of KKR’s private equity funds or its management companies. On a segment basis, interest expense is included in other investment income. We believe this measure is useful to unitholders as it provides an indication of the amount of interest expense borne by KKR excluding interest expense that is allocated to KKR’s investment funds and vehicles and other noncontrolling interest holders. Additionally, we believe this measure is useful for analyzing KKR’s ability to service its debt obligations.
Book value is a measure of the net assets of KKR’s reportable segments and is used by management primarily in assessing the unrealized value of KKR’s investment portfolio, including carried interest, as well as KKR’s overall liquidity position. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders. Book value differs from KKR & Co. L.P. Partners’ Capital on a GAAP basis primarily as a result of the exclusion of ownership interests attributable to KKR Holdings.
Fee related EBITDA is comprised of FRE before the impact of depreciation of fixed assets and amortization of intangible assets and is used by management as a measure of the cash earnings of KKR and its business segments before investment income. We believe this measure is useful to unitholders as it provides additional insight into the amount of cash earnings generated by KKR’s management companies and capital markets businesses.
Cash and short-term investments represent cash and liquid short-term investments in high-grade, short-duration cash management strategies used by KKR to generate additional yield on our excess liquidity and is used by management in evaluating KKR’s liquidity position. We believe this measure is useful to unitholders as it provides additional insight into KKR’s available liquidity. Cash and short-term investments differ from cash and cash equivalents on a GAAP basis as a result of the inclusion of liquid short-term investments in cash and short-term investments.
KKR | |||||||||
EXHIBIT A | |||||||||
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (GAAP BASIS) | |||||||||
TO ENI AFTER TAXES PER ADJUSTED UNIT (UNAUDITED) | |||||||||
(Amounts in thousands, except common unit and per common unit amounts) | |||||||||
Quarter Ended | |||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | |||||||
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic | $ | 0.96 | $ | 0.73 | $ | 0.39 | |||
Weighted Average Common Units Outstanding - Basic | 288,045,501 | 282,148,802 | 249,303,558 | ||||||
Net income (loss) attributable to KKR & Co. L.P. | 277,913 | 204,740 | 96,728 | ||||||
Plus: Net income (loss) attributable to noncontrolling | |||||||||
interests held by KKR Holdings L.P. | 393,739 | 300,169 | 170,256 | ||||||
Plus: Non-cash equity based charges | 60,331 | 85,215 | 70,170 | ||||||
Plus: Amortization of intangibles and other, net | 45,265 | 15,979 | 4,898 | ||||||
Plus: Income taxes | 12,401 | 7,644 | 5,628 | ||||||
Economic net income (loss) | 789,649 | 613,747 | 347,680 | ||||||
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 30,128 | 31,227 | 15,198 | ||||||
Economic net income (loss) after equity-based charges | 759,521 | 582,520 | 332,482 | ||||||
Less: Provision for income taxes | 16,048 | 11,950 | 10,632 | ||||||
Economic net income (loss) after taxes and equity-based charges | 743,473 | 570,570 | 321,850 | ||||||
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 30,128 | 31,227 | 15,198 | ||||||
Economic net income (loss) after taxes | 773,601 | 601,797 | 337,048 | ||||||
Weighted Average Adjusted Units | 716,807,180 | 715,781,663 | 704,805,537 | ||||||
Economic net income (loss) after taxes per adjusted unit | 1.08 | 0.84 | 0.48 | ||||||
Weighted Average Adjusted Units | 716,807,180 | 715,781,663 | 704,805,537 | ||||||
Economic net income (loss) after taxes | 773,601 | 601,797 | 337,048 | ||||||
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 30,128 | 31,227 | 15,198 | ||||||
Economic net income (loss) after taxes and equity-based charges | 743,473 | 570,570 | 321,850 | ||||||
Weighted Average Adjusted Units | 716,807,180 | 715,781,663 | 704,805,537 | ||||||
Economic net income (loss) after taxes and equity-based charges per adjusted unit | $ | 1.04 | $ | 0.80 | $ | 0.46 | |||
Year Ended | |||||||||
December 31, 2013 | December 31, 2012 | ||||||||
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic | $ | 2.51 | $ | 2.35 | |||||
Weighted Average Common Units Outstanding - Basic | 274,910,628 | 238,503,257 | |||||||
Net income (loss) attributable to KKR & Co. L.P. | 691,226 | 560,836 | |||||||
Plus: Net income (loss) attributable to noncontrolling | |||||||||
interests held by KKR Holdings L.P. | 1,056,126 | 1,116,740 | |||||||
Plus: Non-cash equity based charges | 307,514 | 400,207 | |||||||
Plus: Amortization of intangibles and other, net | 102,789 | 9,683 | |||||||
Plus: Income taxes | 37,926 | 43,405 | |||||||
Economic net income (loss) | 2,195,581 | 2,130,871 | |||||||
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 114,709 | 62,877 | |||||||
Economic net income (loss) after equity-based charges | 2,080,872 | 2,067,994 | |||||||
Less: Provision for income taxes | 61,601 | 102,420 | |||||||
Economic net income (loss) after taxes and equity-based charges | 2,019,271 | 1,965,574 | |||||||
Plus: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 114,709 | 62,877 | |||||||
Economic net income (loss) after taxes | 2,133,980 | 2,028,451 | |||||||
Weighted Average Adjusted Units | 714,835,941 | 699,988,443 | |||||||
Economic net income (loss) after taxes per adjusted unit | 2.99 | 2.90 | |||||||
Weighted Average Adjusted Units | 714,835,941 | 699,988,443 | |||||||
Economic net income (loss) after taxes | 2,133,980 | 2,028,451 | |||||||
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan | 114,709 | 62,877 | |||||||
Economic net income (loss) after taxes and equity-based charges | 2,019,271 | 1,965,574 | |||||||
Weighted Average Adjusted Units | 714,835,941 | 699,988,443 | |||||||
Economic net income (loss) after taxes and equity-based charges per adjusted unit | $ | 2.82 | $ | 2.81 | |||||
KKR | |||||||||
EXHIBIT A (CONTINUED) | |||||||||
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. (GAAP BASIS) | |||||||||
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE RELATED EBITDA, AND TOTAL DISTRIBUTABLE EARNINGS (UNAUDITED) | |||||||||
(Amounts in thousands) | |||||||||
Quarter Ended | |||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | |||||||
Net income (loss) attributable to KKR & Co. L.P. | $ | 277,913 | $ | 204,740 | $ | 96,728 | |||
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. | 393,739 | 300,169 | 170,256 | ||||||
Plus: Non-cash equity based charges | 60,331 | 85,215 | 70,170 | ||||||
Plus: Amortization of intangibles and other, net | 45,265 | 15,979 | 4,898 | ||||||
Plus: Income taxes | 12,401 | 7,644 | 5,628 | ||||||
Economic net income (loss) | 789,649 | 613,747 | 347,680 | ||||||
Plus: Income attributable to segment noncontrolling interests | 1,943 | 2,020 | 1,245 | ||||||
Less: Investment income (loss) | 671,459 | 509,729 | 262,946 | ||||||
Fee related earnings | 120,133 | 106,038 | 85,979 | ||||||
Plus: Depreciation and amortization | 3,658 | 3,601 | 3,580 | ||||||
Fee related EBITDA | $ | 123,791 | $ | 109,639 | $ | 89,559 | |||
Less: Depreciation and amortization | 3,658 | 3,601 | 3,580 | ||||||
Plus: Realized cash carry, net of realized cash carry allocated to carry pool | 150,300 | 48,919 | 100,992 | ||||||
Plus: Net realized principal investment income | 250,856 | 102,766 | 366,878 | ||||||
Less: Local income taxes and noncontrolling interests | 10,938 | 6,586 | 7,559 | ||||||
Total distributable earnings | $ | 510,351 | $ | 251,137 | $ | 546,290 | |||
Year Ended | |||||||||
December 31, 2013 | December 31, 2012 | ||||||||
Net income (loss) attributable to KKR & Co. L.P. | $ | 691,226 | $ | 560,836 | |||||
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. | 1,056,126 | 1,116,740 | |||||||
Plus: Non-cash equity based charges | 307,514 | 400,207 | |||||||
Plus: Amortization of intangibles and other, net | 102,789 | 9,683 | |||||||
Plus: Income taxes | 37,926 | 43,405 | |||||||
Economic net income (loss) | 2,195,581 | 2,130,871 | |||||||
Plus: Income attributable to segment noncontrolling interests | 6,387 | 7,043 | |||||||
Less: Investment income (loss) | 1,789,620 | 1,818,103 | |||||||
Fee related earnings | 412,348 | 319,811 | |||||||
Plus: Depreciation and amortization | 14,648 | 12,499 | |||||||
Fee related EBITDA | $ | 426,996 | $ | 332,310 | |||||
Less: Depreciation and amortization | 14,648 | 12,499 | |||||||
Plus: Realized cash carry, net of realized cash carry allocated to carry pool | 414,016 | 285,424 | |||||||
Plus: Net realized principal investment income | 657,139 | 866,776 | |||||||
Less: Local income taxes and noncontrolling interests | 27,625 | 22,615 | |||||||
Total distributable earnings | $ | 1,455,878 | $ | 1,449,396 | |||||
KKR | ||||||||
EXHIBIT A (CONTINUED) | ||||||||
RECONCILIATION OF KKR & CO. L.P. PARTNERS' CAPITAL (GAAP BASIS) | ||||||||
TO BOOK VALUE AND BOOK VALUE PER ADJUSTED UNIT (UNAUDITED) | ||||||||
(Amounts in thousands, except common unit and per common unit amounts) | ||||||||
As of | As of | |||||||
December 31, 2013 | December 31, 2012 | |||||||
KKR & Co. L.P. partners’ capital | $ | 2,722,010 | $ | 2,004,359 | ||||
Noncontrolling interests held by KKR Holdings L.P. | 5,116,761 | 4,981,864 | ||||||
Equity impact of KKR Management Holdings Corp. and other | (76,171 | ) | (29,039 | ) | ||||
Book value | 7,762,600 | 6,957,184 | ||||||
Adjusted units | 716,676,699 | 704,780,484 | ||||||
Book value per adjusted unit | $ | 10.83 | $ | 9.87 | ||||
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS) | ||||||||
TO CASH AND SHORT-TERM INVESTMENTS (SEGMENT BASIS) (UNAUDITED) | ||||||||
(Amounts in thousands) | ||||||||
As of | As of | |||||||
December 31, 2013 | December 31, 2012 | |||||||
Cash and cash equivalents | $ | 1,306,383 | $ | 1,230,464 | ||||
Liquid short-term investments | 854,714 | 303,823 | ||||||
Cash and short-term investments | $ | 2,161,097 | $ | 1,534,287 | ||||
KKR | ||||||
EXHIBIT B | ||||||
RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING TO WEIGHTED AVERAGE ADJUSTED UNITS (UNAUDITED) | ||||||
The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units. | ||||||
Quarter Ended | ||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | ||||
Weighted Average GAAP Common Units Outstanding - Basic | 288,045,501 | 282,148,802 | 249,303,558 | |||
Weighted Average Unvested Common Units(a) | 24,294,835 | 25,986,389 | 18,888,570 | |||
Weighted Average GAAP Common Units Outstanding - Diluted | 312,340,336 | 308,135,191 | 268,192,128 | |||
Adjustments: | ||||||
Weighted Average KKR Holdings Units(b) | 404,466,844 | 407,646,472 | 436,613,409 | |||
Weighted Average Adjusted Units | 716,807,180 | 715,781,663 | 704,805,537 | |||
Year Ended | ||||||
December 31, 2013 | December 31, 2012 | |||||
Weighted Average GAAP Common Units Outstanding - Basic | 274,910,628 | 238,503,257 | ||||
Weighted Average Unvested Common Units(a) | 25,343,462 | 15,589,903 | ||||
Weighted Average GAAP Common Units Outstanding - Diluted | 300,254,090 | 254,093,160 | ||||
Adjustments: | ||||||
Weighted Average KKR Holdings Units(b) | 414,581,851 | 445,895,283 | ||||
Weighted Average Adjusted Units | 714,835,941 | 699,988,443 | ||||
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING TO ADJUSTED UNITS (UNAUDITED) | ||||||
The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units. | ||||||
As of | As of | |||||
December 31, 2013 | December 31, 2012 | |||||
GAAP Common Units Outstanding - Basic | 288,143,327 | 253,363,691 | ||||
Unvested Common Units(a) | 24,164,354 | 18,863,517 | ||||
GAAP Common Units Outstanding - Diluted | 312,307,681 | 272,227,208 | ||||
Adjustments: | ||||||
KKR Holdings Units(b) | 404,369,018 | 432,553,276 | ||||
Adjusted Units | 716,676,699 | 704,780,484 | ||||
(a) | Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan. The issuance of common units of KKR & Co. L.P. pursuant to awards under its equity incentive plan dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business. | |
(b) | Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units. |
CONTACT:
Investor Relations:
Kohlberg Kravis Roberts & Co. L.P.
Craig Larson
+1-877-610-4910 (U.S.) / +1-212-230-9410
investor-relations@kkr.com
or
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller
+1-212-750-8300
media@kkr.com