Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | KKR & Co. L.P. | |
Entity Central Index Key | 1,404,912 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 469,983,183 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and Cash Equivalents | $ 2,131,687 | $ 2,508,902 |
Cash and Cash Equivalents Held at Consolidated Entities | 1,477,009 | 1,624,758 |
Restricted Cash and Cash Equivalents | 103,372 | 212,155 |
Investments | 36,267,767 | 31,409,765 |
Due from Affiliates | 394,717 | 250,452 |
Other Assets | 2,493,529 | 2,996,865 |
Total Assets | 42,868,081 | 39,002,897 |
Liabilities and Equity | ||
Debt Obligations | 19,425,253 | 18,544,075 |
Due to Affiliates | 392,340 | 359,479 |
Accounts Payable, Accrued Expenses and Other Liabilities | 3,508,129 | 2,981,260 |
Total Liabilities | 23,325,722 | 21,884,814 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 512,481 | 632,348 |
Equity | ||
KKR & Co. L.P. Capital - Common Unitholders (469,968,183 and 452,380,335 common units issued and outstanding as of June 30, 2017 and December 31, 2016, respectively) | 6,212,556 | 5,457,279 |
Total KKR & Co. L.P. Partners' Capital | 6,695,110 | 5,939,833 |
Noncontrolling Interests | 12,334,768 | 10,545,902 |
Total Equity | 19,029,878 | 16,485,735 |
Total Liabilities and Equity | 42,868,081 | 39,002,897 |
Consolidated VIEs | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 1,477,009 | 1,624,758 |
Restricted Cash and Cash Equivalents | 67,629 | 181,882 |
Investments | 24,018,042 | 22,930,238 |
Due from Affiliates | 7,030 | 5,555 |
Other Assets | 325,507 | 583,609 |
Total Assets | 25,895,217 | 25,326,042 |
Liabilities and Equity | ||
Debt Obligations | 15,702,027 | 15,471,087 |
Accounts Payable, Accrued Expenses and Other Liabilities | 1,153,821 | 1,038,835 |
Total Liabilities | 16,855,848 | 16,509,922 |
Consolidated VIEs | Consolidated CFEs | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 1,027,597 | 1,158,641 |
Restricted Cash and Cash Equivalents | 0 | 86,777 |
Investments | 15,286,680 | 13,950,897 |
Due from Affiliates | 0 | 0 |
Other Assets | 156,010 | 153,283 |
Total Assets | 16,470,287 | 15,349,598 |
Liabilities and Equity | ||
Debt Obligations | 14,740,575 | 13,858,288 |
Accounts Payable, Accrued Expenses and Other Liabilities | 957,248 | 722,714 |
Total Liabilities | 15,697,823 | 14,581,002 |
Consolidated VIEs | Consolidated KKR Funds and Other Entities | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 449,412 | 466,117 |
Restricted Cash and Cash Equivalents | 67,629 | 95,105 |
Investments | 8,731,362 | 8,979,341 |
Due from Affiliates | 7,030 | 5,555 |
Other Assets | 169,497 | 430,326 |
Total Assets | 9,424,930 | 9,976,444 |
Liabilities and Equity | ||
Debt Obligations | 961,452 | 1,612,799 |
Accounts Payable, Accrued Expenses and Other Liabilities | 196,573 | 316,121 |
Total Liabilities | 1,158,025 | 1,928,920 |
Capital - Series A Preferred Units | ||
Equity | ||
Series A Preferred Units (13,800,000 units issued and outstanding as of June 30, 2017 and December 31, 2016), Series B Preferred Units (6,200,000 units issued and outstanding as of June 30, 2017 and December 31, 2016) | 332,988 | 332,988 |
Capital - Series B Preferred Units | ||
Equity | ||
Series A Preferred Units (13,800,000 units issued and outstanding as of June 30, 2017 and December 31, 2016), Series B Preferred Units (6,200,000 units issued and outstanding as of June 30, 2017 and December 31, 2016) | $ 149,566 | $ 149,566 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (Parenthetical) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Common units issued (in units) | 469,968,183 | 452,380,335 |
Common units outstanding (in units) | 469,968,183 | 452,380,335 |
Capital - Series A Preferred Units | ||
Preferred units issued (in units) | 13,800,000 | 13,800,000 |
Preferred units outstanding (in units) | 13,800,000 | 13,800,000 |
Capital - Series B Preferred Units | ||
Preferred units issued (in units) | 6,200,000 | 6,200,000 |
Preferred units outstanding (in units) | 6,200,000 | 6,200,000 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Fees and Other | $ 931,788 | $ 576,757 | $ 1,647,740 | $ 739,562 |
Expenses | ||||
Compensation and Benefits | 462,841 | 296,412 | 865,804 | 421,901 |
Occupancy and Related Charges | 14,032 | 16,188 | 28,883 | 32,754 |
General, Administrative and Other | 152,855 | 110,618 | 275,055 | 276,886 |
Total Expenses | 629,728 | 423,218 | 1,169,742 | 731,541 |
Investment Income (Loss) | ||||
Net Gains (Losses) from Investment Activities | 418,428 | 9,168 | 976,876 | (726,055) |
Dividend Income | 69,446 | 31,669 | 79,370 | 94,882 |
Interest Income | 295,718 | 266,213 | 576,698 | 496,689 |
Interest Expense | (198,590) | (181,313) | (385,444) | (352,707) |
Total Investment Income (Loss) | 585,002 | 125,737 | 1,247,500 | (487,191) |
Income (Loss) Before Taxes | 887,062 | 279,276 | 1,725,498 | (479,170) |
Income Tax / (Benefit) | 18,538 | 6,045 | 59,080 | 7,935 |
Net Income (Loss) | 868,524 | 273,231 | 1,666,418 | (487,105) |
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | 22,387 | 1,533 | 43,320 | 1,495 |
Net Income (Loss) Attributable to Noncontrolling Interests | 432,150 | 172,115 | 941,427 | (258,244) |
Net Income (Loss) Attributable to KKR & Co. L.P. | 413,987 | 99,583 | 681,671 | (230,356) |
Net Income Attributable to Preferred Unitholders | 8,341 | 5,693 | 16,682 | 5,693 |
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | $ 405,646 | $ 93,890 | $ 664,989 | $ (236,049) |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit | ||||
Basic (in dollars per unit) | $ 0.87 | $ 0.21 | $ 1.45 | $ (0.53) |
Diluted (in dollars per unit) | $ 0.81 | $ 0.19 | $ 1.33 | $ (0.53) |
Weighted Average Common Units Outstanding | ||||
Basic (in units) | 466,170,025 | 448,221,538 | 459,967,395 | 449,241,840 |
Diluted (in units) | 501,177,423 | 481,809,612 | 498,943,294 | 449,241,840 |
Capital - Series A Preferred Units | ||||
Investment Income (Loss) | ||||
Net Income Attributable to Preferred Unitholders | $ 5,822 | $ 5,693 | $ 11,644 | $ 5,693 |
Capital - Series B Preferred Units | ||||
Investment Income (Loss) | ||||
Net Income Attributable to Preferred Unitholders | $ 2,519 | $ 0 | $ 5,038 | $ 0 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 868,524 | $ 273,231 | $ 1,666,418 | $ (487,105) |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Foreign Currency Translation Adjustments | 20,520 | (10,207) | 37,096 | (1,773) |
Comprehensive Income (Loss) | 889,044 | 263,024 | 1,703,514 | (488,878) |
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests | 22,387 | 1,533 | 43,320 | 1,495 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests | 441,638 | 165,664 | 961,747 | (261,109) |
Comprehensive Income (Loss) Attributable to KKR & Co. L.P. | $ 425,019 | $ 95,827 | $ 698,447 | $ (229,264) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | 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 |
Balance at Dec. 31, 2015 | $ 49,278,956 | $ 5,575,981 | $ (28,799) | $ 5,547,182 | $ 0 | $ 0 | $ 43,731,774 | |
Balance (in units) at Dec. 31, 2015 | 457,834,875 | |||||||
Increase (Decrease) in Partners' Capital | ||||||||
Net Income (Loss) | (488,600) | (236,049) | (236,049) | 5,693 | (258,244) | |||
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) | (1,773) | 1,092 | 1,092 | (2,865) | ||||
Changes in Consolidation | (34,240,240) | (34,240,240) | ||||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units | 31,532 | (268) | 31,264 | (31,264) | ||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units (in units) | 2,668,200 | |||||||
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units | (4,112) | (3,981) | (131) | (4,112) | ||||
Net Delivery of Common Units - Equity Incentive Plan | (28,234) | (28,234) | (28,234) | |||||
Net Delivery of Common Units - Equity Incentive Plan (in units) | 5,104,131 | |||||||
Equity Based Compensation | 124,480 | 97,987 | 97,987 | 26,493 | ||||
Unit Repurchases | (265,218) | (265,218) | (265,218) | |||||
Unit Repurchases (in units) | (19,403,655) | |||||||
Equity Issued in connection with Preferred Unit Offering | 482,554 | 332,988 | 149,566 | |||||
Capital Contributions | 1,454,761 | 1,454,761 | ||||||
Capital Distributions | (968,258) | (142,310) | (142,310) | (5,693) | (820,255) | |||
Balance at Jun. 30, 2016 | 15,344,316 | 5,029,708 | (28,106) | 5,001,602 | 332,988 | 149,566 | 9,860,160 | |
Balance (in units) at Jun. 30, 2016 | 446,203,551 | |||||||
Balance at Dec. 31, 2015 | 188,629 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Net Income (Loss) | 1,495 | |||||||
Capital Contributions | 167,000 | |||||||
Capital Distributions | (17,487) | |||||||
Balance at Jun. 30, 2016 | 339,637 | |||||||
Balance at Dec. 31, 2016 | 16,485,735 | 5,506,375 | (49,096) | 5,457,279 | 332,988 | 149,566 | 10,545,902 | |
Balance (in units) at Dec. 31, 2016 | 452,380,335 | |||||||
Increase (Decrease) in Partners' Capital | ||||||||
Net Income (Loss) | 1,623,098 | 664,989 | 664,989 | 11,644 | 5,038 | 941,427 | ||
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) | 37,096 | 16,776 | 16,776 | 20,320 | ||||
Changes in Consolidation | (71,657) | (71,657) | ||||||
Transfer of interests under common control (See Note 15) | 0 | 12,269 | (1,988) | 10,281 | (10,281) | |||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units | 154,789 | (1,315) | 153,474 | (153,474) | ||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units (in units) | 11,361,012 | |||||||
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units | 3,029 | 2,605 | 424 | 3,029 | ||||
Net Delivery of Common Units - Equity Incentive Plan | (37,304) | (37,304) | (37,304) | |||||
Net Delivery of Common Units - Equity Incentive Plan (in units) | 6,226,836 | |||||||
Equity Based Compensation | 198,976 | 94,919 | 94,919 | 104,057 | ||||
Unit Repurchases | 0 | 0 | ||||||
Capital Contributions | 1,759,873 | 1,759,873 | ||||||
Capital Distributions | (968,968) | (150,887) | (150,887) | (11,644) | (5,038) | (801,399) | ||
Balance at Jun. 30, 2017 | 19,029,878 | $ 6,247,755 | $ (35,199) | $ 6,212,556 | $ 332,988 | $ 149,566 | $ 12,334,768 | |
Balance (in units) at Jun. 30, 2017 | 469,968,183 | |||||||
Balance at Dec. 31, 2016 | 632,348 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Net Income (Loss) | 43,320 | |||||||
Changes in Consolidation | (315,057) | |||||||
Capital Contributions | 152,222 | |||||||
Capital Distributions | (352) | |||||||
Balance at Jun. 30, 2017 | $ 512,481 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities | ||
Net Income (Loss) | $ 1,666,418 | $ (487,105) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: | ||
Equity Based Compensation | 198,976 | 124,480 |
Net Realized (Gains) Losses on Investments | (44,752) | (65,488) |
Change in Unrealized (Gains) Losses on Investments | (932,124) | 791,543 |
Carried Interest Allocated as a result of Changes in Fund Fair Value | (886,776) | (187,831) |
Other Non-Cash Amounts | 31,186 | 1,234 |
Cash Flows Due to Changes in Operating Assets and Liabilities: | ||
Change in Cash and Cash Equivalents Held at Consolidated Entities | 199,676 | (767,808) |
Change in Due from / to Affiliates | (124,400) | (95,261) |
Change in Other Assets | 146,267 | 32,777 |
Change in Accounts Payable, Accrued Expenses and Other Liabilities | 883,099 | 250,666 |
Investments Purchased | (22,853,278) | (7,386,747) |
Proceeds from Investments | 19,852,232 | 6,598,621 |
Net Cash Provided (Used) by Operating Activities | (1,863,476) | (1,190,919) |
Investing Activities | ||
Change in Restricted Cash and Cash Equivalents | 108,783 | 80,345 |
Purchase of Fixed Assets | (48,239) | (3,784) |
Development of Oil and Natural Gas Properties | (1,111) | (1,190) |
Net Cash Provided (Used) by Investing Activities | 59,433 | 75,371 |
Financing Activities | ||
Distributions to Partners | (150,887) | (142,310) |
Distributions to Redeemable Noncontrolling Interests | (352) | (17,487) |
Contributions from Redeemable Noncontrolling Interests | 152,222 | 167,000 |
Distributions to Noncontrolling Interests | (801,399) | (820,255) |
Contributions from Noncontrolling Interests | 1,755,608 | 1,027,774 |
Issuance of Preferred Units (net of issuance costs) | 0 | 482,554 |
Preferred Unit Distributions | (16,682) | (5,693) |
Net Delivery of Common Units - Equity Incentive Plan | (37,304) | (28,234) |
Unit Repurchases | 0 | (265,218) |
Proceeds from Debt Obligations | 5,297,648 | 3,404,624 |
Repayment of Debt Obligations | (4,763,930) | (2,219,243) |
Financing Costs Paid | (8,096) | (3,229) |
Net Cash Provided (Used) by Financing Activities | 1,426,828 | 1,580,283 |
Net Increase/(Decrease) in Cash and Cash Equivalents | (377,215) | 464,735 |
Cash and Cash Equivalents, Beginning of Period | 2,508,902 | 1,047,740 |
Cash and Cash Equivalents, End of Period | 2,131,687 | 1,512,475 |
Supplemental Disclosures of Cash Flow Information | ||
Payments for Interest | 369,666 | 327,682 |
Payments for Income Taxes | 22,828 | 13,448 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities | ||
Non-Cash Contributions of Equity Based Compensation | 198,976 | 124,480 |
Non-Cash Contributions from Noncontrolling Interests | 4,265 | 426,987 |
Debt Obligations - Net Gains (Losses), Translation and Other | (352,664) | (337,316) |
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units | 3,029 | (4,112) |
Changes in Consolidation and Other | ||
Cash and Cash Equivalents Held at Consolidated Entities | (2,244) | (270,458) |
Restricted Cash and Cash Equivalents | 0 | (54,064) |
Investments | (174,906) | (35,686,489) |
Due From Affiliates | (3,536) | 147,427 |
Other Assets | (298,097) | (532,226) |
Debt Obligations | 0 | (2,355,305) |
Due to Affiliates | 0 | 329,083 |
Accounts Payable, Accrued Expenses and Other Liabilities | (114,573) | (129,348) |
Noncontrolling Interests | (71,657) | (34,240,240) |
Redeemable Noncontrolling Interests | $ (315,057) | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION KKR & Co. L.P. (NYSE: KKR), together with its consolidated subsidiaries (“KKR”), is a leading global investment firm that manages multiple alternative asset classes including private equity, energy, infrastructure, real estate, credit and, through its strategic partners, hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation 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. 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. is the parent company of KKR Group Limited, which is the non-economic general partner of KKR Group Holdings L.P. (“Group Holdings”), 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. both indirectly controls the KKR Group Partnerships and indirectly holds Class A partner units in each KKR Group Partnership (collectively, “KKR Group Partnership Units”) representing economic interests in KKR’s business. The remaining KKR Group Partnership Units are held by KKR Holdings L.P. (“KKR Holdings”), which is not a subsidiary of KKR. As of June 30, 2017 , KKR & Co. L.P. held approximately 57.8% of the KKR Group Partnership Units and principals through KKR Holdings held approximately 42.2% of the KKR Group Partnership Units. The percentage ownership in the KKR Group Partnerships will continue to change as KKR Holdings and/or principals exchange units in the KKR Group Partnerships for KKR & Co. L.P. common units or when KKR & Co. L.P. otherwise issues or repurchases KKR & Co. L.P. common units. The KKR Group Partnerships also have outstanding equity interests that provide for the carry pool and preferred units with economic terms that mirror the preferred units issued by KKR & Co. L.P. PAAMCO Prisma On June 1, 2017, KKR completed its previously announced transaction to combine Pacific Alternative Asset Management Company, LLC (“PAAMCO”) and Prisma Capital Partners LP (“Prisma”), formerly known as KKR Prisma or KKR’s hedge fund solutions platform, to create PAAMCO Prisma Holdings, LLC ("PAAMCO Prisma"). PAAMCO Prisma is a leading liquid alternatives investment firm, which operates independently from KKR. In connection with this transaction, KKR contributed $114.1 million of net assets, including intangible assets and an allocation of goodwill, in exchange for a 39.9% equity interest in PAAMCO Prisma and the right to receive certain payments from PAAMCO Prisma, the collective fair value of which was $131.6 million . KKR reports its investment in PAAMCO Prisma using the equity method of accounting. See Note 16 "Goodwill and Intangible Assets." |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of KKR & Co. L.P. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements (referred to hereafter as the “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 was derived from audited consolidated financial statements included in KKR’s Annual Report on Form 10-K for the year ended December 31, 2016 , which include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited consolidated financial statements included in KKR & Co. L.P.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). KKR & Co. L.P. consolidates the financial results of the KKR Group Partnerships and their consolidated subsidiaries, which include the accounts of KKR’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 and certain other entities including CFEs. References in the accompanying financial statements to “principals” are to KKR’s senior employees and non‑employee operating consultants who hold interests in KKR’s business through KKR Holdings. All intercompany transactions and balances have been eliminated. 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, expenses and investment income (loss) during the reporting periods. Such estimates include but are not limited to the valuation of investments and financial instruments. Actual results could differ from those estimates, and such differences could be material to the financial statements. Principles of Consolidation The types of entities KKR assesses for consolidation include (i) subsidiaries, including management companies, broker-dealers and general partners of investment funds that KKR manages, (ii) entities that have all the attributes 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 depending 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 apply the consolidation guidance under the VIE model. Entities that do not qualify as VIEs 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 performance and the obligation to absorb losses 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; and (vii) holders of the 7.375% Series A LLC Preferred Shares of 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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Balance at the beginning of the period $ 4,491,197 $ 3,998,930 $ 4,293,337 $ 4,347,153 Net income (loss) attributable to noncontrolling interests held by KKR Holdings (1) 305,280 73,400 521,712 (198,175 ) Other comprehensive income (loss), net of tax (2) 8,833 (3,998 ) 13,753 (268 ) Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units (3) (104,797 ) (1,598 ) (140,701 ) (30,978 ) Equity based compensation 42,964 9,041 104,057 19,647 Capital contributions 2,913 69 2,950 138 Capital distributions (62,717 ) (57,539 ) (119,354 ) (119,212 ) Transfer of interests under common control (See Note 15 "Equity") — — 7,919 — Balance at the end of the period $ 4,683,673 $ 4,018,305 $ 4,683,673 $ 4,018,305 (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. 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 hold 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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) $ 868,524 $ 273,231 $ 1,666,418 $ (487,105 ) Less: Net income (loss) attributable to Redeemable Noncontrolling Interests 22,387 1,533 43,320 1,495 Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities 126,870 98,715 419,715 (60,069 ) Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders 8,341 5,693 16,682 5,693 Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. 5,348 (2,178 ) 24,508 (11,563 ) Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings $ 716,274 $ 165,112 $ 1,211,209 $ (445,787 ) Net income (loss) attributable to noncontrolling interests held by KKR Holdings $ 305,280 $ 73,400 $ 521,712 $ (198,175 ) 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 changes related to exchange rate movements reflected as a component of Net Gains (Losses) from Investment Activities in the consolidated 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 companies 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 companies 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 from 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 Activities 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 companies 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 requirements 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 June 30, 2017, equity method investees for which KKR reports financial results on a quarter lag include Marshall Wace LLP 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 mark |
NET GAINS (LOSSES) FROM INVESTM
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES | NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES 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 summarize total Net Gains (Losses) from Investment Activities for the three and six months ended June 30, 2017 and 2016, respectively: Three Months Ended Three Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Total Private Equity (1) $ 21,253 $ 291,748 $ 313,001 $ 200,003 $ (237,407 ) $ (37,404 ) Credit and Other (1) (363,791 ) 256,371 (107,420 ) 18,338 (123,115 ) (104,777 ) Investments of Consolidated CFEs (1) (3,777 ) 15,064 11,287 (183,816 ) 287,866 104,050 Real Assets (1) (61,747 ) 170,593 108,846 — 119,365 119,365 Foreign Exchange Forward Contracts and Options (2) 8,082 (184,118 ) (176,036 ) (17,186 ) 34,799 17,613 Securities Sold Short (2) 258,924 9,398 268,322 (16,133 ) (22,553 ) (38,686 ) Other Derivatives (2) (119 ) (706 ) (825 ) (1,876 ) 21,253 19,377 Debt Obligations and Other (3) 39,763 (38,510 ) 1,253 109,441 (179,811 ) (70,370 ) Net Gains (Losses) From Investment $ (101,412 ) $ 519,840 $ 418,428 $ 108,771 $ (99,603 ) $ 9,168 Six Months Ended Six Months Ended Net Realized Net Unrealized Total Net Realized Net Unrealized Total Private Equity (1) $ 128,066 $ 295,036 $ 423,102 $ 197,876 $ (449,768 ) $ (251,892 ) Credit and Other (1) (586,199 ) 704,617 118,418 (22,166 ) (360,165 ) (382,331 ) Investments of Consolidated CFEs (1) (4,880 ) 28,047 23,167 (220,805 ) 507,050 286,245 Real Assets (1) (58,687 ) 177,391 118,704 12,355 (3,773 ) 8,582 Foreign Exchange Forward Contracts and Options (2) 18,068 (242,381 ) (224,313 ) 575 (11,401 ) (10,826 ) Securities Sold Short (2) 505,711 51,668 557,379 (974 ) (39,888 ) (40,862 ) Other Derivatives (2) (5,879 ) (5,553 ) (11,432 ) (18,389 ) 25,609 7,220 Debt Obligations and Other (3) 48,552 (76,701 ) (28,149 ) 117,016 (459,207 ) (342,191 ) Net Gains (Losses) From Investment $ 44,752 $ 932,124 $ 976,876 $ 65,488 $ (791,543 ) $ (726,055 ) (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." |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Investments consist of the following: June 30, 2017 December 31, 2016 Private Equity $ 3,847,420 $ 2,915,667 Credit 5,553,692 4,847,936 Investments of Consolidated CFEs 15,286,680 13,950,897 Real Assets 2,457,053 1,807,128 Equity Method 3,536,324 2,728,995 Carried Interest 2,776,470 2,384,177 Other 2,810,128 2,774,965 Total Investments $ 36,267,767 $ 31,409,765 As of June 30, 2017 and December 31, 2016, there were no investments which represented greater than 5% of total investments. In addition, as of June 30, 2017 and December 31, 2016 , investments totaling $17.8 billion and $16.1 billion , respectively, were pledged as direct collateral against various financing arrangements. See Note 10 “Debt Obligations.” The majority of the securities underlying private equity investments represent equity securities. Carried Interest Carried interest allocated to the general partner in respect of performance of investment funds that are not consolidated were as follows: Balance at December 31, 2016 $ 2,384,177 Carried Interest Allocated as a result of Changes in Fund Fair Value 886,776 Cash Proceeds Received (494,483 ) Balance at June 30, 2017 $ 2,776,470 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables summarize the valuation of KKR's assets and liabilities by the fair value hierarchy. Carried Interest and Equity Method Investments for which the fair value option has not been elected have been excluded from the tables below. Assets, at fair value: June 30, 2017 Level I Level II Level III Total Private Equity $ 1,384,889 $ 68,033 $ 2,394,498 $ 3,847,420 Credit — 1,688,622 3,865,070 5,553,692 Investments of Consolidated CFEs — 9,839,430 5,447,250 15,286,680 Real Assets — 33,634 2,423,419 2,457,053 Equity Method — 207,577 571,575 779,152 Other 1,001,303 37,198 1,771,627 2,810,128 Total 2,386,192 11,874,494 16,473,439 30,734,125 Foreign Exchange Contracts and Options — 113,147 — 113,147 Other Derivatives — 7,112 57,354 (1) 64,466 Total Assets $ 2,386,192 $ 11,994,753 $ 16,530,793 $ 30,911,738 (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. 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 Other 994,677 12,715 1,767,573 2,774,965 Total 2,234,785 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 Liabilities, at fair value: June 30, 2017 Level I Level II Level III Total Securities Sold Short $ 583,665 $ — $ — $ 583,665 Foreign Exchange Contracts and Options — 176,400 — 176,400 Unfunded Revolver Commitments — — 16,533 (1) 16,533 Other Derivatives — 28,271 50,400 (2) 78,671 Debt Obligations of Consolidated CFEs — 9,407,372 5,333,203 14,740,575 Total Liabilities $ 583,665 $ 9,612,043 $ 5,400,136 $ 15,595,844 (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 LLP 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. 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 (1) 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 The following tables summarize changes in investments and debt obligations reported at fair value for which Level III inputs have been used to determine fair value for the three and six months ended June 30, 2017 and 2016, respectively: Three Months Ended June 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 $ 2,001,204 $ 3,903,023 $ 5,426,552 $ 2,045,587 $ 593,227 $ 1,806,381 $ 15,775,974 $ 5,313,570 Transfers Out Due to Deconsolidation of Funds — — — — — — — — Transfers In — — — — — — — — Transfers Out — — — — — — — — Asset Purchases / Debt Issuances 394,861 347,036 — 354,950 1,576 208,385 1,306,808 — Sales / Paydowns (149,854 ) (549,466 ) (8,995 ) (85,964 ) (8,300 ) (134,608 ) (937,187 ) — Settlements — 30,200 — — — — 30,200 (8,995 ) Net Realized Gains (Losses) 689 (93,386 ) — (61,747 ) 626 (3,911 ) (157,729 ) — Net Unrealized Gains (Losses) 147,598 224,757 29,693 170,593 (15,554 ) (104,620 ) 452,467 28,628 Change in Other Comprehensive Income — 2,906 — — — — 2,906 — Balance, End 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 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 $ 147,598 $ 127,361 $ 29,693 $ 100,146 $ (15,554 ) $ (104,620 ) $ 284,624 $ 28,628 Three Months Ended June 30, 2016 Level III Investments Level III Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method Other Total Debt Obligations of Consolidated CFEs Balance, Beg. of Period $ 1,313,701 $ 4,256,576 $ 5,550,482 $ 1,426,693 $ 455,945 $ 504,326 $ 13,507,723 $ 5,447,158 Transfers Out Due to Deconsolidation of Funds (49,350 ) (1,643,833 ) — — — 1,041,980 (651,203 ) — Transfers In — 41,303 — 58,537 — — 99,840 — Transfers Out (96,640 ) (760 ) — — — — (97,400 ) — Asset Purchases / Debt Issuances 18,535 210,044 — 229,252 10,761 169,744 638,336 — Sales / Paydowns — (193,970 ) (7,639 ) (14,138 ) (2,826 ) (75,290 ) (293,863 ) — Settlements — 48,931 — — — — 48,931 (7,639 ) Net Realized Gains (Losses) — (19,986 ) — — — 17,198 (2,788 ) — Net Unrealized Gains (Losses) 45,622 (20,429 ) 72,499 119,365 13,339 (162,261 ) 68,135 66,762 Change in Other Comprehensive Income — (5,697 ) — — — — (5,697 ) — Balance, End 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 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 $ 45,622 $ (20,429 ) $ 72,499 $ 119,365 $ 13,339 $ (186,011 ) $ 44,385 $ 66,762 Six Months Ended June 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 — — — — — (1,496 ) (1,496 ) — Asset Purchases / Debt Issuances 824,505 943,898 — 605,228 11,132 223,504 2,608,267 — Sales / Paydowns (172,483 ) (718,324 ) (17,935 ) (107,641 ) (20,978 ) (142,736 ) (1,180,097 ) — Settlements — 19,125 — — — — 19,125 (17,935 ) Net Realized Gains (Losses) 689 (102,629 ) — (58,687 ) 626 (23,441 ) (183,442 ) — Net Unrealized Gains (Losses) 182,228 504,796 58,965 177,391 10,273 (51,777 ) 881,876 56,397 Change in Other Comprehensive Income — 23,805 — — — — 23,805 — Balance, End 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 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 $ 182,228 $ 407,400 $ 58,965 $ 106,944 $ 10,273 $ (51,777 ) $ 714,033 $ 56,397 Six Months Ended June 30, 2016 Level III Investments Level III 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 — 43,750 4,343,829 — — — 4,387,579 4,272,081 Transfers Out (104,000 ) (760 ) — — (311,270 ) — (416,030 ) — Asset Purchases / Debt Issuances 254,076 554,099 1,026,801 453,771 18,992 203,670 2,511,409 990,450 Sales / Paydowns — (480,074 ) (14,917 ) (72,757 ) (60,386 ) (130,818 ) (758,952 ) — Settlements — 50,178 — — — — 50,178 (14,917 ) Net Realized Gains (Losses) — (8,595 ) — 12,355 (1,991 ) (7,415 ) (5,646 ) — Net Unrealized Gains (Losses) 34,352 (142,137 ) 259,629 7,058 (59,732 ) (166,115 ) (66,945 ) 258,667 Change in Other Comprehensive Income — (2,456 ) — — — — (2,456 ) — Balance, End 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 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 $ 34,352 $ (142,137 ) $ 259,629 $ 7,058 $ (59,732 ) $ (189,865 ) $ (90,695 ) $ 258,667 Total realized and unrealized gains and losses recorded for Level III assets and liabilities are reported in Net Gains (Losses) from Investment Activities in the accompanying condensed consolidated statements of operations. The following table summarizes the fair value transfers between fair value levels for the three and six months ended June 30, 2017 and 2016: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Assets, at fair value: Transfers from Level I to Level II (1) $ — $ 73,600 $ — $ 73,600 Transfers from Level II to Level III (2) $ — $ 99,840 $ — $ 4,387,579 Transfers from Level III to Level II (3) $ — $ 760 $ — $ 312,030 Transfers from Level III to Level I (4) $ — $ 96,640 $ 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 experienced an insignificant level of market activity during the period and thus were valued in the absence of observable inputs. (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 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 investments and debt obligations that are measured at fair value and categorized within Level III as of June 30, 2017 : Fair Value June 30, 2017 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Private Equity $ 2,394,498 Private Equity $ 1,131,550 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.2% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 48.1% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 49.3% 25.0% - 100.0% (5) Weight Ascribed to Transaction Price 2.6% 0.0% - 50.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 13.5x 5.9x - 26.0x Increase Enterprise Value/Forward EBITDA Multiple 12.0x 5.7x - 25.7x Increase Discounted cash flow Weighted Average Cost of Capital 9.8% 6.8% - 19.3% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 6.0x - 13.4x Increase Growth Equity $ 1,262,948 Inputs to market comparables, discounted cash flow and milestones Illiquidity Discount 13.8% 10.0% - 20.0% Decrease Weight Ascribed to Market Comparables 31.3% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 9.9% 0.0% - 75.0% (5) Weight Ascribed to Milestones 58.8% 0.0% - 100.0% (6) Scenario Weighting Base 53.2% 30.0% - 80.0% Increase Downside 22.7% 10.0% - 40.0% Decrease Upside 24.1% 10.0% - 40.0% Increase Credit $ 3,865,070 Yield Analysis Yield 11.3% 3.4% - 37.5% Decrease Net Leverage 5.9x 0.3x - 19.3x Decrease EBITDA Multiple 10.9x 0.1x - 18.4 Increase Investments of Consolidated CFEs $ 5,447,250 (9) Debt Obligations of Consolidated CFEs $ 5,333,203 Discounted cash flow Yield 5.4% 1.9% - 27.1% Decrease Real Assets $ 2,423,419 (10) Energy $ 1,267,241 Discounted cash flow Weighted Average Cost of Capital 10.7% 9.6% - 16.9% Decrease Average Price Per BOE (8) $36.05 $30.34 - $39.39 Increase Real Estate $ 952,096 Inputs to direct income capitalization and discounted cash flow Weight Ascribed to Direct Income Capitalization 34.2% 0.0% - 75.0% (7) Weight Ascribed to Discounted Cash Flow 65.8% 25.0% - 100.0% (5) Direct income capitalization Current Capitalization Rate 5.8% 2.9% - 12.0% Decrease Discounted cash flow Unlevered Discount Rate 9.1% 4.5% - 20.0% Decrease Other $ 1,771,627 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 10.6% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 27.2% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 46.8% 0.0% - 100.0% (5) Weight Ascribed to Transaction Price 26.0% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 11.6x 0.1x - 17.7x Increase Enterprise Value/Forward EBITDA Multiple 9.9x 0.6x - 13.7x Increase Discounted cash flow Weighted Average Cost of Capital 11.1% 5.6% - 16.5% Decrease Enterprise Value/LTM EBITDA Exit Multiple 6.9x 2.2x - 9.0x 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. 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. (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 and transaction price. (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. (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, 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 85% liquids and 15% natural gas. (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 $204.1 million that was valued using a discounted cash flow analysis. The significant inputs used included the weighted average cost of capital 7.9% and the enterprise value/LTM EBITDA Exit Multiple 12.0 x. The table above excludes equity method investments in the amount of $571.6 million , comprised primarily of interests in real estate joint ventures, which were valued using Level III value methodologies which are generally the same as those shown for real estate investments. 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. |
FAIR VALUE OPTION
FAIR VALUE OPTION | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OPTION | FAIR VALUE OPTION The following table summarizes the financial instruments for which the fair value option has been elected: June 30, 2017 December 31, 2016 Assets Private Equity $ 576,936 $ 96,721 Credit 2,804,341 1,392,525 Investments of Consolidated CFEs 15,286,680 13,950,897 Real Assets 331,410 247,376 Equity Method 779,152 791,418 Other 387,040 240,343 Total $ 20,165,559 $ 16,719,280 Liabilities Debt Obligations of Consolidated CFEs $ 14,740,575 $ 13,858,288 Total $ 14,740,575 $ 13,858,288 The following tables present the realized and net change in unrealized gains (losses) on financial instruments on which the fair value option was elected for the three and six months ended, June 30, 2017 and 2016, respectively: Three Months Ended Three Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 689 $ 40,133 $ 40,822 $ — $ 846 $ 846 Credit (169,500 ) 28,968 (140,532 ) 10,213 3,603 13,816 Investments of Consolidated CFEs (3,777 ) 15,064 11,287 (183,816 ) 287,866 104,050 Real Assets 30 40,822 40,852 — 5,355 5,355 Equity Method 626 (23,408 ) (22,782 ) — (7,804 ) (7,804 ) Other (3,346 ) (4,471 ) (7,817 ) — (8,495 ) (8,495 ) Total $ (175,278 ) $ 97,108 $ (78,170 ) $ (173,603 ) $ 281,371 $ 107,768 Liabilities Debt Obligations of Consolidated CFEs 35,621 (43,915 ) (8,294 ) 102,542 (179,707 ) (77,165 ) Total $ 35,621 $ (43,915 ) $ (8,294 ) $ 102,542 $ (179,707 ) $ (77,165 ) Six Months Ended Six Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 689 $ 40,495 $ 41,184 $ — $ (2,298 ) $ (2,298 ) Credit (408,598 ) 84,838 (323,760 ) 5,017 (42,038 ) (37,021 ) Investments of Consolidated CFEs (4,880 ) 28,047 23,167 (220,805 ) 507,050 286,245 Real Assets (186 ) 47,610 47,424 — 10,595 10,595 Equity Method 626 (3,046 ) (2,420 ) (1,991 ) (101,097 ) (103,088 ) Other (22,145 ) 12,810 (9,335 ) (1,816 ) (18,997 ) (20,813 ) Total $ (434,494 ) $ 210,754 $ (223,740 ) $ (219,595 ) $ 353,215 $ 133,620 Liabilities Debt Obligations of Consolidated CFEs 40,446 (54,973 ) (14,527 ) 102,542 (447,163 ) (344,621 ) Total $ 40,446 $ (54,973 ) $ (14,527 ) $ 102,542 $ (447,163 ) $ (344,621 ) |
NET INCOME (LOSS) ATTRIBUTABLE
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT For the three and six months ended June 30, 2017 and 2016 , basic and diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit were calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 405,646 $ 93,890 $ 664,989 $ (236,049 ) Basic Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 466,170,025 448,221,538 459,967,395 449,241,840 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic $ 0.87 $ 0.21 $ 1.45 $ (0.53 ) Diluted Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 466,170,025 448,221,538 459,967,395 449,241,840 Weighted Average Unvested Common Units and Other Exchangeable Securities 35,007,398 33,588,074 38,975,899 — Weighted Average Common Units Outstanding - Diluted 501,177,423 481,809,612 498,943,294 449,241,840 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted $ 0.81 $ 0.19 $ 1.33 $ (0.53 ) Weighted Average Common Units Outstanding—Diluted primarily includes unvested equity awards that have been granted under the Equity Incentive Plan as well as exchangeable equity securities issued in connection with the acquisition of Avoca. Vesting or exchanges of these equity interests dilute KKR and KKR Holdings pro rata in accordance with their respective ownership interests in the KKR Group Partnerships. For the six months ended June 30, 2016, equity awards granted under the Equity Incentive Plan as well as exchangeable equity securities issued in connection with the acquisition of Avoca have been excluded from the calculation of diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit since these equity awards and exchangeable equity securities would be anti-dilutive, having the effect of decreasing the loss per common unit. Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Weighted Average KKR Holdings Units Outstanding 346,473,324 358,728,334 349,513,066 359,522,981 For the three and six months ended June 30, 2017 and 2016 , KKR Holdings units have been excluded from the calculation of Net Income (Loss) attributable to KKR & Co. L.P. per common unit - diluted since the exchange of these units would not dilute KKR’s respective ownership interests in the KKR Group Partnerships. |
OTHER ASSETS AND ACCOUNTS PAYAB
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES Other Assets consist of the following: June 30, 2017 December 31, 2016 Unsettled Investment Sales (1) $ 133,493 $ 144,600 Receivables 333,976 49,279 Due from Broker (2) 497,265 1,084,602 Oil & Gas Assets, net (3) 264,256 276,694 Deferred Tax Assets, net 277,317 286,948 Interest Receivable 201,157 158,511 Fixed Assets, net (4) 322,968 283,262 Foreign Exchange Contracts and Options (5) 113,147 240,627 Intangible Assets, net (6) 19,320 135,024 Goodwill (6) 83,500 89,000 Derivative Assets 64,466 81,593 Deferred Transaction Related Expenses 41,571 17,688 Prepaid Taxes 45,479 46,996 Prepaid Expenses 15,188 17,761 Deferred Financing Costs 10,318 10,507 Other 70,108 73,773 Total $ 2,493,529 $ 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 $149,694 and $141,911 as of June 30, 2017 and December 31, 2016 , respectively. Depreciation and amortization expense of $3,867 and $3,988 for the three months ended June 30, 2017 and 2016, respectively, and $8,064 and $7,904 for the six months ended June 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: June 30, 2017 December 31, 2016 Amounts Payable to Carry Pool (1) $ 1,152,015 $ 987,994 Unsettled Investment Purchases (2) 913,528 722,076 Securities Sold Short (3) 583,665 647,234 Derivative Liabilities 78,671 100,015 Accrued Compensation and Benefits 181,255 20,764 Interest Payable 148,847 114,894 Foreign Exchange Contracts and Options (4) 176,400 75,218 Accounts Payable and Accrued Expenses 128,341 114,854 Deferred Rent 20,053 19,144 Taxes Payable 25,518 12,514 Redemptions Payable — 4,021 Due to Broker (5) — 83,206 Other Liabilities 99,836 79,326 Total $ 3,508,129 $ 2,981,260 (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. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Consolidated VIEs KKR consolidates certain VIEs in which it is determined that KKR is the primary beneficiary as described in Note 2 "Summary of Significant Accounting Policies" and which are predominately CFEs and certain investment funds. The primary purpose of these VIEs is to provide strategy specific investment opportunities to earn capital gains, current income or both in exchange for management and performance based fees or carried interest. KKR’s investment strategies for these VIEs differ by product; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and carried interests. 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. 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 include certain investment funds sponsored by KKR and certain CLO vehicles. Investments in Unconsolidated Investment Funds 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’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 June 30, 2017 . Accordingly, disaggregation of KKR’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 June 30, 2017 , KKR's commitments to these unconsolidated investment funds was $2.8 billion . KKR has not provided any financial support other than its obligated amount as of June 30, 2017 . Investments 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 June 30, 2017 , combined assets under management in the pools of unconsolidated CLO vehicles were $0.7 billion . KKR’s maximum exposure to loss as a result of its investments in the residual interests of unconsolidated CLO vehicles is the carrying value of such investments, which was $1.2 million as of June 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. As of June 30, 2017 and December 31, 2016 , 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: June 30, 2017 December 31, 2016 Investments $ 4,230,381 $ 3,632,162 Due from (to) Affiliates, net 42,416 (60,604 ) Maximum Exposure to Loss $ 4,272,797 $ 3,571,558 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | DEBT OBLIGATIONS 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 which are non-recourse to KKR beyond the assets of KFN. Fund financing facilities have been established for the benefit of certain investment funds. When an investment fund borrows from the facility in which it participates, the proceeds from the borrowings are limited for their intended use by the borrowing investment fund. KKR’s obligations with respect to these financing arrangements are generally limited to KKR’s pro-rata equity interest in such funds. In addition, certain consolidated CFE vehicles issue debt securities to third party investors which are collateralized by assets held by the CFE vehicle. 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 consisted of the following: June 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 Agreement 488,256 — — 500,000 — — KCM Short-Term Credit Agreement 750,000 — — — — — Notes Issued: KKR Issued 6.375% Notes Due 2020 (1) — 498,097 560,675 (10) — 497,804 562,960 (10) KKR Issued 5.500% Notes Due 2043 (2) — 491,327 554,950 (10) — 491,158 502,800 (10) KKR Issued 5.125% Notes Due 2044 (3) — 990,192 1,058,750 (10) — 990,009 955,240 (10) KFN Issued 5.500% Notes Due 2032 (4) — 367,728 378,417 — — — KFN Issued 7.500% Notes Due 2042 (5) — — — — 123,008 116,699 (11) KFN Issued Junior Subordinated Notes (6) — 235,330 201,365 — 250,154 210,084 Other Consolidated Debt Obligations: Fund Financing Facilities and Other (7) 2,643,471 2,102,004 2,102,004 (12) 2,039,532 2,333,654 2,333,654 (12) CLO Senior Secured Notes (8) — 9,132,461 9,132,461 — 8,279,812 8,279,812 CLO Subordinated Notes (8) — 274,911 274,911 — 283,735 283,735 CMBS Debt Obligations (9) — 5,333,203 5,333,203 — 5,294,741 5,294,741 $ 4,881,727 $ 19,425,253 $ 19,596,736 $ 3,539,532 $ 18,544,075 $ 18,539,725 (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 $1.2 million and $1.4 million as of June 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 June 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 $8.5 million and $8.6 million as of June 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 $4.7 million as of June 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 3.6% and the weighted average years to maturity is 19.5 years as of June 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 2.6% and 2.4% as of June 30, 2017 and December 31, 2016 , respectively. In addition, the weighted average years to maturity is 4.0 years and 2.4 years as of June 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. Revolving Credit Facilities 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. 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 a Eurocurrency loan, it will be based on a LIBOR rate plus an applicable margin ranging between 1.25% and 2.50% , depending on the duration of the loan. If the borrowing is an ABR loan, it will be based on a base rate plus an applicable margin ranging between 0.25% and 1.50% , depending on the duration of the loan. For the quarter ended June 30, 2017, no amounts were borrowed under the KCM Short-Term Credit Agreement. Notes Issuances and Redemptions KFN Issued 5.500% Notes Due 2032 On March 30, 2017, KFN issued $375.0 million par amount of 5.500% Senior Unsecured Notes (“KFN 2032 Senior Unsecured Notes”) in a private placement, resulting in net proceeds to KFN of $368.6 million . Interest on the KFN 2032 Senior Unsecured Notes is payable semi-annually on March 30th and September 30th. The KFN 2032 Senior Unsecured Notes will mature on March 30, 2032. KFN may redeem the KFN 2032 Senior Unsecured Notes in whole, but not in part, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to, but excluding, the date of redemption on or after March 30, 2022 and annually thereafter, after providing notice to noteholders 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% 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. 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 Consolidated Debt Obligations Debt Obligations of Consolidated CFEs As of June 30, 2017 , debt obligations of consolidated CFEs consisted of the following: Borrowing Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity in Years Senior Secured Notes of Consolidated CLOs $ 9,132,461 2.7 % 11.2 Subordinated Notes of Consolidated CLOs 274,911 (1) 11.4 Debt Obligations of Consolidated CMBS Vehicles 5,333,203 4.5 % 31.5 $ 14,740,575 (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. Debt obligations of consolidated CFEs are collateralized by assets held by each respective CFE vehicle and assets of one CFE vehicle may not be used to satisfy the liabilities of another. As of June 30, 2017 , the fair value of the consolidated CFE assets was $16.5 billion . This collateral consisted of Cash and Cash Equivalents Held at Consolidated Entities, Investments, and Other Assets. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The consolidated entities of KKR are generally treated as partnerships or disregarded entities for U.S. and non-U.S. tax purposes. The taxes payable on the 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 therefore subject to U.S. federal, state and/or local income taxes and/or non-U.S. taxes at the entity-level. In addition, certain consolidated entities which are treated as partnerships for U.S. tax purposes are subject to the New York City Unincorporated Business Tax or other local taxes. The effective tax rates were 2.09% and 2.16% for the three months ended June 30, 2017 and 2016, respectively, and 3.42% and (1.66)% for the six months ended June 30, 2017 and 2016, respectively. The effective tax rate differs from the statutory rate primarily due to the following: (i) 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 Holdings or by third parties, (ii) a significant 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 for tax purposes. During the three and six month period ended June 30, 2017 , there were no material changes to KKR’s uncertain tax positions and KKR believes there will be no significant increase or decrease to the uncertain tax positions within 12 months of the reporting date. |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY BASED COMPENSATION | EQUITY BASED COMPENSATION The following table summarizes the expense associated with equity based compensation for the three and six months ended June 30, 2017 and 2016 , respectively. Three Months Ended June 30, Six Months Ended 2017 2016 2017 2016 Equity Incentive Plan Units $ 44,976 $ 48,026 $ 94,919 $ 97,987 KKR Holdings Principal Awards 27,268 7,165 72,247 13,713 Other Exchangeable Securities — 3,590 — 6,846 Discretionary Compensation 15,696 1,876 31,810 5,934 Total $ 87,940 $ 60,657 $ 198,976 $ 124,480 Equity Incentive Plan Under the Equity Incentive Plan, KKR is permitted to grant equity awards representing ownership interests in KKR & Co. L.P. common units. Vested awards under the Equity Incentive Plan dilute KKR & Co. L.P. common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR Group Partnerships. The total number of common units that may be issued under the Equity Incentive Plan is equivalent to 15% of the number of fully diluted common units outstanding, subject to annual adjustment. Equity awards have been granted under the Equity Incentive Plan and are generally subject to service based vesting, typically over a three to five year period from the date of grant. In certain cases, these 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, certain of these awards are also subject to minimum retained ownership rules requiring the award recipient to continuously hold common unit equivalents equal to at least 15% of their cumulatively vested awards that have the minimum retained ownership requirement. Expense associated with the vesting of these awards is based on the closing price of the KKR & Co. L.P. common units on the date of grant, discounted for the lack of participation rights in the expected distributions 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% . Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8% annually based upon expected turnover by class of recipient. As of June 30, 2017 , there was approximately $304.3 million of estimated unrecognized expense related to unvested awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2017 $ 83.1 2018 123.1 2019 72.3 2020 21.8 2021 3.7 2022 0.3 Total $ 304.3 A summary of the status of unvested awards granted under the Equity Incentive Plan from January 1, 2017 through June 30, 2017 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2017 37,498,333 $ 13.85 Granted 2,512,331 15.21 Vested (8,321,851 ) 14.80 Forfeited (1,244,074 ) 13.72 Balance, June 30, 2017 30,444,739 $ 13.71 The weighted average remaining vesting period over which unvested awards are expected to vest is 1.4 years . A summary of the remaining vesting tranches of awards granted under the Equity Incentive Plan is presented below: Vesting Date Units October 1, 2017 3,700,493 April 1, 2018 10,015,163 October 1, 2018 3,148,174 April 1, 2019 6,842,517 October 1, 2019 1,736,871 April 1, 2020 3,683,049 October 1, 2020 519,844 April 1, 2021 593,544 October 1, 2021 120,000 April 1, 2022 85,084 30,444,739 KKR Holdings Awards KKR Holdings units are exchangeable for KKR Group Partnership Units and allow for their exchange into common units of KKR & Co. L.P. on a one -for one basis. As of June 30, 2017 and 2016, KKR Holdings owned approximately 42.2% or 342,993,993 and 44.6% , or 358,673,603 units respectively, of outstanding KKR Group Partnership Units. Awards for KKR Holdings units that have been granted are generally subject to service based vesting, typically over a three to five year period from the date of grant. They are also subject to transfer restrictions which last 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, all of the 342,993,993 KKR Holdings units have been legally allocated, but the allocation of 7,936,872 of these units has not been communicated to each respective principal and the final allocation and terms of vesting for these units are subject to change and the exercise of judgment 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. The fair value of awards granted out of KKR Holdings is generally based on the closing price of KKR & Co L.P. common units on the date of grant. KKR determined this to be the best evidence of fair value as a KKR & Co. L.P. common unit 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. common unit. Specifically, units in both KKR Holdings and KKR & Co. L.P. 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 KKR & Co. L.P. common unit on a one -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 Awards 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. 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 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. Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8% annually based on expected turnover by class of recipient. As of June 30, 2017 , there was approximately $235.5 million of estimated unrecognized expense related to unvested KKR Holdings awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2017 $ 36.5 2018 66.2 2019 60.1 2020 54.9 2021 17.8 Total $ 235.5 A summary of the status of unvested awards granted under the KKR Holdings Plan from January 1, 2017 through June 30, 2017 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2017 28,245,886 $ 12.10 Granted — — Vested (5,968,939 ) 13.97 Forfeited (377,807 ) 11.61 Balance, June 30, 2017 21,899,140 $ 11.60 The weighted average remaining vesting period over which unvested awards are expected to vest is 2.3 years. A summary of the remaining vesting tranches of awards granted under the KKR Holdings Plan is presented below: Vesting Date Units October 1, 2017 93,486 April 1, 2018 824,999 May 1, 2018 5,110,000 April 1, 2019 349,143 May 1, 2019 5,110,000 April 1, 2020 191,512 May 1, 2020 5,110,000 May 1, 2021 5,110,000 21,899,140 Other Exchangeable Securities As of October 1, 2016, all equity securities of a subsidiary of a KKR Group Partnership and of KKR & Co. L.P. both of which are exchangeable into common units of KKR & Co. L.P. on a one -for-one basis issued in connection with the acquisition of Avoca ("Other Exchangeable Securities") have either vested or forfeited, and there is no unrecognized expense associated with Other Exchangeable Securities as of June 30, 2017. Discretionary Compensation KKR employees and certain employees of certain consolidated entities are eligible to receive discretionary cash bonuses. While cash bonuses paid to most employees are borne by KKR 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 recorded based on the amount of cash expected to be paid by KKR Holdings. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Due from Affiliates consists of: June 30, 2017 December 31, 2016 Amounts due from portfolio companies $ 90,439 $ 66,940 Amounts due from unconsolidated investment funds 296,986 170,219 Amounts due from related entities 7,292 13,293 Due from Affiliates $ 394,717 $ 250,452 Due to Affiliates consists of: June 30, 2017 December 31, 2016 Amounts due to KKR Holdings in connection with the tax receivable agreement $ 137,770 $ 128,091 Amounts due to unconsolidated investment funds 254,570 230,823 Amounts due to related entities — 565 Due to Affiliates $ 392,340 $ 359,479 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING KKR operates through four reportable business segments. These segments, which are differentiated primarily by their business objectives and 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 sponsors investment funds and co-investment vehicles that invest capital in real assets, such as infrastructure, energy 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 partnerships with third party hedge fund managers in which KKR owns minority stakes. Capital Markets KKR’s global capital markets business supports the firm, 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 for transactions, placing and underwriting securities offerings and providing other types of capital markets services. Principal Activities Through KKR's Principal Activities 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, including 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 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 and as such represents the business in total. In addition, KKR’s reportable segments are presented without giving effect to the consolidation of the funds that KKR manages. 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. ENI is comprised of total segment revenues; less total segment expenses and certain economic interests in KKR’s segments held by third parties. The following tables present the financial data for KKR’s reportable segments: As of and for the Three Months Ended June 30, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 142,253 $ 87,316 $ — $ — $ 229,569 Monitoring Fees 30,510 — — — 30,510 Transaction Fees 37,252 25,515 93,698 — 156,465 Fee Credits (31,750 ) (19,634 ) — — (51,384 ) Total Management, Monitoring and Transaction Fees, Net 178,265 93,197 93,698 — 365,160 Performance Income (Loss) Realized Incentive Fees — 2,624 — — 2,624 Realized Carried Interest 264,668 — — — 264,668 Unrealized Carried Interest 279,010 17,709 — — 296,719 Total Performance Income (Loss) 543,678 20,333 — — 564,011 Investment Income (Loss) Net Realized Gains (Losses) — — — 7,180 7,180 Net Unrealized Gains (Losses) — — — 307,977 307,977 Total Realized and Unrealized — — — 315,157 315,157 Interest Income and Dividends — — — 67,836 67,836 Interest Expense — — — (47,026 ) (47,026 ) Net Interest and Dividends — — — 20,810 20,810 Total Investment Income (Loss) — — — 335,967 335,967 Total Segment Revenues 721,943 113,530 93,698 335,967 1,265,138 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 60,453 22,950 17,568 34,551 135,522 Realized Performance Income Compensation 110,867 1,050 — — 111,917 Unrealized Performance Income Compensation 112,690 7,084 — — 119,774 Total Compensation and Benefits 284,010 31,084 17,568 34,551 367,213 Occupancy and Related Charges 7,530 1,749 628 3,500 13,407 Other Operating Expenses 27,992 8,234 3,699 13,144 53,069 Total Segment Expenses 319,532 41,067 21,895 51,195 433,689 Income (Loss) attributable to noncontrolling interests — — 1,180 — 1,180 Economic Net Income (Loss) $ 402,411 $ 72,463 $ 70,623 $ 284,772 $ 830,269 Total Assets $ 2,032,830 $ 1,252,887 $ 517,438 $ 11,197,514 $ 15,000,669 As of and for the Three Months Ended June 30, 2016 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 118,783 $ 84,834 $ — $ — $ 203,617 Monitoring Fees 28,998 — — — 28,998 Transaction Fees 23,400 5,888 39,276 — 68,564 Fee Credits (33,319 ) (5,754 ) — — (39,073 ) Total Management, Monitoring and Transaction Fees, Net 137,862 84,968 39,276 — 262,106 Performance Income (Loss) Realized Incentive Fees — 4,645 — — 4,645 Realized Carried Interest 305,275 — — — 305,275 Unrealized Carried Interest 9,974 8,724 — — 18,698 Total Performance Income (Loss) 315,249 13,369 — — 328,618 Investment Income (Loss) Net Realized Gains (Losses) — — — 224,699 224,699 Net Unrealized Gains (Losses) — — — (297,448 ) (297,448 ) Total Realized and Unrealized — — — (72,749 ) (72,749 ) Interest Income and Dividends — — — 74,451 74,451 Interest Expense — — — (48,447 ) (48,447 ) Net Interest and Dividends — — — 26,004 26,004 Total Investment Income (Loss) — — — (46,745 ) (46,745 ) Total Segment Revenues 453,111 98,337 39,276 (46,745 ) 543,979 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 45,675 20,117 7,403 23,695 96,890 Realized Performance Income Compensation 122,110 1,858 — — 123,968 Unrealized Performance Income Compensation 5,035 3,490 — — 8,525 Total Compensation and Benefits 172,820 25,465 7,403 23,695 229,383 Occupancy and Related Charges 9,039 2,007 943 3,670 15,659 Other Operating Expenses 26,009 9,930 3,222 10,372 49,533 Total Segment Expenses 207,868 37,402 11,568 37,737 294,575 Income (Loss) attributable to noncontrolling interests — — 575 — 575 Economic Net Income (Loss) $ 245,243 $ 60,935 $ 27,133 $ (84,482 ) $ 248,829 Total Assets $ 1,792,584 $ 1,165,388 $ 321,000 $ 9,744,199 $ 13,023,171 As of and for the Six Months Ended June 30, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 265,765 $ 172,088 $ — $ — $ 437,853 Monitoring Fees 43,730 — — — 43,730 Transaction Fees 155,134 29,571 214,795 — 399,500 Fee Credits (117,400 ) (23,001 ) — — (140,401 ) Total Management, Monitoring and Transaction Fees, Net 347,229 178,658 214,795 — 740,682 Performance Income (Loss) Realized Incentive Fees — 4,310 — — 4,310 Realized Carried Interest 470,872 — — — 470,872 Unrealized Carried Interest 402,516 34,829 — — 437,345 Total Performance Income (Loss) 873,388 39,139 — — 912,527 Investment Income (Loss) Net Realized Gains (Losses) — — — 86,631 86,631 Net Unrealized Gains (Losses) — — — 512,013 512,013 Total Realized and Unrealized — — — 598,644 598,644 Interest Income and Dividends — — — 124,718 124,718 Interest Expense — — — (88,735 ) (88,735 ) Net Interest and Dividends — — — 35,983 35,983 Total Investment Income (Loss) — — — 634,627 634,627 Total Segment Revenues 1,220,617 217,797 214,795 634,627 2,287,836 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 120,461 42,734 40,129 71,633 274,957 Realized Performance Income Compensation 198,260 1,724 — — 199,984 Unrealized Performance Income Compensation 163,056 13,932 — — 176,988 Total Compensation and Benefits 481,777 58,390 40,129 71,633 651,929 Occupancy and Related Charges 15,637 3,605 1,292 7,242 27,776 Other Operating Expenses 54,879 16,572 9,027 26,089 106,567 Total Segment Expenses 552,293 78,567 50,448 104,964 786,272 Income (Loss) attributable to noncontrolling interests — — 2,764 — 2,764 Economic Net Income (Loss) $ 668,324 $ 139,230 $ 161,583 $ 529,663 $ 1,498,800 Total Assets $ 2,032,830 $ 1,252,887 $ 517,438 $ 11,197,514 $ 15,000,669 As of and for the Six Months Ended June 30, 2016 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 236,581 $ 161,636 $ — $ — $ 398,217 Monitoring Fees 41,035 — — — 41,035 Transaction Fees 60,798 7,020 96,831 — 164,649 Fee Credits (55,915 ) (5,965 ) — — (61,880 ) Total Management, Monitoring and Transaction Fees, Net 282,499 162,691 96,831 — 542,021 Performance Income (Loss) Realized Incentive Fees — 6,238 — — 6,238 Realized Carried Interest 398,725 3,838 — — 402,563 Unrealized Carried Interest (184,725 ) (20,382 ) — — (205,107 ) Total Performance Income (Loss) 214,000 (10,306 ) — — 203,694 Investment Income (Loss) Net Realized Gains (Losses) — — — 200,516 200,516 Net Unrealized Gains (Losses) — — — (862,439 ) (862,439 ) Total Realized and Unrealized — — — (661,923 ) (661,923 ) Interest Income and Dividends — — — 182,571 182,571 Interest Expense — — — (96,991 ) (96,991 ) Net Interest and Dividends — — — 85,580 85,580 Total Investment Income (Loss) — — — (576,343 ) (576,343 ) Total Segment Revenues 496,499 152,385 96,831 (576,343 ) 169,372 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 94,642 39,171 15,571 48,405 197,789 Realized Performance Income Compensation 159,490 4,030 — — 163,520 Unrealized Performance Income Compensation (69,965 ) (8,152 ) — — (78,117 ) Total Compensation and Benefits 184,167 35,049 15,571 48,405 283,192 Occupancy and Related Charges 17,964 4,682 1,571 7,392 31,609 Other Operating Expenses 63,135 19,208 7,318 21,758 111,419 Total Segment Expenses 265,266 58,939 24,460 77,555 426,220 Income (Loss) attributable to noncontrolling interests — — 1,242 — 1,242 Economic Net Income (Loss) $ 231,233 $ 93,446 $ 71,129 $ (653,898 ) $ (258,090 ) Total Assets $ 1,792,584 $ 1,165,388 $ 321,000 $ 9,744,199 $ 13,023,171 The following tables reconcile KKR’s total reportable segments to the most directly comparable financial measures calculated and presented in accordance with GAAP: Fees and Other Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Total Segment Revenues $ 1,265,138 $ 543,979 $ 2,287,836 $ 169,372 Management fees relating to consolidated funds and placement fees (52,300 ) (44,048 ) (99,402 ) (82,318 ) Fee credits relating to consolidated funds 2,707 1,921 3,646 2,349 Net realized and unrealized carried interest - consolidated funds (10,384 ) (19,186 ) (21,441 ) (9,625 ) Total investment income (loss) (335,967 ) 46,745 (634,627 ) 576,343 Revenue earned by oil & gas producing entities 17,382 18,225 34,655 31,786 Reimbursable expenses 36,076 18,638 59,625 34,519 Other 9,136 10,483 17,448 17,136 Fees and Other $ 931,788 $ 576,757 $ 1,647,740 $ 739,562 Expenses Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Total Segment Expenses $ 433,689 $ 294,575 $ 786,272 $ 426,220 Equity based compensation 87,940 60,657 198,976 124,480 Reimbursable expenses and placement fees 58,860 30,525 94,983 54,632 Operating expenses relating to consolidated funds, CFEs and other entities 21,229 21,281 34,659 64,952 Expenses incurred by oil & gas producing entities 12,924 20,392 24,101 38,218 Intangible amortization 5,062 (3,865 ) 11,428 13,528 Other 10,024 (347 ) 19,323 9,511 Total Expenses $ 629,728 $ 423,218 $ 1,169,742 $ 731,541 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Economic Net Income (Loss) $ 830,269 $ 248,829 $ 1,498,800 $ (258,090 ) Income tax (18,538 ) (6,045 ) (59,080 ) (7,935 ) Amortization of intangibles, placement fees and other, net (1) (4,524 ) (9,144 ) (37,361 ) (38,026 ) Equity based compensation (87,940 ) (60,657 ) (198,976 ) (124,480 ) Net income (loss) attributable to noncontrolling interests held by KKR Holdings (305,280 ) (73,400 ) (521,712 ) 198,175 Preferred Unit Distributions (8,341 ) (5,693 ) (16,682 ) (5,693 ) Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 405,646 $ 93,890 $ 664,989 $ (236,049 ) (1) Other primarily represents the statement of operations impact 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" for 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 impact of KKR Holdings L.P., KKR's consolidated funds and certain other entities. Assets As of June 30, 2017 2016 Total Segment Assets $ 15,000,669 $ 13,023,171 Impact of Consolidation of Investment Vehicles and Other Entities (1) 26,412,562 23,086,165 Carry Pool Reclassification to Liabilities 1,152,015 1,107,578 Impact of KKR Management Holdings Corp. 302,835 289,957 Total Assets $ 42,868,081 $ 37,506,871 (1) Includes accounting basis difference for oil & natural gas properties of $12,757 and $39,430 as of June 30, 2017 and 2016, respectively. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
EQUITY | 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 . Unit 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 July 24, 2017. Under this common unit repurchase program, common units 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. 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. See condensed consolidated statements of changes in equity for the amount of common units repurchased during the six months ended June 30, 2017 and 2016 . Distribution Policy Under KKR's distribution policy for its common units, KKR intends to make equal quarterly distributions to holders of its common units in an amount of $0.17 per common unit per quarter. The declaration 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. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill As of December 31, 2016 , the carrying value of goodwill was $89.0 million , which was allocated to Public Markets and Principal Activities in 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 Activities is $53.5 million and $30.0 million , respectively, as of June 30, 2017 . 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: June 30, 2017 December 31, 2016 Finite-Lived Intangible Assets $ 73,249 $ 251,768 Accumulated Amortization (53,929 ) (116,744 ) Intangible Assets, Net $ 19,320 $ 135,024 Changes in Intangible Assets, Net consists of the following: Six Months Ended June 30, 2017 Balance, Beginning of Period $ 135,024 Amortization Expense (11,418 ) Foreign Exchange 1,347 Other (1) (105,633 ) Balance, End of Period $ 19,320 (1) Represents the removal of intangible assets in connection with the PAAMCO Prisma transaction. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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 June 30, 2017 . KKR is in compliance with its debt covenants in all material respects as of June 30, 2017 . Funding Commitments As of June 30, 2017 , KKR had unfunded commitments consisting of $3,465.9 million to its active private equity and other investment vehicles. In addition to the uncalled commitments to KKR's investment funds, KKR has entered into contractual commitments with respect to (i) the purchase of investments and other assets in its Principal Activities segment, and (ii) underwriting transactions, debt financing, and syndications in KKR's Capital Markets segment. As of June 30, 2017 , these commitments amounted to $152.8 million and $461.3 million , respectively. 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. In the case of purchases of investments or assets in our Principal Activities segment, 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. Contingent Repayment Guarantees The partnership documents governing KKR’s carry-paying funds, including funds relating to private equity, infrastructure, energy, real estate, mezzanine, 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 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 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 June 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 June 30, 2017 fair values. Had the investments in such funds been liquidated at zero value, the clawback obligation would have been $2,078.7 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 KKR’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 June 30, 2017 . Using valuations as of June 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, certain of KKR’s investment funds and KFN have provided certain indemnities relating to environmental and other matters and have provided nonrecourse carve-out guarantees for fraud, willful misconduct and other customary wrongful acts, each in connection with the financing of certain real estate investments that KKR has made. In addition, KKR has also provided credit support to certain of its 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’s derivative transactions, and 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 credit support regarding repayment obligations to third party lenders to certain of its employees, excluding its executive officers, in connection with their personal investments in KKR investment funds and to a strategic partnership regarding the ownership of its business. KKR 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 is currently unknown and KKR's liabilities for these matters would require a claim to be made against KKR in the future. Litigation From time to time, KKR is involved in various legal proceedings, lawsuits and claims incidental to the conduct of KKR’s business. KKR’s business is also subject to extensive regulation, which may result in regulatory proceedings against it. KKR 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. governmental and regulatory agencies, including but not limited to the U.S. Securities and Exchange Commission, or SEC, Department of Justice, state attorney generals, Financial Industry Regulatory Authority, or FINRA, and the U.K. Financial Conduct Authority. Such examinations, inquiries and investigations may result in the commencement of civil, criminal or administrative proceedings against KKR or its personnel. Moreover, in the ordinary course of business, KKR is and can be both the defendant and the plaintiff in numerous lawsuits with respect to acquisitions, bankruptcy, insolvency and other types of proceedings. Such lawsuits may involve claims that adversely affect the value of certain investments owned by KKR’s funds. 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 others (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; 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. 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, based 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’s financial results in any particular period. |
REGULATORY CAPITAL REQUIREMENTS
REGULATORY CAPITAL REQUIREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
REGULATORY CAPITAL REQUIREMENTS | |
REGULATORY CAPITAL REQUIREMENTS | REGULATORY CAPITAL REQUIREMENTS KKR has registered broker-dealer subsidiaries which are subject to the minimum net capital requirements of the SEC 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 or RBI and the Securities and Exchange Board of India or SEBI. All of these entities have continuously operated in excess of their respective minimum regulatory capital requirements. The regulatory capital requirements referred to above may restrict KKR’s ability to withdraw capital from its registered broker-dealer entities. At June 30, 2017 , approximately $144.6 million of cash at KKR’s registered broker-dealer entities may be restricted as to the payment of cash dividends and advances to KKR. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Common Unit Distribution A distribution of $0.17 per KKR & Co. L.P. common unit was announced on July 27, 2017 , and will be paid on August 22, 2017 to common unitholders of record as of the close of business on August 7, 2017 . KKR Holdings will receive its pro rata share of the distribution from the KKR Group Partnerships. Preferred Unit Distributions A distribution of $0.421875 per Series A Preferred Unit has been declared as announced on July 27, 2017 and set aside for payment on September 15, 2017 to holders of record of Series A Preferred Units as of the close of business on September 1, 2017 . A distribution of $0.406250 per Series B Preferred Unit has been declared as announced on July 27, 2017 and set aside for payment on September 15, 2017 to holders of record of Series B Preferred Units as of the close of business on September 1, 2017 . |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of KKR & Co. L.P. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements (referred to hereafter as the “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 was derived from audited consolidated financial statements included in KKR’s Annual Report on Form 10-K for the year ended December 31, 2016 , which include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited consolidated financial statements included in KKR & Co. L.P.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). KKR & Co. L.P. consolidates the financial results of the KKR Group Partnerships and their consolidated subsidiaries, which include the accounts of KKR’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 and certain other entities including CFEs. References in the accompanying financial statements to “principals” are to KKR’s senior employees and non‑employee operating consultants who hold interests in KKR’s business through KKR Holdings. All intercompany transactions and balances have been eliminated. |
Use of Estimates | 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, expenses and investment income (loss) during the reporting periods. Such estimates include but are not limited to the valuation of investments and financial instruments. Actual results could differ from those estimates, and such differences could be material to the financial statements. |
Principles of Consolidation | Principles of Consolidation The types of entities KKR assesses for consolidation include (i) subsidiaries, including management companies, broker-dealers and general partners of investment funds that KKR manages, (ii) entities that have all the attributes 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 depending 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 apply the consolidation guidance under the VIE model. Entities that do not qualify as VIEs 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 performance and the obligation to absorb losses 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 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 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; and (vii) holders of the 7.375% Series A LLC Preferred Shares of 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. Net income (loss) attributable to KKR & Co. L.P. 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 hold 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. |
Investments | 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 changes related to exchange rate movements reflected as a component of Net Gains (Losses) from Investment Activities in the consolidated 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 companies 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 companies 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 from 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 Activities 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 companies 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 | 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 | 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 | Equity Method For certain investments in entities over which KKR exercises significant influence but which do not meet the requirements 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 June 30, 2017, equity method investees for which KKR reports financial results on a quarter lag include Marshall Wace LLP 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 | 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 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 | 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. 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. |
Recently Issued Accounting Pronouncements | 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, and ASU 2016-12. 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 periods beginning after December 15, 2017. Early adoption will be permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within those annual periods. A full retrospective or modified retrospective approach is required. Carried interest is a capital allocation to 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 the adoption of ASU 2014-09, KKR will account for such carried interest as 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) based on the change in KKR’s proportionate claim on the net assets of the investment fund, including performance-based capital allocations, assuming the investment fund was liquidated as of each reporting date pursuant to each investment fund's governing agreements. As carried interest and the related general partner investments are considered to be a single unit of account under KKR’s new accounting policy, the equity method income associated with the general partner interests will be combined with the associated carried interest and reported in a single line within the statement of operations. KKR expects to apply this change in accounting on a full retrospective basis. The pattern and amount of recognition under the new policy is not expected to differ materially from KKR’s existing recognition. As it pertains to incentive fees, 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 expects to adopt the new revenue recognition guidance effective January 1, 2018. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Liabilities (“ASU 2016-01”). The amended guidance (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is currently required to be disclosed for financial instruments measured at fair value; (iii) requires an entity to present separately in other comprehensive income the portion of the total change 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 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amended guidance should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amended guidance related 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 evaluating the impact of this guidance on the financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance requires the recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The guidance retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not changed significantly from previous GAAP. For operating leases, a lessee is required to do 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, including interim periods 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. Early adoption is permitted. KKR is currently evaluating the impact of this guidance on the financial statements. Cash Flow Classification In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amends the guidance on the classification of certain cash receipts and payments 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 relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement 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 on the financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), 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 (“ASU 2017-04”). 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 of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. The ASU also (i) clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment; and (ii) clarifies that an entity should consider income tax effects from any tax deductible goodwill on 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 entities as of January 1, 2017, for annual and any interim impairment tests occurring after January 1, 2017. KKR is currently evaluating the impact of this guidance on the financial statements. Other Income 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 ("ASU 2017-05"). 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 for certain purchased callable debt securities held at a premium. The guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted and the guidance when adopted should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. KKR is currently evaluating the impact of this guidance on the financial statements. |
Share-based Compensation Forfeiture policy | Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8% annually based upon expected turnover by class of recipient. Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to 8% annually based on expected turnover by class of recipient. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of calculation of noncontrolling interests held by KKR Holdings | The following table presents the calculation of noncontrolling interests held by KKR Holdings: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Balance at the beginning of the period $ 4,491,197 $ 3,998,930 $ 4,293,337 $ 4,347,153 Net income (loss) attributable to noncontrolling interests held by KKR Holdings (1) 305,280 73,400 521,712 (198,175 ) Other comprehensive income (loss), net of tax (2) 8,833 (3,998 ) 13,753 (268 ) Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units (3) (104,797 ) (1,598 ) (140,701 ) (30,978 ) Equity based compensation 42,964 9,041 104,057 19,647 Capital contributions 2,913 69 2,950 138 Capital distributions (62,717 ) (57,539 ) (119,354 ) (119,212 ) Transfer of interests under common control (See Note 15 "Equity") — — 7,919 — Balance at the end of the period $ 4,683,673 $ 4,018,305 $ 4,683,673 $ 4,018,305 (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. |
Schedule of net income (loss) attributable to noncontrolling interests held by KKR Holdings | The following table presents net income (loss) attributable to noncontrolling interests held by KKR Holdings: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) $ 868,524 $ 273,231 $ 1,666,418 $ (487,105 ) Less: Net income (loss) attributable to Redeemable Noncontrolling Interests 22,387 1,533 43,320 1,495 Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities 126,870 98,715 419,715 (60,069 ) Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders 8,341 5,693 16,682 5,693 Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. 5,348 (2,178 ) 24,508 (11,563 ) Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings $ 716,274 $ 165,112 $ 1,211,209 $ (445,787 ) Net income (loss) attributable to noncontrolling interests held by KKR Holdings $ 305,280 $ 73,400 $ 521,712 $ (198,175 ) |
Schedule of fees | For the three and six months ended June 30, 2017 and 2016 , respectively, fees and other consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Management Fees $ 177,269 $ 159,569 $ 338,451 $ 315,899 Transaction Fees 156,472 67,452 400,130 164,720 Monitoring Fees 66,586 47,918 103,355 76,021 Fee Credits (48,677 ) (37,152 ) (136,755 ) (59,531 ) Carried Interest 551,003 304,787 886,776 187,831 Incentive Fees 845 4,253 1,118 2,245 Oil and Gas Revenue 17,382 18,225 34,655 31,786 Consulting Fees 10,908 11,705 20,010 20,591 Total Fees and Other $ 931,788 $ 576,757 $ 1,647,740 $ 739,562 |
NET GAINS (LOSSES) FROM INVES29
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of total net gains (losses) from investment activities | The following tables summarize total Net Gains (Losses) from Investment Activities for the three and six months ended June 30, 2017 and 2016, respectively: Three Months Ended Three Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Total Private Equity (1) $ 21,253 $ 291,748 $ 313,001 $ 200,003 $ (237,407 ) $ (37,404 ) Credit and Other (1) (363,791 ) 256,371 (107,420 ) 18,338 (123,115 ) (104,777 ) Investments of Consolidated CFEs (1) (3,777 ) 15,064 11,287 (183,816 ) 287,866 104,050 Real Assets (1) (61,747 ) 170,593 108,846 — 119,365 119,365 Foreign Exchange Forward Contracts and Options (2) 8,082 (184,118 ) (176,036 ) (17,186 ) 34,799 17,613 Securities Sold Short (2) 258,924 9,398 268,322 (16,133 ) (22,553 ) (38,686 ) Other Derivatives (2) (119 ) (706 ) (825 ) (1,876 ) 21,253 19,377 Debt Obligations and Other (3) 39,763 (38,510 ) 1,253 109,441 (179,811 ) (70,370 ) Net Gains (Losses) From Investment $ (101,412 ) $ 519,840 $ 418,428 $ 108,771 $ (99,603 ) $ 9,168 Six Months Ended Six Months Ended Net Realized Net Unrealized Total Net Realized Net Unrealized Total Private Equity (1) $ 128,066 $ 295,036 $ 423,102 $ 197,876 $ (449,768 ) $ (251,892 ) Credit and Other (1) (586,199 ) 704,617 118,418 (22,166 ) (360,165 ) (382,331 ) Investments of Consolidated CFEs (1) (4,880 ) 28,047 23,167 (220,805 ) 507,050 286,245 Real Assets (1) (58,687 ) 177,391 118,704 12,355 (3,773 ) 8,582 Foreign Exchange Forward Contracts and Options (2) 18,068 (242,381 ) (224,313 ) 575 (11,401 ) (10,826 ) Securities Sold Short (2) 505,711 51,668 557,379 (974 ) (39,888 ) (40,862 ) Other Derivatives (2) (5,879 ) (5,553 ) (11,432 ) (18,389 ) 25,609 7,220 Debt Obligations and Other (3) 48,552 (76,701 ) (28,149 ) 117,016 (459,207 ) (342,191 ) Net Gains (Losses) From Investment $ 44,752 $ 932,124 $ 976,876 $ 65,488 $ (791,543 ) $ (726,055 ) (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." |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments [Abstract] | |
Summary of investments | Investments consist of the following: June 30, 2017 December 31, 2016 Private Equity $ 3,847,420 $ 2,915,667 Credit 5,553,692 4,847,936 Investments of Consolidated CFEs 15,286,680 13,950,897 Real Assets 2,457,053 1,807,128 Equity Method 3,536,324 2,728,995 Carried Interest 2,776,470 2,384,177 Other 2,810,128 2,774,965 Total Investments $ 36,267,767 $ 31,409,765 |
Schedule of carried interest | Carried interest allocated to the general partner in respect of performance of investment funds that are not consolidated were as follows: Balance at December 31, 2016 $ 2,384,177 Carried Interest Allocated as a result of Changes in Fund Fair Value 886,776 Cash Proceeds Received (494,483 ) Balance at June 30, 2017 $ 2,776,470 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities at fair value | The following tables summarize the valuation of KKR's assets and liabilities by the fair value hierarchy. Carried Interest and Equity Method Investments for which the fair value option has not been elected have been excluded from the tables below. Assets, at fair value: June 30, 2017 Level I Level II Level III Total Private Equity $ 1,384,889 $ 68,033 $ 2,394,498 $ 3,847,420 Credit — 1,688,622 3,865,070 5,553,692 Investments of Consolidated CFEs — 9,839,430 5,447,250 15,286,680 Real Assets — 33,634 2,423,419 2,457,053 Equity Method — 207,577 571,575 779,152 Other 1,001,303 37,198 1,771,627 2,810,128 Total 2,386,192 11,874,494 16,473,439 30,734,125 Foreign Exchange Contracts and Options — 113,147 — 113,147 Other Derivatives — 7,112 57,354 (1) 64,466 Total Assets $ 2,386,192 $ 11,994,753 $ 16,530,793 $ 30,911,738 (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. 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 Other 994,677 12,715 1,767,573 2,774,965 Total 2,234,785 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 Liabilities, at fair value: June 30, 2017 Level I Level II Level III Total Securities Sold Short $ 583,665 $ — $ — $ 583,665 Foreign Exchange Contracts and Options — 176,400 — 176,400 Unfunded Revolver Commitments — — 16,533 (1) 16,533 Other Derivatives — 28,271 50,400 (2) 78,671 Debt Obligations of Consolidated CFEs — 9,407,372 5,333,203 14,740,575 Total Liabilities $ 583,665 $ 9,612,043 $ 5,400,136 $ 15,595,844 (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 LLP 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. 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 (1) 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 |
Summary of changes in assets and liabilities reported at fair value for which Level III inputs have been used to determine fair value | The following tables summarize changes in investments and debt obligations reported at fair value for which Level III inputs have been used to determine fair value for the three and six months ended June 30, 2017 and 2016, respectively: Three Months Ended June 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 $ 2,001,204 $ 3,903,023 $ 5,426,552 $ 2,045,587 $ 593,227 $ 1,806,381 $ 15,775,974 $ 5,313,570 Transfers Out Due to Deconsolidation of Funds — — — — — — — — Transfers In — — — — — — — — Transfers Out — — — — — — — — Asset Purchases / Debt Issuances 394,861 347,036 — 354,950 1,576 208,385 1,306,808 — Sales / Paydowns (149,854 ) (549,466 ) (8,995 ) (85,964 ) (8,300 ) (134,608 ) (937,187 ) — Settlements — 30,200 — — — — 30,200 (8,995 ) Net Realized Gains (Losses) 689 (93,386 ) — (61,747 ) 626 (3,911 ) (157,729 ) — Net Unrealized Gains (Losses) 147,598 224,757 29,693 170,593 (15,554 ) (104,620 ) 452,467 28,628 Change in Other Comprehensive Income — 2,906 — — — — 2,906 — Balance, End 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 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 $ 147,598 $ 127,361 $ 29,693 $ 100,146 $ (15,554 ) $ (104,620 ) $ 284,624 $ 28,628 Three Months Ended June 30, 2016 Level III Investments Level III Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method Other Total Debt Obligations of Consolidated CFEs Balance, Beg. of Period $ 1,313,701 $ 4,256,576 $ 5,550,482 $ 1,426,693 $ 455,945 $ 504,326 $ 13,507,723 $ 5,447,158 Transfers Out Due to Deconsolidation of Funds (49,350 ) (1,643,833 ) — — — 1,041,980 (651,203 ) — Transfers In — 41,303 — 58,537 — — 99,840 — Transfers Out (96,640 ) (760 ) — — — — (97,400 ) — Asset Purchases / Debt Issuances 18,535 210,044 — 229,252 10,761 169,744 638,336 — Sales / Paydowns — (193,970 ) (7,639 ) (14,138 ) (2,826 ) (75,290 ) (293,863 ) — Settlements — 48,931 — — — — 48,931 (7,639 ) Net Realized Gains (Losses) — (19,986 ) — — — 17,198 (2,788 ) — Net Unrealized Gains (Losses) 45,622 (20,429 ) 72,499 119,365 13,339 (162,261 ) 68,135 66,762 Change in Other Comprehensive Income — (5,697 ) — — — — (5,697 ) — Balance, End 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 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 $ 45,622 $ (20,429 ) $ 72,499 $ 119,365 $ 13,339 $ (186,011 ) $ 44,385 $ 66,762 Six Months Ended June 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 — — — — — (1,496 ) (1,496 ) — Asset Purchases / Debt Issuances 824,505 943,898 — 605,228 11,132 223,504 2,608,267 — Sales / Paydowns (172,483 ) (718,324 ) (17,935 ) (107,641 ) (20,978 ) (142,736 ) (1,180,097 ) — Settlements — 19,125 — — — — 19,125 (17,935 ) Net Realized Gains (Losses) 689 (102,629 ) — (58,687 ) 626 (23,441 ) (183,442 ) — Net Unrealized Gains (Losses) 182,228 504,796 58,965 177,391 10,273 (51,777 ) 881,876 56,397 Change in Other Comprehensive Income — 23,805 — — — — 23,805 — Balance, End 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 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 $ 182,228 $ 407,400 $ 58,965 $ 106,944 $ 10,273 $ (51,777 ) $ 714,033 $ 56,397 Six Months Ended June 30, 2016 Level III Investments Level III 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 — 43,750 4,343,829 — — — 4,387,579 4,272,081 Transfers Out (104,000 ) (760 ) — — (311,270 ) — (416,030 ) — Asset Purchases / Debt Issuances 254,076 554,099 1,026,801 453,771 18,992 203,670 2,511,409 990,450 Sales / Paydowns — (480,074 ) (14,917 ) (72,757 ) (60,386 ) (130,818 ) (758,952 ) — Settlements — 50,178 — — — — 50,178 (14,917 ) Net Realized Gains (Losses) — (8,595 ) — 12,355 (1,991 ) (7,415 ) (5,646 ) — Net Unrealized Gains (Losses) 34,352 (142,137 ) 259,629 7,058 (59,732 ) (166,115 ) (66,945 ) 258,667 Change in Other Comprehensive Income — (2,456 ) — — — — (2,456 ) — Balance, End 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 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 $ 34,352 $ (142,137 ) $ 259,629 $ 7,058 $ (59,732 ) $ (189,865 ) $ (90,695 ) $ 258,667 |
Summary of fair value transfers between fair value levels | The following table summarizes the fair value transfers between fair value levels for the three and six months ended June 30, 2017 and 2016: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Assets, at fair value: Transfers from Level I to Level II (1) $ — $ 73,600 $ — $ 73,600 Transfers from Level II to Level III (2) $ — $ 99,840 $ — $ 4,387,579 Transfers from Level III to Level II (3) $ — $ 760 $ — $ 312,030 Transfers from Level III to Level I (4) $ — $ 96,640 $ 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 experienced an insignificant level of market activity during the period and thus were valued in the absence of observable inputs. (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 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. |
Summary of valuation methodologies used for assets, measured at fair value and categorized within Level III | The following table presents additional information about valuation methodologies and significant unobservable inputs used for investments and debt obligations that are measured at fair value and categorized within Level III as of June 30, 2017 : Fair Value June 30, 2017 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Private Equity $ 2,394,498 Private Equity $ 1,131,550 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.2% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 48.1% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 49.3% 25.0% - 100.0% (5) Weight Ascribed to Transaction Price 2.6% 0.0% - 50.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 13.5x 5.9x - 26.0x Increase Enterprise Value/Forward EBITDA Multiple 12.0x 5.7x - 25.7x Increase Discounted cash flow Weighted Average Cost of Capital 9.8% 6.8% - 19.3% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 6.0x - 13.4x Increase Growth Equity $ 1,262,948 Inputs to market comparables, discounted cash flow and milestones Illiquidity Discount 13.8% 10.0% - 20.0% Decrease Weight Ascribed to Market Comparables 31.3% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 9.9% 0.0% - 75.0% (5) Weight Ascribed to Milestones 58.8% 0.0% - 100.0% (6) Scenario Weighting Base 53.2% 30.0% - 80.0% Increase Downside 22.7% 10.0% - 40.0% Decrease Upside 24.1% 10.0% - 40.0% Increase Credit $ 3,865,070 Yield Analysis Yield 11.3% 3.4% - 37.5% Decrease Net Leverage 5.9x 0.3x - 19.3x Decrease EBITDA Multiple 10.9x 0.1x - 18.4 Increase Investments of Consolidated CFEs $ 5,447,250 (9) Debt Obligations of Consolidated CFEs $ 5,333,203 Discounted cash flow Yield 5.4% 1.9% - 27.1% Decrease Real Assets $ 2,423,419 (10) Energy $ 1,267,241 Discounted cash flow Weighted Average Cost of Capital 10.7% 9.6% - 16.9% Decrease Average Price Per BOE (8) $36.05 $30.34 - $39.39 Increase Real Estate $ 952,096 Inputs to direct income capitalization and discounted cash flow Weight Ascribed to Direct Income Capitalization 34.2% 0.0% - 75.0% (7) Weight Ascribed to Discounted Cash Flow 65.8% 25.0% - 100.0% (5) Direct income capitalization Current Capitalization Rate 5.8% 2.9% - 12.0% Decrease Discounted cash flow Unlevered Discount Rate 9.1% 4.5% - 20.0% Decrease Other $ 1,771,627 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 10.6% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 27.2% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 46.8% 0.0% - 100.0% (5) Weight Ascribed to Transaction Price 26.0% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 11.6x 0.1x - 17.7x Increase Enterprise Value/Forward EBITDA Multiple 9.9x 0.6x - 13.7x Increase Discounted cash flow Weighted Average Cost of Capital 11.1% 5.6% - 16.5% Decrease Enterprise Value/LTM EBITDA Exit Multiple 6.9x 2.2x - 9.0x 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. 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. (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 and transaction price. (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. (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, 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 85% liquids and 15% natural gas. (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 $204.1 million that was valued using a discounted cash flow analysis. The significant inputs used included the weighted average cost of capital 7.9% and the enterprise value/LTM EBITDA Exit Multiple 12.0 x. |
FAIR VALUE OPTION (Tables)
FAIR VALUE OPTION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of disclosures of financial instruments for which the fair value option was elected | The following table summarizes the financial instruments for which the fair value option has been elected: June 30, 2017 December 31, 2016 Assets Private Equity $ 576,936 $ 96,721 Credit 2,804,341 1,392,525 Investments of Consolidated CFEs 15,286,680 13,950,897 Real Assets 331,410 247,376 Equity Method 779,152 791,418 Other 387,040 240,343 Total $ 20,165,559 $ 16,719,280 Liabilities Debt Obligations of Consolidated CFEs $ 14,740,575 $ 13,858,288 Total $ 14,740,575 $ 13,858,288 The following tables present the realized and net change in unrealized gains (losses) on financial instruments on which the fair value option was elected for the three and six months ended, June 30, 2017 and 2016, respectively: Three Months Ended Three Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 689 $ 40,133 $ 40,822 $ — $ 846 $ 846 Credit (169,500 ) 28,968 (140,532 ) 10,213 3,603 13,816 Investments of Consolidated CFEs (3,777 ) 15,064 11,287 (183,816 ) 287,866 104,050 Real Assets 30 40,822 40,852 — 5,355 5,355 Equity Method 626 (23,408 ) (22,782 ) — (7,804 ) (7,804 ) Other (3,346 ) (4,471 ) (7,817 ) — (8,495 ) (8,495 ) Total $ (175,278 ) $ 97,108 $ (78,170 ) $ (173,603 ) $ 281,371 $ 107,768 Liabilities Debt Obligations of Consolidated CFEs 35,621 (43,915 ) (8,294 ) 102,542 (179,707 ) (77,165 ) Total $ 35,621 $ (43,915 ) $ (8,294 ) $ 102,542 $ (179,707 ) $ (77,165 ) Six Months Ended Six Months Ended Net Realized Gains (Losses) Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 689 $ 40,495 $ 41,184 $ — $ (2,298 ) $ (2,298 ) Credit (408,598 ) 84,838 (323,760 ) 5,017 (42,038 ) (37,021 ) Investments of Consolidated CFEs (4,880 ) 28,047 23,167 (220,805 ) 507,050 286,245 Real Assets (186 ) 47,610 47,424 — 10,595 10,595 Equity Method 626 (3,046 ) (2,420 ) (1,991 ) (101,097 ) (103,088 ) Other (22,145 ) 12,810 (9,335 ) (1,816 ) (18,997 ) (20,813 ) Total $ (434,494 ) $ 210,754 $ (223,740 ) $ (219,595 ) $ 353,215 $ 133,620 Liabilities Debt Obligations of Consolidated CFEs 40,446 (54,973 ) (14,527 ) 102,542 (447,163 ) (344,621 ) Total $ 40,446 $ (54,973 ) $ (14,527 ) $ 102,542 $ (447,163 ) $ (344,621 ) |
NET INCOME (LOSS) ATTRIBUTABL33
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted Net Income (Loss) attributable to KKR & Co. earnings per common unit | For the three and six months ended June 30, 2017 and 2016 , basic and diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit were calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 405,646 $ 93,890 $ 664,989 $ (236,049 ) Basic Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 466,170,025 448,221,538 459,967,395 449,241,840 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic $ 0.87 $ 0.21 $ 1.45 $ (0.53 ) Diluted Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 466,170,025 448,221,538 459,967,395 449,241,840 Weighted Average Unvested Common Units and Other Exchangeable Securities 35,007,398 33,588,074 38,975,899 — Weighted Average Common Units Outstanding - Diluted 501,177,423 481,809,612 498,943,294 449,241,840 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted $ 0.81 $ 0.19 $ 1.33 $ (0.53 ) |
Schedule of KKR Holdings units excluded from the calculation of diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit | Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Weighted Average KKR Holdings Units Outstanding 346,473,324 358,728,334 349,513,066 359,522,981 |
OTHER ASSETS AND ACCOUNTS PAY34
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of other assets | Other Assets consist of the following: June 30, 2017 December 31, 2016 Unsettled Investment Sales (1) $ 133,493 $ 144,600 Receivables 333,976 49,279 Due from Broker (2) 497,265 1,084,602 Oil & Gas Assets, net (3) 264,256 276,694 Deferred Tax Assets, net 277,317 286,948 Interest Receivable 201,157 158,511 Fixed Assets, net (4) 322,968 283,262 Foreign Exchange Contracts and Options (5) 113,147 240,627 Intangible Assets, net (6) 19,320 135,024 Goodwill (6) 83,500 89,000 Derivative Assets 64,466 81,593 Deferred Transaction Related Expenses 41,571 17,688 Prepaid Taxes 45,479 46,996 Prepaid Expenses 15,188 17,761 Deferred Financing Costs 10,318 10,507 Other 70,108 73,773 Total $ 2,493,529 $ 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 $149,694 and $141,911 as of June 30, 2017 and December 31, 2016 , respectively. Depreciation and amortization expense of $3,867 and $3,988 for the three months ended June 30, 2017 and 2016, respectively, and $8,064 and $7,904 for the six months ended June 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.” |
Schedule of accounts payable, accrued expenses and other liabilities | Accounts Payable, Accrued Expenses and Other Liabilities consist of the following: June 30, 2017 December 31, 2016 Amounts Payable to Carry Pool (1) $ 1,152,015 $ 987,994 Unsettled Investment Purchases (2) 913,528 722,076 Securities Sold Short (3) 583,665 647,234 Derivative Liabilities 78,671 100,015 Accrued Compensation and Benefits 181,255 20,764 Interest Payable 148,847 114,894 Foreign Exchange Contracts and Options (4) 176,400 75,218 Accounts Payable and Accrued Expenses 128,341 114,854 Deferred Rent 20,053 19,144 Taxes Payable 25,518 12,514 Redemptions Payable — 4,021 Due to Broker (5) — 83,206 Other Liabilities 99,836 79,326 Total $ 3,508,129 $ 2,981,260 (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. |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of maximum exposure to loss, before allocations to the carry pool, if any, for those VIEs in which entity is determined not to be the primary beneficiary but in which it has a variable interest | As of June 30, 2017 and December 31, 2016 , 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: June 30, 2017 December 31, 2016 Investments $ 4,230,381 $ 3,632,162 Due from (to) Affiliates, net 42,416 (60,604 ) Maximum Exposure to Loss $ 4,272,797 $ 3,571,558 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | KKR’s borrowings consisted of the following: June 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 Agreement 488,256 — — 500,000 — — KCM Short-Term Credit Agreement 750,000 — — — — — Notes Issued: KKR Issued 6.375% Notes Due 2020 (1) — 498,097 560,675 (10) — 497,804 562,960 (10) KKR Issued 5.500% Notes Due 2043 (2) — 491,327 554,950 (10) — 491,158 502,800 (10) KKR Issued 5.125% Notes Due 2044 (3) — 990,192 1,058,750 (10) — 990,009 955,240 (10) KFN Issued 5.500% Notes Due 2032 (4) — 367,728 378,417 — — — KFN Issued 7.500% Notes Due 2042 (5) — — — — 123,008 116,699 (11) KFN Issued Junior Subordinated Notes (6) — 235,330 201,365 — 250,154 210,084 Other Consolidated Debt Obligations: Fund Financing Facilities and Other (7) 2,643,471 2,102,004 2,102,004 (12) 2,039,532 2,333,654 2,333,654 (12) CLO Senior Secured Notes (8) — 9,132,461 9,132,461 — 8,279,812 8,279,812 CLO Subordinated Notes (8) — 274,911 274,911 — 283,735 283,735 CMBS Debt Obligations (9) — 5,333,203 5,333,203 — 5,294,741 5,294,741 $ 4,881,727 $ 19,425,253 $ 19,596,736 $ 3,539,532 $ 18,544,075 $ 18,539,725 (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 $1.2 million and $1.4 million as of June 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 June 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 $8.5 million and $8.6 million as of June 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 $4.7 million as of June 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 3.6% and the weighted average years to maturity is 19.5 years as of June 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 2.6% and 2.4% as of June 30, 2017 and December 31, 2016 , respectively. In addition, the weighted average years to maturity is 4.0 years and 2.4 years as of June 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. |
Schedule of debt obligations of consolidated CLOs | As of June 30, 2017 , debt obligations of consolidated CFEs consisted of the following: Borrowing Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity in Years Senior Secured Notes of Consolidated CLOs $ 9,132,461 2.7 % 11.2 Subordinated Notes of Consolidated CLOs 274,911 (1) 11.4 Debt Obligations of Consolidated CMBS Vehicles 5,333,203 4.5 % 31.5 $ 14,740,575 (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. |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of expense associated with equity based compensation | The following table summarizes the expense associated with equity based compensation for the three and six months ended June 30, 2017 and 2016 , respectively. Three Months Ended June 30, Six Months Ended 2017 2016 2017 2016 Equity Incentive Plan Units $ 44,976 $ 48,026 $ 94,919 $ 97,987 KKR Holdings Principal Awards 27,268 7,165 72,247 13,713 Other Exchangeable Securities — 3,590 — 6,846 Discretionary Compensation 15,696 1,876 31,810 5,934 Total $ 87,940 $ 60,657 $ 198,976 $ 124,480 |
Schedule of unrecognized expense of equity incentive plan awards expected to be recognized | As of June 30, 2017 , there was approximately $304.3 million of estimated unrecognized expense related to unvested awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2017 $ 83.1 2018 123.1 2019 72.3 2020 21.8 2021 3.7 2022 0.3 Total $ 304.3 |
Schedule of awards granted under equity incentive plan | A summary of the status of unvested awards granted under the Equity Incentive Plan from January 1, 2017 through June 30, 2017 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2017 37,498,333 $ 13.85 Granted 2,512,331 15.21 Vested (8,321,851 ) 14.80 Forfeited (1,244,074 ) 13.72 Balance, June 30, 2017 30,444,739 $ 13.71 |
Schedule of remaining vesting tranches of awards granted under the equity incentive plan | A summary of the remaining vesting tranches of awards granted under the Equity Incentive Plan is presented below: Vesting Date Units October 1, 2017 3,700,493 April 1, 2018 10,015,163 October 1, 2018 3,148,174 April 1, 2019 6,842,517 October 1, 2019 1,736,871 April 1, 2020 3,683,049 October 1, 2020 519,844 April 1, 2021 593,544 October 1, 2021 120,000 April 1, 2022 85,084 30,444,739 |
Schedule of unrecognized expense of unvested market condition awards expected to be recognized | As of June 30, 2017 , there was approximately $235.5 million of estimated unrecognized expense related to unvested KKR Holdings awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2017 $ 36.5 2018 66.2 2019 60.1 2020 54.9 2021 17.8 Total $ 235.5 |
Schedule of holding awards granted | A summary of the status of unvested awards granted under the KKR Holdings Plan from January 1, 2017 through June 30, 2017 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2017 28,245,886 $ 12.10 Granted — — Vested (5,968,939 ) 13.97 Forfeited (377,807 ) 11.61 Balance, June 30, 2017 21,899,140 $ 11.60 |
Schedule of remaining vesting tranches of holding awards granted | A summary of the remaining vesting tranches of awards granted under the KKR Holdings Plan is presented below: Vesting Date Units October 1, 2017 93,486 April 1, 2018 824,999 May 1, 2018 5,110,000 April 1, 2019 349,143 May 1, 2019 5,110,000 April 1, 2020 191,512 May 1, 2020 5,110,000 May 1, 2021 5,110,000 21,899,140 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of due from and to affiliates | Due from Affiliates consists of: June 30, 2017 December 31, 2016 Amounts due from portfolio companies $ 90,439 $ 66,940 Amounts due from unconsolidated investment funds 296,986 170,219 Amounts due from related entities 7,292 13,293 Due from Affiliates $ 394,717 $ 250,452 Due to Affiliates consists of: June 30, 2017 December 31, 2016 Amounts due to KKR Holdings in connection with the tax receivable agreement $ 137,770 $ 128,091 Amounts due to unconsolidated investment funds 254,570 230,823 Amounts due to related entities — 565 Due to Affiliates $ 392,340 $ 359,479 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial data of the entity's reportable segments | The following tables present the financial data for KKR’s reportable segments: As of and for the Three Months Ended June 30, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 142,253 $ 87,316 $ — $ — $ 229,569 Monitoring Fees 30,510 — — — 30,510 Transaction Fees 37,252 25,515 93,698 — 156,465 Fee Credits (31,750 ) (19,634 ) — — (51,384 ) Total Management, Monitoring and Transaction Fees, Net 178,265 93,197 93,698 — 365,160 Performance Income (Loss) Realized Incentive Fees — 2,624 — — 2,624 Realized Carried Interest 264,668 — — — 264,668 Unrealized Carried Interest 279,010 17,709 — — 296,719 Total Performance Income (Loss) 543,678 20,333 — — 564,011 Investment Income (Loss) Net Realized Gains (Losses) — — — 7,180 7,180 Net Unrealized Gains (Losses) — — — 307,977 307,977 Total Realized and Unrealized — — — 315,157 315,157 Interest Income and Dividends — — — 67,836 67,836 Interest Expense — — — (47,026 ) (47,026 ) Net Interest and Dividends — — — 20,810 20,810 Total Investment Income (Loss) — — — 335,967 335,967 Total Segment Revenues 721,943 113,530 93,698 335,967 1,265,138 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 60,453 22,950 17,568 34,551 135,522 Realized Performance Income Compensation 110,867 1,050 — — 111,917 Unrealized Performance Income Compensation 112,690 7,084 — — 119,774 Total Compensation and Benefits 284,010 31,084 17,568 34,551 367,213 Occupancy and Related Charges 7,530 1,749 628 3,500 13,407 Other Operating Expenses 27,992 8,234 3,699 13,144 53,069 Total Segment Expenses 319,532 41,067 21,895 51,195 433,689 Income (Loss) attributable to noncontrolling interests — — 1,180 — 1,180 Economic Net Income (Loss) $ 402,411 $ 72,463 $ 70,623 $ 284,772 $ 830,269 Total Assets $ 2,032,830 $ 1,252,887 $ 517,438 $ 11,197,514 $ 15,000,669 As of and for the Three Months Ended June 30, 2016 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 118,783 $ 84,834 $ — $ — $ 203,617 Monitoring Fees 28,998 — — — 28,998 Transaction Fees 23,400 5,888 39,276 — 68,564 Fee Credits (33,319 ) (5,754 ) — — (39,073 ) Total Management, Monitoring and Transaction Fees, Net 137,862 84,968 39,276 — 262,106 Performance Income (Loss) Realized Incentive Fees — 4,645 — — 4,645 Realized Carried Interest 305,275 — — — 305,275 Unrealized Carried Interest 9,974 8,724 — — 18,698 Total Performance Income (Loss) 315,249 13,369 — — 328,618 Investment Income (Loss) Net Realized Gains (Losses) — — — 224,699 224,699 Net Unrealized Gains (Losses) — — — (297,448 ) (297,448 ) Total Realized and Unrealized — — — (72,749 ) (72,749 ) Interest Income and Dividends — — — 74,451 74,451 Interest Expense — — — (48,447 ) (48,447 ) Net Interest and Dividends — — — 26,004 26,004 Total Investment Income (Loss) — — — (46,745 ) (46,745 ) Total Segment Revenues 453,111 98,337 39,276 (46,745 ) 543,979 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 45,675 20,117 7,403 23,695 96,890 Realized Performance Income Compensation 122,110 1,858 — — 123,968 Unrealized Performance Income Compensation 5,035 3,490 — — 8,525 Total Compensation and Benefits 172,820 25,465 7,403 23,695 229,383 Occupancy and Related Charges 9,039 2,007 943 3,670 15,659 Other Operating Expenses 26,009 9,930 3,222 10,372 49,533 Total Segment Expenses 207,868 37,402 11,568 37,737 294,575 Income (Loss) attributable to noncontrolling interests — — 575 — 575 Economic Net Income (Loss) $ 245,243 $ 60,935 $ 27,133 $ (84,482 ) $ 248,829 Total Assets $ 1,792,584 $ 1,165,388 $ 321,000 $ 9,744,199 $ 13,023,171 As of and for the Six Months Ended June 30, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 265,765 $ 172,088 $ — $ — $ 437,853 Monitoring Fees 43,730 — — — 43,730 Transaction Fees 155,134 29,571 214,795 — 399,500 Fee Credits (117,400 ) (23,001 ) — — (140,401 ) Total Management, Monitoring and Transaction Fees, Net 347,229 178,658 214,795 — 740,682 Performance Income (Loss) Realized Incentive Fees — 4,310 — — 4,310 Realized Carried Interest 470,872 — — — 470,872 Unrealized Carried Interest 402,516 34,829 — — 437,345 Total Performance Income (Loss) 873,388 39,139 — — 912,527 Investment Income (Loss) Net Realized Gains (Losses) — — — 86,631 86,631 Net Unrealized Gains (Losses) — — — 512,013 512,013 Total Realized and Unrealized — — — 598,644 598,644 Interest Income and Dividends — — — 124,718 124,718 Interest Expense — — — (88,735 ) (88,735 ) Net Interest and Dividends — — — 35,983 35,983 Total Investment Income (Loss) — — — 634,627 634,627 Total Segment Revenues 1,220,617 217,797 214,795 634,627 2,287,836 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 120,461 42,734 40,129 71,633 274,957 Realized Performance Income Compensation 198,260 1,724 — — 199,984 Unrealized Performance Income Compensation 163,056 13,932 — — 176,988 Total Compensation and Benefits 481,777 58,390 40,129 71,633 651,929 Occupancy and Related Charges 15,637 3,605 1,292 7,242 27,776 Other Operating Expenses 54,879 16,572 9,027 26,089 106,567 Total Segment Expenses 552,293 78,567 50,448 104,964 786,272 Income (Loss) attributable to noncontrolling interests — — 2,764 — 2,764 Economic Net Income (Loss) $ 668,324 $ 139,230 $ 161,583 $ 529,663 $ 1,498,800 Total Assets $ 2,032,830 $ 1,252,887 $ 517,438 $ 11,197,514 $ 15,000,669 As of and for the Six Months Ended June 30, 2016 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 236,581 $ 161,636 $ — $ — $ 398,217 Monitoring Fees 41,035 — — — 41,035 Transaction Fees 60,798 7,020 96,831 — 164,649 Fee Credits (55,915 ) (5,965 ) — — (61,880 ) Total Management, Monitoring and Transaction Fees, Net 282,499 162,691 96,831 — 542,021 Performance Income (Loss) Realized Incentive Fees — 6,238 — — 6,238 Realized Carried Interest 398,725 3,838 — — 402,563 Unrealized Carried Interest (184,725 ) (20,382 ) — — (205,107 ) Total Performance Income (Loss) 214,000 (10,306 ) — — 203,694 Investment Income (Loss) Net Realized Gains (Losses) — — — 200,516 200,516 Net Unrealized Gains (Losses) — — — (862,439 ) (862,439 ) Total Realized and Unrealized — — — (661,923 ) (661,923 ) Interest Income and Dividends — — — 182,571 182,571 Interest Expense — — — (96,991 ) (96,991 ) Net Interest and Dividends — — — 85,580 85,580 Total Investment Income (Loss) — — — (576,343 ) (576,343 ) Total Segment Revenues 496,499 152,385 96,831 (576,343 ) 169,372 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 94,642 39,171 15,571 48,405 197,789 Realized Performance Income Compensation 159,490 4,030 — — 163,520 Unrealized Performance Income Compensation (69,965 ) (8,152 ) — — (78,117 ) Total Compensation and Benefits 184,167 35,049 15,571 48,405 283,192 Occupancy and Related Charges 17,964 4,682 1,571 7,392 31,609 Other Operating Expenses 63,135 19,208 7,318 21,758 111,419 Total Segment Expenses 265,266 58,939 24,460 77,555 426,220 Income (Loss) attributable to noncontrolling interests — — 1,242 — 1,242 Economic Net Income (Loss) $ 231,233 $ 93,446 $ 71,129 $ (653,898 ) $ (258,090 ) Total Assets $ 1,792,584 $ 1,165,388 $ 321,000 $ 9,744,199 $ 13,023,171 |
Schedule of reconciliation of financial information from total reportable segments to the most directly comparable financial measures calculated and presented in accordance with GAAP | The following tables reconcile KKR’s total reportable segments to the most directly comparable financial measures calculated and presented in accordance with GAAP: Fees and Other Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Total Segment Revenues $ 1,265,138 $ 543,979 $ 2,287,836 $ 169,372 Management fees relating to consolidated funds and placement fees (52,300 ) (44,048 ) (99,402 ) (82,318 ) Fee credits relating to consolidated funds 2,707 1,921 3,646 2,349 Net realized and unrealized carried interest - consolidated funds (10,384 ) (19,186 ) (21,441 ) (9,625 ) Total investment income (loss) (335,967 ) 46,745 (634,627 ) 576,343 Revenue earned by oil & gas producing entities 17,382 18,225 34,655 31,786 Reimbursable expenses 36,076 18,638 59,625 34,519 Other 9,136 10,483 17,448 17,136 Fees and Other $ 931,788 $ 576,757 $ 1,647,740 $ 739,562 Expenses Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Total Segment Expenses $ 433,689 $ 294,575 $ 786,272 $ 426,220 Equity based compensation 87,940 60,657 198,976 124,480 Reimbursable expenses and placement fees 58,860 30,525 94,983 54,632 Operating expenses relating to consolidated funds, CFEs and other entities 21,229 21,281 34,659 64,952 Expenses incurred by oil & gas producing entities 12,924 20,392 24,101 38,218 Intangible amortization 5,062 (3,865 ) 11,428 13,528 Other 10,024 (347 ) 19,323 9,511 Total Expenses $ 629,728 $ 423,218 $ 1,169,742 $ 731,541 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Economic Net Income (Loss) $ 830,269 $ 248,829 $ 1,498,800 $ (258,090 ) Income tax (18,538 ) (6,045 ) (59,080 ) (7,935 ) Amortization of intangibles, placement fees and other, net (1) (4,524 ) (9,144 ) (37,361 ) (38,026 ) Equity based compensation (87,940 ) (60,657 ) (198,976 ) (124,480 ) Net income (loss) attributable to noncontrolling interests held by KKR Holdings (305,280 ) (73,400 ) (521,712 ) 198,175 Preferred Unit Distributions (8,341 ) (5,693 ) (16,682 ) (5,693 ) Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 405,646 $ 93,890 $ 664,989 $ (236,049 ) (1) Other primarily represents the statement of operations impact 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" for 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. |
Reconciliation of assets from segment to consolidated | Assets As of June 30, 2017 2016 Total Segment Assets $ 15,000,669 $ 13,023,171 Impact of Consolidation of Investment Vehicles and Other Entities (1) 26,412,562 23,086,165 Carry Pool Reclassification to Liabilities 1,152,015 1,107,578 Impact of KKR Management Holdings Corp. 302,835 289,957 Total Assets $ 42,868,081 $ 37,506,871 (1) Includes accounting basis difference for oil & natural gas properties of $12,757 and $39,430 as of June 30, 2017 and 2016, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Intangible Assets, Net consists of the following: June 30, 2017 December 31, 2016 Finite-Lived Intangible Assets $ 73,249 $ 251,768 Accumulated Amortization (53,929 ) (116,744 ) Intangible Assets, Net $ 19,320 $ 135,024 |
Schedule of changes in intangible assets, net | Changes in Intangible Assets, Net consists of the following: Six Months Ended June 30, 2017 Balance, Beginning of Period $ 135,024 Amortization Expense (11,418 ) Foreign Exchange 1,347 Other (1) (105,633 ) Balance, End of Period $ 19,320 (1) Represents the removal of intangible assets in connection with the PAAMCO Prisma transaction. |
ORGANIZATION - Narrative (Detai
ORGANIZATION - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 01, 2017 | Feb. 06, 2017 | |
Group Holdings | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Percentage owned by KKR Holdings L.P. | 99.00% | |||
Management Holdings Corp | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Percentage of economic interest held by parent entity | 1.00% | |||
KKR Group Partnerships | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Percentage owned by KKR Holdings L.P. | 42.20% | 44.60% | ||
Percentage of economic interest held by parent entity | 57.80% | |||
PAAMCO Prisma | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Assets contributed to combined entity | $ 114.1 | |||
Ownership stake in combined entity to be retained | 39.90% | |||
Fair value of payments to be received | $ 131.6 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Redeemable Noncontrolling Interests (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Expiration period of redeemable noncontrolling interests, low end of range | 1 year |
Expiration period of redeemable noncontrolling interests, high end of range | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Noncontrolling Interests in Consolidated Entities (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Percentage of carried interest received by general partners (up to) | 1.00% | |
Percentage of other profits (losses) received by general partners | 1.00% | |
Series A LLC Preferred Stock | KFN | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Preferred units dividend rate (as a percent) | 7.375% |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Noncontrolling Interests Held by KKR Holdings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Calculation of Noncontrolling Interest [Abstract] | ||||
Capital contributions | $ 1,759,873 | $ 1,454,761 | ||
Capital distributions | (968,968) | (968,258) | ||
Transfer of interests under common control (See Note 15 Equity) | 0 | |||
Net Income (Loss) Attributable to Noncontrolling Interest [Abstract] | ||||
Net income (loss) | $ 868,524 | $ 273,231 | 1,666,418 | (487,105) |
Less: Net income (loss) attributable to Redeemable Noncontrolling Interests | 22,387 | 1,533 | 43,320 | 1,495 |
Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities | 126,870 | 98,715 | 419,715 | (60,069) |
Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders | 8,341 | 5,693 | 16,682 | 5,693 |
Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. | 5,348 | (2,178) | 24,508 | (11,563) |
Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings | 716,274 | 165,112 | 1,211,209 | (445,787) |
Noncontrolling Interests held by KKR Holdings | ||||
Calculation of Noncontrolling Interest [Abstract] | ||||
Balance at the beginning of the period | 4,491,197 | 3,998,930 | 4,293,337 | 4,347,153 |
Net income (loss) attributable to noncontrolling interests held by KKR Holdings | 305,280 | 73,400 | 521,712 | (198,175) |
Other comprehensive income (loss), net of tax | 8,833 | (3,998) | 13,753 | (268) |
Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units | (104,797) | (1,598) | (140,701) | (30,978) |
Equity based compensation | 42,964 | 9,041 | 104,057 | 19,647 |
Capital contributions | 2,913 | 69 | 2,950 | 138 |
Capital distributions | (62,717) | (57,539) | (119,354) | (119,212) |
Transfer of interests under common control (See Note 15 Equity) | 0 | 0 | 7,919 | 0 |
Balance at the end of the period | 4,683,673 | 4,018,305 | 4,683,673 | 4,018,305 |
Net Income (Loss) Attributable to Noncontrolling Interest [Abstract] | ||||
Net income (loss) attributable to noncontrolling interests held by KKR Holdings | $ 305,280 | $ 73,400 | $ 521,712 | $ (198,175) |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurement (Details) | 6 Months Ended |
Jun. 30, 2017methodology | |
Accounting Policies [Abstract] | |
Number of valuation methodologies used to determine fair value of investments | 2 |
Maximum | |
Fair Value Measurements | |
Weighting percentage of methodology used to determine fair value of investments (up to 100%) | 100.00% |
Minimum | |
Fair Value Measurements | |
Illiquidity discount (as a percent) | 5.00% |
Private markets investments valuation | Level III | Maximum | |
Fair Value Measurements | |
Percentage of fair value of investments for which valuations reviewed quarterly (less than) | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fees and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Management Fees | $ 177,269 | $ 159,569 | $ 338,451 | $ 315,899 |
Transaction Fees | 156,472 | 67,452 | 400,130 | 164,720 |
Monitoring Fees | 66,586 | 47,918 | 103,355 | 76,021 |
Fee Credits | (48,677) | (37,152) | (136,755) | (59,531) |
Carried Interest | 551,003 | 304,787 | 886,776 | 187,831 |
Incentive Fees | 845 | 4,253 | 1,118 | 2,245 |
Oil and Gas Revenue | 17,382 | 18,225 | 34,655 | 31,786 |
Consulting Fees | 10,908 | 11,705 | 20,010 | 20,591 |
Total Fees and Other | 931,788 | 576,757 | $ 1,647,740 | 739,562 |
Fees and Commissions [Line Items] | ||||
Incentive fee, low end of range (as a percent) | 5.00% | |||
Incentive fee, high end of range (as a percent) | 20.00% | |||
Measurement period (in years) | 1 year | |||
Reportable segments | ||||
Accounting Policies [Abstract] | ||||
Fee Credits | (51,384) | (39,073) | $ (140,401) | (61,880) |
Incentive Fees | 264,668 | 305,275 | 470,872 | 402,563 |
Total Fees and Other | $ 365,160 | $ 262,106 | $ 740,682 | $ 542,021 |
Minimum | Reportable segments | ||||
Fees and Commissions [Line Items] | ||||
Fee Credits as a percentage of monitoring and transaction fees net of fund-related expenses | 80.00% | |||
Maximum | Reportable segments | ||||
Fees and Commissions [Line Items] | ||||
Fee Credits as a percentage of monitoring and transaction fees net of fund-related expenses | 100.00% |
NET GAINS (LOSSES) FROM INVES47
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | $ (101,412) | $ 108,771 | $ 44,752 | $ 65,488 |
Net Unrealized Gains (Losses) | 519,840 | (99,603) | 932,124 | (791,543) |
Total | 418,428 | 9,168 | 976,876 | (726,055) |
Private Equity | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | 21,253 | 200,003 | 128,066 | 197,876 |
Net Unrealized Gains (Losses) | 291,748 | (237,407) | 295,036 | (449,768) |
Total | 313,001 | (37,404) | 423,102 | (251,892) |
Credit and Other | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | (363,791) | 18,338 | (586,199) | (22,166) |
Net Unrealized Gains (Losses) | 256,371 | (123,115) | 704,617 | (360,165) |
Total | (107,420) | (104,777) | 118,418 | (382,331) |
Investments of Consolidated CFEs | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | (3,777) | (183,816) | (4,880) | (220,805) |
Net Unrealized Gains (Losses) | 15,064 | 287,866 | 28,047 | 507,050 |
Total | 11,287 | 104,050 | 23,167 | 286,245 |
Real Assets | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | (61,747) | 0 | (58,687) | 12,355 |
Net Unrealized Gains (Losses) | 170,593 | 119,365 | 177,391 | (3,773) |
Total | 108,846 | 119,365 | 118,704 | 8,582 |
Foreign Exchange Forward Contracts and Options | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | 8,082 | (17,186) | 18,068 | 575 |
Net Unrealized Gains (Losses) | (184,118) | 34,799 | (242,381) | (11,401) |
Total | (176,036) | 17,613 | (224,313) | (10,826) |
Securities Sold Short | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | 258,924 | (16,133) | 505,711 | (974) |
Net Unrealized Gains (Losses) | 9,398 | (22,553) | 51,668 | (39,888) |
Total | 268,322 | (38,686) | 557,379 | (40,862) |
Other Derivatives | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | (119) | (1,876) | (5,879) | (18,389) |
Net Unrealized Gains (Losses) | (706) | 21,253 | (5,553) | 25,609 |
Total | (825) | 19,377 | (11,432) | 7,220 |
Debt Obligations and Other | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) | 39,763 | 109,441 | 48,552 | 117,016 |
Net Unrealized Gains (Losses) | (38,510) | (179,811) | (76,701) | (459,207) |
Total | $ 1,253 | $ (70,370) | $ (28,149) | $ (342,191) |
INVESTMENTS - Summary of Invest
INVESTMENTS - Summary of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investments | ||
Investments owned, at fair value | $ 36,267,767 | $ 31,409,765 |
Private Equity | ||
Investments | ||
Investments owned, at fair value | 3,847,420 | 2,915,667 |
Credit | ||
Investments | ||
Investments owned, at fair value | 5,553,692 | 4,847,936 |
Investments of Consolidated CFEs | ||
Investments | ||
Investments owned, at fair value | 15,286,680 | 13,950,897 |
Real Assets | ||
Investments | ||
Investments owned, at fair value | 2,457,053 | 1,807,128 |
Equity Method | ||
Investments | ||
Investments owned, at fair value | 3,536,324 | 2,728,995 |
Carried Interest | ||
Investments | ||
Investments owned, at fair value | 2,776,470 | 2,384,177 |
Other | ||
Investments | ||
Investments owned, at fair value | $ 2,810,128 | $ 2,774,965 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Billions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Investment Type | ||
Investments | ||
Pledged assets | $ 17.8 | $ 16.1 |
Investments | Investment Concentration Risk | ||
Investments | ||
Threshold percentage of total investments (greater than) | 5.00% | 5.00% |
INVESTMENTS - Carried Interest
INVESTMENTS - Carried Interest (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Schedule of Nonconsolidated Carried Interest [Roll Forward] | |
Balance at December 31, 2016 | $ 2,384,177 |
Carried Interest Allocated as a result of Changes in Fund Fair Value | 886,776 |
Cash Proceeds Received | (494,483) |
Balance at June 30, 2017 | $ 2,776,470 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Marshall Wace LLP | ||
Liabilities, at fair value: | ||
Equity interests acquired (as a percent) | 24.90% | |
Entity interests acquired, option to increase, potential interest in acquiree (as a percent) | 39.90% | |
Level III | Private Equity | ||
Assets, at fair value: | ||
Total Assets | $ 2,394,498 | |
Level III | Credit | ||
Assets, at fair value: | ||
Total Assets | 3,865,070 | |
Level III | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Assets | 5,447,250 | |
Level III | Real Assets | ||
Assets, at fair value: | ||
Total Assets | 2,423,419 | |
Level III | Other | ||
Assets, at fair value: | ||
Total Assets | 1,771,627 | |
Fair value measured on recurring basis | ||
Assets, at fair value: | ||
Total Investments | 30,734,125 | $ 27,088,011 |
Total Assets | 30,911,738 | 27,410,231 |
Liabilities, at fair value: | ||
Securities Sold Short | 583,665 | 647,234 |
Unfunded Revolver Commitments | 16,533 | 9,023 |
Total Liabilities | 15,595,844 | 14,689,778 |
Fair value measured on recurring basis | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 14,740,575 | 13,858,288 |
Fair value measured on recurring basis | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 113,147 | 240,627 |
Liabilities, at fair value: | ||
Total Liabilities | 176,400 | 75,218 |
Fair value measured on recurring basis | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 64,466 | 81,593 |
Liabilities, at fair value: | ||
Total Liabilities | 78,671 | 100,015 |
Fair value measured on recurring basis | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 3,847,420 | 2,915,667 |
Fair value measured on recurring basis | Credit | ||
Assets, at fair value: | ||
Total Investments | 5,553,692 | 4,847,936 |
Fair value measured on recurring basis | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 15,286,680 | 13,950,897 |
Fair value measured on recurring basis | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 2,457,053 | 1,807,128 |
Fair value measured on recurring basis | Equity Method | ||
Assets, at fair value: | ||
Total Investments | 779,152 | 791,418 |
Fair value measured on recurring basis | Other | ||
Assets, at fair value: | ||
Total Investments | 2,810,128 | 2,774,965 |
Fair value measured on recurring basis | Level I | ||
Assets, at fair value: | ||
Total Investments | 2,386,192 | 2,234,785 |
Total Assets | 2,386,192 | 2,234,785 |
Liabilities, at fair value: | ||
Securities Sold Short | 583,665 | 644,196 |
Unfunded Revolver Commitments | 0 | 0 |
Total Liabilities | 583,665 | 644,196 |
Fair value measured on recurring basis | Level I | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 0 | 0 |
Fair value measured on recurring basis | Level I | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 0 | 0 |
Liabilities, at fair value: | ||
Total Liabilities | 0 | 0 |
Fair value measured on recurring basis | Level I | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 0 | 0 |
Liabilities, at fair value: | ||
Total Liabilities | 0 | 0 |
Fair value measured on recurring basis | Level I | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 1,384,889 | 1,240,108 |
Fair value measured on recurring basis | Level I | Credit | ||
Assets, at fair value: | ||
Total Investments | 0 | 0 |
Fair value measured on recurring basis | Level I | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 0 | 0 |
Fair value measured on recurring basis | Level I | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 0 | 0 |
Fair value measured on recurring basis | Level I | Equity Method | ||
Assets, at fair value: | ||
Total Investments | 0 | 0 |
Fair value measured on recurring basis | Level I | Other | ||
Assets, at fair value: | ||
Total Investments | 1,001,303 | 994,677 |
Fair value measured on recurring basis | Level II | ||
Assets, at fair value: | ||
Total Investments | 11,874,494 | 10,451,863 |
Total Assets | 11,994,753 | 10,774,083 |
Liabilities, at fair value: | ||
Securities Sold Short | 0 | 3,038 |
Unfunded Revolver Commitments | 0 | 9,023 |
Total Liabilities | 9,612,043 | 8,694,841 |
Fair value measured on recurring basis | Level II | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 9,407,372 | 8,563,547 |
Fair value measured on recurring basis | Level II | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 113,147 | 240,627 |
Liabilities, at fair value: | ||
Total Liabilities | 176,400 | 75,218 |
Fair value measured on recurring basis | Level II | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 7,112 | 81,593 |
Liabilities, at fair value: | ||
Total Liabilities | 28,271 | 44,015 |
Fair value measured on recurring basis | Level II | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 68,033 | 116,000 |
Fair value measured on recurring basis | Level II | Credit | ||
Assets, at fair value: | ||
Total Investments | 1,688,622 | 1,557,575 |
Fair value measured on recurring basis | Level II | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 9,839,430 | 8,544,677 |
Fair value measured on recurring basis | Level II | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 33,634 | 0 |
Fair value measured on recurring basis | Level II | Equity Method | ||
Assets, at fair value: | ||
Total Investments | 207,577 | 220,896 |
Fair value measured on recurring basis | Level II | Other | ||
Assets, at fair value: | ||
Total Investments | 37,198 | 12,715 |
Fair value measured on recurring basis | Level III | ||
Assets, at fair value: | ||
Total Investments | 16,473,439 | 14,401,363 |
Total Assets | 16,530,793 | 14,401,363 |
Liabilities, at fair value: | ||
Securities Sold Short | 0 | 0 |
Unfunded Revolver Commitments | 16,533 | 0 |
Total Liabilities | 5,400,136 | 5,350,741 |
Fair value measured on recurring basis | Level III | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 5,333,203 | 5,294,741 |
Fair value measured on recurring basis | Level III | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 0 | 0 |
Liabilities, at fair value: | ||
Total Liabilities | 0 | 0 |
Fair value measured on recurring basis | Level III | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 57,354 | 0 |
Liabilities, at fair value: | ||
Total Liabilities | 50,400 | 56,000 |
Fair value measured on recurring basis | Level III | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 2,394,498 | 1,559,559 |
Fair value measured on recurring basis | Level III | Credit | ||
Assets, at fair value: | ||
Total Investments | 3,865,070 | 3,290,361 |
Fair value measured on recurring basis | Level III | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 5,447,250 | 5,406,220 |
Fair value measured on recurring basis | Level III | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 2,423,419 | 1,807,128 |
Fair value measured on recurring basis | Level III | Equity Method | ||
Assets, at fair value: | ||
Total Investments | 571,575 | 570,522 |
Fair value measured on recurring basis | Level III | Other | ||
Assets, at fair value: | ||
Total Investments | $ 1,771,627 | $ 1,767,573 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level III Investments (Details) - Level III - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Total Level III Investments | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | $ 15,775,974 | $ 13,507,723 | $ 14,401,363 | $ 31,436,968 |
Transfers Out Due to Deconsolidation of Funds | 0 | (651,203) | (95,962) | (23,824,091) |
Transfers In | 0 | 99,840 | 0 | 4,387,579 |
Transfers Out | 0 | (97,400) | (1,496) | (416,030) |
Asset Purchases / Debt Issuances | 1,306,808 | 638,336 | 2,608,267 | 2,511,409 |
Sales | (937,187) | (293,863) | (1,180,097) | (758,952) |
Settlements | 30,200 | 48,931 | 19,125 | 50,178 |
Net Realized Gains (Losses) | (157,729) | (2,788) | (183,442) | (5,646) |
Net Unrealized Gains (Losses) | 452,467 | 68,135 | 881,876 | (66,945) |
Change in Other Comprehensive Income | 2,906 | (5,697) | 23,805 | (2,456) |
Balance, End of Period | 16,473,439 | 13,312,014 | 16,473,439 | 13,312,014 |
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 | 284,624 | 44,385 | 714,033 | (90,695) |
Private Equity | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 2,001,204 | 1,313,701 | 1,559,559 | 18,903,538 |
Transfers Out Due to Deconsolidation of Funds | 0 | (49,350) | 0 | (17,856,098) |
Transfers In | 0 | 0 | 0 | 0 |
Transfers Out | 0 | (96,640) | 0 | (104,000) |
Asset Purchases / Debt Issuances | 394,861 | 18,535 | 824,505 | 254,076 |
Sales | (149,854) | 0 | (172,483) | 0 |
Settlements | 0 | 0 | 0 | 0 |
Net Realized Gains (Losses) | 689 | 0 | 689 | 0 |
Net Unrealized Gains (Losses) | 147,598 | 45,622 | 182,228 | 34,352 |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 2,394,498 | 1,231,868 | 2,394,498 | 1,231,868 |
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 | 147,598 | 45,622 | 182,228 | 34,352 |
Credit | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 3,903,023 | 4,256,576 | 3,290,361 | 5,012,355 |
Transfers Out Due to Deconsolidation of Funds | 0 | (1,643,833) | (95,962) | (2,354,181) |
Transfers In | 0 | 41,303 | 0 | 43,750 |
Transfers Out | 0 | (760) | 0 | (760) |
Asset Purchases / Debt Issuances | 347,036 | 210,044 | 943,898 | 554,099 |
Sales | (549,466) | (193,970) | (718,324) | (480,074) |
Settlements | 30,200 | 48,931 | 19,125 | 50,178 |
Net Realized Gains (Losses) | (93,386) | (19,986) | (102,629) | (8,595) |
Net Unrealized Gains (Losses) | 224,757 | (20,429) | 504,796 | (142,137) |
Change in Other Comprehensive Income | 2,906 | (5,697) | 23,805 | (2,456) |
Balance, End of Period | 3,865,070 | 2,672,179 | 3,865,070 | 2,672,179 |
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 | 127,361 | (20,429) | 407,400 | (142,137) |
Investments of Consolidated CFEs | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 5,426,552 | 5,550,482 | 5,406,220 | 0 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 | 0 | 0 |
Transfers In | 0 | 0 | 0 | 4,343,829 |
Transfers Out | 0 | 0 | 0 | 0 |
Asset Purchases / Debt Issuances | 0 | 0 | 0 | 1,026,801 |
Sales | (8,995) | (7,639) | (17,935) | (14,917) |
Settlements | 0 | 0 | 0 | 0 |
Net Realized Gains (Losses) | 0 | 0 | 0 | 0 |
Net Unrealized Gains (Losses) | 29,693 | 72,499 | 58,965 | 259,629 |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 5,447,250 | 5,615,342 | 5,447,250 | 5,615,342 |
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 | 29,693 | 72,499 | 58,965 | 259,629 |
Real Assets | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 2,045,587 | 1,426,693 | 1,807,128 | 4,048,281 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 | 0 | (2,628,999) |
Transfers In | 0 | 58,537 | 0 | 0 |
Transfers Out | 0 | 0 | 0 | 0 |
Asset Purchases / Debt Issuances | 354,950 | 229,252 | 605,228 | 453,771 |
Sales | (85,964) | (14,138) | (107,641) | (72,757) |
Settlements | 0 | 0 | 0 | 0 |
Net Realized Gains (Losses) | (61,747) | 0 | (58,687) | 12,355 |
Net Unrealized Gains (Losses) | 170,593 | 119,365 | 177,391 | 7,058 |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 2,423,419 | 1,819,709 | 2,423,419 | 1,819,709 |
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 | 100,146 | 119,365 | 106,944 | 7,058 |
Equity Method | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 593,227 | 455,945 | 570,522 | 891,606 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 | 0 | 0 |
Transfers In | 0 | 0 | 0 | 0 |
Transfers Out | 0 | 0 | 0 | (311,270) |
Asset Purchases / Debt Issuances | 1,576 | 10,761 | 11,132 | 18,992 |
Sales | (8,300) | (2,826) | (20,978) | (60,386) |
Settlements | 0 | 0 | 0 | 0 |
Net Realized Gains (Losses) | 626 | 0 | 626 | (1,991) |
Net Unrealized Gains (Losses) | (15,554) | 13,339 | 10,273 | (59,732) |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 571,575 | 477,219 | 571,575 | 477,219 |
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 | (15,554) | 13,339 | 10,273 | (59,732) |
Other | ||||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | 1,806,381 | 504,326 | 1,767,573 | 2,581,188 |
Transfers Out Due to Deconsolidation of Funds | 0 | 1,041,980 | 0 | (984,813) |
Transfers In | 0 | 0 | 0 | 0 |
Transfers Out | 0 | 0 | (1,496) | 0 |
Asset Purchases / Debt Issuances | 208,385 | 169,744 | 223,504 | 203,670 |
Sales | (134,608) | (75,290) | (142,736) | (130,818) |
Settlements | 0 | 0 | 0 | 0 |
Net Realized Gains (Losses) | (3,911) | 17,198 | (23,441) | (7,415) |
Net Unrealized Gains (Losses) | (104,620) | (162,261) | (51,777) | (166,115) |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 1,771,627 | 1,495,697 | 1,771,627 | 1,495,697 |
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 | $ (104,620) | $ (186,011) | $ (51,777) | $ (189,865) |
FAIR VALUE MEASUREMENTS - Cha53
FAIR VALUE MEASUREMENTS - Changes in Level III Debt Obligations (Details) - Level III - Debt Obligations of Consolidated CFEs - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair value, liabilities measured on recurring basis, level 3 fair-value category reconciliation | ||||
Balance, Beg. of Period | $ 5,313,570 | $ 5,447,158 | $ 5,294,741 | $ 0 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 | 0 | 0 |
Transfers In | 0 | 0 | 0 | 4,272,081 |
Transfers Out | 0 | 0 | 0 | 0 |
Asset Purchases / Debt Issuances | 0 | 0 | 0 | 990,450 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (8,995) | (7,639) | (17,935) | (14,917) |
Net Realized Gains (Losses) | 0 | 0 | 0 | 0 |
Net Unrealized Gains (Losses) | 28,628 | 66,762 | 56,397 | 258,667 |
Change in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Balance, End of Period | 5,333,203 | 5,506,281 | 5,333,203 | 5,506,281 |
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 | $ 28,628 | $ 66,762 | $ 56,397 | $ 258,667 |
FAIR VALUE MEASUREMENTS - Trans
FAIR VALUE MEASUREMENTS - Transfers Between Fair Value Levels (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | ||||
Assets, transfers from Level I to Level II | $ 0 | $ 73,600 | $ 0 | $ 73,600 |
Assets, transfers from Level II to Level III | 0 | 99,840 | 0 | 4,387,579 |
Assets, transfers from Level III to Level II | 0 | 760 | 0 | 312,030 |
Assets, transfers from Level III to Level I | 0 | 96,640 | 1,496 | 104,000 |
Liabilities, transfers from Level II to Level III | $ 0 | $ 0 | $ 0 | $ 4,272,081 |
FAIR VALUE MEASUREMENTS - Valua
FAIR VALUE MEASUREMENTS - Valuation Methodologies and Significant Unobservable Inputs (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)$ / barrel | Dec. 31, 2016USD ($) | |
Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | $ 30,911,738 | $ 27,410,231 |
Investments, fair value disclosure | $ 30,734,125 | 27,088,011 |
Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 5.00% | |
Private Equity | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | $ 3,847,420 | 2,915,667 |
Credit | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 5,553,692 | 4,847,936 |
Investments of Consolidated CFEs | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 15,286,680 | 13,950,897 |
Real Assets | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,457,053 | 1,807,128 |
Other | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,810,128 | 2,774,965 |
Equity Method | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 779,152 | 791,418 |
Level III | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 16,530,793 | 14,401,363 |
Investments, fair value disclosure | 16,473,439 | 14,401,363 |
Level III | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 2,394,498 | |
Level III | Private Equity | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,394,498 | 1,559,559 |
Level III | Private Equity | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,131,550 | |
Level III | Private Equity | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,262,948 | |
Level III | Credit | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 3,865,070 | |
Level III | Credit | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 3,865,070 | 3,290,361 |
Level III | Investments of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 5,447,250 | |
Level III | Investments of Consolidated CFEs | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 5,447,250 | 5,406,220 |
Level III | Investments of Consolidated CFEs | Debt Obligations of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 5,333,203 | |
Level III | Real Assets | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 2,423,419 | |
Level III | Real Assets | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,423,419 | 1,807,128 |
Level III | Real Assets | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,267,241 | |
Level III | Real Assets | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 952,096 | |
Level III | Real Assets | Infrastructure | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 204,100 | |
Level III | Other | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,771,627 | |
Level III | Other | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 1,771,627 | 1,767,573 |
Level III | Equity Method | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | $ 571,575 | $ 570,522 |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Minimum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 5.00% | |
Weight Ascribed to Market Comparables | 0.00% | |
Weight Ascribed to Discounted Cash Flow | 25.00% | |
Weight Ascribed to Transaction Price | 0.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Minimum | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 10.00% | |
Weight Ascribed to Market Comparables | 0.00% | |
Weight Ascribed to Discounted Cash Flow | 0.00% | |
Weight Ascribed to Milestones | 0.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Maximum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 15.00% | |
Weight Ascribed to Market Comparables | 50.00% | |
Weight Ascribed to Discounted Cash Flow | 100.00% | |
Weight Ascribed to Transaction Price | 50.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Maximum | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 20.00% | |
Weight Ascribed to Market Comparables | 100.00% | |
Weight Ascribed to Discounted Cash Flow | 75.00% | |
Weight Ascribed to Milestones | 100.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Weighted Average | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 9.20% | |
Weight Ascribed to Market Comparables | 48.10% | |
Weight Ascribed to Discounted Cash Flow | 49.30% | |
Weight Ascribed to Transaction Price | 2.60% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Private Equity | Weighted Average | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 13.80% | |
Weight Ascribed to Market Comparables | 31.30% | |
Weight Ascribed to Discounted Cash Flow | 9.90% | |
Weight Ascribed to Milestones | 58.80% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Other | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 5.00% | |
Weight Ascribed to Market Comparables | 0.00% | |
Weight Ascribed to Discounted Cash Flow | 0.00% | |
Weight Ascribed to Transaction Price | 0.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 15.00% | |
Weight Ascribed to Market Comparables | 100.00% | |
Weight Ascribed to Discounted Cash Flow | 100.00% | |
Weight Ascribed to Transaction Price | 100.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 10.60% | |
Weight Ascribed to Market Comparables | 27.20% | |
Weight Ascribed to Discounted Cash Flow | 46.80% | |
Weight Ascribed to Transaction Price | 26.00% | |
Level III | Market comparables | Private Equity | Minimum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 5.9 | |
Enterprise Value/Forward EBITDA Multiple | 5.7 | |
Level III | Market comparables | Private Equity | Maximum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 26 | |
Enterprise Value/Forward EBITDA Multiple | 25.7 | |
Level III | Market comparables | Private Equity | Weighted Average | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 13.5 | |
Enterprise Value/Forward EBITDA Multiple | 12 | |
Level III | Market comparables | Other | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 0.1 | |
Enterprise Value/Forward EBITDA Multiple | 0.6 | |
Level III | Market comparables | Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 17.7 | |
Enterprise Value/Forward EBITDA Multiple | 13.7 | |
Level III | Market comparables | Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 11.6 | |
Enterprise Value/Forward EBITDA Multiple | 9.9 | |
Level III | Discounted cash flow | Private Equity | Minimum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 6.80% | |
Enterprise Value/LTM EBITDA Exit Multiple | 6 | |
Level III | Discounted cash flow | Private Equity | Maximum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 19.30% | |
Enterprise Value/LTM EBITDA Exit Multiple | 13.4 | |
Level III | Discounted cash flow | Private Equity | Weighted Average | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 9.80% | |
Enterprise Value/LTM EBITDA Exit Multiple | 10.6 | |
Level III | Discounted cash flow | Investments of Consolidated CFEs | Minimum | Debt Obligations of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 1.90% | |
Level III | Discounted cash flow | Investments of Consolidated CFEs | Maximum | Debt Obligations of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 27.10% | |
Level III | Discounted cash flow | Investments of Consolidated CFEs | Weighted Average | Debt Obligations of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 5.40% | |
Level III | Discounted cash flow | Real Assets | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Revenue ratio of liquids (percent) | 85.00% | |
Revenue ratio of natural gas (percent) | 15.00% | |
Level III | Discounted cash flow | Real Assets | Minimum | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 9.60% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 30.34 | |
Level III | Discounted cash flow | Real Assets | Minimum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Unlevered Discount Rate | 4.50% | |
Level III | Discounted cash flow | Real Assets | Maximum | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 16.90% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 39.39 | |
Level III | Discounted cash flow | Real Assets | Maximum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Unlevered Discount Rate | 20.00% | |
Level III | Discounted cash flow | Real Assets | Weighted Average | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 10.70% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 36.05 | |
Level III | Discounted cash flow | Real Assets | Weighted Average | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Unlevered Discount Rate | 9.10% | |
Level III | Discounted cash flow | Real Assets | Weighted Average | Infrastructure | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 7.90% | |
Enterprise Value/LTM EBITDA Exit Multiple | 12 | |
Level III | Discounted cash flow | Other | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 5.60% | |
Enterprise Value/LTM EBITDA Exit Multiple | 2.2 | |
Level III | Discounted cash flow | Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 16.50% | |
Enterprise Value/LTM EBITDA Exit Multiple | 9 | |
Level III | Discounted cash flow | Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 11.10% | |
Enterprise Value/LTM EBITDA Exit Multiple | 6.9 | |
Level III | Scenario Weighting | Private Equity | Minimum | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Base | 30.00% | |
Downside | 10.00% | |
Upside | 10.00% | |
Level III | Scenario Weighting | Private Equity | Maximum | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Base | 80.00% | |
Downside | 40.00% | |
Upside | 40.00% | |
Level III | Scenario Weighting | Private Equity | Weighted Average | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Base | 53.20% | |
Downside | 22.70% | |
Upside | 24.10% | |
Level III | Yield Analysis | Credit | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 3.40% | |
Net Leverage | 0.3 | |
EBITDA Multiple | 0.1 | |
Level III | Yield Analysis | Credit | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 37.50% | |
Net Leverage | 19.3 | |
EBITDA Multiple | 18.4 | |
Level III | Yield Analysis | Credit | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 11.30% | |
Net Leverage | 5.9 | |
EBITDA Multiple | 10.9 | |
Level III | Inputs to direct income capitalization and discounted cash flow | Real Assets | Minimum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weight Ascribed to Discounted Cash Flow | 25.00% | |
Weight Ascribed to Direct Income Capitalization | 0.00% | |
Level III | Inputs to direct income capitalization and discounted cash flow | Real Assets | Maximum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weight Ascribed to Discounted Cash Flow | 100.00% | |
Weight Ascribed to Direct Income Capitalization | 75.00% | |
Level III | Inputs to direct income capitalization and discounted cash flow | Real Assets | Weighted Average | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weight Ascribed to Discounted Cash Flow | 65.80% | |
Weight Ascribed to Direct Income Capitalization | 34.20% | |
Level III | Direct income capitalization | Real Assets | Minimum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Current Capitalization Rate | 2.90% | |
Level III | Direct income capitalization | Real Assets | Maximum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Current Capitalization Rate | 12.00% | |
Level III | Direct income capitalization | Real Assets | Weighted Average | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Current Capitalization Rate | 5.80% |
FAIR VALUE OPTION - Financial I
FAIR VALUE OPTION - Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | $ 20,165,559 | $ 16,719,280 |
Liabilities | 14,740,575 | 13,858,288 |
Private Equity | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 576,936 | 96,721 |
Credit | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 2,804,341 | 1,392,525 |
Investments of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 15,286,680 | 13,950,897 |
Real Assets | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 331,410 | 247,376 |
Equity Method | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 779,152 | 791,418 |
Other | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 387,040 | 240,343 |
Debt Obligations of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities | $ 14,740,575 | $ 13,858,288 |
FAIR VALUE OPTION - Change in F
FAIR VALUE OPTION - Change in Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | $ (175,278) | $ (173,603) | $ (434,494) | $ (219,595) |
Fair value, option, liabilities, net realized gains (losses) | 35,621 | 102,542 | 40,446 | 102,542 |
Fair value, option, assets, net unrealized gains (losses) | 97,108 | 281,371 | 210,754 | 353,215 |
Fair value, option, liabilities, net unrealized gains (losses) | (43,915) | (179,707) | (54,973) | (447,163) |
Fair value, option, assets, total gains (losses) | (78,170) | 107,768 | (223,740) | 133,620 |
Fair value, option, liabilities, total gains (losses) | (8,294) | (77,165) | (14,527) | (344,621) |
Private Equity | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | 689 | 0 | 689 | 0 |
Fair value, option, assets, net unrealized gains (losses) | 40,133 | 846 | 40,495 | (2,298) |
Fair value, option, assets, total gains (losses) | 40,822 | 846 | 41,184 | (2,298) |
Credit | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | (169,500) | 10,213 | (408,598) | 5,017 |
Fair value, option, assets, net unrealized gains (losses) | 28,968 | 3,603 | 84,838 | (42,038) |
Fair value, option, assets, total gains (losses) | (140,532) | 13,816 | (323,760) | (37,021) |
Investments of Consolidated CFEs | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | (3,777) | (183,816) | (4,880) | (220,805) |
Fair value, option, assets, net unrealized gains (losses) | 15,064 | 287,866 | 28,047 | 507,050 |
Fair value, option, assets, total gains (losses) | 11,287 | 104,050 | 23,167 | 286,245 |
Real Assets | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | 30 | 0 | (186) | 0 |
Fair value, option, assets, net unrealized gains (losses) | 40,822 | 5,355 | 47,610 | 10,595 |
Fair value, option, assets, total gains (losses) | 40,852 | 5,355 | 47,424 | 10,595 |
Equity Method | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | 626 | 0 | 626 | (1,991) |
Fair value, option, assets, net unrealized gains (losses) | (23,408) | (7,804) | (3,046) | (101,097) |
Fair value, option, assets, total gains (losses) | (22,782) | (7,804) | (2,420) | (103,088) |
Other | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, assets, net realized gains (losses) | (3,346) | 0 | (22,145) | (1,816) |
Fair value, option, assets, net unrealized gains (losses) | (4,471) | (8,495) | 12,810 | (18,997) |
Fair value, option, assets, total gains (losses) | (7,817) | (8,495) | (9,335) | (20,813) |
Debt Obligations of Consolidated CFEs | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value, option, liabilities, net realized gains (losses) | 35,621 | 102,542 | 40,446 | 102,542 |
Fair value, option, liabilities, net unrealized gains (losses) | (43,915) | (179,707) | (54,973) | (447,163) |
Fair value, option, liabilities, total gains (losses) | $ (8,294) | $ (77,165) | $ (14,527) | $ (344,621) |
NET INCOME (LOSS) ATTRIBUTABL58
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | ||||
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | $ 405,646 | $ 93,890 | $ 664,989 | $ (236,049) |
Basic Net Income (Loss) Per Common Unit | ||||
Weighted Average Common Units Outstanding - Basic (in units) | 466,170,025 | 448,221,538 | 459,967,395 | 449,241,840 |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic (in dollars per unit) | $ 0.87 | $ 0.21 | $ 1.45 | $ (0.53) |
Diluted Net Income (Loss) Per Common Unit | ||||
Weighted Average Common Units Outstanding - Basic (in units) | 466,170,025 | 448,221,538 | 459,967,395 | 449,241,840 |
Weighted Average Unvested Common Units and Other Exchangeable Securities (in units) | 35,007,398 | 33,588,074 | 38,975,899 | 0 |
Weighted Average Common Units Outstanding - Diluted (in units) | 501,177,423 | 481,809,612 | 498,943,294 | 449,241,840 |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted (in dollars per unit) | $ 0.81 | $ 0.19 | $ 1.33 | $ (0.53) |
Weighted Average KKR Holdings Units Outstanding (in units) | 346,473,324 | 358,728,334 | 349,513,066 | 359,522,981 |
OTHER ASSETS AND ACCOUNTS PAY59
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES - Other Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |||||
Unsettled Investment Sales | $ 133,493 | $ 133,493 | $ 144,600 | ||
Receivables | 333,976 | 333,976 | 49,279 | ||
Due from Broker | 497,265 | 497,265 | 1,084,602 | ||
Oil & Gas Assets, net | 264,256 | 264,256 | 276,694 | ||
Deferred Tax Assets, net | 277,317 | 277,317 | 286,948 | ||
Interest Receivable | 201,157 | 201,157 | 158,511 | ||
Fixed Assets, net | 322,968 | 322,968 | 283,262 | ||
Foreign Exchange Contracts and Options | 113,147 | 113,147 | 240,627 | ||
Intangible Assets, net | 19,320 | 19,320 | 135,024 | ||
Goodwill | 83,500 | 83,500 | 89,000 | ||
Derivative Assets | 64,466 | 64,466 | 81,593 | ||
Deferred Transaction Related Expenses | 41,571 | 41,571 | 17,688 | ||
Prepaid Taxes | 45,479 | 45,479 | 46,996 | ||
Prepaid Expenses | 15,188 | 15,188 | 17,761 | ||
Deferred Financing Costs | 10,318 | 10,318 | 10,507 | ||
Other | 70,108 | 70,108 | 73,773 | ||
Total | 2,493,529 | 2,493,529 | 2,996,865 | ||
Accumulated depreciation and amortization | 149,694 | 149,694 | $ 141,911 | ||
Depreciation and amortization expense | $ 3,867 | $ 3,988 | $ 8,064 | $ 7,904 |
OTHER ASSETS AND ACCOUNTS PAY60
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES - Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | ||
Amounts Payable to Carry Pool | $ 1,152,015 | $ 987,994 |
Unsettled Investment Purchases | 913,528 | 722,076 |
Securities Sold Short | 583,665 | 647,234 |
Derivative Liabilities | 78,671 | 100,015 |
Accrued Compensation and Benefits | 181,255 | 20,764 |
Interest Payable | 148,847 | 114,894 |
Foreign Exchange Contracts and Options | 176,400 | 75,218 |
Accounts Payable and Accrued Expenses | 128,341 | 114,854 |
Deferred Rent | 20,053 | 19,144 |
Taxes Payable | 25,518 | 12,514 |
Redemptions Payable | 0 | 4,021 |
Due to Broker | 0 | 83,206 |
Other Liabilities | 99,836 | 79,326 |
Total | $ 3,508,129 | $ 2,981,260 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Investments in Unconsolidated Investment Funds | ||
Variable Interest Entity [Line Items] | ||
Investments | $ 4,200,000 | |
Commitment to unconsolidated investment funds | 2,800,000 | |
Investments in Unconsolidated CLO Vehicles | ||
Variable Interest Entity [Line Items] | ||
Investments | 4,230,381 | $ 3,632,162 |
Combined assets under management | 700,000 | |
Maximum exposure to loss as a result of investments in the residual interests | $ 1,200 |
VARIABLE INTEREST ENTITIES - Ma
VARIABLE INTEREST ENTITIES - Maximum Exposure to Loss (Details) - Investments in Unconsolidated CLO Vehicles - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Investments | $ 4,230,381 | $ 3,632,162 |
Due from (to) Affiliates, net | 42,416 | (60,604) |
Maximum Exposure to Loss | $ 4,272,797 | $ 3,571,558 |
DEBT OBLIGATIONS - KKR's Borrow
DEBT OBLIGATIONS - KKR's Borrowings (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | Apr. 24, 2017 | Mar. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Financing Available | $ 4,881,727,000 | $ 3,539,532,000 | ||
Borrowing Outstanding | 19,425,253,000 | 18,544,075,000 | ||
Fair Value | 19,596,736,000 | 18,539,725,000 | ||
Fund Financing Facilities and Other | ||||
Debt Instrument [Line Items] | ||||
Financing Available | 2,643,471,000 | 2,039,532,000 | ||
Borrowing Outstanding | 2,102,004,000 | 2,333,654,000 | ||
Fair Value | $ 2,102,004,000 | $ 2,333,654,000 | ||
Weighted average interest rate (percentage) | 2.60% | 2.40% | ||
Weighted average remaining maturity (in years) | 4 years | 2 years 4 months 24 days | ||
Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 14,740,575,000 | |||
Senior Notes | KKR Issued 6.375% Notes Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 498,097,000 | $ 497,804,000 | ||
Fair Value | 560,675,000 | 562,960,000 | ||
Aggregate principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 6.375% | |||
Unamortized debt issuance costs | $ 1,200,000 | 1,400,000 | ||
Senior Notes | KKR Issued 5.500% Notes Due 2043 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 491,327,000 | 491,158,000 | ||
Fair Value | 554,950,000 | 502,800,000 | ||
Aggregate principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 5.50% | |||
Unamortized debt issuance costs | $ 3,800,000 | 3,900,000 | ||
Senior Notes | KKR Issued 5.125% Notes Due 2044 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 990,192,000 | 990,009,000 | ||
Fair Value | 1,058,750,000 | 955,240,000 | ||
Aggregate principal amount | $ 1,000,000,000 | |||
Interest rate, stated percentage | 5.125% | |||
Unamortized debt issuance costs | $ 8,500,000 | 8,600,000 | ||
Senior Notes | KFN Issued 5.500% Notes Due 2032 | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 367,728,000 | 0 | ||
Fair Value | 378,417,000 | 0 | ||
Aggregate principal amount | $ 375,000,000 | $ 375,000,000 | ||
Interest rate, stated percentage | 5.50% | 5.50% | ||
Unamortized debt issuance costs | $ 4,700,000 | |||
Senior Notes | KFN Issued 7.500% Notes Due 2042 | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 0 | 123,008,000 | ||
Fair Value | 0 | 116,699,000 | ||
Aggregate principal amount | $ 115,000,000 | |||
Interest rate, stated percentage | 7.50% | 7.50% | ||
Senior Notes | KFN Issued Junior Subordinated Notes | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 235,330,000 | 250,154,000 | ||
Fair Value | 201,365,000 | 210,084,000 | ||
Aggregate principal amount | $ 264,800,000 | |||
Weighted average interest rate (percentage) | 3.60% | |||
Weighted average remaining maturity (in years) | 19 years 6 months | |||
Senior Secured Notes | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 9,132,461,000 | 8,279,812,000 | ||
Fair Value | $ 9,132,461,000 | 8,279,812,000 | ||
Weighted average interest rate (percentage) | 2.70% | |||
Weighted average remaining maturity (in years) | 11 years 2 months 12 days | |||
Subordinated Notes | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 274,911,000 | 283,735,000 | ||
Fair Value | $ 274,911,000 | 283,735,000 | ||
Weighted average remaining maturity (in years) | 11 years 4 months 24 days | |||
Collateralized Mortgage Backed Securities | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 5,333,203,000 | 5,294,741,000 | ||
Fair Value | 5,333,203,000 | 5,294,741,000 | ||
Collateralized Mortgage Backed Securities | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 5,333,203,000 | |||
Weighted average interest rate (percentage) | 4.50% | |||
Weighted average remaining maturity (in years) | 31 years 6 months | |||
Revolving Credit Facility | Corporate Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Financing Available | $ 1,000,000,000 | 1,000,000,000 | ||
Borrowing Outstanding | 0 | 0 | ||
Fair Value | 0 | 0 | ||
Revolving Credit Facility | KCM Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Financing Available | 488,256,000 | 500,000,000 | ||
Borrowing Outstanding | 0 | 0 | ||
Fair Value | 0 | 0 | ||
Revolving Credit Facility | KCM Short-Term Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Financing Available | 750,000,000 | 0 | ||
Borrowing Outstanding | 0 | 0 | ||
Fair Value | $ 0 | $ 0 |
DEBT OBLIGATIONS - Narrative (D
DEBT OBLIGATIONS - Narrative (Details) - USD ($) | Jun. 29, 2017 | Apr. 24, 2017 | Mar. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
KFN Issued 5.500% Notes Due 2032 | Senior Notes | KFN | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 375,000,000 | $ 375,000,000 | $ 375,000,000 | ||
Interest rate, stated percentage | 5.50% | 5.50% | 5.50% | ||
Proceeds from issuance of debt | $ 368,600,000 | ||||
KFN Issued 5.500% Notes Due 2032 | Senior Notes | KFN | On or After March 30, 2022 | |||||
Debt Instrument [Line Items] | |||||
Redemption price (as a percent of principal) | 100.00% | ||||
Minimum advance notice required for redemption | 30 days | ||||
Maximum advance notice required for redemption | 60 days | ||||
KFN Issued 5.500% Notes Due 2032 | Senior Notes | KFN | Prior to March 30, 2022 | |||||
Debt Instrument [Line Items] | |||||
Redemption price (as a percent of principal) | 100.00% | ||||
KFN Issued 5.500% Notes Due 2032 | Senior Notes | Treasury Rate | KFN | Prior to March 30, 2022 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 0.50% | ||||
KFN Issued 7.500% Notes Due 2042 | Senior Notes | KFN | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 115,000,000 | $ 115,000,000 | |||
Interest rate, stated percentage | 7.50% | 7.50% | 7.50% | ||
Redemption price (as a percent of principal) | 100.00% | ||||
Revolving Credit Facility | KCM Short-Term Credit Agreement | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument term | 364 days | ||||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | ||||
Borrowings outstanding | $ 0 | ||||
Minimum | Revolving Credit Facility | KCM Short-Term Credit Agreement | Line of Credit | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 1.25% | ||||
Minimum | Revolving Credit Facility | KCM Short-Term Credit Agreement | Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 0.25% | ||||
Maximum | Revolving Credit Facility | KCM Short-Term Credit Agreement | Line of Credit | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 2.50% | ||||
Maximum | Revolving Credit Facility | KCM Short-Term Credit Agreement | Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 1.50% |
DEBT OBLIGATIONS - Obligations
DEBT OBLIGATIONS - Obligations of Consolidated CLOs (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 19,425,253 | $ 18,544,075 | |
Total Assets | 42,868,081 | 39,002,897 | $ 37,506,871 |
Consolidated VIEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 15,702,027 | 15,471,087 | |
Total Assets | 25,895,217 | 25,326,042 | |
Consolidated VIEs | Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 14,740,575 | 13,858,288 | |
Total Assets | 16,470,287 | 15,349,598 | |
Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 14,740,575 | ||
Senior Secured Notes | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 9,132,461 | 8,279,812 | |
Weighted Average Interest Rate | 2.70% | ||
Weighted Average Remaining Maturity in Years | 11 years 2 months 12 days | ||
Subordinated Notes | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 274,911 | 283,735 | |
Weighted Average Remaining Maturity in Years | 11 years 4 months 24 days | ||
Collateralized Mortgage Backed Securities | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 5,333,203 | $ 5,294,741 | |
Collateralized Mortgage Backed Securities | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 5,333,203 | ||
Weighted Average Interest Rate | 4.50% | ||
Weighted Average Remaining Maturity in Years | 31 years 6 months |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 2.09% | 2.16% | 3.42% | (1.66%) |
Changes to KKR's uncertain tax positions | $ 0 | $ 0 | ||
Increase in unrecognized tax benefits is reasonably possible | 0 | 0 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 0 | $ 0 |
EQUITY BASED COMPENSATION - Exp
EQUITY BASED COMPENSATION - Expense (Details) - Compensation and Benefits - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Expense associated with equity based compensation | ||||
Equity based expenses | $ 87,940 | $ 60,657 | $ 198,976 | $ 124,480 |
KKR Holdings Principal Awards | ||||
Expense associated with equity based compensation | ||||
Equity based expenses | 27,268 | 7,165 | 72,247 | 13,713 |
Other Exchangeable Securities | ||||
Expense associated with equity based compensation | ||||
Equity based expenses | 0 | 3,590 | 0 | 6,846 |
Discretionary Compensation | ||||
Expense associated with equity based compensation | ||||
Equity based expenses | 15,696 | 1,876 | 31,810 | 5,934 |
Equity Incentive Plan Units | ||||
Expense associated with equity based compensation | ||||
Equity based expenses | $ 44,976 | $ 48,026 | $ 94,919 | $ 97,987 |
EQUITY BASED COMPENSATION - Nar
EQUITY BASED COMPENSATION - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2016USD ($) | Feb. 29, 2016shares | Dec. 31, 2017$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Sep. 30, 2016$ / shares | Jun. 30, 2016$ / sharesshares | Mar. 31, 2016$ / shares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016shares | Dec. 31, 2016$ / shares | |
Common Units | |||||||||||||
Equity Based Payments | |||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ / shares | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | |||||||
Common unit distribution announced, per annum (in dollars per unit) | $ / shares | $ 0.68 | $ 0.64 | |||||||||||
Common Units | Forecast | |||||||||||||
Equity Based Payments | |||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ / shares | $ 0.17 | $ 0.17 | |||||||||||
KKR Group Partnerships | |||||||||||||
Equity Based Payments | |||||||||||||
Percentage owned by KKR Holdings L.P. | 42.20% | 44.60% | |||||||||||
KKR Holdings Principal Awards | |||||||||||||
Equity Based Payments | |||||||||||||
Vesting period (in years) | 5 years | ||||||||||||
Minimum transfer restriction period with respect to one-half awards vested (in years) | 1 year | ||||||||||||
Portion of awards vested having one-year transfer restriction period (as a percent) | 50.00% | ||||||||||||
Minimum transfer restriction period with respect to remaining one-half awards vested (in years) | 2 years | ||||||||||||
Portion of awards vested having two-year transfer restriction period (as a percent) | 50.00% | ||||||||||||
Minimum retained ownership required to continuously hold common unit equivalents to as percentage of cumulatively vested interests | 25.00% | ||||||||||||
Forfeiture rate assumed (as a percent) | 8.00% | ||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 320,900,000 | $ 235,500,000 | $ 235,500,000 | ||||||||||
Weighted average remaining vesting period over which unvested units are expected to vest (in years) (less than 1 year for equity bases awards) | 2 years 3 months 18 days | ||||||||||||
Common units conversion basis | 1 | ||||||||||||
Number of common units owned in KKR Group Partnership Units (in units) | shares | 342,993,993 | 358,673,603 | 342,993,993 | 358,673,603 | |||||||||
Number of common units owned in KKR Group Partnership Units, not disclosed (in units) | shares | 7,936,872 | 7,936,872 | |||||||||||
Modified awards granted (in units) | shares | 28,900,000 | ||||||||||||
KKR Holdings Principal Awards | Minimum | |||||||||||||
Equity Based Payments | |||||||||||||
Vesting period (in years) | 3 years | ||||||||||||
KKR Holdings Principal Awards | Maximum | |||||||||||||
Equity Based Payments | |||||||||||||
Vesting period (in years) | 5 years | ||||||||||||
Other Exchangeable Securities | |||||||||||||
Equity Based Payments | |||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 0 | $ 0 | |||||||||||
Equity Incentive Plan Units | |||||||||||||
Equity Based Payments | |||||||||||||
Total awards issuable as a percentage of diluted common units outstanding | 15.00% | ||||||||||||
Minimum retained ownership required to continuously hold common unit equivalents to as percentage of cumulatively vested interests | 15.00% | ||||||||||||
Forfeiture rate assumed (as a percent) | 8.00% | ||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 304,300,000 | $ 304,300,000 | |||||||||||
Weighted average remaining vesting period over which unvested units are expected to vest (in years) (less than 1 year for equity bases awards) | 1 year 4 months 18 days | ||||||||||||
Equity Incentive Plan Units | Minimum | |||||||||||||
Equity Based Payments | |||||||||||||
Vesting period (in years) | 3 years | ||||||||||||
Discount rate (as a percent) | 8.00% | ||||||||||||
Equity Incentive Plan Units | Maximum | |||||||||||||
Equity Based Payments | |||||||||||||
Vesting period (in years) | 5 years | ||||||||||||
Discount rate (as a percent) | 56.00% | ||||||||||||
Equity Incentive Plan Units | KKR Holdings | |||||||||||||
Equity Based Payments | |||||||||||||
Minimum transfer restriction period with respect to one-half awards vested (in years) | 1 year | ||||||||||||
Portion of awards vested having one-year transfer restriction period (as a percent) | 50.00% | ||||||||||||
Minimum transfer restriction period with respect to remaining one-half awards vested (in years) | 2 years | ||||||||||||
Portion of awards vested having two-year transfer restriction period (as a percent) | 50.00% |
EQUITY BASED COMPENSATION - Est
EQUITY BASED COMPENSATION - Estimated Unrecognized Expense (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Nov. 30, 2016 |
KKR Holdings Principal Awards | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | $ 235.5 | $ 320.9 |
KKR Holdings Principal Awards | Remainder of 2017 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 36.5 | |
KKR Holdings Principal Awards | 2018 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 66.2 | |
KKR Holdings Principal Awards | 2019 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 60.1 | |
KKR Holdings Principal Awards | 2020 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 54.9 | |
KKR Holdings Principal Awards | 2021 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 17.8 | |
Equity Incentive Plan Units | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 304.3 | |
Equity Incentive Plan Units | Remainder of 2017 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 83.1 | |
Equity Incentive Plan Units | 2018 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 123.1 | |
Equity Incentive Plan Units | 2019 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 72.3 | |
Equity Incentive Plan Units | 2020 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 21.8 | |
Equity Incentive Plan Units | 2021 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 3.7 | |
Equity Incentive Plan Units | 2022 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | $ 0.3 |
EQUITY BASED COMPENSATION - Awa
EQUITY BASED COMPENSATION - Awards Rollforward (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Equity Incentive Plan Units | |
Units | |
Balance at the beginning of the period (in units) | shares | 37,498,333 |
Granted (in units) | shares | 2,512,331 |
Vested (in units) | shares | (8,321,851) |
Forfeited (in units) | shares | (1,244,074) |
Balance at the end of the period (in units) | shares | 30,444,739 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per unit) | $ / shares | $ 13.85 |
Granted (in dollars per unit) | $ / shares | 15.21 |
Vested (in dollars per unit) | $ / shares | 14.80 |
Forfeited (in dollars per unit) | $ / shares | 13.72 |
Balance at the end of the period (in dollars per unit) | $ / shares | $ 13.71 |
KKR Holdings Principal Awards | |
Units | |
Balance at the beginning of the period (in units) | shares | 28,245,886 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | (5,968,939) |
Forfeited (in units) | shares | (377,807) |
Balance at the end of the period (in units) | shares | 21,899,140 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per unit) | $ / shares | $ 12.10 |
Granted (in dollars per unit) | $ / shares | 0 |
Vested (in dollars per unit) | $ / shares | 13.97 |
Forfeited (in dollars per unit) | $ / shares | 11.61 |
Balance at the end of the period (in dollars per unit) | $ / shares | $ 11.60 |
EQUITY BASED COMPENSATION - Rem
EQUITY BASED COMPENSATION - Remaining Vesting Tranches (Details) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Equity Incentive Plan Units | ||
Equity Based Payments | ||
Principal units (in units) | 30,444,739 | 37,498,333 |
Equity Incentive Plan Units | October 1, 2017 | ||
Equity Based Payments | ||
Principal units (in units) | 3,700,493 | |
Equity Incentive Plan Units | April 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 10,015,163 | |
Equity Incentive Plan Units | October 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 3,148,174 | |
Equity Incentive Plan Units | April 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 6,842,517 | |
Equity Incentive Plan Units | October 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 1,736,871 | |
Equity Incentive Plan Units | April 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 3,683,049 | |
Equity Incentive Plan Units | October 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 519,844 | |
Equity Incentive Plan Units | April 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 593,544 | |
Equity Incentive Plan Units | October 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 120,000 | |
Equity Incentive Plan Units | April 1, 2022 | ||
Equity Based Payments | ||
Principal units (in units) | 85,084 | |
KKR Holdings Principal Awards | ||
Equity Based Payments | ||
Principal units (in units) | 21,899,140 | 28,245,886 |
KKR Holdings Principal Awards | October 1, 2017 | ||
Equity Based Payments | ||
Principal units (in units) | 93,486 | |
KKR Holdings Principal Awards | April 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 824,999 | |
KKR Holdings Principal Awards | May 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 5,110,000 | |
KKR Holdings Principal Awards | April 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 349,143 | |
KKR Holdings Principal Awards | May 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 5,110,000 | |
KKR Holdings Principal Awards | April 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 191,512 | |
KKR Holdings Principal Awards | May 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 5,110,000 | |
KKR Holdings Principal Awards | May 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 5,110,000 |
RELATED PARTY TRANSACTIONS - Su
RELATED PARTY TRANSACTIONS - Summary of Due From and Due To Affiliates (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due from Affiliates | $ 394,717 | $ 250,452 |
Due to Affiliates | 392,340 | 359,479 |
Portfolio Companies | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 90,439 | 66,940 |
Unconsolidated Investment Funds | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 296,986 | 170,219 |
Due to Affiliates | 254,570 | 230,823 |
Related Entities | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 7,292 | 13,293 |
Due to Affiliates | 0 | 565 |
Due to KKR Holdings in connection with the tax receivable agreement | ||
Related Party Transaction [Line Items] | ||
Due to Affiliates | $ 137,770 | $ 128,091 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
SEGMENT REPORTING - Financial D
SEGMENT REPORTING - Financial Data for KKR's Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Management, Monitoring and Transaction Fees, Net | |||||
Fee Credits | $ (48,677) | $ (37,152) | $ (136,755) | $ (59,531) | |
Total Fees and Other | 931,788 | 576,757 | 1,647,740 | 739,562 | |
Performance Income (Loss) | |||||
Realized Carried Interest | 845 | 4,253 | 1,118 | 2,245 | |
Investment Income (Loss) | |||||
Total Investment Income (Loss) | 585,002 | 125,737 | 1,247,500 | (487,191) | |
Segment Expenses | |||||
Total Compensation and Benefits | 462,841 | 296,412 | 865,804 | 421,901 | |
Occupancy and Related Charges | 14,032 | 16,188 | 28,883 | 32,754 | |
Total Expenses | 629,728 | 423,218 | 1,169,742 | 731,541 | |
Income (Loss) attributable to noncontrolling interests | 126,870 | 98,715 | 419,715 | (60,069) | |
Total Assets | 42,868,081 | 37,506,871 | 42,868,081 | 37,506,871 | $ 39,002,897 |
Reportable segments | |||||
Management, Monitoring and Transaction Fees, Net | |||||
Management Fees | 229,569 | 203,617 | 437,853 | 398,217 | |
Monitoring Fees | 30,510 | 28,998 | 43,730 | 41,035 | |
Transaction Fees | 156,465 | 68,564 | 399,500 | 164,649 | |
Fee Credits | (51,384) | (39,073) | (140,401) | (61,880) | |
Total Fees and Other | 365,160 | 262,106 | 740,682 | 542,021 | |
Performance Income (Loss) | |||||
Realized Incentive Fees | 2,624 | 4,645 | 4,310 | 6,238 | |
Realized Carried Interest | 264,668 | 305,275 | 470,872 | 402,563 | |
Unrealized Carried Interest | 296,719 | 18,698 | 437,345 | (205,107) | |
Total Performance Income (Loss) | 564,011 | 328,618 | 912,527 | 203,694 | |
Investment Income (Loss) | |||||
Net Realized Gains (Losses) | 7,180 | 224,699 | 86,631 | 200,516 | |
Net Unrealized Gains (Losses) | 307,977 | (297,448) | 512,013 | (862,439) | |
Total Realized and Unrealized | 315,157 | (72,749) | 598,644 | (661,923) | |
Interest Income and Dividends | 67,836 | 74,451 | 124,718 | 182,571 | |
Interest Expense | (47,026) | (48,447) | (88,735) | (96,991) | |
Net Interest and Dividends | 20,810 | 26,004 | 35,983 | 85,580 | |
Total Investment Income (Loss) | 335,967 | (46,745) | 634,627 | (576,343) | |
Total Segment Revenues | 1,265,138 | 543,979 | 2,287,836 | 169,372 | |
Segment Expenses | |||||
Cash Compensation and Benefits | 135,522 | 96,890 | 274,957 | 197,789 | |
Realized Performance Income Compensation | 111,917 | 123,968 | 199,984 | 163,520 | |
Unrealized Performance Income Compensation | 119,774 | 8,525 | 176,988 | (78,117) | |
Total Compensation and Benefits | 367,213 | 229,383 | 651,929 | 283,192 | |
Occupancy and Related Charges | 13,407 | 15,659 | 27,776 | 31,609 | |
Other Operating Expenses | 53,069 | 49,533 | 106,567 | 111,419 | |
Total Expenses | 433,689 | 294,575 | 786,272 | 426,220 | |
Income (Loss) attributable to noncontrolling interests | 1,180 | 575 | 2,764 | 1,242 | |
Economic Net Income (Loss) | 830,269 | 248,829 | 1,498,800 | (258,090) | |
Total Assets | 15,000,669 | 13,023,171 | 15,000,669 | 13,023,171 | |
Reportable segments | Private Markets | |||||
Management, Monitoring and Transaction Fees, Net | |||||
Management Fees | 142,253 | 118,783 | 265,765 | 236,581 | |
Monitoring Fees | 30,510 | 28,998 | 43,730 | 41,035 | |
Transaction Fees | 37,252 | 23,400 | 155,134 | 60,798 | |
Fee Credits | (31,750) | (33,319) | (117,400) | (55,915) | |
Total Fees and Other | 178,265 | 137,862 | 347,229 | 282,499 | |
Performance Income (Loss) | |||||
Realized Incentive Fees | 0 | 0 | 0 | 0 | |
Realized Carried Interest | 264,668 | 305,275 | 470,872 | 398,725 | |
Unrealized Carried Interest | 279,010 | 9,974 | 402,516 | (184,725) | |
Total Performance Income (Loss) | 543,678 | 315,249 | 873,388 | 214,000 | |
Investment Income (Loss) | |||||
Net Realized Gains (Losses) | 0 | 0 | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | 0 | 0 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | 0 | 0 | |
Total Segment Revenues | 721,943 | 453,111 | 1,220,617 | 496,499 | |
Segment Expenses | |||||
Cash Compensation and Benefits | 60,453 | 45,675 | 120,461 | 94,642 | |
Realized Performance Income Compensation | 110,867 | 122,110 | 198,260 | 159,490 | |
Unrealized Performance Income Compensation | 112,690 | 5,035 | 163,056 | (69,965) | |
Total Compensation and Benefits | 284,010 | 172,820 | 481,777 | 184,167 | |
Occupancy and Related Charges | 7,530 | 9,039 | 15,637 | 17,964 | |
Other Operating Expenses | 27,992 | 26,009 | 54,879 | 63,135 | |
Total Expenses | 319,532 | 207,868 | 552,293 | 265,266 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Economic Net Income (Loss) | 402,411 | 245,243 | 668,324 | 231,233 | |
Total Assets | 2,032,830 | 1,792,584 | 2,032,830 | 1,792,584 | |
Reportable segments | Public Markets | |||||
Management, Monitoring and Transaction Fees, Net | |||||
Management Fees | 87,316 | 84,834 | 172,088 | 161,636 | |
Monitoring Fees | 0 | 0 | 0 | 0 | |
Transaction Fees | 25,515 | 5,888 | 29,571 | 7,020 | |
Fee Credits | (19,634) | (5,754) | (23,001) | (5,965) | |
Total Fees and Other | 93,197 | 84,968 | 178,658 | 162,691 | |
Performance Income (Loss) | |||||
Realized Incentive Fees | 2,624 | 4,645 | 4,310 | 6,238 | |
Realized Carried Interest | 0 | 0 | 0 | 3,838 | |
Unrealized Carried Interest | 17,709 | 8,724 | 34,829 | (20,382) | |
Total Performance Income (Loss) | 20,333 | 13,369 | 39,139 | (10,306) | |
Investment Income (Loss) | |||||
Net Realized Gains (Losses) | 0 | 0 | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | 0 | 0 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | 0 | 0 | |
Total Segment Revenues | 113,530 | 98,337 | 217,797 | 152,385 | |
Segment Expenses | |||||
Cash Compensation and Benefits | 22,950 | 20,117 | 42,734 | 39,171 | |
Realized Performance Income Compensation | 1,050 | 1,858 | 1,724 | 4,030 | |
Unrealized Performance Income Compensation | 7,084 | 3,490 | 13,932 | (8,152) | |
Total Compensation and Benefits | 31,084 | 25,465 | 58,390 | 35,049 | |
Occupancy and Related Charges | 1,749 | 2,007 | 3,605 | 4,682 | |
Other Operating Expenses | 8,234 | 9,930 | 16,572 | 19,208 | |
Total Expenses | 41,067 | 37,402 | 78,567 | 58,939 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Economic Net Income (Loss) | 72,463 | 60,935 | 139,230 | 93,446 | |
Total Assets | 1,252,887 | 1,165,388 | 1,252,887 | 1,165,388 | |
Reportable segments | Capital Markets | |||||
Management, Monitoring and Transaction Fees, Net | |||||
Management Fees | 0 | 0 | 0 | 0 | |
Monitoring Fees | 0 | 0 | 0 | 0 | |
Transaction Fees | 93,698 | 39,276 | 214,795 | 96,831 | |
Fee Credits | 0 | 0 | 0 | 0 | |
Total Fees and Other | 93,698 | 39,276 | 214,795 | 96,831 | |
Performance Income (Loss) | |||||
Realized Incentive Fees | 0 | 0 | 0 | 0 | |
Realized Carried Interest | 0 | 0 | 0 | 0 | |
Unrealized Carried Interest | 0 | 0 | 0 | 0 | |
Total Performance Income (Loss) | 0 | 0 | 0 | 0 | |
Investment Income (Loss) | |||||
Net Realized Gains (Losses) | 0 | 0 | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | 0 | 0 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | 0 | 0 | |
Total Segment Revenues | 93,698 | 39,276 | 214,795 | 96,831 | |
Segment Expenses | |||||
Cash Compensation and Benefits | 17,568 | 7,403 | 40,129 | 15,571 | |
Realized Performance Income Compensation | 0 | 0 | 0 | 0 | |
Unrealized Performance Income Compensation | 0 | 0 | 0 | 0 | |
Total Compensation and Benefits | 17,568 | 7,403 | 40,129 | 15,571 | |
Occupancy and Related Charges | 628 | 943 | 1,292 | 1,571 | |
Other Operating Expenses | 3,699 | 3,222 | 9,027 | 7,318 | |
Total Expenses | 21,895 | 11,568 | 50,448 | 24,460 | |
Income (Loss) attributable to noncontrolling interests | 1,180 | 575 | 2,764 | 1,242 | |
Economic Net Income (Loss) | 70,623 | 27,133 | 161,583 | 71,129 | |
Total Assets | 517,438 | 321,000 | 517,438 | 321,000 | |
Reportable segments | Principal Activities | |||||
Management, Monitoring and Transaction Fees, Net | |||||
Management Fees | 0 | 0 | 0 | 0 | |
Monitoring Fees | 0 | 0 | 0 | 0 | |
Transaction Fees | 0 | 0 | 0 | 0 | |
Fee Credits | 0 | 0 | 0 | 0 | |
Total Fees and Other | 0 | 0 | 0 | 0 | |
Performance Income (Loss) | |||||
Realized Incentive Fees | 0 | 0 | 0 | 0 | |
Realized Carried Interest | 0 | 0 | 0 | 0 | |
Unrealized Carried Interest | 0 | 0 | 0 | 0 | |
Total Performance Income (Loss) | 0 | 0 | 0 | 0 | |
Investment Income (Loss) | |||||
Net Realized Gains (Losses) | 7,180 | 224,699 | 86,631 | 200,516 | |
Net Unrealized Gains (Losses) | 307,977 | (297,448) | 512,013 | (862,439) | |
Total Realized and Unrealized | 315,157 | (72,749) | 598,644 | (661,923) | |
Interest Income and Dividends | 67,836 | 74,451 | 124,718 | 182,571 | |
Interest Expense | (47,026) | (48,447) | (88,735) | (96,991) | |
Net Interest and Dividends | 20,810 | 26,004 | 35,983 | 85,580 | |
Total Investment Income (Loss) | 335,967 | (46,745) | 634,627 | (576,343) | |
Total Segment Revenues | 335,967 | (46,745) | 634,627 | (576,343) | |
Segment Expenses | |||||
Cash Compensation and Benefits | 34,551 | 23,695 | 71,633 | 48,405 | |
Realized Performance Income Compensation | 0 | 0 | 0 | 0 | |
Unrealized Performance Income Compensation | 0 | 0 | 0 | 0 | |
Total Compensation and Benefits | 34,551 | 23,695 | 71,633 | 48,405 | |
Occupancy and Related Charges | 3,500 | 3,670 | 7,242 | 7,392 | |
Other Operating Expenses | 13,144 | 10,372 | 26,089 | 21,758 | |
Total Expenses | 51,195 | 37,737 | 104,964 | 77,555 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Economic Net Income (Loss) | 284,772 | (84,482) | 529,663 | (653,898) | |
Total Assets | $ 11,197,514 | $ 9,744,199 | $ 11,197,514 | $ 9,744,199 |
SEGMENT REPORTING - Fees (Detai
SEGMENT REPORTING - Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total investment income (loss) | $ 585,002 | $ 125,737 | $ 1,247,500 | $ (487,191) |
Revenue earned by oil & gas producing entities | 17,382 | 18,225 | 34,655 | 31,786 |
Total Fees and Other | 931,788 | 576,757 | 1,647,740 | 739,562 |
Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Revenues | 1,265,138 | 543,979 | 2,287,836 | 169,372 |
Net realized and unrealized carried interest - consolidated funds | (564,011) | (328,618) | (912,527) | (203,694) |
Total investment income (loss) | 335,967 | (46,745) | 634,627 | (576,343) |
Total Fees and Other | 365,160 | 262,106 | 740,682 | 542,021 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Management fees relating to consolidated funds and placement fees | (52,300) | (44,048) | (99,402) | (82,318) |
Fee credits relating to consolidated funds | 2,707 | 1,921 | 3,646 | 2,349 |
Net realized and unrealized carried interest - consolidated funds | (10,384) | (19,186) | (21,441) | (9,625) |
Total investment income (loss) | (335,967) | 46,745 | (634,627) | 576,343 |
Revenue earned by oil & gas producing entities | 17,382 | 18,225 | 34,655 | 31,786 |
Reimbursable expenses | 36,076 | 18,638 | 59,625 | 34,519 |
Other | $ 9,136 | $ 10,483 | $ 17,448 | $ 17,136 |
SEGMENT REPORTING - Expenses (D
SEGMENT REPORTING - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total Expenses | $ 629,728 | $ 423,218 | $ 1,169,742 | $ 731,541 |
Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Expenses | 433,689 | 294,575 | 786,272 | 426,220 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Equity based compensation | 87,940 | 60,657 | 198,976 | 124,480 |
Reimbursable expenses and placement fees | 58,860 | 30,525 | 94,983 | 54,632 |
Operating expenses relating to consolidated funds, CFEs and other entities | 21,229 | 21,281 | 34,659 | 64,952 |
Expenses incurred by oil & gas producing entities | 12,924 | 20,392 | 24,101 | 38,218 |
Intangible amortization | 5,062 | (3,865) | 11,428 | 13,528 |
Other | $ 10,024 | $ (347) | $ 19,323 | $ 9,511 |
SEGMENT REPORTING - Income (Los
SEGMENT REPORTING - Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Income tax | $ (18,538) | $ (6,045) | $ (59,080) | $ (7,935) |
Equity based compensation | (198,976) | (124,480) | ||
Preferred Unit Distributions | (8,341) | (5,693) | (16,682) | (5,693) |
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | 405,646 | 93,890 | 664,989 | (236,049) |
Reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Economic Net Income (Loss) | 830,269 | 248,829 | 1,498,800 | (258,090) |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Income tax | (18,538) | (6,045) | (59,080) | (7,935) |
Amortization of intangibles and other, net | (4,524) | (9,144) | (37,361) | (38,026) |
Equity based compensation | (87,940) | (60,657) | (198,976) | (124,480) |
Net income (loss) attributable to noncontrolling interests held by KKR Holdings | (305,280) | (73,400) | (521,712) | 198,175 |
Preferred Unit Distributions | $ (8,341) | $ (5,693) | $ (16,682) | $ (5,693) |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total Assets | $ 42,868,081 | $ 39,002,897 | $ 37,506,871 |
Carry Pool Reclassification to Liabilities | 1,152,015 | 987,994 | |
Impact of KKR Management Holdings Corp. | 2,493,529 | $ 2,996,865 | |
Reportable segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total Assets | 15,000,669 | 13,023,171 | |
Segment Reconciling Items | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Impact of Consolidation of Investment Vehicles and Other Entities | 26,412,562 | 23,086,165 | |
Carry Pool Reclassification to Liabilities | 1,107,578 | ||
Impact of KKR Management Holdings Corp. | 302,835 | 289,957 | |
Accounting basis difference for oil & natural gas properties | $ 12,757 | $ 39,430 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, shares in Millions | Jul. 27, 2017 | Mar. 30, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jul. 24, 2017 |
Class of Stock [Line Items] | ||||||||||||
Transfer of interests under common control | $ 0 | |||||||||||
Common Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | ||||||
Common Units | Forecast | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | $ 0.17 | ||||||||||
2015 Unit Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit repurchase program, authorized amount | $ 750,000,000 | 750,000,000 | ||||||||||
Total Capital - Common Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Transfer of interests under common control | $ 10,300,000 | $ 10,281,000 | ||||||||||
KIFL | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Ownership percentage | 60.00% | |||||||||||
KKR Holdings | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Transfer of interests under common control | $ 7,900,000 | |||||||||||
Subsequent Event | Common Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | |||||||||||
Subsequent Event | 2015 Unit Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Payments to repurchase common units | $ 459,000,000 | |||||||||||
Units repurchased (in units) | 31.7 |
GOODWILL AND INTANGIBLE ASSET80
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 01, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | |||
Carrying value of goodwill | $ 83,500 | $ 89,000 | |
Public Markets | |||
Goodwill [Line Items] | |||
Carrying value of goodwill | 53,500 | 59,000 | |
Principal Activities | |||
Goodwill [Line Items] | |||
Carrying value of goodwill | $ 30,000 | $ 30,000 | |
PAAMCO Prisma | |||
Goodwill [Line Items] | |||
Carrying value of goodwill | $ 5,500 |
GOODWILL AND INTANGIBLE ASSET81
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible Assets, Net consists of the following: | ||
Finite-Lived Intangible Assets | $ 73,249 | $ 251,768 |
Accumulated Amortization | (53,929) | (116,744) |
Intangible Assets, Net | $ 19,320 | $ 135,024 |
GOODWILL AND INTANGIBLE ASSET82
GOODWILL AND INTANGIBLE ASSETS - Change in Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance, Beginning of Period | $ 135,024 |
Amortization Expense | (11,418) |
Foreign Exchange | 1,347 |
Other | (105,633) |
Balance, End of Period | $ 19,320 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contingent Repayment Guarantees (Details) | Jun. 30, 2017USD ($) |
Contingent Repayment Guarantees | |
Private equity fund carried interest amount subject to clawback provision assuming liquidation at fair value | $ 47,300,000 |
Liquidation value for clawback obligation | 0 |
Clawback obligation amount if private equity vehicles liquidated at fair value | 2,078,700,000 |
Clawback receivable maximum potential amount (up to) | 223,600,000 |
Clawback receivable | 72,200,000 |
Clawback obligations, amount due from noncontrolling interest holders | 19,700,000 |
Private Equity | |
Investment Commitments | |
Unfunded commitments | 3,465,900,000 |
Principal Activities | |
Investment Commitments | |
Unfunded commitments | 152,800,000 |
Capital Markets | |
Investment Commitments | |
Unfunded commitments | $ 461,300,000 |
REGULATORY CAPITAL REQUIREMEN84
REGULATORY CAPITAL REQUIREMENTS (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)entity | |
REGULATORY CAPITAL REQUIREMENTS | |
Number of entities based in Mumbai subject to capital requirements of the RBI and SEBI | entity | 2 |
Cash restricted for payment of cash dividend and advances | $ | $ 144.6 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Jul. 27, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 |
Common Units | |||||||
Subsequent Events | |||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | |
Subsequent Event | Common Units | |||||||
Subsequent Events | |||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | ||||||
Subsequent Event | Capital - Series A Preferred Units | |||||||
Subsequent Events | |||||||
Unit distribution to be paid (in dollars per unit) | 0.421875 | ||||||
Subsequent Event | Capital - Series B Preferred Units | |||||||
Subsequent Events | |||||||
Unit distribution to be paid (in dollars per unit) | $ 0.406250 |