Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
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 | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 496,891,815 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and Cash Equivalents | $ 1,880,834 | $ 1,876,687 |
Cash and Cash Equivalents Held at Consolidated Entities | 868,114 | 1,802,372 |
Restricted Cash and Cash Equivalents | 59,316 | 56,302 |
Investments | 42,101,905 | 39,013,934 |
Due from Affiliates | 565,681 | 554,349 |
Other Assets | 2,103,303 | 2,531,075 |
Total Assets | 47,579,153 | 45,834,719 |
Liabilities and Equity | ||
Debt Obligations | 22,041,271 | 21,193,859 |
Due to Affiliates | 265,190 | 323,810 |
Accounts Payable, Accrued Expenses and Other Liabilities | 3,503,754 | 3,654,250 |
Total Liabilities | 25,810,215 | 25,171,919 |
Commitments and Contingencies | ||
Redeemable Noncontrolling Interests | 690,630 | 610,540 |
Equity | ||
KKR & Co. L.P. Capital - Common Unitholders (489,242,042 and 486,174,736 common units issued and outstanding as of March 31, 2018 and December 31, 2017, respectively) | 6,918,185 | 6,703,382 |
Total KKR & Co. L.P. Partners' Capital | 7,400,739 | 7,185,936 |
Noncontrolling Interests | 13,677,569 | 12,866,324 |
Total Equity | 21,078,308 | 20,052,260 |
Total Liabilities and Equity | 47,579,153 | 45,834,719 |
Consolidated VIEs | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 845,389 | 1,699,252 |
Restricted Cash and Cash Equivalents | 27,309 | 21,255 |
Investments | 27,614,025 | 24,982,170 |
Due from Affiliates | 5,919 | 23,562 |
Other Assets | 409,236 | 344,575 |
Total Assets | 28,901,878 | 27,070,814 |
Liabilities and Equity | ||
Debt Obligations | 16,235,845 | 16,356,566 |
Accounts Payable, Accrued Expenses and Other Liabilities | 1,264,097 | 1,167,154 |
Total Liabilities | 17,499,942 | 17,523,720 |
Consolidated VIEs | Consolidated CFEs | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 594,873 | 1,467,829 |
Restricted Cash and Cash Equivalents | 0 | 0 |
Investments | 16,063,337 | 15,573,203 |
Due from Affiliates | 0 | 0 |
Other Assets | 185,800 | 176,572 |
Total Assets | 16,844,010 | 17,217,604 |
Liabilities and Equity | ||
Debt Obligations | 15,251,646 | 15,586,216 |
Accounts Payable, Accrued Expenses and Other Liabilities | 875,365 | 923,494 |
Total Liabilities | 16,127,011 | 16,509,710 |
Consolidated VIEs | Consolidated KKR Funds and Other Entities | ||
Assets | ||
Cash and Cash Equivalents Held at Consolidated Entities | 250,516 | 231,423 |
Restricted Cash and Cash Equivalents | 27,309 | 21,255 |
Investments | 11,550,688 | 9,408,967 |
Due from Affiliates | 5,919 | 23,562 |
Other Assets | 223,436 | 168,003 |
Total Assets | 12,057,868 | 9,853,210 |
Liabilities and Equity | ||
Debt Obligations | 984,199 | 770,350 |
Accounts Payable, Accrued Expenses and Other Liabilities | 388,732 | 243,660 |
Total Liabilities | 1,372,931 | 1,014,010 |
Capital - Series A Preferred Units | ||
Equity | ||
Series A Preferred Units (13,800,000 units issued and outstanding as of March 31, 2018 and December 31, 2017), Series B Preferred Units (6,200,000 units issued and outstanding as of March 31, 2018 and December 31, 2017) | 332,988 | 332,988 |
Capital - Series B Preferred Units | ||
Equity | ||
Series A Preferred Units (13,800,000 units issued and outstanding as of March 31, 2018 and December 31, 2017), Series B Preferred Units (6,200,000 units issued and outstanding as of March 31, 2018 and December 31, 2017) | $ 149,566 | $ 149,566 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (Parenthetical) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Common units issued (in units) | 489,242,042 | 486,174,736 |
Common units outstanding (in units) | 489,242,042 | 486,174,736 |
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Fees and Other | $ 394,394 | $ 380,179 |
Capital Allocation-Based Income | 78,212 | 387,576 |
Total Revenues | 472,606 | 767,755 |
Expenses | ||
Compensation and Benefits | 298,136 | 402,963 |
Occupancy and Related Charges | 14,215 | 14,851 |
General, Administrative and Other | 124,250 | 122,200 |
Total Expenses | 436,601 | 540,014 |
Investment Income (Loss) | ||
Net Gains (Losses) from Investment Activities | 472,800 | 506,645 |
Dividend Income | 33,064 | 9,924 |
Interest Income | 298,256 | 280,980 |
Interest Expense | (219,590) | (186,854) |
Total Investment Income (Loss) | 584,530 | 610,695 |
Income (Loss) Before Taxes | 620,535 | 838,436 |
Income Taxes | 17,641 | 40,542 |
Net Income (Loss) | 602,894 | 797,894 |
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | 25,674 | 20,933 |
Net Income (Loss) Attributable to Noncontrolling Interests | 398,777 | 509,277 |
Net Income (Loss) Attributable to KKR & Co. L.P. | 178,443 | 267,684 |
Plus: Preferred Distributions | 8,341 | 8,341 |
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | $ 170,102 | $ 259,343 |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit | ||
Basic (in dollars per unit) | $ 0.36 | $ 0.57 |
Diluted (in dollars per unit) | $ 0.32 | $ 0.52 |
Weighted Average Common Units Outstanding | ||
Basic (in units) | 487,704,838 | 453,695,846 |
Diluted (in units) | 535,918,274 | 496,684,340 |
Capital - Series A Preferred Units | ||
Investment Income (Loss) | ||
Plus: Preferred Distributions | $ 5,822 | $ 5,822 |
Capital - Series B Preferred Units | ||
Investment Income (Loss) | ||
Plus: Preferred Distributions | $ 2,519 | $ 2,519 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ 602,894 | $ 797,894 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation Adjustments | 3,624 | 16,576 |
Comprehensive Income (Loss) | 606,518 | 814,470 |
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests | 25,674 | 20,933 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests | 398,050 | 520,109 |
Comprehensive Income (Loss) Attributable to KKR & Co. L.P. | $ 182,794 | $ 273,428 |
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, 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) | 776,961 | 259,343 | 259,343 | 5,822 | 2,519 | 509,277 | ||
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) | 16,576 | 5,744 | 5,744 | 10,832 | ||||
Changes in Consolidation | (71,657) | (71,657) | ||||||
Transfer of interests under common control and Other (See Note 15 Equity) | 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 | 43,564 | (388) | 43,176 | (43,176) | ||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units (in units) | 3,190,630 | |||||||
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units and Other | 1,969 | 1,802 | 167 | 1,969 | ||||
Equity-Based and Other Non-Cash Compensation | 111,036 | 49,943 | 49,943 | 61,093 | ||||
Capital Contributions | 528,833 | 528,833 | ||||||
Capital Distributions | (343,083) | (72,381) | (72,381) | (5,822) | (2,519) | (262,361) | ||
Balance at Mar. 31, 2017 | 17,506,370 | 5,800,915 | (45,561) | 5,755,354 | 332,988 | 149,566 | 11,268,462 | |
Balance (in units) at Mar. 31, 2017 | 455,570,965 | |||||||
Balance at Dec. 31, 2016 | 632,348 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Net Income (Loss) | 20,933 | |||||||
Capital Contributions | 128,499 | |||||||
Capital Distributions | (352) | |||||||
Balance at Mar. 31, 2017 | 781,428 | |||||||
Balance at Dec. 31, 2017 | 20,052,260 | 6,722,863 | (19,481) | 6,703,382 | 332,988 | 149,566 | 12,866,324 | |
Balance (in units) at Dec. 31, 2017 | 486,174,736 | |||||||
Increase (Decrease) in Partners' Capital | ||||||||
Net Income (Loss) | 577,220 | 170,102 | 170,102 | 5,822 | 2,519 | 398,777 | ||
Other Comprehensive Income (Loss)- Foreign Currency Translation (Net of Tax) | 3,624 | 4,351 | 4,351 | (727) | ||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units | 51,221 | (132) | 51,089 | (51,089) | ||||
Exchange of KKR Holdings L.P. Units and Other Securities to KKR & Co. L.P. Common Units (in units) | 3,067,306 | |||||||
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units and Other | 4,222 | 4,205 | 17 | 4,222 | ||||
Equity-Based and Other Non-Cash Compensation | 100,491 | 67,796 | 67,796 | 32,695 | ||||
Capital Contributions | 1,270,723 | 0 | 1,270,723 | |||||
Capital Distributions | (930,232) | (82,757) | (82,757) | (5,822) | (2,519) | (839,134) | ||
Balance at Mar. 31, 2018 | 21,078,308 | $ 6,933,430 | $ (15,245) | $ 6,918,185 | $ 332,988 | $ 149,566 | $ 13,677,569 | |
Balance (in units) at Mar. 31, 2018 | 489,242,042 | |||||||
Balance at Dec. 31, 2017 | 610,540 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Net Income (Loss) | 25,674 | |||||||
Capital Contributions | 56,950 | |||||||
Capital Distributions | (2,534) | |||||||
Balance at Mar. 31, 2018 | $ 690,630 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net Income (Loss) | $ 602,894 | $ 797,894 |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: | ||
Equity-Based and Other Non-Cash Compensation | 96,227 | 111,036 |
Net Realized (Gains) Losses on Investments | (30,380) | (146,164) |
Change in Unrealized (Gains) Losses on Investments | (442,420) | (360,481) |
Capital Allocation-Based Income | (78,212) | (387,576) |
Other Non-Cash Amounts | 74,156 | 37,860 |
Cash Flows Due to Changes in Operating Assets and Liabilities: | ||
Change in Consolidation and Other | 0 | (1,254) |
Change in Due from / to Affiliates | (71,686) | (48,964) |
Change in Other Assets | 420,004 | 539,623 |
Change in Accounts Payable, Accrued Expenses and Other Liabilities | (41,480) | 310,776 |
Investments Purchased | (9,515,686) | (8,345,252) |
Proceeds from Investments | 6,829,083 | 6,341,592 |
Net Cash Provided (Used) by Operating Activities | (2,157,500) | (1,150,910) |
Investing Activities | ||
Purchase of Fixed Assets | (8,670) | (21,384) |
Development of Oil and Natural Gas Properties | 0 | (177) |
Net Cash Provided (Used) by Investing Activities | (8,670) | (21,561) |
Financing Activities | ||
Distributions to Partners | (82,757) | (72,381) |
Distributions to Redeemable Noncontrolling Interests | (2,534) | (352) |
Contributions from Redeemable Noncontrolling Interests | 56,950 | 128,499 |
Distributions to Noncontrolling Interests | (839,134) | (262,361) |
Contributions from Noncontrolling Interests | 1,263,774 | 520,269 |
Preferred Unit Distributions | (8,341) | (8,341) |
Proceeds from Debt Obligations | 3,588,463 | 2,160,958 |
Repayment of Debt Obligations | (2,750,750) | (1,154,415) |
Financing Costs Paid | (7,500) | (5,790) |
Net Cash Provided (Used) by Financing Activities | 1,218,171 | 1,306,086 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 20,902 | 7,680 |
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash | (927,097) | 141,295 |
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 3,735,361 | 4,345,815 |
Cash, Cash Equivalents and Restricted Cash, End of Period | 2,808,264 | 4,487,110 |
Supplemental Disclosures of Cash Flow Information | ||
Payments for Interest | 207,703 | 197,242 |
Payments for Income Taxes | 19,295 | 9,687 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities | ||
Equity-Based and Other Non-Cash Contributions | 100,491 | 111,036 |
Non-Cash Contributions from Noncontrolling Interests | 6,949 | 8,564 |
Debt Obligations - Net Gains (Losses), Translation and Other | (11,724) | (78,860) |
Tax Effects Resulting from Exchange of KKR Holdings L.P. Units and delivery of KKR & Co. L.P. Common Units | 4,222 | 1,969 |
Change in Consolidation and Other | ||
Investments | 0 | (70,403) |
Noncontrolling Interests | 0 | (71,657) |
Reconciliation to the Condensed Consolidated Statements of Financial Condition | ||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ 3,735,361 | $ 4,345,815 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2018 | |
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 and credit, with strategic manager partnerships that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors 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 the capital it manages for fund investors 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 March 31, 2018 , KKR & Co. L.P. held approximately 59.5% of the KKR Group Partnership Units and principals through KKR Holdings held approximately 40.5% 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 condensed consolidated balance sheet data was derived from audited consolidated financial statements included in KKR & Co. L.P.’s Annual Report on Form 10-K for the year ended December 31, 2017 , 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 for the year ended December 31, 2017 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 revenues, 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 vehicle. 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 one year), 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 that have made investments on or prior to December 31, 2015; (iii) certain former principals and their designees representing a portion of the carried interest received by the general partners of KKR's private equity funds that was allocated to them with respect to private equity investments made during such former principals' tenure with KKR prior to October 1, 2009; (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; and (vi) holders of exchangeable equity securities representing ownership interests in a subsidiary of a KKR Group Partnership issued in connection with the acquisition of Avoca Capital ("Avoca"). On January 16, 2018, KKR Financial Holdings LLC ("KFN") completed the redemption of all of its outstanding 7.375% Series A LLC Preferred Shares. 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 March 31, 2018 2017 Balance at the beginning of the period $ 4,793,475 $ 4,293,337 Net income (loss) attributable to noncontrolling interests held by KKR Holdings (1) 121,002 216,432 Other comprehensive income (loss), net of tax (2) 3,143 4,920 Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units (3) (33,775 ) (35,904 ) Equity-based and other non-cash compensation 32,695 61,093 Capital contributions 39 37 Capital distributions (57,167 ) (56,637 ) Transfer of interests under common control and Other (See Note 15 "Equity") — 7,919 Balance at the end of the period $ 4,859,412 $ 4,491,197 (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. Common Unitholders and KKR Holdings, with the exception of certain tax assets and liabilities that are directly allocable to KKR Management Holdings Corp., is attributed based on the percentage of the weighted average KKR Group Partnership Units held by KKR and KKR Holdings, each of which holds equity of the KKR Group Partnerships. However, primarily because of the (i) contribution of certain expenses borne entirely by KKR Holdings, (ii) the periodic exchange of KKR Holdings units for KKR & Co. L.P. common units pursuant to the exchange agreement and (iii) the contribution of certain expenses borne entirely by KKR associated with the KKR & Co. L.P. 2010 Equity Incentive Plan ("Equity Incentive Plan"), equity allocations shown in the condensed consolidated statement of changes in equity differ from their respective pro rata ownership interests in KKR's net assets. The following table presents net income (loss) attributable to noncontrolling interests held by KKR Holdings: Three Months Ended March 31, 2018 2017 Net income (loss) $ 602,894 $ 797,894 Less: Net income (loss) attributable to Redeemable Noncontrolling Interests 25,674 20,933 Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities 277,775 292,845 Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders 8,341 8,341 Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. 6,068 19,160 Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings $ 297,172 $ 494,935 Net income (loss) attributable to Noncontrolling Interests held by KKR Holdings $ 121,002 $ 216,432 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 condensed 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. 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. 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. Equity Method - Other - Consists primarily of (i) certain direct interests in operating companies in which KKR is deemed to exert significant influence under GAAP and (ii) certain interests in partnerships and joint ventures that hold private equity and real estate investments. Equity Method - Capital Allocation - Based Income - Consists primarily of (i) the capital interest KKR holds as the general partner in certain investment funds, which are not consolidated and (ii) the carried interest component of the general partner interest, which are accounted for as a single unit of account. 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 condensed 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 - other and other financial instruments not held through a consolidated investment fund. 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 condensed 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. The carrying value of equity method investments 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. For equity method investments for which KKR has not elected the fair value option, 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 March 31, 2018, equity method investees for which KKR reports financial results on a lag include Marshall Wace LLP ("Marshall Wace"). 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 - Capital Allocation - Based Income investments approximate fair value, because the underlying investments of the unconsolidated investment funds are reported at fair value. 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 CLOs, 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 in consolidation 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 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. I |
NET GAINS (LOSSES) FROM INVESTM
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES | 3 Months Ended |
Mar. 31, 2018 | |
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: Three Months Ended March 31, 2018 Three Months Ended Net Realized Net Unrealized Total Net Realized Net Unrealized Total Private Equity (1) $ 16,253 $ 158,369 $ 174,622 $ 106,813 $ 3,288 $ 110,101 Credit (1) 1,263 58,150 59,413 (213,857 ) 247,139 33,282 Investments of Consolidated CFEs (1) (26,516 ) (48,403 ) (74,919 ) (1,103 ) 12,983 11,880 Real Assets (1) 12,957 59,297 72,254 3,060 6,798 9,858 Equity Method - Other (1) 9,210 135,604 144,814 (287 ) 35,320 35,033 Other Investments (1) (244,199 ) 86,365 (157,834 ) (8,264 ) 113,984 105,720 Foreign Exchange Forward Contracts and Options (2) (32,614 ) (63,118 ) (95,732 ) 9,986 (58,263 ) (48,277 ) Securities Sold Short (2) 275,949 (29,874 ) 246,075 246,787 42,270 289,057 Other Derivatives (2) 3,642 (8,223 ) (4,581 ) (5,760 ) (4,847 ) (10,607 ) Debt Obligations and Other (3) 14,435 94,253 108,688 8,789 (38,191 ) (29,402 ) Net Gains (Losses) From Investment Activities $ 30,380 $ 442,420 $ 472,800 $ 146,164 $ 360,481 $ 506,645 (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 | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Investments consist of the following: March 31, 2018 December 31, 2017 Private Equity $ 4,416,481 $ 3,301,261 Credit 8,308,887 7,621,320 Investments of Consolidated CFEs 16,063,337 15,573,203 Real Assets 2,876,531 2,302,061 Equity Method - Other 3,505,032 3,324,631 Equity Method - Capital Allocation - Based Income 4,086,218 4,132,171 Other Investments 2,845,419 2,759,287 Total Investments $ 42,101,905 $ 39,013,934 As of March 31, 2018 and December 31, 2017, there were no investments which represented greater than 5% of total investments. The majority of the securities underlying private equity investments represent equity securities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
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. Investments classified as Equity Method - Other, for which the fair value option has not been elected, have been excluded from the tables below. Assets, at fair value: March 31, 2018 Level I Level II Level III Total Private Equity $ 994,496 $ 333,574 $ 3,088,411 $ 4,416,481 Credit — 2,490,032 5,818,855 8,308,887 Investments of Consolidated CFEs — 10,804,938 5,258,399 16,063,337 Real Assets 49,098 — 2,827,433 2,876,531 Equity Method - Other 52,555 291,668 1,085,725 1,429,948 Other Investments 858,120 186,095 1,801,204 2,845,419 Total 1,954,269 14,106,307 19,880,027 35,940,603 Foreign Exchange Contracts and Options — 70,032 — 70,032 Other Derivatives — 32,425 43,131 (1) 75,556 Total Assets $ 1,954,269 $ 14,208,764 $ 19,923,158 $ 36,086,191 December 31, 2017 Level I Level II Level III Total Private Equity $ 1,043,390 $ 85,581 $ 2,172,290 $ 3,301,261 Credit — 2,482,383 5,138,937 7,621,320 Investments of Consolidated CFEs — 10,220,113 5,353,090 15,573,203 Real Assets 50,794 — 2,251,267 2,302,061 Equity Method - Other 60,282 247,748 1,076,709 1,384,739 Other Investments 864,872 134,404 1,760,011 2,759,287 Total 2,019,338 13,170,229 17,752,304 32,941,871 Foreign Exchange Contracts and Options — 96,584 — 96,584 Other Derivatives — 33,125 51,949 (1) 85,074 Total Assets $ 2,019,338 $ 13,299,938 $ 17,804,253 $ 33,123,529 (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. Liabilities, at fair value: March 31, 2018 Level I Level II Level III Total Securities Sold Short $ 430,009 $ 19,554 $ — $ 449,563 Foreign Exchange Contracts and Options — 304,940 — 304,940 Unfunded Revolver Commitments — — 33,530 (1) 33,530 Other Derivatives — 20,775 41,800 (2) 62,575 Debt Obligations of Consolidated CFEs — 10,113,479 5,138,167 15,251,646 Total Liabilities $ 430,009 $ 10,458,748 $ 5,213,497 $ 16,102,254 December 31, 2017 Level I Level II Level III Total Securities Sold Short $ 692,007 $ — $ — $ 692,007 Foreign Exchange Contracts and Options — 260,948 — 260,948 Unfunded Revolver Commitments — — 17,629 (1) 17,629 Other Derivatives — 27,581 41,800 (2) 69,381 Debt Obligations of Consolidated CFEs — 10,347,980 5,238,236 15,586,216 Total Liabilities $ 692,007 $ 10,636,509 $ 5,297,665 $ 16,626,181 (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 equity interest in Marshall Wace and its affiliates in November 2015 to increase KKR's ownership interest up to 39.9% in periodic increments from 2018 to 2019. The option is valued using a Monte-Carlo simulation valuation methodology. Key inputs used in this methodology that require estimates include Marshall Wace's dividend yield, assets under management volatility and equity volatility. See Note 4 "Investments." 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 months ended March 31, 2018 and 2017, respectively: For the Three Months Ended March 31, 2018 Level III Investments Level III Debt Obligations Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method - Other Other Investments Total Debt Obligations of Consolidated CFEs Balance, Beg. of Period $ 2,172,290 $ 5,138,937 $ 5,353,090 $ 2,251,267 $ 1,076,709 $ 1,760,011 $ 17,752,304 $ 5,238,236 Transfers In / (Out) Due to Changes in Consolidation — — — — — — — — Transfers In — — — — — — — — Transfers Out — — — — — — — — Asset Purchases / Debt Issuances 727,626 890,113 — 540,898 2,037 64,757 2,225,431 — Sales / Paydowns (35,245 ) (230,144 ) (11,541 ) (34,237 ) (31,939 ) (36,218 ) (379,324 ) — Settlements — (53,825 ) — — — — (53,825 ) (11,541 ) Net Realized Gains (Losses) 15,312 11,581 — 8,354 9,348 8,892 53,487 — Net Unrealized Gains (Losses) 208,428 77,715 (83,150 ) 61,151 29,570 3,762 297,476 (88,528 ) Change in Other Comprehensive Income — (15,522 ) — — — — (15,522 ) — Balance, End of Period $ 3,088,411 $ 5,818,855 $ 5,258,399 $ 2,827,433 $ 1,085,725 $ 1,801,204 $ 19,880,027 $ 5,138,167 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 $ 208,428 $ 86,754 $ (83,150 ) $ 61,151 $ 34,928 $ 10,442 $ 318,553 $ (88,528 ) For the Three Months Ended March 31, 2017 Level III Investments Level III Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method - Other Other Investments 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 In / (Out) Due to Changes in Consolidation — (95,962 ) — — — — (95,962 ) — Transfers In — — — — — — — — Transfers Out — — — — — (1,496 ) (1,496 ) — Asset Purchases / Debt Issuances 429,644 596,862 — 250,278 9,556 15,119 1,301,459 — Sales / Paydowns (22,629 ) (168,858 ) (8,940 ) (21,677 ) (12,678 ) (8,128 ) (242,910 ) — Settlements — (11,075 ) — — — — (11,075 ) (8,940 ) Net Realized Gains (Losses) — (9,243 ) — 3,060 — (19,530 ) (25,713 ) — Net Unrealized Gains (Losses) 34,630 280,039 29,272 6,798 25,827 52,843 429,409 27,769 Change in Other Comprehensive Income — 20,899 — — — — 20,899 — Balance, End 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 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 $ 34,630 $ 280,039 $ 29,272 $ 6,798 $ 25,827 $ 52,843 $ 429,409 $ 27,769 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 months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Investments, at fair value: Transfers from Level III to Level I (1) $ — $ 1,496 (1) Transfers out of Level III into Level I are attributable to companies that are valued using their publicly traded market price. 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 March 31, 2018 : Fair Value March 31, 2018 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Private Equity $ 3,088,411 Private Equity $ 1,282,345 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.1% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 47.7% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 50.6% 25.0% - 100.0% (5) Weight Ascribed to Transaction Price 1.7% 0.0% - 50.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 14.7x 7.9x - 28.0x Increase Enterprise Value/Forward EBITDA Multiple 12.6x 6.0x - 20.4x Increase Discounted cash flow Weighted Average Cost of Capital 9.9% 6.9% - 14.9% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 5.1x - 15.3x Increase Growth Equity $ 1,806,066 Inputs to market comparables, discounted cash flow and milestones Illiquidity Discount 11.7% 10.0% - 20.0% Decrease Weight Ascribed to Market Comparables 19.7% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 7.7% 0.0% - 75.0% (5) Weight Ascribed to Milestones 72.6% 0.0% - 100.0% (6) Scenario Weighting Base 54.9% 40.0% - 80.0% Increase Downside 21.3% 10.0% - 30.0% Decrease Upside 23.8% 10.0% - 40.0% Increase Credit $ 5,818,855 Yield Analysis Yield 10.5% 1.0% - 30.8% Decrease Net Leverage 4.7x 0.5x - 30.6x Decrease EBITDA Multiple 13.9x 0.1x - 29.7x Increase Investments of Consolidated CFEs $ 5,258,399 (9) Debt Obligations of Consolidated CFEs $ 5,138,167 Discounted cash flow Yield 5.8% 2.6% - 26.0% Decrease Real Assets $ 2,827,433 (10) Energy $ 1,606,595 Discounted cash flow Weighted Average Cost of Capital 10.2% 9.4% - 16.3% Decrease Average Price Per BOE (8) $41.47 $28.90 - $43.56 Increase Fair Value March 31, 2018 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Real Estate $ 1,014,158 Inputs to direct income capitalization and discounted cash flow Weight Ascribed to Direct Income Capitalization 38.6% 0.0% - 100.0% (7) Weight Ascribed to Discounted Cash Flow 61.4% 0.0% - 100.0% (5) Direct income capitalization Current Capitalization Rate 5.9% 1.1% - 12.0% Decrease Discounted cash flow Unlevered Discount Rate 8.8% 4.5% - 18.0% Decrease Equity Method - Other $ 1,085,725 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.6% 5.0% - 10.0% Decrease Weight Ascribed to Market Comparables 42.8% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 42.8% 0.0% - 50.0% (5) Weight Ascribed to Transaction Price 14.4% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 12.3x 7.9x - 14.0x Increase Enterprise Value/Forward EBITDA Multiple 11.6x 6.0x - 12.7x Increase Discounted cash flow Weighted Average Cost of Capital 8.6% 6.2% - 11.1% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 6.0x - 12.5x Increase Other Investments $ 1,801,204 (11) Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 10.4% 5.0% - 20.0% Decrease Weight Ascribed to Market Comparables 27.9% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 45.3% 0.0% - 100.0% (5) Weight Ascribed to Transaction Price 26.8% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 10.4x 0.1x - 13.3x Increase Enterprise Value/Forward EBITDA Multiple 9.4x 3.5x - 13.5x Increase Discounted cash flow Weighted Average Cost of Capital 13.1% 8.1% - 20.8% Decrease Enterprise Value/LTM EBITDA Exit Multiple 3.9x 1.9x - 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 $206.7 million that was valued using a discounted cash flow analysis. The significant inputs used included the weighted average cost of capital 7.2% and the enterprise value/LTM EBITDA Exit Multiple 12.0 x. (11) Consists primarily of investments in common stock, preferred stock, warrants and options of companies that are not private equity, real assets, credit, equity method - other or investments of consolidated CFEs. 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 | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 Assets Private Equity $ 3,092 $ 3,744 Credit 4,746,290 4,381,519 Investments of Consolidated CFEs 16,063,337 15,573,203 Real Assets 340,412 343,820 Equity Method - Other 1,429,948 1,384,739 Other Investments 308,391 344,996 Total $ 22,891,470 $ 22,032,021 Liabilities Debt Obligations of Consolidated CFEs $ 15,251,646 $ 15,586,216 Total $ 15,251,646 $ 15,586,216 The following table presents the net realized and net change in unrealized gains (losses) on financial instruments on which the fair value option was elected: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net Realized Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 71 $ 316 $ 387 $ — $ 362 $ 362 Credit (28,867 ) 2,656 (26,211 ) (239,098 ) 55,870 (183,228 ) Investments of Consolidated CFEs (26,516 ) (48,403 ) (74,919 ) (1,103 ) 12,983 11,880 Real Assets 428 (3,483 ) (3,055 ) (216 ) 6,788 6,572 Equity Method - Other 9,348 66,093 75,441 — 20,362 20,362 Other Investments 4,607 (7,878 ) (3,271 ) (18,799 ) 17,281 (1,518 ) Total $ (40,929 ) $ 9,301 $ (31,628 ) $ (259,216 ) $ 113,646 $ (145,570 ) Liabilities Debt Obligations of Consolidated CFEs 13,256 93,654 106,910 4,825 (11,058 ) (6,233 ) Total $ 13,256 $ 93,654 $ 106,910 $ 4,825 $ (11,058 ) $ (6,233 ) |
NET INCOME (LOSS) ATTRIBUTABLE
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | 3 Months Ended |
Mar. 31, 2018 | |
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 months ended March 31, 2018 and 2017 , basic and diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit were calculated as follows: Three Months Ended March 31, 2018 2017 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 170,102 $ 259,343 Excess of carrying value over consideration transferred on redemption of KFN 7.375% Series A LLC Preferred Shares 3,102 — Net Income (Loss) Available to KKR & Co. L.P. Common Unitholders $ 173,204 $ 259,343 Basic Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 487,704,838 453,695,846 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic $ 0.36 $ 0.57 Diluted Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 487,704,838 453,695,846 Weighted Average Unvested Common Units and Other Exchangeable Securities 48,213,436 42,988,494 Weighted Average Common Units Outstanding - Diluted 535,918,274 496,684,340 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted $ 0.32 $ 0.52 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 three months ended March 31, 2018 and 2017 , 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. Three Months Ended March 31, 2018 2017 Weighted Average KKR Holdings Units Outstanding 335,016,218 352,586,584 Additionally, for the three months ended March 31, 2018 , 5.0 million KKR common units subject to a market-price based vesting condition ("Market Condition Awards") were excluded from the calculation of Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted since the vesting conditions have not been satisfied. See Note 12 "Equity Based Compensation." |
OTHER ASSETS AND ACCOUNTS PAYAB
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 Unsettled Investment Sales (1) $ 154,082 $ 134,781 Receivables 53,448 138,109 Due from Broker (2) 331,830 682,403 Oil & Gas Assets, net (3) 245,373 252,371 Deferred Tax Assets, net 131,361 131,944 Interest Receivable 244,547 189,785 Fixed Assets, net (4) 368,957 364,203 Foreign Exchange Contracts and Options (5) 70,032 96,584 Intangible Assets, net (6) 124,514 129,178 Goodwill (6) 83,500 83,500 Derivative Assets 75,556 85,074 Deposits 16,654 16,330 Prepaid Taxes 78,295 83,371 Prepaid Expenses 23,530 25,677 Deferred Financing Costs 12,552 7,534 Other 89,072 110,231 Total $ 2,103,303 $ 2,531,075 (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. Depreciation, depletion and amortization amounted to $7,077 and $5,864 for the three months ended March 31, 2018 and 2017, respectively. (4) Net of accumulated depreciation and amortization of $160,376 and $156,859 as of March 31, 2018 and December 31, 2017 , respectively. Depreciation and amortization expense of $3,710 and $4,197 for the three months ended March 31, 2018 and 2017, 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. Such instruments 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. (6) See Note 16 "Goodwill and Intangible Assets." Accounts Payable, Accrued Expenses and Other Liabilities consist of the following: March 31, 2018 December 31, 2017 Amounts Payable to Carry Pool (1) $ 1,176,070 $ 1,220,559 Unsettled Investment Purchases (2) 945,940 885,945 Securities Sold Short (3) 449,563 692,007 Derivative Liabilities 62,575 69,381 Accrued Compensation and Benefits 107,401 35,953 Interest Payable 183,350 168,673 Foreign Exchange Contracts and Options (4) 304,940 260,948 Accounts Payable and Accrued Expenses 111,519 152,916 Deferred Rent 16,322 17,441 Taxes Payable 23,331 35,933 Uncertain Tax Positions Reserve 58,370 58,369 Other Liabilities 64,373 56,125 Total $ 3,503,754 $ 3,654,250 (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. Such instruments 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. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2018 | |
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 $4.1 billion at March 31, 2018 . 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 March 31, 2018 , KKR's commitments to these unconsolidated investment funds was $2.0 billion . KKR has not provided any financial support other than its obligated amount as of March 31, 2018 . 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 condensed consolidated statements of financial condition. KKR earns management fees, including subordinated collateral management fees, for managing the collateral of the CLO vehicles. As of March 31, 2018 , 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 $27.5 million as of March 31, 2018 . 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 March 31, 2018 and December 31, 2017, the maximum exposure to loss, before allocations to the carry pool and noncontrolling interests, if any, for those VIEs in which KKR is determined not to be the primary beneficiary but in which it has a variable interest is as follows: March 31, 2018 December 31, 2017 Investments $ 4,113,673 $ 4,417,003 Due from (to) Affiliates, net 232,653 176,131 Maximum Exposure to Loss $ 4,346,326 $ 4,593,134 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 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 452,223 — — 487,656 — — KCM Short-Term Credit Agreement 750,000 — — 750,000 — — Notes Issued: KKR Issued 6.375% Notes Due 2020 (1) — 498,536 540,275 (13) — 498,390 549,000 (13) KKR Issued 5.500% Notes Due 2043 (2) — 491,581 545,730 (13) — 491,496 580,000 (13) KKR Issued 5.125% Notes Due 2044 (3) — 990,466 1,036,910 (13) — 990,375 1,107,100 (13) KKR Issued 0.509% Notes Due 2023 (4) — 234,004 235,247 (13) — — — KKR Issued 0.764% Notes Due 2025 (5) — 46,488 47,052 (13) — — — KKR Issued 1.595% Notes Due 2038 (6) — 95,921 97,227 (13) — — — KFN Issued 5.500% Notes Due 2032 (7) — 493,249 523,647 — 493,129 505,235 KFN Issued 5.200% Notes Due 2033 (8) — 118,407 122,169 — — — KFN Issued Junior Subordinated Notes (9) — 236,385 207,673 — 236,038 201,828 Other Consolidated Debt Obligations: Fund Financing Facilities and Other (10) 1,676,423 3,584,588 3,584,588 (14) 2,056,096 2,898,215 2,898,215 (14) CLO Senior Secured Notes (11) — 9,806,031 9,806,031 — 10,055,686 10,055,686 CLO Subordinated Notes (11) — 307,448 307,448 — 292,294 292,294 CMBS Debt Obligations (12) — 5,138,167 5,138,167 — 5,238,236 5,238,236 $ 3,878,646 $ 22,041,271 $ 22,192,164 $ 4,293,752 $ 21,193,859 $ 21,427,594 (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 $0.9 million and $1.0 million as of March 31, 2018 and December 31, 2017 , 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 $3.7 million as of March 31, 2018 and December 31, 2017 . (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 $8.2 million and $8.3 million as of March 31, 2018 and December 31, 2017 , respectively. (4) $235.3 million aggregate principal amount of 0.509% senior notes of KKR due 2023. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.3 million as of March 31, 2018 . These senior notes are denominated in Japanese Yen ("JPY"). (5) $47.1 million aggregate principal amount of 0.764% senior notes of KKR due 2025. Borrowing outstanding is presented net of unamortized debt issuance costs of $0.6 million as of March 31, 2018 . These senior notes are denominated in JPY. (6) $96.9 million aggregate principal amount of 1.595% senior notes of KKR due 2038. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.0 million as of March 31, 2018 . These senior notes are denominated in JPY. (7) KKR consolidates KFN and thus reports KFN's outstanding $500.0 million aggregate principal amount of 5.500% senior notes due 2032. Borrowing outstanding is presented net of i) unamortized note discount and ii) unamortized debt issuance costs of $4.6 million and $4.7 million as of March 31, 2018 and December 31, 2017 , respectively. 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. (8) KKR consolidates KFN and thus reports KFN's outstanding $120.0 million aggregate principal amount of 5.200% senior notes due 2033. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.6 million as of March 31, 2018 . 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. (9) 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 4.2% and 3.8% and the weighted average years to maturity is 18.5 years and 19.0 years as of March 31, 2018 and December 31, 2017 , respectively. 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. (10) 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 4.3% and 4.2% as of March 31, 2018 and December 31, 2017 , respectively. In addition, the weighted average years to maturity is 3.3 years and 3.6 years as of March 31, 2018 and December 31, 2017 , respectively. (11) 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." (12) 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." (13) The notes are classified as Level II within the fair value hierarchy and fair value is determined by third party broker quotes. (14) Carrying value approximates fair value given the fund financing facilities' interest rates are variable. Revolving Credit Facilities KCM Credit Agreement As of March 31, 2018 and December 31, 2017, no amounts were outstanding under the KCM Credit Agreement, however various letters of credit were outstanding in the amount of $47.8 million and $12.3 million , respectively, which reduce the overall capacity of the KCM Credit Agreement. Notes Issuances KKR Issued 0.509% Senior Notes Due 2023, 0.764% Senior Notes Due 2025, and 1.595% Senior Notes Due 2038 On March 23, 2018, KKR Group Finance Co. IV LLC ("KKR Group Finance IV"), an indirect subsidiary of KKR & Co. L.P., completed the offering of ¥40.3 billion , or $379.3 million , aggregate principal amount of its (i) ¥25.0 billion , or $235.3 million , 0.509% Senior Notes due 2023 (the "2023 Notes"), (ii) ¥5.0 billion , or $47.1 million , 0.764% Senior Notes due 2025 (the "2025 Notes"), and (iii) ¥10.3 billion , or $96.9 million , 1.595% Senior Notes due 2038 (the "2038 Notes" and, together with the 2023 Notes and the 2025 Notes, the "JPY Notes"). The JPY Notes are guaranteed by KKR & Co. L.P. and KKR Management Holdings L.P., KKR Fund Holdings L.P. and KKR International Holdings L.P., each an indirect subsidiary of KKR & Co. L.P. (collectively with KKR & Co. L.P., the "Guarantors"). The 2023 Notes bear interest at a rate of 0.509% per annum and will mature on March 23, 2023 unless earlier redeemed. The 2025 Notes bear interest at a rate of 0.764% per annum and will mature on March 21, 2025 unless earlier redeemed. The 2038 Notes bear interest at a rate of 1.595% per annum and will mature on March 23, 2038 unless earlier redeemed. Interest on the JPY Notes accrues from March 23, 2018 and is payable semiannually in arrears on March 23 and September 23 of each year, commencing on September 23, 2018 and ending on the applicable maturity date. The JPY Notes are unsecured and unsubordinated obligations of KKR Group Finance IV. The JPY Notes are fully and unconditionally guaranteed, jointly and severally, by each of the Guarantors. The guarantees are unsecured and unsubordinated obligations of the Guarantors. The indenture, as supplemented by the first supplemental indenture, related to the JPY Notes includes covenants, including limitations on KKR Group Finance IV's and the Guarantors' ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The indenture, as supplemented, also provides for events of default and further provides that the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding JPY Notes may declare the JPY Notes immediately due and payable upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the JPY Notes and any accrued and unpaid interest on the JPY Notes automatically become due and payable. KKR Group Finance IV may redeem the JPY Notes at its option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the JPY Notes to be redeemed, together with interest accrued and unpaid to, but excluding, the date fixed for redemption, at any time, in the event of certain changes affecting taxation as provided in the JPY Indenture. KFN Issued 5.200% Notes Due 2033 On February 12, 2018, KFN issued $120.0 million aggregate principal amount of 5.200% Senior Notes due 2033 (the "KFN 2033 Senior Notes"). The KFN 2033 Senior Notes are unsecured and unsubordinated obligations of KFN, which do not provide for recourse to KKR beyond the assets of KFN. The KFN 2033 Senior Notes are not guaranteed by the Guarantors. The KFN 2033 Senior Notes will mature on February 12, 2033, unless earlier redeemed or repurchased. The KFN 2033 Senior Notes bear interest at a rate of 5.200% per annum, accruing from February 12, 2018. Interest is payable semi-annually in arrears on February 12 and August 12 of each year. The indenture, as supplemented by a first supplemental indenture, relating to the KFN 2033 Senior Notes includes covenants, including (i) limitations on KFN's ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of certain of its subsidiaries or merge, consolidate or sell, transfer or lease assets, (ii) requirements that KFN maintain a minimum Consolidated Net Worth (as defined in the indenture) and (iii) requirements that KFN maintain a minimum Cash and Liquid Investments (as defined in the indenture). The indenture, as supplemented, also provides for events of default and further provides that the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding KFN 2033 Senior Notes may declare the KFN 2033 Senior Notes immediately due and payable upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the KFN 2033 Senior Notes and any accrued and unpaid interest on the KFN 2033 Senior Notes automatically becomes due and payable. Beginning on February 12, 2023, KFN may redeem the KFN 2033 Senior Notes in whole, but not in part, at KFN's option, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to, but excluding, the date of redemption. At any time prior to February 12, 2023, KFN may redeem the KFN 2033 Senior Notes in whole, but not in part, at KFN's option at any time, at a "make-whole" redemption price set forth in the KFN 2033 Senior Notes. If a change of control occurs, the KFN 2033 Senior Notes are subject to repurchase by the issuer at a repurchase price in cash equal to 101% of the aggregate principal amount of the KFN 2033 Senior Notes repurchased plus any accrued and unpaid interest on the KFN 2033 Senior Notes repurchased to, but not including, the date of repurchase. Other Consolidated Debt Obligations Debt Obligations of Consolidated CFEs As of March 31, 2018 , 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 $ 9,806,031 2.8 % 11.8 Subordinated Notes of Consolidated CLOs 307,448 (1) 12.1 Debt Obligations of Consolidated CMBS Vehicles 5,138,167 4.4 % 26.4 $ 15,251,646 (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 March 31, 2018 , the fair value of the consolidated CFE assets was $16.8 billion . This collateral consisted of Cash and Cash Equivalents Held at Consolidated Entities, Investments, and Other Assets. 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 March 31, 2018 . KKR is in compliance with its debt covenants in all material respects as of March 31, 2018 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
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 partners who beneficially own such partnerships and disregarded entities and are generally not payable by KKR. However, certain consolidated entities 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 2.84% and 4.84% for the three months ended March 31, 2018 and 2017, 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. On December 22, 2017, the 2017 Tax Act was enacted in the United States, which instituted fundamental changes to the taxation of multinational businesses. During the year ended December 31, 2017, the Company estimated that $96.4 million of deferred tax expense, recorded in connection with the remeasurement of certain deferred tax assets and liabilities at the reduced U.S. federal tax rate, and $1.5 million of expense, net of the reversal of the deferred tax liability related to unremitted foreign earnings, recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate in accordance with Staff Accounting Bulletin 118 ("SAB 118"). As of March 31, 2018, the Company has not completed the accounting for the effects of the 2017 Tax Act and there have been no material changes to our estimated amounts. Accordingly, there has been no change to the provisional amounts previously recorded and there is no impact to the March 31, 2018 effective tax rate for such provisional amounts. During the three months ended March 31, 2018 , 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. On May 3, 2018, KKR announced its decision to convert KKR & Co. L.P. from a Delaware limited partnership to a Delaware corporation effective July 1, 2018. See Note 19 "Subsequent Events." |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
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 and other non-cash compensation for the three months ended March 31, 2018 and 2017 , respectively. Three Months Ended March 31, 2018 2017 Equity Incentive Plan Units $ 67,796 $ 49,943 KKR Holdings Principal Awards 27,282 44,979 Total (1) $ 95,078 $ 94,922 (1) Includes $4,264 of equity based charges for the three months ended March 31, 2018 related to employees of equity method investees. Such amounts are included in Net Gains (Losses) from Investment Activities in the consolidated statements of operations. 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's distribution policy has been to make equal 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 was based on the $ 0.68 annual distribution. See Note 19 "Subsequent Events" for update to KKR's distribution policy. 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 7% annually based upon expected turnover by class of recipient. Market Condition Awards On November 2, 2017, KKR's Co-Presidents and Co-Chief Operating Officers were each granted 2.5 million KKR common units subject to a market-price based vesting condition ("Market Condition Awards"). These units were granted under the Equity Incentive Plan. All of such units will vest upon the market price of KKR common units reaching and maintaining a closing market price of $40 per unit for 10 consecutive trading days on or prior to December 31, 2022, subject to the employee's continued service to the time of such vesting. If the $40 price target is not achieved by the close of business on December 31, 2022, the unvested Market Condition Awards will be automatically canceled and forfeited. These Market Condition Awards are subject to additional transfer restrictions and minimum retained ownership requirements after vesting. Due to the existence of the market condition, the vesting period for the Market Condition Awards is not explicit, and as such, compensation expense will be recognized over the period derived from the valuation technique used to estimate the grant-date fair value of the award (the "Derived Vesting Period"). The fair value of the Market Condition Awards at the date of grant was $4.02 per unit based on a Monte-Carlo simulation valuation model due to the existence of the market condition described above. Below is a summary of the significant assumptions used to estimate the grant date fair value of the Market Condition Awards. Closing KKR unit price as of valuation date $19.90 Risk Free Rate 2.02 % Volatility 25.00 % Dividend Yield 3.42 % Expected Cost of Equity 11.02 % In addition, the grant date fair value assumes that holders of the Market Condition Awards will not participate in distributions until such awards have met their vesting requirements. Compensation expense is recognized over the Derived Vesting Period, which was estimated to be 3 years from the date of grant, on a straight-line basis. As of March 31, 2018 , there was approximately $17.4 million of estimated unrecognized compensation expense related to unvested Market Condition Awards and such awards did not meet their market-price based vesting condition. As of March 31, 2018 , there was approximately $492.7 million of total estimated unrecognized expense related to unvested awards, including Market Condition Awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2018 164.2 2019 167.8 2020 111.3 2021 38.2 2022 10.3 2023 0.9 Total $ 492.7 A summary of the status of unvested awards granted under the Equity Incentive Plan, excluding Market Condition Awards as described above, from January 1, 2018 through March 31, 2018 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2018 46,422,733 $ 14.98 Granted 1,271,656 20.21 Vested — — Forfeitures (1,092,523 ) 13.40 Balance, March 31, 2018 46,601,866 $ 15.16 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 April 1, 2018 10,254,674 October 1, 2018 5,824,493 April 1, 2019 9,492,030 October 1, 2019 4,425,709 April 1, 2020 6,625,455 October 1, 2020 3,371,704 April 1, 2021 3,378,686 October 1, 2021 1,930,239 April 1, 2022 116,532 October 1, 2022 1,091,172 October 1, 2023 91,172 46,601,866 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 March 31, 2018 and 2017, KKR Holdings owned approximately 40.5% or 333,648,078 units and 43.5% or 350,909,471 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 generally 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. All of the KKR Holdings units (except for less than 0.1% of the outstanding KKR Holdings units) have been granted as of March 31, 2018 . 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's distribution policy has been 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. See Note 19 "Subsequent Events" for update to KKR's distribution policy. 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 7% annually based on expected turnover by class of recipient. As of March 31, 2018 , there was approximately $332.7 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 2018 $ 75.2 2019 96.5 2020 88.3 2021 47.5 2022 25.2 Total $ 332.7 A summary of the status of unvested awards granted under the KKR Holdings Plan from January 1, 2018 through March 31, 2018 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2018 30,848,583 $ 14.42 Granted — — Vested — — Forfeitures — — Balance, March 31, 2018 30,848,583 $ 14.42 The weighted average remaining vesting period over which unvested awards are expected to vest is 2.2 years. A summary of the remaining vesting tranches of awards granted under the KKR Holdings Plan is presented below: Vesting Date Units April 1, 2018 574,590 May 1, 2018 3,805,000 October 1, 2018 1,970,000 April 1, 2019 229,514 May 1, 2019 3,805,000 October 1, 2019 2,455,000 April 1, 2020 124,479 May 1, 2020 3,805,000 October 1, 2020 2,940,000 May 1, 2021 3,805,000 October 1, 2021 3,425,000 October 1, 2022 3,910,000 30,848,583 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Due from Affiliates consists of: March 31, 2018 December 31, 2017 Amounts due from portfolio companies $ 139,158 $ 129,594 Amounts due from unconsolidated investment funds 414,133 415,907 Amounts due from related entities 12,390 8,848 Due from Affiliates $ 565,681 $ 554,349 Due to Affiliates consists of: March 31, 2018 December 31, 2017 Amounts due to KKR Holdings in connection with the tax receivable agreement $ 83,710 $ 84,034 Amounts due to unconsolidated investment funds 181,480 239,776 Due to Affiliates $ 265,190 $ 323,810 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2018 | |
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, opportunistic credit and revolving credit strategies, and alternative credit strategies including special situations and private credit opportunities, such as direct lending and private opportunistic credit investment strategies. KKR's hedge funds business consists of strategic manager partnerships with third-party hedge fund managers in which KKR owns a minority stake. Capital Markets KKR's 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, placing and underwriting securities offerings and providing other types of capital markets services. Principal Activities Through KKR's Principal Activities segment, KKR manages the firm's assets and deploy capital to support and grow its 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. Economic Net Income ("ENI") ENI is a measure of profitability for KKR's reportable segments and is 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 segment noncontrolling interests. 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. The following tables present the financial data for KKR's reportable segments: As of and for the Three Months Ended March 31, 2018 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 158,190 $ 93,395 $ — $ — $ 251,585 Monitoring Fees 17,530 — — — 17,530 Transaction Fees 46,689 2,558 107,598 — 156,845 Fee Credits (41,343 ) (2,431 ) — — (43,774 ) Total Management, Monitoring and Transaction Fees, Net 181,066 93,522 107,598 — 382,186 Performance Income (Loss) Realized Incentive Fees — 16,407 — — 16,407 Realized Carried Interest 202,555 — — — 202,555 Unrealized Carried Interest (141,240 ) 29,508 — — (111,732 ) Total Performance Income (Loss) 61,315 45,915 — — 107,230 Investment Income (Loss) Net Realized Gains (Losses) — — — 7,875 7,875 Net Unrealized Gains (Losses) — — — 207,862 207,862 Total Realized and Unrealized — — — 215,737 215,737 Interest Income and Dividends — — — 72,577 72,577 Interest Expense — — — (50,192 ) (50,192 ) Net Interest and Dividends — — — 22,385 22,385 Total Investment Income (Loss) — — — 238,122 238,122 Total Segment Revenues 242,381 139,437 107,598 238,122 727,538 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 59,719 22,714 21,457 34,640 138,530 Realized Performance Income Compensation 87,099 7,055 — — 94,154 Unrealized Performance Income Compensation (55,379 ) 12,256 — — (43,123 ) Total Compensation and Benefits 91,439 42,025 21,457 34,640 189,561 Occupancy and Related Charges 7,876 1,608 744 3,355 13,583 Other Operating Expenses 28,302 9,587 6,749 13,267 57,905 Total Segment Expenses 127,617 53,220 28,950 51,262 261,049 Income (Loss) attributable to noncontrolling interests — — 1,203 — 1,203 Economic Net Income (Loss) $ 114,764 $ 86,217 $ 77,445 $ 186,860 $ 465,286 Total Assets $ 2,203,895 $ 1,642,038 $ 550,429 $ 11,847,241 $ 16,243,603 As of and for the Three Months Ended March 31, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 123,512 $ 84,772 $ — $ — $ 208,284 Monitoring Fees 13,220 — — — 13,220 Transaction Fees 117,882 4,056 121,097 — 243,035 Fee Credits (85,650 ) (3,367 ) — — (89,017 ) Total Management, Monitoring and Transaction Fees, Net 168,964 85,461 121,097 — 375,522 Performance Income (Loss) Realized Incentive Fees — 1,686 — — 1,686 Realized Carried Interest 206,204 — — — 206,204 Unrealized Carried Interest 123,506 17,120 — — 140,626 Total Performance Income (Loss) 329,710 18,806 — — 348,516 Investment Income (Loss) Net Realized Gains (Losses) — — — 79,451 79,451 Net Unrealized Gains (Losses) — — — 204,036 204,036 Total Realized and Unrealized — — — 283,487 283,487 Interest Income and Dividends — — — 56,882 56,882 Interest Expense — — — (41,709 ) (41,709 ) Net Interest and Dividends — — — 15,173 15,173 Total Investment Income (Loss) — — — 298,660 298,660 Total Segment Revenues 498,674 104,267 121,097 298,660 1,022,698 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 60,008 19,784 22,561 37,082 139,435 Realized Performance Income Compensation 87,393 674 — — 88,067 Unrealized Performance Income Compensation 50,366 6,848 — — 57,214 Total Compensation and Benefits 197,767 27,306 22,561 37,082 284,716 Occupancy and Related Charges 8,107 1,856 664 3,742 14,369 Other Operating Expenses 26,887 8,338 5,328 12,945 53,498 Total Segment Expenses 232,761 37,500 28,553 53,769 352,583 Income (Loss) attributable to noncontrolling interests — — 1,584 — 1,584 Economic Net Income (Loss) $ 265,913 $ 66,767 $ 90,960 $ 244,891 $ 668,531 Total Assets $ 1,815,404 $ 1,191,199 $ 573,162 $ 10,758,695 $ 14,338,460 The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with GAAP to KKR's total reportable segments: Revenues Three Months Ended March 31, 2018 March 31, 2017 Total Revenues $ 472,606 $ 767,755 Plus: Management fees relating to consolidated funds and placement fees 63,858 47,102 Less: Fee credits relating to consolidated funds 14,721 939 Plus: Net realized and unrealized carried interest - consolidated funds 28,076 11,057 Less: General partner capital interest - unconsolidated funds 15,465 51,803 Plus: Total investment income (loss) 238,122 298,660 Less: Revenue earned by oil & gas producing entities 14,507 17,273 Less: Expense reimbursements 20,211 23,549 Less: Other 10,220 8,312 Total Segment Revenues $ 727,538 $ 1,022,698 Expenses Three Months Ended March 31, 2018 March 31, 2017 Total Expenses $ 436,601 $ 540,014 Less: Equity-based and other non-cash compensation 96,227 111,036 Less: Reimbursable expenses and placement fees 27,761 36,123 Less: Operating expenses relating to consolidated funds, CFEs and other entities 21,805 13,430 Less: Expenses incurred by oil & gas producing entities 11,101 11,177 Less: Intangible amortization 5,030 6,366 Less: Other 13,628 9,299 Total Segment Expenses $ 261,049 $ 352,583 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders Three Months Ended March 31, 2018 March 31, 2017 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 170,102 $ 259,343 Plus: Preferred Distributions 8,341 8,341 Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. 121,002 216,432 Plus: Equity-based and other non-cash compensation 100,491 111,036 Plus: Amortization of intangibles, placement fees and other, net (1) 47,709 32,837 Plus: Income tax (benefit) 17,641 40,542 Economic Net Income (Loss) $ 465,286 $ 668,531 (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 March 31, 2018 2017 Total Assets $ 47,579,153 $ 41,635,712 Less: Impact of consolidation of funds and other entities (1) 29,972,064 25,963,256 Less: Carry pool reclassification from liabilities 1,176,070 1,035,671 Less: Impact of KKR Management Holdings Corp. 187,416 298,325 Total Segment Assets $ 16,243,603 $ 14,338,460 (1) Includes accounting basis difference for oil & natural gas properties of $10,738 and $7,700 as of March 31, 2018 and 2017, respectively. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
EQUITY | EQUITY Transfer of Interests Under Common Control and Other On March 30, 2017, KKR reorganized KKR's Indian capital markets and credit asset management businesses, to create KKR India Financial Investments Pte. Ltd. ("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. No gain or loss was recognized in the condensed consolidated financial statements. On November 24, 2017, KIFL issued equity to an unaffiliated third-party. This transaction was accounted for as a subsidiary's direct issuance of its equity to third-parties, and the difference between KKR's carrying value before and after the transaction was treated as a reallocation of equity interests. No gain or loss was recognized in the condensed consolidated financial statements. Both transactions above resulted in an increase to KKR's equity and to noncontrolling interests held by KKR Holdings. Unit Repurchase Program As of March 31, 2018, KKR had a total of $750.0 million authorized to repurchase its common units. Through May 7, 2018, KKR has utilized $459.0 million to repurchase 31.7 million common units. See Note 19 "Subsequent Events." 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. There were no common units repurchased pursuant to this program during the three months ended March 31, 2018 and 2017. 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. See Note 19 "Subsequent Events." |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill As of March 31, 2018 and December 31, 2017 , the carrying value of goodwill was $83.5 million . The carrying value of goodwill allocated to the Public Markets and Principal Activities segments is $53.5 million and $30.0 million , respectively, as of March 31, 2018 and December 31, 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: March 31, 2018 December 31, 2017 Finite-Lived Intangible Assets $ 191,526 $ 190,526 Accumulated Amortization (67,012 ) (61,348 ) Intangible Assets, Net $ 124,514 $ 129,178 Changes in Intangible Assets, Net consists of the following: Three Months Ended March 31, 2018 Balance, Beginning of Period $ 129,178 Amortization Expense (5,030 ) Foreign Exchange 366 Balance, End of Period $ 124,514 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Funding Commitments As of March 31, 2018 , KKR had unfunded commitments consisting of $5,720.8 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 March 31, 2018 , these commitments amounted to $275.1 million and $1,114.1 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. The unfunded commitments shown for KKR's Capital Markets segment are shown without reflecting arrangements that may reduce the actual amount of contractual commitments shown; KKR's capital market business has an arrangement with a third party, which reduces its risk when underwriting certain debt transactions. In the case of purchases of investments or assets in its 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 March 31, 2018 , $12.6 million of carried interest was subject to this clawback obligation, assuming that all applicable carry-paying funds were liquidated at their March 31, 2018 fair values. Had the investments in such funds been liquidated at zero value, the clawback obligation would have been approximately $1.8 billion . Carried interest is recognized in the condensed consolidated statements of operations based on the contractual conditions set forth in the agreements governing the fund as if the fund were terminated and liquidated at the reporting date and the fund'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 condensed 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. 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 other investment vehicles. 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 partner 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. In December 2017, KKR & Co. L.P. and its Co-Chief Executive Officers were named as defendants in a lawsuit pending in Kentucky state court alleging, among other things, the violation of fiduciary and other duties in connection with certain separately managed accounts that Prisma Capital Partners LP, a former subsidiary of KKR, manages for the Kentucky Retirement Systems. Also named as defendants in the lawsuit are certain current and former trustees and officers of the Kentucky Retirement Systems, Prisma Capital Partners LP, and various other service providers to the Kentucky Retirement Systems and their related persons. KKR 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 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 and the Securities and Exchange Board of India. 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 March 31, 2018 , approximately $180.1 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 May 3, 2018 , and will be paid on May 29, 2018 to common unitholders of record as of the close of business on May 14, 2018 . 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 May 3, 2018 and set aside for payment on June 15, 2018 to holders of record of Series A Preferred Units as of the close of business on June 1, 2018 . A distribution of $0.406250 per Series B Preferred Unit has been declared as announced on May 3, 2018 and set aside for payment on June 15, 2018 to holders of record of Series B Preferred Units as of the close of business on June 1, 2018 . Conversion to a Corporation On May 3, 2018, KKR announced its decision to convert KKR & Co. L.P. (the "Conversion") from a Delaware limited partnership to a Delaware corporation named KKR & Co. Inc., to become effective at 12:01 a.m. (Eastern Time) on July 1, 2018. Distribution Policy KKR's distribution policy as a limited partnership has been to pay annual aggregate distributions to holders of our common units of $0.68 per common unit, and KKR has announced that it anticipates that its dividend policy as a corporation will be to pay dividends to holders of our Class A common stock in an initial annual aggregate amount of $0.50 per share, in each case, subject to the discretion of KKR's board of directors and compliance with applicable law. For U.S. federal income tax purposes, any dividends KKR pays following the Conversion (including dividends on KKR's preferred shares) generally will be treated as qualified dividend income (generally taxable to U.S. individual stockholders at capital gain rates) paid by a domestic corporation to the extent paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Unit Repurchase Program On May 3, 2018, KKR announced an increase to the available amount under its repurchase program to $500 million, which may be used for the repurchase of its common units or, after the Conversion, Class A common stock, and the cancellation (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards issued pursuant to our Equity Incentive Plan (and any successor equity plan thereto) representing the right to receive its common units or Class A common stock. Prior to this increase, there was approximately $291 million remaining under the program. Strategic BDC Partnership with FS Investments On December 11, 2017, KKR announced a definitive agreement to form a new strategic BDC partnership with FS Investment Corporation. This transaction was completed through a combination of cash and other assets on April 9, 2018. CMBS Sale In April 2018, a consolidated entity of KKR sold its controlling beneficial interest in four consolidated CMBS vehicles. As a result of this sale, KKR expects to deconsolidate these CMBS vehicles in the second quarter of 2018, resulting in a reduction in investments and debt obligations of approximately $4.1 billion and $4.0 billion , respectively. Subsequent to this sale, KKR will continue to consolidate one CMBS vehicle. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 condensed consolidated balance sheet data was derived from audited consolidated financial statements included in KKR & Co. L.P.’s Annual Report on Form 10-K for the year ended December 31, 2017 , 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 for the year ended December 31, 2017 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 revenues, 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 vehicle. |
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 one year), 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 that have made investments on or prior to December 31, 2015; (iii) certain former principals and their designees representing a portion of the carried interest received by the general partners of KKR's private equity funds that was allocated to them with respect to private equity investments made during such former principals' tenure with KKR prior to October 1, 2009; (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; and (vi) holders of exchangeable equity securities representing ownership interests in a subsidiary of a KKR Group Partnership issued in connection with the acquisition of Avoca Capital ("Avoca"). On January 16, 2018, KKR Financial Holdings LLC ("KFN") completed the redemption of all of its outstanding 7.375% Series A LLC Preferred Shares. 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. Common Unitholders and KKR Holdings, with the exception of certain tax assets and liabilities that are directly allocable to KKR Management Holdings Corp., is attributed based on the percentage of the weighted average KKR Group Partnership Units held by KKR and KKR Holdings, each of which holds equity of the KKR Group Partnerships. However, primarily because of the (i) contribution of certain expenses borne entirely by KKR Holdings, (ii) the periodic exchange of KKR Holdings units for KKR & Co. L.P. common units pursuant to the exchange agreement and (iii) the contribution of certain expenses borne entirely by KKR associated with the KKR & Co. L.P. 2010 Equity Incentive Plan ("Equity Incentive Plan"), equity allocations shown in the condensed consolidated statement of changes in equity differ from their respective pro rata ownership interests in KKR's net assets. |
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 condensed 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. 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. 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. Equity Method - Other - Consists primarily of (i) certain direct interests in operating companies in which KKR is deemed to exert significant influence under GAAP and (ii) certain interests in partnerships and joint ventures that hold private equity and real estate investments. Equity Method - Capital Allocation - Based Income - Consists primarily of (i) the capital interest KKR holds as the general partner in certain investment funds, which are not consolidated and (ii) the carried interest component of the general partner interest, which are accounted for as a single unit of account. 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 condensed 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 - other and other financial instruments not held through a consolidated investment fund. 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 condensed 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. The carrying value of equity method investments 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. For equity method investments for which KKR has not elected the fair value option, 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 March 31, 2018, equity method investees for which KKR reports financial results on a lag include Marshall Wace LLP ("Marshall Wace"). 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 - Capital Allocation - Based Income investments approximate fair value, because the underlying investments of the unconsolidated investment funds are reported at fair value. |
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 CLOs, 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 in consolidation 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 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 Asset 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 for review and approval by KKR's valuation committees. KKR has a global valuation committee that 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. The global valuation committee is assisted by the asset class-specific valuation committees that exist for private equity (including growth equity), real estate, energy and infrastructure, and credit. The asset class-specific valuation committees are responsible for the review and approval of all preliminary Level III valuations in their respective asset classes on a quarterly basis. The members of these valuation 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. 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 committee for hedge funds reviewed these valuations. All Level III valuations are also subject to approval by the global valuation committee, which is 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. When valuations are approved by the global valuation committee after reflecting any input from it, the valuations of Level III investments, as well as the valuations of Level I and Level II investments, are presented to the audit committee of the board of directors of the general partner of KKR & Co. L.P. and are then reported to the board of directors. |
Fees and Other | Fees and Other Management Fees KKR provides investment management services to investment funds, CLOs, and other vehicles in exchange for a management fee. Management fees are recognized in the period during which the related investment management services are rendered in accordance with the contractual terms of the related agreement. Management fees are determined quarterly based on an annual rate and are generally based upon a percentage of the capital committed or capital invested during the investment period. Thereafter, management fees are generally based on a percentage of remaining invested capital, net asset value, gross assets or as otherwise defined in the respective contractual agreements. Management fees are generally billed quarterly or annually under the terms of the related agreement. Management fees earned from KKR's consolidated investment funds, CLOs and other 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 the consolidated investment funds, CLOs and other vehicles is increased by the amount of fees that are eliminated. Accordingly, the elimination of these fees does not impact the net income (loss) attributable to KKR or KKR partners' capital. In the Private Markets segment, management fees earned from private equity funds generally range from 1% to 2% of committed capital during the fund's investment period and are generally 0.75% to 1.25% of invested capital after the expiration of the fund's investment period with subsequent reductions over time. Typically, an investment period is defined as a period of up to six years. The actual length of the investment period is often shorter due to the earlier deployment of committed capital. Management fees earned from growth equity, real assets, and core investment strategy funds generally range from 0.5% to 2.0% and are generally based on the investment fund's average net asset value, capital commitments, or invested capital. In the Public Markets segment, management fees earned from credit funds and other investment vehicles generally range from 0.33% to 1.75% . Such rates may be based on the investment fund's average net asset value, capital commitments, or invested capital. Management fees earned from CLOs include senior collateral management fees and subordinate collateral management fees. When combined, senior collateral management fees and subordinate collateral management fees are determined based on an annual rate ranging from 0.40% to 0.50% of collateral. If amounts distributable on any payment date are insufficient to pay the collateral management fees according to the priority of payments, any shortfall is deferred and payable on subsequent payment dates. KKR has the right to waive all or any portion of any collateral management fee. For the purpose of calculating the collateral management fees, collateral, the payment dates, and the priority of payments are terms defined in the management agreements. Management fees recognized but not received from investment funds, CLOs and other vehicles are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Transaction Fees KKR (i) arranges debt and equity financing, places and underwrites securities offerings and provides other types of capital markets services for companies seeking financing in its Capital Markets segment and (ii) provides advisory services in connection with successful Private Markets and Public Markets portfolio company investment transactions, in each case, in exchange for a transaction fee. Transaction fees are separately negotiated for each transaction and are generally based on (i) in our Capital Markets segment, a percentage of the overall transaction size and (ii) for Private Markets and Public Markets transactions, a percentage of either total enterprise value of an investment or a percentage of the aggregate price paid for an investment. Transaction fees are recognized when the underlying services rendered are completed in accordance with the terms of the transaction and advisory agreements, which is typically when the transaction closes. Transaction fees are generally paid on or shortly after the closing of a transaction. Transaction fees from our Private Markets and Public Markets businesses recognized but not received from portfolio companies are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Transaction fees from our Capital Markets business recognized but not received from third parties are recorded in Other Assets on the condensed consolidated statements of financial condition (See Note 8 "Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities"). Monitoring Fees KKR agrees to provide services in connection with monitoring portfolio companies in exchange for a fee. Monitoring fees are recognized in the period during which the related services are rendered in accordance with the contractual terms of the related agreement. Monitoring fees are determined quarterly and 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 addition, certain monitoring fee provisions may provide for a termination payment following an initial public offering or change of control as defined in the contractual terms of the related agreement. These termination payments are recognized in the period when the related transaction closes. Monitoring fees recognized but not received from portfolio companies are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Fee Credits Under the terms of the management agreements with certain of its investment funds, KKR is required to share with such funds an agreed upon percentage of certain fees, including monitoring and transaction fees earned from portfolio companies ("Fee Credits"). Investment funds earn 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 costs related to investment transactions that were not consummated (“broken deal costs”) and generally amount to 80% for older funds, or 100% for our newer funds, of allocable monitoring and transaction fees after broken deal costs are recovered, although the actual percentage may vary from fund to fund. Fee Credits are recognized and owed to investment funds concurrently with the recognition of monitoring fees, transaction fees and broken deal costs. Since Fee Credits are payable to investment funds, amounts owed are generally applied as a reduction of the management fee that is otherwise billed to the investment fund. Fee credits owed to investment funds are recorded in Due to Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Incentive Fees KKR provides investment management services to investment funds, CLOs and other vehicles in exchange for a management fee as discussed above and, in some cases an incentive fee when KKR is not entitled to a carried interest. Incentive fees 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 governing agreement. Incentive fee rates generally range from 5% to 20% of investment gains. 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. Incentive fees are generally paid within 90 days of the end of the investment vehicles' measurement period. Incentive fees recognized but not received from investment funds, CLOs and other vehicles are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Expense Reimbursements In connection with the (i) investment management services provided to investment funds and (ii) the monitoring of portfolio companies, KKR receives reimbursement for certain expenses incurred on behalf of these entities that have been determined by KKR to be additional compensation to satisfy its performance obligation. For these expense reimbursements KKR is considered the principal under the agreements and records the expense and related reimbursement revenue on a gross basis. Costs incurred are classified as General, Administrative and Other and reimbursements of such costs are classified as Expense Reimbursements within Revenues on the condensed consolidated statements of operations. Expense reimbursements recognized but not received from investment funds and portfolio companies are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Oil and Gas Revenue 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. Oil and gas revenue recognized but not received from third parties are recorded in Other Assets on the condensed consolidated statements of financial condition (See Note 8 "Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities"). Consulting Fees Certain consolidated entities that employ non-employee operating consultants provide consulting and other services to portfolio companies and other companies in exchange for a consulting fee. Consulting fees are recognized in the period during which the related advisory services are rendered in accordance with the contractual terms of the related agreement. Consulting fees are separately negotiated with each portfolio company for which services are provided and are not shared with KKR. Consulting fees recognized but not received from portfolio companies are recorded in Due from Affiliates on the condensed consolidated statements of financial condition (See Note 13 "Related Party Transactions"). Capital Allocation-Based Income Capital allocation-based income is earned from those arrangements where KKR has a general partner capital interest and is entitled to a disproportionate allocation of investment income (referred to hereafter as “carried interest”). KKR accounts for its general partner interests in capital allocation-based arrangements as financial instruments under ASC 323, Investments - Equity Method and Joint Ventures (“ASC 323”) since the general partner has significant governance rights in the investment funds in which it invests, which demonstrates significant influence. In accordance with ASC 323, KKR records equity method income based on the proportionate share of the income of the investment fund, including carried interest, assuming the investment fund was liquidated as of each reporting date pursuant to each investment fund's governing agreements. Accordingly, these general partner interests are accounted for outside of the scope of ASC 606. Other arrangements surrounding contractual incentive fees through an advisory contract are separate and distinct and accounted for in accordance with ASC 606. In these incentive fee arrangements, accounted for in accordance with ASC 606, KKR’s economics in the entity do not involve an allocation of capital. See “Incentive Fees” above. Carried interest is allocated to the general partner based on cumulative fund performance to date, and where applicable, subject to a preferred return to the funds' limited partners. At the end of each reporting period, KKR calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (a) positive performance resulting in an increase in 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, 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 to make the required positive or negative adjustments. KKR ceases to record negative carried interest allocations once previously recognized carried interest allocations for an investment fund have been fully reversed. KKR is not obligated to make payments for guaranteed returns or hurdles and, therefore, cannot have negative carried interest over the life of an investment fund. Accrued but unpaid carried interest as of the reporting date is reflected in Investments in the condensed consolidated statements of financial condition. Prior to January 1, 2018, to the extent an investment fund was not consolidated, KKR accounted for carried interest within Fees and Other separately from its general partner capital interest, which was included in Net Gains (Losses) from Investment Activities in the condensed consolidated statements of operations. Effective January 1, 2018, the carried interest component of the general partner interest and the capital interest KKR holds in its investment funds as the general partner are accounted for as a single unit of account and reported in capital allocation-based income within Revenues in the condensed consolidated statements of operations. This change in accounting has been applied on a full retrospective basis. |
Cash and Cash Equivalents Held at Consolidated Entities | Cash and Cash Equivalents Held at Consolidated Entities Cash and cash equivalents held at consolidated entities represents cash that, although not legally restricted, is not available to fund general liquidity needs of KKR as the use of such funds is generally limited to the investment activities of KKR's investment funds and CFEs. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents Restricted cash and cash equivalents primarily represent amounts that are held by third parties under certain of KKR's financing and derivative transactions. The duration of this restricted cash generally matches the duration of the related financing or derivative transaction. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Revenue from Contracts with Customers The FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) in May 2014 and subsequently issued several amendments to the standard. ASU 2014-09, and related amendments, provide comprehensive guidance for recognizing revenue from contracts with customers. Entities will be able to recognize revenue when the entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contracts with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contracts, and (v) recognize revenue when the entity satisfies a performance obligation. The guidance in ASU 2014-09, and the related amendments, is effective for KKR beginning on January 1, 2018, and KKR adopted this guidance on that date. KKR has implemented ASU 2014-09 and its related amendments and there were no changes to KKR's historical pattern of recognizing revenue. See the accounting policy for Revenues above. Cash Flows In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, 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 is effective for KKR beginning on January 1, 2018, and KKR adopted this guidance on that date. This adoption did not have a material impact on KKR's condensed consolidated statements of cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which amends the guidance to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The amended guidance requires the following: (i) restricted cash and restricted cash equivalents should be included in the cash and cash-equivalents balances in the statement of cash flows; (ii) changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the statement of cash flows; (iii) a reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents; and (iv) the nature of the restrictions must be disclosed for material restricted cash and restricted cash equivalents amounts. The guidance is effective for KKR beginning on January 1, 2018, and KKR adopted this guidance on that date. Upon adoption, (i) Restricted Cash and Cash Equivalents and (ii) Cash and Cash Equivalents Held at Consolidated Entities were (a) included in the cash and cash-equivalents balances in the condensed consolidated statements of cash flows and (b) disclosed in a reconciliation between the condensed consolidated statements of financial condition and the condensed consolidated statements of cash flows. This guidance has been applied on a full retrospective basis. For the three months ended March 31, 2017, $32.5 million of cash provided by operating activities and $83.3 million of cash provided by investing activities were removed from net cash provided (used) by operating activities and net cash provided (used) by investing activities, respectively, and included in net increase/(decrease) in cash, cash-equivalents and restricted cash in the condensed consolidated statements of cash flows. 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. Equity-Based Compensation 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. This guidance has been adopted as of January 1, 2018 and did not have a material impact to KKR. 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. This guidance has been adopted as of January 1, 2018 and did not have a material impact to KKR. 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 for transactions (i.e. acquisitions or dispositions) that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. This guidance has been adopted as of the fourth quarter of 2017. Goodwill In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance simplifies the accounting for goodwill impairments by eliminating the second step from the goodwill impairment test. The ASU requires goodwill impairments to be measured on the basis 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. 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. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02). Under ASC 740-10-45-15, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of tax expense related to continuing operations for the period in which the law was enacted, even if the assets and liabilities related to items of accumulated other comprehensive income ("OCI"). ASU 2018-02 allows entities to reclassify from accumulated OCI to retained earnings stranded tax effects related to the change in federal tax rate for all items accounted for in OCI. Entities can also elect to reclassify other stranded tax effects that relate to the Tax Cuts and Jobs Act, which was enacted in December 2017 and amended various aspects of U.S. federal income tax legislation (the "2017 Tax Act"), but do not directly relate to the change in the federal tax rate. Tax effects that are stranded in OCI for other reasons may not be reclassified. In the period of adoption, entities that elect to reclassify the income tax effects of the 2017 Tax Act from accumulated OCI to retained earnings must disclose that they made such an election. Entities must also disclose a description of other income tax effects related to the 2017 Tax Act that are reclassified from accumulated OCI to retained earnings, if any. The guidance is effective for fiscal periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statement have not yet been issued or made available upon issuance, including in the period the 2017 Tax Act was enacted. An entity that adopts ASU 2018-02 in an annual or interim periods after the period of enactment is able to choose whether to apply the amendments retrospectively to each period in which the effect of the 2017 Tax Act is recognized or to apply the amendments in the period of adoption. KKR is currently evaluating the impact of this guidance on the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 2017 Balance at the beginning of the period $ 4,793,475 $ 4,293,337 Net income (loss) attributable to noncontrolling interests held by KKR Holdings (1) 121,002 216,432 Other comprehensive income (loss), net of tax (2) 3,143 4,920 Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units (3) (33,775 ) (35,904 ) Equity-based and other non-cash compensation 32,695 61,093 Capital contributions 39 37 Capital distributions (57,167 ) (56,637 ) Transfer of interests under common control and Other (See Note 15 "Equity") — 7,919 Balance at the end of the period $ 4,859,412 $ 4,491,197 (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 March 31, 2018 2017 Net income (loss) $ 602,894 $ 797,894 Less: Net income (loss) attributable to Redeemable Noncontrolling Interests 25,674 20,933 Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities 277,775 292,845 Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders 8,341 8,341 Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. 6,068 19,160 Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings $ 297,172 $ 494,935 Net income (loss) attributable to Noncontrolling Interests held by KKR Holdings $ 121,002 $ 216,432 |
Schedule of fees | For the three months ended March 31, 2018 and 2017 , respectively, revenues consisted of the following: Three Months Ended March 31, 2018 2017 Management Fees $ 187,727 $ 161,182 Transaction Fees 158,653 243,658 Monitoring Fees 17,586 13,504 Fee Credits (29,053 ) (88,078 ) Incentive Fees 13,805 273 Expense Reimbursements 20,211 23,265 Oil and Gas Revenue 14,507 17,273 Consulting Fees 10,958 9,102 Total Fees and Other (1) 394,394 380,179 Carried Interest 62,747 335,773 General Partner Capital Interest 15,465 51,803 Total Capital Allocation-Based Income 78,212 387,576 Total Revenues (2) $ 472,606 $ 767,755 (1) Fees and Other 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. (2) See Note 14 "Segment Reporting" for disaggregated revenues by reportable segment and a reconciliation of such segment revenues to revenues recorded in the condensed consolidated statements of operations. |
NET GAINS (LOSSES) FROM INVES29
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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: Three Months Ended March 31, 2018 Three Months Ended Net Realized Net Unrealized Total Net Realized Net Unrealized Total Private Equity (1) $ 16,253 $ 158,369 $ 174,622 $ 106,813 $ 3,288 $ 110,101 Credit (1) 1,263 58,150 59,413 (213,857 ) 247,139 33,282 Investments of Consolidated CFEs (1) (26,516 ) (48,403 ) (74,919 ) (1,103 ) 12,983 11,880 Real Assets (1) 12,957 59,297 72,254 3,060 6,798 9,858 Equity Method - Other (1) 9,210 135,604 144,814 (287 ) 35,320 35,033 Other Investments (1) (244,199 ) 86,365 (157,834 ) (8,264 ) 113,984 105,720 Foreign Exchange Forward Contracts and Options (2) (32,614 ) (63,118 ) (95,732 ) 9,986 (58,263 ) (48,277 ) Securities Sold Short (2) 275,949 (29,874 ) 246,075 246,787 42,270 289,057 Other Derivatives (2) 3,642 (8,223 ) (4,581 ) (5,760 ) (4,847 ) (10,607 ) Debt Obligations and Other (3) 14,435 94,253 108,688 8,789 (38,191 ) (29,402 ) Net Gains (Losses) From Investment Activities $ 30,380 $ 442,420 $ 472,800 $ 146,164 $ 360,481 $ 506,645 (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) | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Summary of investments | Investments consist of the following: March 31, 2018 December 31, 2017 Private Equity $ 4,416,481 $ 3,301,261 Credit 8,308,887 7,621,320 Investments of Consolidated CFEs 16,063,337 15,573,203 Real Assets 2,876,531 2,302,061 Equity Method - Other 3,505,032 3,324,631 Equity Method - Capital Allocation - Based Income 4,086,218 4,132,171 Other Investments 2,845,419 2,759,287 Total Investments $ 42,101,905 $ 39,013,934 |
Schedule of carried interest |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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. Investments classified as Equity Method - Other, for which the fair value option has not been elected, have been excluded from the tables below. Assets, at fair value: March 31, 2018 Level I Level II Level III Total Private Equity $ 994,496 $ 333,574 $ 3,088,411 $ 4,416,481 Credit — 2,490,032 5,818,855 8,308,887 Investments of Consolidated CFEs — 10,804,938 5,258,399 16,063,337 Real Assets 49,098 — 2,827,433 2,876,531 Equity Method - Other 52,555 291,668 1,085,725 1,429,948 Other Investments 858,120 186,095 1,801,204 2,845,419 Total 1,954,269 14,106,307 19,880,027 35,940,603 Foreign Exchange Contracts and Options — 70,032 — 70,032 Other Derivatives — 32,425 43,131 (1) 75,556 Total Assets $ 1,954,269 $ 14,208,764 $ 19,923,158 $ 36,086,191 December 31, 2017 Level I Level II Level III Total Private Equity $ 1,043,390 $ 85,581 $ 2,172,290 $ 3,301,261 Credit — 2,482,383 5,138,937 7,621,320 Investments of Consolidated CFEs — 10,220,113 5,353,090 15,573,203 Real Assets 50,794 — 2,251,267 2,302,061 Equity Method - Other 60,282 247,748 1,076,709 1,384,739 Other Investments 864,872 134,404 1,760,011 2,759,287 Total 2,019,338 13,170,229 17,752,304 32,941,871 Foreign Exchange Contracts and Options — 96,584 — 96,584 Other Derivatives — 33,125 51,949 (1) 85,074 Total Assets $ 2,019,338 $ 13,299,938 $ 17,804,253 $ 33,123,529 (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. Liabilities, at fair value: March 31, 2018 Level I Level II Level III Total Securities Sold Short $ 430,009 $ 19,554 $ — $ 449,563 Foreign Exchange Contracts and Options — 304,940 — 304,940 Unfunded Revolver Commitments — — 33,530 (1) 33,530 Other Derivatives — 20,775 41,800 (2) 62,575 Debt Obligations of Consolidated CFEs — 10,113,479 5,138,167 15,251,646 Total Liabilities $ 430,009 $ 10,458,748 $ 5,213,497 $ 16,102,254 December 31, 2017 Level I Level II Level III Total Securities Sold Short $ 692,007 $ — $ — $ 692,007 Foreign Exchange Contracts and Options — 260,948 — 260,948 Unfunded Revolver Commitments — — 17,629 (1) 17,629 Other Derivatives — 27,581 41,800 (2) 69,381 Debt Obligations of Consolidated CFEs — 10,347,980 5,238,236 15,586,216 Total Liabilities $ 692,007 $ 10,636,509 $ 5,297,665 $ 16,626,181 (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 equity interest in Marshall Wace and its affiliates in November 2015 to increase KKR's ownership interest up to 39.9% in periodic increments from 2018 to 2019. The option is valued using a Monte-Carlo simulation valuation methodology. Key inputs used in this methodology that require estimates include Marshall Wace's dividend yield, assets under management volatility and equity volatility. See Note 4 "Investments." |
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 months ended March 31, 2018 and 2017, respectively: For the Three Months Ended March 31, 2018 Level III Investments Level III Debt Obligations Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method - Other Other Investments Total Debt Obligations of Consolidated CFEs Balance, Beg. of Period $ 2,172,290 $ 5,138,937 $ 5,353,090 $ 2,251,267 $ 1,076,709 $ 1,760,011 $ 17,752,304 $ 5,238,236 Transfers In / (Out) Due to Changes in Consolidation — — — — — — — — Transfers In — — — — — — — — Transfers Out — — — — — — — — Asset Purchases / Debt Issuances 727,626 890,113 — 540,898 2,037 64,757 2,225,431 — Sales / Paydowns (35,245 ) (230,144 ) (11,541 ) (34,237 ) (31,939 ) (36,218 ) (379,324 ) — Settlements — (53,825 ) — — — — (53,825 ) (11,541 ) Net Realized Gains (Losses) 15,312 11,581 — 8,354 9,348 8,892 53,487 — Net Unrealized Gains (Losses) 208,428 77,715 (83,150 ) 61,151 29,570 3,762 297,476 (88,528 ) Change in Other Comprehensive Income — (15,522 ) — — — — (15,522 ) — Balance, End of Period $ 3,088,411 $ 5,818,855 $ 5,258,399 $ 2,827,433 $ 1,085,725 $ 1,801,204 $ 19,880,027 $ 5,138,167 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 $ 208,428 $ 86,754 $ (83,150 ) $ 61,151 $ 34,928 $ 10,442 $ 318,553 $ (88,528 ) For the Three Months Ended March 31, 2017 Level III Investments Level III Private Equity Credit Investments of Consolidated CFEs Real Assets Equity Method - Other Other Investments 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 In / (Out) Due to Changes in Consolidation — (95,962 ) — — — — (95,962 ) — Transfers In — — — — — — — — Transfers Out — — — — — (1,496 ) (1,496 ) — Asset Purchases / Debt Issuances 429,644 596,862 — 250,278 9,556 15,119 1,301,459 — Sales / Paydowns (22,629 ) (168,858 ) (8,940 ) (21,677 ) (12,678 ) (8,128 ) (242,910 ) — Settlements — (11,075 ) — — — — (11,075 ) (8,940 ) Net Realized Gains (Losses) — (9,243 ) — 3,060 — (19,530 ) (25,713 ) — Net Unrealized Gains (Losses) 34,630 280,039 29,272 6,798 25,827 52,843 429,409 27,769 Change in Other Comprehensive Income — 20,899 — — — — 20,899 — Balance, End 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 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 $ 34,630 $ 280,039 $ 29,272 $ 6,798 $ 25,827 $ 52,843 $ 429,409 $ 27,769 |
Summary of fair value transfers between fair value levels | The following table summarizes the fair value transfers between fair value levels for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Investments, at fair value: Transfers from Level III to Level I (1) $ — $ 1,496 (1) Transfers out of Level III into Level I are attributable to companies that are valued using their publicly traded market price. |
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 March 31, 2018 : Fair Value March 31, 2018 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Private Equity $ 3,088,411 Private Equity $ 1,282,345 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.1% 5.0% - 15.0% Decrease Weight Ascribed to Market Comparables 47.7% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 50.6% 25.0% - 100.0% (5) Weight Ascribed to Transaction Price 1.7% 0.0% - 50.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 14.7x 7.9x - 28.0x Increase Enterprise Value/Forward EBITDA Multiple 12.6x 6.0x - 20.4x Increase Discounted cash flow Weighted Average Cost of Capital 9.9% 6.9% - 14.9% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 5.1x - 15.3x Increase Growth Equity $ 1,806,066 Inputs to market comparables, discounted cash flow and milestones Illiquidity Discount 11.7% 10.0% - 20.0% Decrease Weight Ascribed to Market Comparables 19.7% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 7.7% 0.0% - 75.0% (5) Weight Ascribed to Milestones 72.6% 0.0% - 100.0% (6) Scenario Weighting Base 54.9% 40.0% - 80.0% Increase Downside 21.3% 10.0% - 30.0% Decrease Upside 23.8% 10.0% - 40.0% Increase Credit $ 5,818,855 Yield Analysis Yield 10.5% 1.0% - 30.8% Decrease Net Leverage 4.7x 0.5x - 30.6x Decrease EBITDA Multiple 13.9x 0.1x - 29.7x Increase Investments of Consolidated CFEs $ 5,258,399 (9) Debt Obligations of Consolidated CFEs $ 5,138,167 Discounted cash flow Yield 5.8% 2.6% - 26.0% Decrease Real Assets $ 2,827,433 (10) Energy $ 1,606,595 Discounted cash flow Weighted Average Cost of Capital 10.2% 9.4% - 16.3% Decrease Average Price Per BOE (8) $41.47 $28.90 - $43.56 Increase Fair Value March 31, 2018 Valuation Methodologies Unobservable Input(s) (1) Weighted Average (2) Range Impact to Valuation from an Increase in Input (3) Real Estate $ 1,014,158 Inputs to direct income capitalization and discounted cash flow Weight Ascribed to Direct Income Capitalization 38.6% 0.0% - 100.0% (7) Weight Ascribed to Discounted Cash Flow 61.4% 0.0% - 100.0% (5) Direct income capitalization Current Capitalization Rate 5.9% 1.1% - 12.0% Decrease Discounted cash flow Unlevered Discount Rate 8.8% 4.5% - 18.0% Decrease Equity Method - Other $ 1,085,725 Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 9.6% 5.0% - 10.0% Decrease Weight Ascribed to Market Comparables 42.8% 0.0% - 50.0% (4) Weight Ascribed to Discounted Cash Flow 42.8% 0.0% - 50.0% (5) Weight Ascribed to Transaction Price 14.4% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 12.3x 7.9x - 14.0x Increase Enterprise Value/Forward EBITDA Multiple 11.6x 6.0x - 12.7x Increase Discounted cash flow Weighted Average Cost of Capital 8.6% 6.2% - 11.1% Decrease Enterprise Value/LTM EBITDA Exit Multiple 10.6x 6.0x - 12.5x Increase Other Investments $ 1,801,204 (11) Inputs to market comparables, discounted cash flow and transaction price Illiquidity Discount 10.4% 5.0% - 20.0% Decrease Weight Ascribed to Market Comparables 27.9% 0.0% - 100.0% (4) Weight Ascribed to Discounted Cash Flow 45.3% 0.0% - 100.0% (5) Weight Ascribed to Transaction Price 26.8% 0.0% - 100.0% (6) Market comparables Enterprise Value/LTM EBITDA Multiple 10.4x 0.1x - 13.3x Increase Enterprise Value/Forward EBITDA Multiple 9.4x 3.5x - 13.5x Increase Discounted cash flow Weighted Average Cost of Capital 13.1% 8.1% - 20.8% Decrease Enterprise Value/LTM EBITDA Exit Multiple 3.9x 1.9x - 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 $206.7 million that was valued using a discounted cash flow analysis. The significant inputs used included the weighted average cost of capital 7.2% and the enterprise value/LTM EBITDA Exit Multiple 12.0 x. (11) Consists primarily of investments in common stock, preferred stock, warrants and options of companies that are not private equity, real assets, credit, equity method - other or investments of consolidated CFEs. |
FAIR VALUE OPTION (Tables)
FAIR VALUE OPTION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 Assets Private Equity $ 3,092 $ 3,744 Credit 4,746,290 4,381,519 Investments of Consolidated CFEs 16,063,337 15,573,203 Real Assets 340,412 343,820 Equity Method - Other 1,429,948 1,384,739 Other Investments 308,391 344,996 Total $ 22,891,470 $ 22,032,021 Liabilities Debt Obligations of Consolidated CFEs $ 15,251,646 $ 15,586,216 Total $ 15,251,646 $ 15,586,216 The following table presents the net realized and net change in unrealized gains (losses) on financial instruments on which the fair value option was elected: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net Realized Net Unrealized Gains (Losses) Total Net Realized Net Unrealized Gains (Losses) Total Assets Private Equity $ 71 $ 316 $ 387 $ — $ 362 $ 362 Credit (28,867 ) 2,656 (26,211 ) (239,098 ) 55,870 (183,228 ) Investments of Consolidated CFEs (26,516 ) (48,403 ) (74,919 ) (1,103 ) 12,983 11,880 Real Assets 428 (3,483 ) (3,055 ) (216 ) 6,788 6,572 Equity Method - Other 9,348 66,093 75,441 — 20,362 20,362 Other Investments 4,607 (7,878 ) (3,271 ) (18,799 ) 17,281 (1,518 ) Total $ (40,929 ) $ 9,301 $ (31,628 ) $ (259,216 ) $ 113,646 $ (145,570 ) Liabilities Debt Obligations of Consolidated CFEs 13,256 93,654 106,910 4,825 (11,058 ) (6,233 ) Total $ 13,256 $ 93,654 $ 106,910 $ 4,825 $ (11,058 ) $ (6,233 ) |
NET INCOME (LOSS) ATTRIBUTABL33
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted Net Income (Loss) attributable to KKR & Co. earnings per common unit | For the three months ended March 31, 2018 and 2017 , basic and diluted Net Income (Loss) attributable to KKR & Co. L.P. per common unit were calculated as follows: Three Months Ended March 31, 2018 2017 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 170,102 $ 259,343 Excess of carrying value over consideration transferred on redemption of KFN 7.375% Series A LLC Preferred Shares 3,102 — Net Income (Loss) Available to KKR & Co. L.P. Common Unitholders $ 173,204 $ 259,343 Basic Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 487,704,838 453,695,846 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic $ 0.36 $ 0.57 Diluted Net Income (Loss) Per Common Unit Weighted Average Common Units Outstanding - Basic 487,704,838 453,695,846 Weighted Average Unvested Common Units and Other Exchangeable Securities 48,213,436 42,988,494 Weighted Average Common Units Outstanding - Diluted 535,918,274 496,684,340 Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted $ 0.32 $ 0.52 |
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 March 31, 2018 2017 Weighted Average KKR Holdings Units Outstanding 335,016,218 352,586,584 |
OTHER ASSETS AND ACCOUNTS PAY34
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of other assets | Other Assets consist of the following: March 31, 2018 December 31, 2017 Unsettled Investment Sales (1) $ 154,082 $ 134,781 Receivables 53,448 138,109 Due from Broker (2) 331,830 682,403 Oil & Gas Assets, net (3) 245,373 252,371 Deferred Tax Assets, net 131,361 131,944 Interest Receivable 244,547 189,785 Fixed Assets, net (4) 368,957 364,203 Foreign Exchange Contracts and Options (5) 70,032 96,584 Intangible Assets, net (6) 124,514 129,178 Goodwill (6) 83,500 83,500 Derivative Assets 75,556 85,074 Deposits 16,654 16,330 Prepaid Taxes 78,295 83,371 Prepaid Expenses 23,530 25,677 Deferred Financing Costs 12,552 7,534 Other 89,072 110,231 Total $ 2,103,303 $ 2,531,075 (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. Depreciation, depletion and amortization amounted to $7,077 and $5,864 for the three months ended March 31, 2018 and 2017, respectively. (4) Net of accumulated depreciation and amortization of $160,376 and $156,859 as of March 31, 2018 and December 31, 2017 , respectively. Depreciation and amortization expense of $3,710 and $4,197 for the three months ended March 31, 2018 and 2017, 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. Such instruments 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. (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: March 31, 2018 December 31, 2017 Amounts Payable to Carry Pool (1) $ 1,176,070 $ 1,220,559 Unsettled Investment Purchases (2) 945,940 885,945 Securities Sold Short (3) 449,563 692,007 Derivative Liabilities 62,575 69,381 Accrued Compensation and Benefits 107,401 35,953 Interest Payable 183,350 168,673 Foreign Exchange Contracts and Options (4) 304,940 260,948 Accounts Payable and Accrued Expenses 111,519 152,916 Deferred Rent 16,322 17,441 Taxes Payable 23,331 35,933 Uncertain Tax Positions Reserve 58,370 58,369 Other Liabilities 64,373 56,125 Total $ 3,503,754 $ 3,654,250 (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. Such instruments 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. |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017, the maximum exposure to loss, before allocations to the carry pool and noncontrolling interests, if any, for those VIEs in which KKR is determined not to be the primary beneficiary but in which it has a variable interest is as follows: March 31, 2018 December 31, 2017 Investments $ 4,113,673 $ 4,417,003 Due from (to) Affiliates, net 232,653 176,131 Maximum Exposure to Loss $ 4,346,326 $ 4,593,134 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | KKR's borrowings consisted of the following: March 31, 2018 December 31, 2017 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 452,223 — — 487,656 — — KCM Short-Term Credit Agreement 750,000 — — 750,000 — — Notes Issued: KKR Issued 6.375% Notes Due 2020 (1) — 498,536 540,275 (13) — 498,390 549,000 (13) KKR Issued 5.500% Notes Due 2043 (2) — 491,581 545,730 (13) — 491,496 580,000 (13) KKR Issued 5.125% Notes Due 2044 (3) — 990,466 1,036,910 (13) — 990,375 1,107,100 (13) KKR Issued 0.509% Notes Due 2023 (4) — 234,004 235,247 (13) — — — KKR Issued 0.764% Notes Due 2025 (5) — 46,488 47,052 (13) — — — KKR Issued 1.595% Notes Due 2038 (6) — 95,921 97,227 (13) — — — KFN Issued 5.500% Notes Due 2032 (7) — 493,249 523,647 — 493,129 505,235 KFN Issued 5.200% Notes Due 2033 (8) — 118,407 122,169 — — — KFN Issued Junior Subordinated Notes (9) — 236,385 207,673 — 236,038 201,828 Other Consolidated Debt Obligations: Fund Financing Facilities and Other (10) 1,676,423 3,584,588 3,584,588 (14) 2,056,096 2,898,215 2,898,215 (14) CLO Senior Secured Notes (11) — 9,806,031 9,806,031 — 10,055,686 10,055,686 CLO Subordinated Notes (11) — 307,448 307,448 — 292,294 292,294 CMBS Debt Obligations (12) — 5,138,167 5,138,167 — 5,238,236 5,238,236 $ 3,878,646 $ 22,041,271 $ 22,192,164 $ 4,293,752 $ 21,193,859 $ 21,427,594 (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 $0.9 million and $1.0 million as of March 31, 2018 and December 31, 2017 , 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 $3.7 million as of March 31, 2018 and December 31, 2017 . (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 $8.2 million and $8.3 million as of March 31, 2018 and December 31, 2017 , respectively. (4) $235.3 million aggregate principal amount of 0.509% senior notes of KKR due 2023. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.3 million as of March 31, 2018 . These senior notes are denominated in Japanese Yen ("JPY"). (5) $47.1 million aggregate principal amount of 0.764% senior notes of KKR due 2025. Borrowing outstanding is presented net of unamortized debt issuance costs of $0.6 million as of March 31, 2018 . These senior notes are denominated in JPY. (6) $96.9 million aggregate principal amount of 1.595% senior notes of KKR due 2038. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.0 million as of March 31, 2018 . These senior notes are denominated in JPY. (7) KKR consolidates KFN and thus reports KFN's outstanding $500.0 million aggregate principal amount of 5.500% senior notes due 2032. Borrowing outstanding is presented net of i) unamortized note discount and ii) unamortized debt issuance costs of $4.6 million and $4.7 million as of March 31, 2018 and December 31, 2017 , respectively. 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. (8) KKR consolidates KFN and thus reports KFN's outstanding $120.0 million aggregate principal amount of 5.200% senior notes due 2033. Borrowing outstanding is presented net of unamortized debt issuance costs of $1.6 million as of March 31, 2018 . 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. (9) 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 4.2% and 3.8% and the weighted average years to maturity is 18.5 years and 19.0 years as of March 31, 2018 and December 31, 2017 , respectively. 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. (10) 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 4.3% and 4.2% as of March 31, 2018 and December 31, 2017 , respectively. In addition, the weighted average years to maturity is 3.3 years and 3.6 years as of March 31, 2018 and December 31, 2017 , respectively. (11) 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." (12) 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." (13) The notes are classified as Level II within the fair value hierarchy and fair value is determined by third party broker quotes. (14) Carrying value approximates fair value given the fund financing facilities' interest rates are variable. |
Schedule of debt obligations of consolidated CLOs | As of March 31, 2018 , 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 $ 9,806,031 2.8 % 11.8 Subordinated Notes of Consolidated CLOs 307,448 (1) 12.1 Debt Obligations of Consolidated CMBS Vehicles 5,138,167 4.4 % 26.4 $ 15,251,646 (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) | 3 Months Ended |
Mar. 31, 2018 | |
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 and other non-cash compensation for the three months ended March 31, 2018 and 2017 , respectively. Three Months Ended March 31, 2018 2017 Equity Incentive Plan Units $ 67,796 $ 49,943 KKR Holdings Principal Awards 27,282 44,979 Total (1) $ 95,078 $ 94,922 (1) Includes $4,264 of equity based charges for the three months ended March 31, 2018 related to employees of equity method investees. Such amounts are included in Net Gains (Losses) from Investment Activities in the consolidated statements of operations. |
Summary of significant assumptions used to estimate grant date fair value of Market Condition Awards | Below is a summary of the significant assumptions used to estimate the grant date fair value of the Market Condition Awards. Closing KKR unit price as of valuation date $19.90 Risk Free Rate 2.02 % Volatility 25.00 % Dividend Yield 3.42 % Expected Cost of Equity 11.02 % |
Schedule of unrecognized expense of equity incentive plan awards expected to be recognized | As of March 31, 2018 , there was approximately $492.7 million of total estimated unrecognized expense related to unvested awards, including Market Condition Awards. That cost is expected to be recognized as follows: Year Unrecognized Expense Remainder of 2018 164.2 2019 167.8 2020 111.3 2021 38.2 2022 10.3 2023 0.9 Total $ 492.7 |
Schedule of awards granted under equity incentive plan | A summary of the status of unvested awards granted under the Equity Incentive Plan, excluding Market Condition Awards as described above, from January 1, 2018 through March 31, 2018 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2018 46,422,733 $ 14.98 Granted 1,271,656 20.21 Vested — — Forfeitures (1,092,523 ) 13.40 Balance, March 31, 2018 46,601,866 $ 15.16 |
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 April 1, 2018 10,254,674 October 1, 2018 5,824,493 April 1, 2019 9,492,030 October 1, 2019 4,425,709 April 1, 2020 6,625,455 October 1, 2020 3,371,704 April 1, 2021 3,378,686 October 1, 2021 1,930,239 April 1, 2022 116,532 October 1, 2022 1,091,172 October 1, 2023 91,172 46,601,866 |
Schedule of unrecognized expense of unvested market condition awards expected to be recognized | As of March 31, 2018 , there was approximately $332.7 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 2018 $ 75.2 2019 96.5 2020 88.3 2021 47.5 2022 25.2 Total $ 332.7 |
Schedule of holding awards granted | A summary of the status of unvested awards granted under the KKR Holdings Plan from January 1, 2018 through March 31, 2018 is presented below: Units Weighted Average Grant Date Fair Value Balance, January 1, 2018 30,848,583 $ 14.42 Granted — — Vested — — Forfeitures — — Balance, March 31, 2018 30,848,583 $ 14.42 |
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 April 1, 2018 574,590 May 1, 2018 3,805,000 October 1, 2018 1,970,000 April 1, 2019 229,514 May 1, 2019 3,805,000 October 1, 2019 2,455,000 April 1, 2020 124,479 May 1, 2020 3,805,000 October 1, 2020 2,940,000 May 1, 2021 3,805,000 October 1, 2021 3,425,000 October 1, 2022 3,910,000 30,848,583 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of due from and to affiliates | Due from Affiliates consists of: March 31, 2018 December 31, 2017 Amounts due from portfolio companies $ 139,158 $ 129,594 Amounts due from unconsolidated investment funds 414,133 415,907 Amounts due from related entities 12,390 8,848 Due from Affiliates $ 565,681 $ 554,349 Due to Affiliates consists of: March 31, 2018 December 31, 2017 Amounts due to KKR Holdings in connection with the tax receivable agreement $ 83,710 $ 84,034 Amounts due to unconsolidated investment funds 181,480 239,776 Due to Affiliates $ 265,190 $ 323,810 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 158,190 $ 93,395 $ — $ — $ 251,585 Monitoring Fees 17,530 — — — 17,530 Transaction Fees 46,689 2,558 107,598 — 156,845 Fee Credits (41,343 ) (2,431 ) — — (43,774 ) Total Management, Monitoring and Transaction Fees, Net 181,066 93,522 107,598 — 382,186 Performance Income (Loss) Realized Incentive Fees — 16,407 — — 16,407 Realized Carried Interest 202,555 — — — 202,555 Unrealized Carried Interest (141,240 ) 29,508 — — (111,732 ) Total Performance Income (Loss) 61,315 45,915 — — 107,230 Investment Income (Loss) Net Realized Gains (Losses) — — — 7,875 7,875 Net Unrealized Gains (Losses) — — — 207,862 207,862 Total Realized and Unrealized — — — 215,737 215,737 Interest Income and Dividends — — — 72,577 72,577 Interest Expense — — — (50,192 ) (50,192 ) Net Interest and Dividends — — — 22,385 22,385 Total Investment Income (Loss) — — — 238,122 238,122 Total Segment Revenues 242,381 139,437 107,598 238,122 727,538 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 59,719 22,714 21,457 34,640 138,530 Realized Performance Income Compensation 87,099 7,055 — — 94,154 Unrealized Performance Income Compensation (55,379 ) 12,256 — — (43,123 ) Total Compensation and Benefits 91,439 42,025 21,457 34,640 189,561 Occupancy and Related Charges 7,876 1,608 744 3,355 13,583 Other Operating Expenses 28,302 9,587 6,749 13,267 57,905 Total Segment Expenses 127,617 53,220 28,950 51,262 261,049 Income (Loss) attributable to noncontrolling interests — — 1,203 — 1,203 Economic Net Income (Loss) $ 114,764 $ 86,217 $ 77,445 $ 186,860 $ 465,286 Total Assets $ 2,203,895 $ 1,642,038 $ 550,429 $ 11,847,241 $ 16,243,603 As of and for the Three Months Ended March 31, 2017 Private Markets Public Markets Capital Markets Principal Activities Total Segment Revenues Management, Monitoring and Transaction Fees, Net Management Fees $ 123,512 $ 84,772 $ — $ — $ 208,284 Monitoring Fees 13,220 — — — 13,220 Transaction Fees 117,882 4,056 121,097 — 243,035 Fee Credits (85,650 ) (3,367 ) — — (89,017 ) Total Management, Monitoring and Transaction Fees, Net 168,964 85,461 121,097 — 375,522 Performance Income (Loss) Realized Incentive Fees — 1,686 — — 1,686 Realized Carried Interest 206,204 — — — 206,204 Unrealized Carried Interest 123,506 17,120 — — 140,626 Total Performance Income (Loss) 329,710 18,806 — — 348,516 Investment Income (Loss) Net Realized Gains (Losses) — — — 79,451 79,451 Net Unrealized Gains (Losses) — — — 204,036 204,036 Total Realized and Unrealized — — — 283,487 283,487 Interest Income and Dividends — — — 56,882 56,882 Interest Expense — — — (41,709 ) (41,709 ) Net Interest and Dividends — — — 15,173 15,173 Total Investment Income (Loss) — — — 298,660 298,660 Total Segment Revenues 498,674 104,267 121,097 298,660 1,022,698 Segment Expenses Compensation and Benefits Cash Compensation and Benefits 60,008 19,784 22,561 37,082 139,435 Realized Performance Income Compensation 87,393 674 — — 88,067 Unrealized Performance Income Compensation 50,366 6,848 — — 57,214 Total Compensation and Benefits 197,767 27,306 22,561 37,082 284,716 Occupancy and Related Charges 8,107 1,856 664 3,742 14,369 Other Operating Expenses 26,887 8,338 5,328 12,945 53,498 Total Segment Expenses 232,761 37,500 28,553 53,769 352,583 Income (Loss) attributable to noncontrolling interests — — 1,584 — 1,584 Economic Net Income (Loss) $ 265,913 $ 66,767 $ 90,960 $ 244,891 $ 668,531 Total Assets $ 1,815,404 $ 1,191,199 $ 573,162 $ 10,758,695 $ 14,338,460 |
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 the most directly comparable financial measures calculated and presented in accordance with GAAP to KKR's total reportable segments: Revenues Three Months Ended March 31, 2018 March 31, 2017 Total Revenues $ 472,606 $ 767,755 Plus: Management fees relating to consolidated funds and placement fees 63,858 47,102 Less: Fee credits relating to consolidated funds 14,721 939 Plus: Net realized and unrealized carried interest - consolidated funds 28,076 11,057 Less: General partner capital interest - unconsolidated funds 15,465 51,803 Plus: Total investment income (loss) 238,122 298,660 Less: Revenue earned by oil & gas producing entities 14,507 17,273 Less: Expense reimbursements 20,211 23,549 Less: Other 10,220 8,312 Total Segment Revenues $ 727,538 $ 1,022,698 Expenses Three Months Ended March 31, 2018 March 31, 2017 Total Expenses $ 436,601 $ 540,014 Less: Equity-based and other non-cash compensation 96,227 111,036 Less: Reimbursable expenses and placement fees 27,761 36,123 Less: Operating expenses relating to consolidated funds, CFEs and other entities 21,805 13,430 Less: Expenses incurred by oil & gas producing entities 11,101 11,177 Less: Intangible amortization 5,030 6,366 Less: Other 13,628 9,299 Total Segment Expenses $ 261,049 $ 352,583 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders Three Months Ended March 31, 2018 March 31, 2017 Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders $ 170,102 $ 259,343 Plus: Preferred Distributions 8,341 8,341 Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. 121,002 216,432 Plus: Equity-based and other non-cash compensation 100,491 111,036 Plus: Amortization of intangibles, placement fees and other, net (1) 47,709 32,837 Plus: Income tax (benefit) 17,641 40,542 Economic Net Income (Loss) $ 465,286 $ 668,531 (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 March 31, 2018 2017 Total Assets $ 47,579,153 $ 41,635,712 Less: Impact of consolidation of funds and other entities (1) 29,972,064 25,963,256 Less: Carry pool reclassification from liabilities 1,176,070 1,035,671 Less: Impact of KKR Management Holdings Corp. 187,416 298,325 Total Segment Assets $ 16,243,603 $ 14,338,460 (1) Includes accounting basis difference for oil & natural gas properties of $10,738 and $7,700 as of March 31, 2018 and 2017, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Intangible Assets, Net consists of the following: March 31, 2018 December 31, 2017 Finite-Lived Intangible Assets $ 191,526 $ 190,526 Accumulated Amortization (67,012 ) (61,348 ) Intangible Assets, Net $ 124,514 $ 129,178 |
Schedule of changes in intangible assets, net | Changes in Intangible Assets, Net consists of the following: Three Months Ended March 31, 2018 Balance, Beginning of Period $ 129,178 Amortization Expense (5,030 ) Foreign Exchange 366 Balance, End of Period $ 124,514 |
ORGANIZATION - Narrative (Detai
ORGANIZATION - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 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. | 40.50% | 43.50% |
Percentage of economic interest held by parent entity | 59.50% |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Noncontrolling Interests in Consolidated Entities (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2015 | |
Class of Stock [Line Items] | ||
Percentage of carried interest received by general partners (up to) | 1.00% | |
Series A LLC Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred units dividend rate (as a percent) | 7.375% |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Noncontrolling Interests Held by KKR Holdings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Calculation of Noncontrolling Interest [Abstract] | ||
Capital contributions | $ 1,270,723 | $ 528,833 |
Capital distributions | (930,232) | (343,083) |
Noncontrolling Interests held by KKR Holdings | ||
Calculation of Noncontrolling Interest [Abstract] | ||
Balance at the beginning of the period | 4,793,475 | 4,293,337 |
Net income (loss) attributable to noncontrolling interests held by KKR Holdings | 121,002 | 216,432 |
Other comprehensive income (loss), net of tax | 3,143 | 4,920 |
Impact of the exchange of KKR Holdings units to KKR & Co. L.P. common units | (33,775) | (35,904) |
Equity-based and other non-cash compensation | 32,695 | 61,093 |
Capital contributions | 39 | 37 |
Capital distributions | (57,167) | (56,637) |
Transfer of interests under common control and Other (See Note 15 Equity) | 0 | 7,919 |
Balance at the end of the period | $ 4,859,412 | $ 4,491,197 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Income (Loss) Attributable To Noncontrolling Interests Held by KKR Holdings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Income (Loss) Attributable to Noncontrolling Interest [Abstract] | ||
Net Income (Loss) | $ 602,894 | $ 797,894 |
Less: Net income (loss) attributable to Redeemable Noncontrolling Interests | 25,674 | 20,933 |
Less: Net income (loss) attributable to Noncontrolling Interests in consolidated entities | 277,775 | 292,845 |
Less: Net income (loss) attributable to Series A and Series B Preferred Unitholders | 8,341 | 8,341 |
Plus: Income tax / (benefit) attributable to KKR Management Holdings Corp. | 6,068 | 19,160 |
Net income (loss) attributable to KKR & Co. L.P. Common Unitholders and KKR Holdings | 297,172 | 494,935 |
Noncontrolling Interests held by KKR Holdings | ||
Net Income (Loss) Attributable to Noncontrolling Interest [Abstract] | ||
Net income (loss) attributable to noncontrolling interests held by KKR Holdings | $ 121,002 | $ 216,432 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurement (Details) | 3 Months Ended |
Mar. 31, 2018methodology | |
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accounting Policies [Abstract] | ||
Management Fees | $ 187,727 | $ 161,182 |
Transaction Fees | 158,653 | 243,658 |
Monitoring Fees | 17,586 | 13,504 |
Fee Credits | (29,053) | (88,078) |
Incentive Fees | 13,805 | 273 |
Expense Reimbursements | 20,211 | 23,265 |
Oil and Gas Revenue | 14,507 | 17,273 |
Consulting Fees | 10,958 | 9,102 |
Total Fees and Other | 394,394 | 380,179 |
Carried Interest | 62,747 | 335,773 |
Less: General partner capital interest - unconsolidated funds | 15,465 | 51,803 |
Total Capital Allocation-Based Income | 78,212 | 387,576 |
Total Revenues | $ 472,606 | 767,755 |
Fees and Commissions [Line Items] | ||
Gross management fees as a percentage of committed capital, low end of range | 1.00% | |
Gross management fees as a percentage of committed capital, high end of range | 2.00% | |
Maximum length of investment period | 6 years | |
Percentage used to derive management fees for separately managed accounts, low end of range | 0.50% | |
Percentage used to derive management fees for separately managed accounts, high end of range | 2.00% | |
Asset Management Fees Earned From Credit Funds And Other Investment Vehicles, Percentage, Low End of Range | 0.33% | |
Asset Management Fees Earned From Credit Funds And Other Investment Vehicles, Percentage, High End of Range | 1.75% | |
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 | $ (43,774) | (89,017) |
Incentive Fees | 202,555 | 206,204 |
Total Fees and Other | 382,186 | 375,522 |
Total Revenues | $ 727,538 | $ 1,022,698 |
Minimum | ||
Fees and Commissions [Line Items] | ||
Gross management fees as a percentage of capital | 0.75% | |
Collateral Management Fee, Based on Annual Rate of Percentage of Collateral | 0.40% | |
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 | ||
Fees and Commissions [Line Items] | ||
Gross management fees as a percentage of capital | 1.25% | |
Collateral Management Fee, Based on Annual Rate of Percentage of Collateral | 0.50% | |
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% |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Capital Allocation-Based Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Fees and Other | $ (394,394) | $ (380,179) |
Net Gains (Losses) from Investment Activities | $ (472,800) | (506,645) |
Restatement | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Fees and Other | 335,800 | |
Net Gains (Losses) from Investment Activities | $ 51,800 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided (used) by operating activities | $ 2,157,500 | $ 1,150,910 |
Net cash provided (used) by investing activities | $ 8,670 | 21,561 |
ASU 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided (used) by operating activities | 32,500 | |
Net cash provided (used) by investing activities | $ 83,300 |
NET GAINS (LOSSES) FROM INVES49
NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | $ 30,380 | $ 146,164 |
Net Unrealized Gains (Losses) | 442,420 | 360,481 |
Total | 472,800 | 506,645 |
Private Equity | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 16,253 | 106,813 |
Net Unrealized Gains (Losses) | 158,369 | 3,288 |
Total | 174,622 | 110,101 |
Credit | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 1,263 | (213,857) |
Net Unrealized Gains (Losses) | 58,150 | 247,139 |
Total | 59,413 | 33,282 |
Investments of Consolidated CFEs | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | (26,516) | (1,103) |
Net Unrealized Gains (Losses) | (48,403) | 12,983 |
Total | (74,919) | 11,880 |
Real Assets | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 12,957 | 3,060 |
Net Unrealized Gains (Losses) | 59,297 | 6,798 |
Total | 72,254 | 9,858 |
Equity Method - Other | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 9,210 | (287) |
Net Unrealized Gains (Losses) | 135,604 | 35,320 |
Total | 144,814 | 35,033 |
Other Investments | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | (244,199) | (8,264) |
Net Unrealized Gains (Losses) | 86,365 | 113,984 |
Total | (157,834) | 105,720 |
Foreign Exchange Forward Contracts and Options | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | (32,614) | 9,986 |
Net Unrealized Gains (Losses) | (63,118) | (58,263) |
Total | (95,732) | (48,277) |
Securities Sold Short | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 275,949 | 246,787 |
Net Unrealized Gains (Losses) | (29,874) | 42,270 |
Total | 246,075 | 289,057 |
Other Derivatives | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 3,642 | (5,760) |
Net Unrealized Gains (Losses) | (8,223) | (4,847) |
Total | (4,581) | (10,607) |
Debt Obligations and Other | ||
Gain (Loss) on Investments [Line Items] | ||
Net Realized Gains (Losses) | 14,435 | 8,789 |
Net Unrealized Gains (Losses) | 94,253 | (38,191) |
Total | $ 108,688 | $ (29,402) |
INVESTMENTS - Summary of Invest
INVESTMENTS - Summary of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Investments owned, at fair value | $ 42,101,905 | $ 39,013,934 |
Private Equity | ||
Investments | ||
Investments owned, at fair value | 4,416,481 | 3,301,261 |
Credit | ||
Investments | ||
Investments owned, at fair value | 8,308,887 | 7,621,320 |
Investments of Consolidated CFEs | ||
Investments | ||
Investments owned, at fair value | 16,063,337 | 15,573,203 |
Real Assets | ||
Investments | ||
Investments owned, at fair value | 2,876,531 | 2,302,061 |
Equity Method - Other | ||
Investments | ||
Investments owned, at fair value | 3,505,032 | 3,324,631 |
Equity Method - Capital Allocation - Based Income | ||
Investments | ||
Investments owned, at fair value | 4,132,171 | |
Other Investments | ||
Investments | ||
Investments owned, at fair value | $ 2,845,419 | $ 2,759,287 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Investments | Investment Concentration Risk | ||
Investments | ||
Threshold percentage of total investments (greater than) | 5.00% | 5.00% |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Marshall Wace | ||
Liabilities, at fair value: | ||
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 | $ 3,088,411 | |
Level III | Credit | ||
Assets, at fair value: | ||
Total Assets | 5,818,855 | |
Level III | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Assets | 5,258,399 | |
Level III | Real Assets | ||
Assets, at fair value: | ||
Total Assets | 2,827,433 | |
Level III | Equity Method - Other | ||
Assets, at fair value: | ||
Total Assets | 1,085,725 | |
Level III | Other Investments | ||
Assets, at fair value: | ||
Total Assets | 1,801,204 | |
Fair value measured on recurring basis | ||
Assets, at fair value: | ||
Total Investments | 35,940,603 | $ 32,941,871 |
Total Assets | 36,086,191 | 33,123,529 |
Liabilities, at fair value: | ||
Securities Sold Short | 449,563 | 692,007 |
Unfunded Revolver Commitments | 33,530 | 17,629 |
Total Liabilities | 16,102,254 | 16,626,181 |
Fair value measured on recurring basis | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 15,251,646 | 15,586,216 |
Fair value measured on recurring basis | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 70,032 | 96,584 |
Liabilities, at fair value: | ||
Total Liabilities | 304,940 | 260,948 |
Fair value measured on recurring basis | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 75,556 | 85,074 |
Liabilities, at fair value: | ||
Total Liabilities | 62,575 | 69,381 |
Fair value measured on recurring basis | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 4,416,481 | 3,301,261 |
Fair value measured on recurring basis | Credit | ||
Assets, at fair value: | ||
Total Investments | 8,308,887 | 7,621,320 |
Fair value measured on recurring basis | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 16,063,337 | 15,573,203 |
Fair value measured on recurring basis | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 2,876,531 | 2,302,061 |
Fair value measured on recurring basis | Equity Method - Other | ||
Assets, at fair value: | ||
Total Investments | 1,429,948 | 1,384,739 |
Fair value measured on recurring basis | Other Investments | ||
Assets, at fair value: | ||
Total Investments | 2,845,419 | 2,759,287 |
Fair value measured on recurring basis | Level I | ||
Assets, at fair value: | ||
Total Investments | 1,954,269 | 2,019,338 |
Total Assets | 1,954,269 | 2,019,338 |
Liabilities, at fair value: | ||
Securities Sold Short | 430,009 | 692,007 |
Unfunded Revolver Commitments | 0 | 0 |
Total Liabilities | 430,009 | 692,007 |
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 | 994,496 | 1,043,390 |
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 | 49,098 | 50,794 |
Fair value measured on recurring basis | Level I | Equity Method - Other | ||
Assets, at fair value: | ||
Total Investments | 52,555 | 60,282 |
Fair value measured on recurring basis | Level I | Other Investments | ||
Assets, at fair value: | ||
Total Investments | 858,120 | 864,872 |
Fair value measured on recurring basis | Level II | ||
Assets, at fair value: | ||
Total Investments | 14,106,307 | 13,170,229 |
Total Assets | 14,208,764 | 13,299,938 |
Liabilities, at fair value: | ||
Securities Sold Short | 19,554 | 0 |
Unfunded Revolver Commitments | 0 | 0 |
Total Liabilities | 10,458,748 | 10,636,509 |
Fair value measured on recurring basis | Level II | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 10,113,479 | 10,347,980 |
Fair value measured on recurring basis | Level II | Foreign Exchange Forward Contracts | ||
Assets, at fair value: | ||
Total Assets | 70,032 | 96,584 |
Liabilities, at fair value: | ||
Total Liabilities | 304,940 | 260,948 |
Fair value measured on recurring basis | Level II | Other Derivatives | ||
Assets, at fair value: | ||
Total Assets | 32,425 | 33,125 |
Liabilities, at fair value: | ||
Total Liabilities | 20,775 | 27,581 |
Fair value measured on recurring basis | Level II | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 333,574 | 85,581 |
Fair value measured on recurring basis | Level II | Credit | ||
Assets, at fair value: | ||
Total Investments | 2,490,032 | 2,482,383 |
Fair value measured on recurring basis | Level II | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 10,804,938 | 10,220,113 |
Fair value measured on recurring basis | Level II | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 0 | 0 |
Fair value measured on recurring basis | Level II | Equity Method - Other | ||
Assets, at fair value: | ||
Total Investments | 291,668 | 247,748 |
Fair value measured on recurring basis | Level II | Other Investments | ||
Assets, at fair value: | ||
Total Investments | 186,095 | 134,404 |
Fair value measured on recurring basis | Level III | ||
Assets, at fair value: | ||
Total Investments | 19,880,027 | 17,752,304 |
Total Assets | 19,923,158 | 17,804,253 |
Liabilities, at fair value: | ||
Securities Sold Short | 0 | 0 |
Unfunded Revolver Commitments | 33,530 | 17,629 |
Total Liabilities | 5,213,497 | 5,297,665 |
Fair value measured on recurring basis | Level III | Debt Obligations of Consolidated CFEs | ||
Liabilities, at fair value: | ||
Total Liabilities | 5,138,167 | 5,238,236 |
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 | 43,131 | 51,949 |
Liabilities, at fair value: | ||
Total Liabilities | 41,800 | 41,800 |
Fair value measured on recurring basis | Level III | Private Equity | ||
Assets, at fair value: | ||
Total Investments | 3,088,411 | 2,172,290 |
Fair value measured on recurring basis | Level III | Credit | ||
Assets, at fair value: | ||
Total Investments | 5,818,855 | 5,138,937 |
Fair value measured on recurring basis | Level III | Investments of Consolidated CFEs | ||
Assets, at fair value: | ||
Total Investments | 5,258,399 | 5,353,090 |
Fair value measured on recurring basis | Level III | Real Assets | ||
Assets, at fair value: | ||
Total Investments | 2,827,433 | 2,251,267 |
Fair value measured on recurring basis | Level III | Equity Method - Other | ||
Assets, at fair value: | ||
Total Investments | 1,085,725 | 1,076,709 |
Fair value measured on recurring basis | Level III | Other Investments | ||
Assets, at fair value: | ||
Total Investments | $ 1,801,204 | $ 1,760,011 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level III Investments (Details) - Level III - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total Level III Investments | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | $ 17,752,304 | $ 14,401,363 |
Transfers Out Due to Deconsolidation of Funds | 0 | (95,962) |
Transfers In | 0 | 0 |
Transfers Out | 0 | (1,496) |
Asset Purchases / Debt Issuances | 2,225,431 | 1,301,459 |
Sales / Paydowns | (379,324) | (242,910) |
Settlements | (53,825) | (11,075) |
Net Realized Gains (Losses) | 53,487 | (25,713) |
Net Unrealized Gains (Losses) | 297,476 | 429,409 |
Change in Other Comprehensive Income | (15,522) | 20,899 |
Balance, End of Period | 19,880,027 | 15,775,974 |
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 | 318,553 | 429,409 |
Private Equity | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 2,172,290 | 1,559,559 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 727,626 | 429,644 |
Sales / Paydowns | (35,245) | (22,629) |
Settlements | 0 | 0 |
Net Realized Gains (Losses) | 15,312 | 0 |
Net Unrealized Gains (Losses) | 208,428 | 34,630 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 3,088,411 | 2,001,204 |
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 | 208,428 | 34,630 |
Credit | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 5,138,937 | 3,290,361 |
Transfers Out Due to Deconsolidation of Funds | 0 | (95,962) |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 890,113 | 596,862 |
Sales / Paydowns | (230,144) | (168,858) |
Settlements | (53,825) | (11,075) |
Net Realized Gains (Losses) | 11,581 | (9,243) |
Net Unrealized Gains (Losses) | 77,715 | 280,039 |
Change in Other Comprehensive Income | (15,522) | 20,899 |
Balance, End of Period | 5,818,855 | 3,903,023 |
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 | 86,754 | 280,039 |
Investments of Consolidated CFEs | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 5,353,090 | 5,406,220 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 0 | 0 |
Sales / Paydowns | (11,541) | (8,940) |
Settlements | 0 | 0 |
Net Realized Gains (Losses) | 0 | 0 |
Net Unrealized Gains (Losses) | (83,150) | 29,272 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 5,258,399 | 5,426,552 |
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 | (83,150) | 29,272 |
Real Assets | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 2,251,267 | 1,807,128 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 540,898 | 250,278 |
Sales / Paydowns | (34,237) | (21,677) |
Settlements | 0 | 0 |
Net Realized Gains (Losses) | 8,354 | 3,060 |
Net Unrealized Gains (Losses) | 61,151 | 6,798 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 2,827,433 | 2,045,587 |
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 | 61,151 | 6,798 |
Equity Method - Other | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 1,076,709 | 570,522 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 2,037 | 9,556 |
Sales / Paydowns | (31,939) | (12,678) |
Settlements | 0 | 0 |
Net Realized Gains (Losses) | 9,348 | 0 |
Net Unrealized Gains (Losses) | 29,570 | 25,827 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 1,085,725 | 593,227 |
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 | 34,928 | 25,827 |
Other Investments | ||
Fair value, assets measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | 1,760,011 | 1,767,573 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | (1,496) |
Asset Purchases / Debt Issuances | 64,757 | 15,119 |
Sales / Paydowns | (36,218) | (8,128) |
Settlements | 0 | 0 |
Net Realized Gains (Losses) | 8,892 | (19,530) |
Net Unrealized Gains (Losses) | 3,762 | 52,843 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 1,801,204 | 1,806,381 |
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 | $ 10,442 | $ 52,843 |
FAIR VALUE MEASUREMENTS - Cha54
FAIR VALUE MEASUREMENTS - Changes in Level III Debt Obligations (Details) - Level III - Debt Obligations of Consolidated CFEs - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair value, liabilities measured on recurring basis, level 3 fair-value category reconciliation | ||
Balance, Beg. of Period | $ 5,238,236 | $ 5,294,741 |
Transfers Out Due to Deconsolidation of Funds | 0 | 0 |
Transfers In | 0 | 0 |
Transfers Out | 0 | 0 |
Asset Purchases / Debt Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | (11,541) | (8,940) |
Net Realized Gains (Losses) | 0 | 0 |
Net Unrealized Gains (Losses) | (88,528) | 27,769 |
Change in Other Comprehensive Income | 0 | 0 |
Balance, End of Period | 5,138,167 | 5,313,570 |
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 | $ (88,528) | $ 27,769 |
FAIR VALUE MEASUREMENTS - Trans
FAIR VALUE MEASUREMENTS - Transfers Between Fair Value Levels (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Assets, transfers from Level III to Level I | $ 0 | $ 1,496 |
FAIR VALUE MEASUREMENTS - Valua
FAIR VALUE MEASUREMENTS - Valuation Methodologies and Significant Unobservable Inputs (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / barrel | Dec. 31, 2017USD ($) | |
Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | $ 36,086,191 | $ 33,123,529 |
Investments, fair value disclosure | $ 35,940,603 | 32,941,871 |
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 | $ 4,416,481 | 3,301,261 |
Credit | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 8,308,887 | 7,621,320 |
Investments of Consolidated CFEs | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 16,063,337 | 15,573,203 |
Real Assets | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,876,531 | 2,302,061 |
Equity Method - Other | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 1,429,948 | 1,384,739 |
Other Investments | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,845,419 | 2,759,287 |
Level III | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 19,923,158 | 17,804,253 |
Investments, fair value disclosure | 19,880,027 | 17,752,304 |
Level III | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 3,088,411 | |
Level III | Private Equity | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 3,088,411 | 2,172,290 |
Level III | Private Equity | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,282,345 | |
Level III | Private Equity | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,806,066 | |
Level III | Credit | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 5,818,855 | |
Level III | Credit | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 5,818,855 | 5,138,937 |
Level III | Investments of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 5,258,399 | |
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 | 5,258,399 | 5,353,090 |
Level III | Investments of Consolidated CFEs | Debt Obligations of Consolidated CFEs | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 5,138,167 | |
Level III | Real Assets | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 2,827,433 | |
Level III | Real Assets | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 2,827,433 | 2,251,267 |
Level III | Real Assets | Energy | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,606,595 | |
Level III | Real Assets | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,014,158 | |
Level III | Real Assets | Infrastructure | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 206,700 | |
Level III | Equity Method - Other | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,085,725 | |
Level III | Equity Method - Other | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | 1,085,725 | 1,076,709 |
Level III | Other Investments | ||
Level III investments and other financial instruments by valuation methodologies | ||
Assets, fair value | 1,801,204 | |
Level III | Other Investments | Fair value measured on recurring basis | ||
Level III investments and other financial instruments by valuation methodologies | ||
Investments, fair value disclosure | $ 1,801,204 | $ 1,760,011 |
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 | 9.10% | |
Weight Ascribed to Market Comparables | 47.70% | |
Weight Ascribed to Discounted Cash Flow | 50.60% | |
Weight Ascribed to Transaction Price | 1.70% | |
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 | 11.70% | |
Weight Ascribed to Market Comparables | 19.70% | |
Weight Ascribed to Discounted Cash Flow | 7.70% | |
Weight Ascribed to Milestones | 72.60% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Equity Method - 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 | Equity Method - Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 10.00% | |
Weight Ascribed to Market Comparables | 50.00% | |
Weight Ascribed to Discounted Cash Flow | 50.00% | |
Weight Ascribed to Transaction Price | 100.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Equity Method - Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 9.60% | |
Weight Ascribed to Market Comparables | 42.80% | |
Weight Ascribed to Discounted Cash Flow | 42.80% | |
Weight Ascribed to Transaction Price | 14.40% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Other Investments | 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 Investments | Maximum | ||
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 | 100.00% | |
Weight Ascribed to Transaction Price | 100.00% | |
Level III | Inputs to market comparables, discounted cash flow and transaction price | Other Investments | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Illiquidity Discount | 10.40% | |
Weight Ascribed to Market Comparables | 27.90% | |
Weight Ascribed to Discounted Cash Flow | 45.30% | |
Weight Ascribed to Transaction Price | 26.80% | |
Level III | Market comparables | Private Equity | Minimum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 7.9 | |
Enterprise Value/Forward EBITDA Multiple | 6 | |
Level III | Market comparables | Private Equity | Maximum | Private Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 28 | |
Enterprise Value/Forward EBITDA Multiple | 20.4 | |
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 | 14.7 | |
Enterprise Value/Forward EBITDA Multiple | 12.6 | |
Level III | Market comparables | Equity Method - Other | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 7.9 | |
Enterprise Value/Forward EBITDA Multiple | 6 | |
Level III | Market comparables | Equity Method - Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 14 | |
Enterprise Value/Forward EBITDA Multiple | 12.7 | |
Level III | Market comparables | Equity Method - Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 12.3 | |
Enterprise Value/Forward EBITDA Multiple | 11.6 | |
Level III | Market comparables | Other Investments | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 0.1 | |
Enterprise Value/Forward EBITDA Multiple | 3.5 | |
Level III | Market comparables | Other Investments | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 13.3 | |
Enterprise Value/Forward EBITDA Multiple | 13.5 | |
Level III | Market comparables | Other Investments | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Enterprise Value/LTM EBITDA Multiple | 10.4 | |
Enterprise Value/Forward EBITDA Multiple | 9.4 | |
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 | 6.90% | |
Enterprise Value/LTM EBITDA Exit Multiple | 5.1 | |
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 | 14.90% | |
Enterprise Value/LTM EBITDA Exit Multiple | 15.3 | |
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 | 9.90% | |
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 | 2.60% | |
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 | 26.00% | |
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 | 5.80% | |
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 | 9.40% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 28.90 | |
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 | 16.30% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 43.56 | |
Level III | Discounted cash flow | Real Assets | Maximum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Unlevered Discount Rate | 18.00% | |
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 | 10.20% | |
Average Price Per Barrel of Oil Equivalents (usd per barrel of oil equivalent) | $ / barrel | 41.47 | |
Level III | Discounted cash flow | Real Assets | Weighted Average | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Unlevered Discount Rate | 8.80% | |
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 | 7.20% | |
Enterprise Value/LTM EBITDA Exit Multiple | 12 | |
Level III | Discounted cash flow | Equity Method - Other | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 6.20% | |
Enterprise Value/LTM EBITDA Exit Multiple | 6 | |
Level III | Discounted cash flow | Equity Method - Other | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 11.10% | |
Enterprise Value/LTM EBITDA Exit Multiple | 12.5 | |
Level III | Discounted cash flow | Equity Method - Other | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 8.60% | |
Enterprise Value/LTM EBITDA Exit Multiple | 10.6 | |
Level III | Discounted cash flow | Other Investments | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 8.10% | |
Enterprise Value/LTM EBITDA Exit Multiple | 1.9 | |
Level III | Discounted cash flow | Other Investments | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 20.80% | |
Enterprise Value/LTM EBITDA Exit Multiple | 9 | |
Level III | Discounted cash flow | Other Investments | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Weighted Average Cost of Capital | 13.10% | |
Enterprise Value/LTM EBITDA Exit Multiple | 3.9 | |
Level III | Scenario Weighting | Private Equity | Minimum | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Base | 40.00% | |
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 | 30.00% | |
Upside | 40.00% | |
Level III | Scenario Weighting | Private Equity | Weighted Average | Growth Equity | ||
Level III investments and other financial instruments by valuation methodologies | ||
Base | 54.90% | |
Downside | 21.30% | |
Upside | 23.80% | |
Level III | Yield Analysis | Credit | Minimum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 1.00% | |
Net Leverage | 0.5 | |
EBITDA Multiple | 0.1 | |
Level III | Yield Analysis | Credit | Maximum | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 30.80% | |
Net Leverage | 30.6 | |
EBITDA Multiple | 29.7 | |
Level III | Yield Analysis | Credit | Weighted Average | ||
Level III investments and other financial instruments by valuation methodologies | ||
Yield | 10.50% | |
Net Leverage | 4.7 | |
EBITDA Multiple | 13.9 | |
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 | 0.00% | |
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 | 100.00% | |
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 | 61.40% | |
Weight Ascribed to Direct Income Capitalization | 38.60% | |
Level III | Direct income capitalization | Real Assets | Minimum | Real Estate | ||
Level III investments and other financial instruments by valuation methodologies | ||
Current Capitalization Rate | 1.10% | |
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 | 5.90% |
FAIR VALUE OPTION - Financial I
FAIR VALUE OPTION - Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | $ 22,891,470 | $ 22,032,021 |
Liabilities | 15,251,646 | 15,586,216 |
Private Equity | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 3,092 | 3,744 |
Credit | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 4,746,290 | 4,381,519 |
Investments of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 16,063,337 | 15,573,203 |
Real Assets | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 340,412 | 343,820 |
Equity Method - Other | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 1,429,948 | 1,384,739 |
Other Investments | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets | 308,391 | 344,996 |
Debt Obligations of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities | $ 15,251,646 | $ 15,586,216 |
FAIR VALUE OPTION - Change in F
FAIR VALUE OPTION - Change in Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | $ (40,929) | $ (259,216) |
Fair value, option, liabilities, net realized gains (losses) | 13,256 | 4,825 |
Fair value, option, assets, net unrealized gains (losses) | 9,301 | 113,646 |
Fair value, option, liabilities, net unrealized gains (losses) | 93,654 | (11,058) |
Fair value, option, assets, total gains (losses) | (31,628) | (145,570) |
Fair value, option, liabilities, total gains (losses) | 106,910 | (6,233) |
Private Equity | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | 71 | 0 |
Fair value, option, assets, net unrealized gains (losses) | 316 | 362 |
Fair value, option, assets, total gains (losses) | 387 | 362 |
Credit | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | (28,867) | (239,098) |
Fair value, option, assets, net unrealized gains (losses) | 2,656 | 55,870 |
Fair value, option, assets, total gains (losses) | (26,211) | (183,228) |
Investments of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | (26,516) | (1,103) |
Fair value, option, assets, net unrealized gains (losses) | (48,403) | 12,983 |
Fair value, option, assets, total gains (losses) | (74,919) | 11,880 |
Real Assets | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | 428 | (216) |
Fair value, option, assets, net unrealized gains (losses) | (3,483) | 6,788 |
Fair value, option, assets, total gains (losses) | (3,055) | 6,572 |
Equity Method - Other | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | 9,348 | 0 |
Fair value, option, assets, net unrealized gains (losses) | 66,093 | 20,362 |
Fair value, option, assets, total gains (losses) | 75,441 | 20,362 |
Other Investments | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, assets, net realized gains (losses) | 4,607 | (18,799) |
Fair value, option, assets, net unrealized gains (losses) | (7,878) | 17,281 |
Fair value, option, assets, total gains (losses) | (3,271) | (1,518) |
Debt Obligations of Consolidated CFEs | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair value, option, liabilities, net realized gains (losses) | 13,256 | 4,825 |
Fair value, option, liabilities, net unrealized gains (losses) | 93,654 | (11,058) |
Fair value, option, liabilities, total gains (losses) | $ 106,910 | $ (6,233) |
NET INCOME (LOSS) ATTRIBUTABL59
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | ||
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | $ 170,102 | $ 259,343 |
Excess of carrying value over consideration transferred on redemption of KFN 7.375% Series A LLC Preferred Shares | 3,102 | 0 |
Net Income (Loss) Available to KKR & Co. L.P. Common Unitholders | $ 173,204 | $ 259,343 |
Basic Net Income (Loss) Per Common Unit | ||
Weighted Average Common Units Outstanding - Basic (in units) | 487,704,838 | 453,695,846 |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Basic (in dollars per unit) | $ 0.36 | $ 0.57 |
Diluted Net Income (Loss) Per Common Unit | ||
Weighted Average Common Units Outstanding - Basic (in units) | 487,704,838 | 453,695,846 |
Weighted Average Unvested Common Units and Other Exchangeable Securities (in units) | 48,213,436 | 42,988,494 |
Weighted Average Common Units Outstanding - Diluted (in units) | 535,918,274 | 496,684,340 |
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit - Diluted (in dollars per unit) | $ 0.32 | $ 0.52 |
Weighted Average KKR Holdings Units Outstanding (in units) | 335,016,218 | 352,586,584 |
Market Condition Awards | ||
Diluted Net Income (Loss) Per Common Unit | ||
Weighted Average KKR Holdings Units Outstanding (in units) | 5,000,000 | |
Series A LLC Preferred Stock | ||
NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT | ||
Preferred units dividend rate (as a percent) | 7.375% |
OTHER ASSETS AND ACCOUNTS PAY60
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES - Other Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |||
Unsettled Investment Sales | $ 154,082 | $ 134,781 | |
Receivables | 53,448 | 138,109 | |
Due from Broker | 331,830 | 682,403 | |
Oil & Gas Assets, net | 245,373 | 252,371 | |
Deferred Tax Assets, net | 131,361 | 131,944 | |
Interest Receivable | 244,547 | 189,785 | |
Fixed Assets, net | 368,957 | 364,203 | |
Foreign Exchange Contracts and Options | 70,032 | 96,584 | |
Intangible Assets, net | 124,514 | 129,178 | |
Goodwill | 83,500 | 83,500 | |
Derivative Assets | 75,556 | 85,074 | |
Deposits | 16,654 | 16,330 | |
Prepaid Taxes | 78,295 | 83,371 | |
Prepaid Expenses | 23,530 | 25,677 | |
Deferred Financing Costs | 12,552 | 7,534 | |
Other | 89,072 | 110,231 | |
Total | 2,103,303 | 2,531,075 | |
Depreciation, depletion, and amortization of oil and natural gas properties | 7,077 | $ 5,864 | |
Accumulated depreciation and amortization | 160,376 | $ 156,859 | |
Depreciation and amortization expense | $ 3,710 | $ 4,197 |
OTHER ASSETS AND ACCOUNTS PAY61
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES - Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | ||
Amounts Payable to Carry Pool | $ 1,176,070 | $ 1,220,559 |
Unsettled Investment Purchases | 945,940 | 885,945 |
Securities Sold Short | 449,563 | 692,007 |
Derivative Liabilities | 62,575 | 69,381 |
Accrued Compensation and Benefits | 107,401 | 35,953 |
Interest Payable | 183,350 | 168,673 |
Foreign Exchange Contracts and Options | 304,940 | 260,948 |
Accounts Payable and Accrued Expenses | 111,519 | 152,916 |
Deferred Rent | 16,322 | 17,441 |
Taxes Payable | 23,331 | 35,933 |
Uncertain Tax Positions Reserve | 58,370 | 58,369 |
Other Liabilities | 64,373 | 56,125 |
Total | $ 3,503,754 | $ 3,654,250 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | ||
Investments owned, at fair value | $ 42,101,905 | $ 39,013,934 |
Investments in Unconsolidated Investment Funds | ||
Variable Interest Entity [Line Items] | ||
Commitment to unconsolidated investment funds | 2,000,000 | |
Investments in Unconsolidated CLO Vehicles | ||
Variable Interest Entity [Line Items] | ||
Investments | 4,113,673 | 4,417,003 |
Combined assets under management | 700,000 | |
Maximum exposure to loss as a result of investments in the residual interests | 27,500 | |
Equity Method - Capital Allocation - Based Income | ||
Variable Interest Entity [Line Items] | ||
Investments owned, at fair value | $ 4,132,171 | |
Equity Method - Capital Allocation - Based Income | Investments in Unconsolidated Investment Funds | ||
Variable Interest Entity [Line Items] | ||
Investments owned, at fair value | $ 4,086,218 |
VARIABLE INTEREST ENTITIES - Ma
VARIABLE INTEREST ENTITIES - Maximum Exposure to Loss (Details) - Investments in Unconsolidated CLO Vehicles - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Investments | $ 4,113,673 | $ 4,417,003 |
Due from (to) Affiliates, net | 232,653 | 176,131 |
Maximum Exposure to Loss | $ 4,346,326 | $ 4,593,134 |
DEBT OBLIGATIONS - KKR's Borrow
DEBT OBLIGATIONS - KKR's Borrowings (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2018JPY (¥) | Feb. 12, 2018USD ($) | |
Debt Instrument [Line Items] | ||||
Financing Available | $ 3,878,646,000 | $ 4,293,752,000 | ||
Borrowing Outstanding | 22,041,271,000 | 21,193,859,000 | ||
Fair Value | 22,192,164,000 | 21,427,594,000 | ||
Fund Financing Facilities and Other | ||||
Debt Instrument [Line Items] | ||||
Financing Available | 1,676,423,000 | 2,056,096,000 | ||
Borrowing Outstanding | 3,584,588,000 | 2,898,215,000 | ||
Fair Value | $ 3,584,588,000 | $ 2,898,215,000 | ||
Weighted average interest rate (percentage) | 4.30% | 4.20% | 4.30% | |
Weighted average remaining maturity (in years) | 3 years 3 months 18 days | 3 years 7 months 6 days | ||
Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 15,251,646,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | 379,260,000 | ¥ 40,300,000,000 | ||
Senior Notes | KKR Issued 6.375% Notes Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 498,536,000 | $ 498,390,000 | ||
Fair Value | 540,275,000 | 549,000,000 | ||
Aggregate principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 6.375% | 6.375% | ||
Unamortized debt issuance costs | $ 900,000 | 1,000,000 | ||
Senior Notes | KKR Issued 5.500% Notes Due 2043 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 491,581,000 | 491,496,000 | ||
Fair Value | 545,730,000 | 580,000,000 | ||
Aggregate principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 5.50% | 5.50% | ||
Unamortized debt issuance costs | $ 3,700,000 | 3,700,000 | ||
Senior Notes | KKR Issued 5.125% Notes Due 2044 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 990,466,000 | 990,375,000 | ||
Fair Value | 1,036,910,000 | 1,107,100,000 | ||
Aggregate principal amount | $ 1,000,000,000 | |||
Interest rate, stated percentage | 5.125% | 5.125% | ||
Unamortized debt issuance costs | $ 8,200,000 | 8,300,000 | ||
Senior Notes | KKR Issued 0.509% Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 234,004,000 | 0 | ||
Fair Value | 235,247,000 | 0 | ||
Aggregate principal amount | $ 235,272,500 | ¥ 25,000,000,000 | ||
Interest rate, stated percentage | 0.509% | 0.509% | ||
Unamortized debt issuance costs | $ 1,300,000 | |||
Senior Notes | KKR Issued 0.764% Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 46,488,000 | 0 | ||
Fair Value | 47,052,000 | 0 | ||
Aggregate principal amount | $ 47,054,500 | ¥ 5,000,000,000 | ||
Interest rate, stated percentage | 0.764% | 0.764% | ||
Unamortized debt issuance costs | $ 600,000 | |||
Senior Notes | KKR Issued 1.595% Notes Due 2038 | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 95,921,000 | 0 | ||
Fair Value | 97,227,000 | 0 | ||
Aggregate principal amount | $ 96,932,270 | ¥ 10,300,000,000 | ||
Interest rate, stated percentage | 1.595% | 1.595% | ||
Unamortized debt issuance costs | $ 1,000,000 | |||
Senior Notes | KFN Issued 5.500% Notes Due 2032 | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 493,249,000 | 493,129,000 | ||
Fair Value | 523,647,000 | 505,235,000 | ||
Aggregate principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 5.50% | 5.50% | ||
Unamortized debt issuance costs | $ 4,600,000 | 4,700,000 | ||
Senior Notes | KFN Issued 5.200% Notes Due 2033 | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 118,407,000 | 0 | ||
Fair Value | 122,169,000 | 0 | ||
Aggregate principal amount | $ 120,000,000 | $ 120,000,000 | ||
Interest rate, stated percentage | 5.20% | 5.20% | 5.20% | |
Unamortized debt issuance costs | $ 1,600,000 | |||
Senior Notes | KFN Issued Junior Subordinated Notes | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 236,385,000 | 236,038,000 | ||
Fair Value | 207,673,000 | $ 201,828,000 | ||
Aggregate principal amount | $ 264,800,000 | |||
Weighted average interest rate (percentage) | 4.20% | 3.80% | 4.20% | |
Weighted average remaining maturity (in years) | 18 years 6 months | 19 years 11 days | ||
Senior Secured Notes | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 9,806,031,000 | $ 10,055,686,000 | ||
Fair Value | $ 9,806,031,000 | 10,055,686,000 | ||
Weighted average interest rate (percentage) | 2.80% | 2.80% | ||
Weighted average remaining maturity (in years) | 11 years 9 months 18 days | |||
Subordinated Notes | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 307,448,000 | 292,294,000 | ||
Fair Value | $ 307,448,000 | 292,294,000 | ||
Weighted average remaining maturity (in years) | 12 years 1 month 6 days | |||
Collateralized Mortgage Backed Securities | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 5,138,167,000 | 5,238,236,000 | ||
Fair Value | 5,138,167,000 | 5,238,236,000 | ||
Collateralized Mortgage Backed Securities | Debt Obligations of Consolidated CFEs | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 5,138,167,000 | |||
Weighted average interest rate (percentage) | 4.40% | 4.40% | ||
Weighted average remaining maturity (in years) | 26 years 4 months 24 days | |||
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 | 452,223,000 | 487,656,000 | ||
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 | 750,000,000 | ||
Borrowing Outstanding | 0 | 0 | ||
Fair Value | $ 0 | $ 0 |
DEBT OBLIGATIONS - Narrative (D
DEBT OBLIGATIONS - Narrative (Details) | Feb. 12, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018JPY (¥) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 22,041,271,000 | $ 21,193,859,000 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 379,260,000 | ¥ 40,300,000,000 | ||
Minimum percentage of aggregate principal amount held to declare notes due and payable | 25.00% | |||
Redemption price (as a percent of principal) | 100.00% | |||
KCM Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding | $ 47,800,000 | 12,300,000 | ||
KKR Issued 0.509% Notes Due 2023 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | 234,004,000 | 0 | ||
Aggregate principal amount | $ 235,272,500 | ¥ 25,000,000,000 | ||
Interest rate, stated percentage | 0.509% | 0.509% | ||
KKR Issued 0.764% Notes Due 2025 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 46,488,000 | 0 | ||
Aggregate principal amount | $ 47,054,500 | ¥ 5,000,000,000 | ||
Interest rate, stated percentage | 0.764% | 0.764% | ||
KKR Issued 1.595% Notes Due 2038 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 95,921,000 | 0 | ||
Aggregate principal amount | $ 96,932,270 | ¥ 10,300,000,000 | ||
Interest rate, stated percentage | 1.595% | 1.595% | ||
KFN Issued 5.200% Notes Due 2033 | Senior Notes | KFN | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 118,407,000 | 0 | ||
Aggregate principal amount | $ 120,000,000 | $ 120,000,000 | ||
Interest rate, stated percentage | 5.20% | 5.20% | 5.20% | |
Minimum percentage of aggregate principal amount held to declare notes due and payable | 25.00% | |||
Redemption price (as a percent of principal) | 100.00% | 101.00% | ||
Revolving Credit Facility | KCM Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Borrowing Outstanding | $ 0 | $ 0 |
DEBT OBLIGATIONS - Obligations
DEBT OBLIGATIONS - Obligations of Consolidated CLOs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 22,041,271 | $ 21,193,859 | |
Total Assets | 47,579,153 | 45,834,719 | $ 41,635,712 |
Consolidated VIEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 16,235,845 | 16,356,566 | |
Total Assets | 28,901,878 | 27,070,814 | |
Consolidated VIEs | Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 15,251,646 | 15,586,216 | |
Total Assets | 16,844,010 | 17,217,604 | |
Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | 15,251,646 | ||
Senior Secured Notes | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 9,806,031 | 10,055,686 | |
Weighted Average Interest Rate | 2.80% | ||
Weighted Average Remaining Maturity in Years | 11 years 9 months 18 days | ||
Subordinated Notes | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 307,448 | 292,294 | |
Weighted Average Remaining Maturity in Years | 12 years 1 month 6 days | ||
Collateralized Mortgage Backed Securities | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 5,138,167 | $ 5,238,236 | |
Collateralized Mortgage Backed Securities | Debt Obligations of Consolidated CFEs | |||
Debt Instrument [Line Items] | |||
Borrowing Outstanding | $ 5,138,167 | ||
Weighted Average Interest Rate | 4.40% | ||
Weighted Average Remaining Maturity in Years | 26 years 4 months 24 days |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 2.84% | 4.84% | |
Provisional amount related to remeasurement of deferred tax assets and liabilities | $ 96,400 | ||
Remeasurement of certain deferred tax assets and liabilities net of reversal | $ 1,500 | ||
Increase in uncertain tax positions within 12 months | $ 0 | ||
Decrease in uncertain tax positions within 12 months | $ 0 |
EQUITY BASED COMPENSATION - Exp
EQUITY BASED COMPENSATION - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Compensation and Benefits | ||
Expense associated with equity based compensation | ||
Equity based expenses | $ 95,078 | $ 94,922 |
Compensation and Benefits | KKR Holdings Principal Awards | ||
Expense associated with equity based compensation | ||
Equity based expenses | 27,282 | 44,979 |
Compensation and Benefits | Equity Incentive Plan Units | ||
Expense associated with equity based compensation | ||
Equity based expenses | 67,796 | $ 49,943 |
Equity method investments | Net Gains (Losses) From Investment Activities | ||
Expense associated with equity based compensation | ||
Equity based expenses | $ 4,264 |
EQUITY BASED COMPENSATION - Nar
EQUITY BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions | Nov. 02, 2017$ / sharesshares | Nov. 30, 2016USD ($) | Feb. 29, 2016shares | Mar. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2017$ / shares | Mar. 31, 2017$ / sharesshares | Dec. 31, 2016$ / shares | Sep. 30, 2016$ / shares | Jun. 30, 2016$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2017$ / shares |
Common Units | |||||||||||||
Equity Based Payments | |||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.68 | |||
Common unit distribution announced, per annum (in dollars per unit) | $ 0.68 | $ 0.64 | |||||||||||
KKR Group Partnerships | |||||||||||||
Equity Based Payments | |||||||||||||
Percentage owned by KKR Holdings L.P. | 40.50% | 43.50% | |||||||||||
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) | 7.00% | ||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 320.9 | $ 332.7 | |||||||||||
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 1 month 25 days | ||||||||||||
Common units conversion basis | 1 | ||||||||||||
Number of common units owned in KKR Group Partnership Units (in units) | shares | 333,648,078 | 350,909,471 | |||||||||||
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 | ||||||||||||
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) | 7.00% | ||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 492.7 | ||||||||||||
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 14 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 | Market Condition Awards | |||||||||||||
Equity Based Payments | |||||||||||||
Awards granted per individual (in units) | shares | 2,500,000 | ||||||||||||
Performance condition, closing market price (in dollars per unit) | $ 40 | ||||||||||||
Required term of performance condition | 10 days | ||||||||||||
Fair value of award at grant date (in dollars per unit) | $ 4.02 | ||||||||||||
Compensation expense recognition period | 3 years | ||||||||||||
Estimated unrecognized equity-based payment expense | $ | $ 17.4 | ||||||||||||
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 - Mar
EQUITY BASED COMPENSATION - Market Condition Awards (Details) - Equity Incentive Plan Units - Market Condition Awards | 3 Months Ended |
Mar. 31, 2018$ / shares | |
Equity Based Payments | |
Closing KKR unit price as of valuation date (in dollars per unit) | $ 19.90 |
Risk Free Rate | 2.02% |
Volatility | 25.00% |
Dividend Yield | 3.42% |
Expected Cost of Equity | 11.02% |
EQUITY BASED COMPENSATION - Est
EQUITY BASED COMPENSATION - Estimated Unrecognized Expense (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Nov. 30, 2016 |
Equity Incentive Plan Units | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | $ 492.7 | |
Equity Incentive Plan Units | Remainder of 2018 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 164.2 | |
Equity Incentive Plan Units | 2019 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 167.8 | |
Equity Incentive Plan Units | 2020 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 111.3 | |
Equity Incentive Plan Units | 2021 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 38.2 | |
Equity Incentive Plan Units | 2022 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 10.3 | |
Equity Incentive Plan Units | 2023 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 0.9 | |
KKR Holdings Principal Awards | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 332.7 | $ 320.9 |
KKR Holdings Principal Awards | Remainder of 2018 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 75.2 | |
KKR Holdings Principal Awards | 2019 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 96.5 | |
KKR Holdings Principal Awards | 2020 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 88.3 | |
KKR Holdings Principal Awards | 2021 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | 47.5 | |
KKR Holdings Principal Awards | 2022 | ||
Equity Based Payments | ||
Estimated unrecognized equity-based payment expense | $ 25.2 |
EQUITY BASED COMPENSATION - Awa
EQUITY BASED COMPENSATION - Awards Rollforward (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
KKR Holdings Principal Awards | |
Units | |
Balance at the beginning of the period (in units) | shares | 30,848,583 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | 0 |
Forfeitures (in units) | shares | 0 |
Balance at the end of the period (in units) | shares | 30,848,583 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per unit) | $ / shares | $ 14.42 |
Granted (in dollars per unit) | $ / shares | 0 |
Vested (in dollars per unit) | $ / shares | 0 |
Forfeitures (in dollars per unit) | $ / shares | 0 |
Balance at the end of the period (in dollars per unit) | $ / shares | $ 14.42 |
Equity Incentive Plan Units | |
Units | |
Balance at the beginning of the period (in units) | shares | 46,422,733 |
Granted (in units) | shares | 1,271,656 |
Vested (in units) | shares | 0 |
Forfeitures (in units) | shares | (1,092,523) |
Balance at the end of the period (in units) | shares | 46,601,866 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per unit) | $ / shares | $ 14.98 |
Granted (in dollars per unit) | $ / shares | 20.21 |
Vested (in dollars per unit) | $ / shares | 0 |
Forfeitures (in dollars per unit) | $ / shares | 13.40 |
Balance at the end of the period (in dollars per unit) | $ / shares | $ 15.16 |
EQUITY BASED COMPENSATION - Rem
EQUITY BASED COMPENSATION - Remaining Vesting Tranches (Details) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Equity Incentive Plan Units | ||
Equity Based Payments | ||
Principal units (in units) | 46,601,866 | 46,422,733 |
Equity Incentive Plan Units | April 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 10,254,674 | |
Equity Incentive Plan Units | October 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 5,824,493 | |
Equity Incentive Plan Units | April 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 9,492,030 | |
Equity Incentive Plan Units | October 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 4,425,709 | |
Equity Incentive Plan Units | April 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 6,625,455 | |
Equity Incentive Plan Units | October 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 3,371,704 | |
Equity Incentive Plan Units | April 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 3,378,686 | |
Equity Incentive Plan Units | October 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 1,930,239 | |
Equity Incentive Plan Units | April 1, 2022 | ||
Equity Based Payments | ||
Principal units (in units) | 116,532 | |
Equity Incentive Plan Units | October 1, 2022 | ||
Equity Based Payments | ||
Principal units (in units) | 1,091,172 | |
Equity Incentive Plan Units | October 1, 2023 | ||
Equity Based Payments | ||
Principal units (in units) | 91,172 | |
KKR Holdings Principal Awards | ||
Equity Based Payments | ||
Principal units (in units) | 30,848,583 | 30,848,583 |
KKR Holdings Principal Awards | April 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 574,590 | |
KKR Holdings Principal Awards | May 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 3,805,000 | |
KKR Holdings Principal Awards | October 1, 2018 | ||
Equity Based Payments | ||
Principal units (in units) | 1,970,000 | |
KKR Holdings Principal Awards | April 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 229,514 | |
KKR Holdings Principal Awards | May 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 3,805,000 | |
KKR Holdings Principal Awards | October 1, 2019 | ||
Equity Based Payments | ||
Principal units (in units) | 2,455,000 | |
KKR Holdings Principal Awards | April 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 124,479 | |
KKR Holdings Principal Awards | May 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 3,805,000 | |
KKR Holdings Principal Awards | October 1, 2020 | ||
Equity Based Payments | ||
Principal units (in units) | 2,940,000 | |
KKR Holdings Principal Awards | May 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 3,805,000 | |
KKR Holdings Principal Awards | October 1, 2021 | ||
Equity Based Payments | ||
Principal units (in units) | 3,425,000 | |
KKR Holdings Principal Awards | October 1, 2022 | ||
Equity Based Payments | ||
Principal units (in units) | 3,910,000 |
RELATED PARTY TRANSACTIONS - Su
RELATED PARTY TRANSACTIONS - Summary of Due From and Due To Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Due from Affiliates | $ 565,681 | $ 554,349 |
Due to Affiliates | 265,190 | 323,810 |
Portfolio Companies | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 139,158 | 129,594 |
Unconsolidated Investment Funds | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 414,133 | 415,907 |
Due to Affiliates | 181,480 | 239,776 |
Related Entities | ||
Related Party Transaction [Line Items] | ||
Due from Affiliates | 12,390 | 8,848 |
Due to KKR Holdings in connection with the tax receivable agreement | ||
Related Party Transaction [Line Items] | ||
Due to Affiliates | $ 83,710 | $ 84,034 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
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 | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Management, Monitoring and Transaction Fees, Net | |||
Fee Credits | $ (29,053) | $ (88,078) | |
Total Fees and Other | 394,394 | 380,179 | |
Performance Income (Loss) | |||
Realized Carried Interest | 13,805 | 273 | |
Investment Income (Loss) | |||
Total Investment Income (Loss) | 584,530 | 610,695 | |
Total Revenues | 472,606 | 767,755 | |
Segment Expenses | |||
Total Compensation and Benefits | 298,136 | 402,963 | |
Occupancy and Related Charges | 14,215 | 14,851 | |
Total Expenses | 436,601 | 540,014 | |
Income (Loss) attributable to noncontrolling interests | 277,775 | 292,845 | |
Total Assets | 47,579,153 | 41,635,712 | $ 45,834,719 |
Reportable segments | |||
Management, Monitoring and Transaction Fees, Net | |||
Management Fees | 251,585 | 208,284 | |
Monitoring Fees | 17,530 | 13,220 | |
Transaction Fees | 156,845 | 243,035 | |
Fee Credits | (43,774) | (89,017) | |
Total Fees and Other | 382,186 | 375,522 | |
Performance Income (Loss) | |||
Realized Incentive Fees | 16,407 | 1,686 | |
Realized Carried Interest | 202,555 | 206,204 | |
Unrealized Carried Interest | (111,732) | 140,626 | |
Total Performance Income (Loss) | 107,230 | 348,516 | |
Investment Income (Loss) | |||
Net Realized Gains (Losses) | 7,875 | 79,451 | |
Net Unrealized Gains (Losses) | 207,862 | 204,036 | |
Total Realized and Unrealized | 215,737 | 283,487 | |
Interest Income and Dividends | 72,577 | 56,882 | |
Interest Expense | (50,192) | (41,709) | |
Net Interest and Dividends | 22,385 | 15,173 | |
Total Investment Income (Loss) | 238,122 | 298,660 | |
Total Revenues | 727,538 | 1,022,698 | |
Segment Expenses | |||
Cash Compensation and Benefits | 138,530 | 139,435 | |
Realized Performance Income Compensation | 94,154 | 88,067 | |
Unrealized Performance Income Compensation | (43,123) | 57,214 | |
Total Compensation and Benefits | 189,561 | 284,716 | |
Occupancy and Related Charges | 13,583 | 14,369 | |
Other Operating Expenses | 57,905 | 53,498 | |
Total Expenses | 261,049 | 352,583 | |
Income (Loss) attributable to noncontrolling interests | 1,203 | 1,584 | |
Economic Net Income (Loss) | 465,286 | 668,531 | |
Total Assets | 16,243,603 | 14,338,460 | |
Reportable segments | Private Markets | |||
Management, Monitoring and Transaction Fees, Net | |||
Management Fees | 158,190 | 123,512 | |
Monitoring Fees | 17,530 | 13,220 | |
Transaction Fees | 46,689 | 117,882 | |
Fee Credits | (41,343) | (85,650) | |
Total Fees and Other | 181,066 | 168,964 | |
Performance Income (Loss) | |||
Realized Incentive Fees | 0 | 0 | |
Realized Carried Interest | 202,555 | 206,204 | |
Unrealized Carried Interest | (141,240) | 123,506 | |
Total Performance Income (Loss) | 61,315 | 329,710 | |
Investment Income (Loss) | |||
Net Realized Gains (Losses) | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | |
Interest Expense | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | |
Total Revenues | 242,381 | 498,674 | |
Segment Expenses | |||
Cash Compensation and Benefits | 59,719 | 60,008 | |
Realized Performance Income Compensation | 87,099 | 87,393 | |
Unrealized Performance Income Compensation | (55,379) | 50,366 | |
Total Compensation and Benefits | 91,439 | 197,767 | |
Occupancy and Related Charges | 7,876 | 8,107 | |
Other Operating Expenses | 28,302 | 26,887 | |
Total Expenses | 127,617 | 232,761 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | |
Economic Net Income (Loss) | 114,764 | 265,913 | |
Total Assets | 2,203,895 | 1,815,404 | |
Reportable segments | Public Markets | |||
Management, Monitoring and Transaction Fees, Net | |||
Management Fees | 93,395 | 84,772 | |
Monitoring Fees | 0 | 0 | |
Transaction Fees | 2,558 | 4,056 | |
Fee Credits | (2,431) | (3,367) | |
Total Fees and Other | 93,522 | 85,461 | |
Performance Income (Loss) | |||
Realized Incentive Fees | 16,407 | 1,686 | |
Realized Carried Interest | 0 | 0 | |
Unrealized Carried Interest | 29,508 | 17,120 | |
Total Performance Income (Loss) | 45,915 | 18,806 | |
Investment Income (Loss) | |||
Net Realized Gains (Losses) | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | |
Interest Expense | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | |
Total Revenues | 139,437 | 104,267 | |
Segment Expenses | |||
Cash Compensation and Benefits | 22,714 | 19,784 | |
Realized Performance Income Compensation | 7,055 | 674 | |
Unrealized Performance Income Compensation | 12,256 | 6,848 | |
Total Compensation and Benefits | 42,025 | 27,306 | |
Occupancy and Related Charges | 1,608 | 1,856 | |
Other Operating Expenses | 9,587 | 8,338 | |
Total Expenses | 53,220 | 37,500 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | |
Economic Net Income (Loss) | 86,217 | 66,767 | |
Total Assets | 1,642,038 | 1,191,199 | |
Reportable segments | Capital Markets | |||
Management, Monitoring and Transaction Fees, Net | |||
Management Fees | 0 | 0 | |
Monitoring Fees | 0 | 0 | |
Transaction Fees | 107,598 | 121,097 | |
Fee Credits | 0 | 0 | |
Total Fees and Other | 107,598 | 121,097 | |
Performance Income (Loss) | |||
Realized Incentive Fees | 0 | 0 | |
Realized Carried Interest | 0 | 0 | |
Unrealized Carried Interest | 0 | 0 | |
Total Performance Income (Loss) | 0 | 0 | |
Investment Income (Loss) | |||
Net Realized Gains (Losses) | 0 | 0 | |
Net Unrealized Gains (Losses) | 0 | 0 | |
Total Realized and Unrealized | 0 | 0 | |
Interest Income and Dividends | 0 | 0 | |
Interest Expense | 0 | 0 | |
Net Interest and Dividends | 0 | 0 | |
Total Investment Income (Loss) | 0 | 0 | |
Total Revenues | 107,598 | 121,097 | |
Segment Expenses | |||
Cash Compensation and Benefits | 21,457 | 22,561 | |
Realized Performance Income Compensation | 0 | 0 | |
Unrealized Performance Income Compensation | 0 | 0 | |
Total Compensation and Benefits | 21,457 | 22,561 | |
Occupancy and Related Charges | 744 | 664 | |
Other Operating Expenses | 6,749 | 5,328 | |
Total Expenses | 28,950 | 28,553 | |
Income (Loss) attributable to noncontrolling interests | 1,203 | 1,584 | |
Economic Net Income (Loss) | 77,445 | 90,960 | |
Total Assets | 550,429 | 573,162 | |
Reportable segments | Principal Activities | |||
Management, Monitoring and Transaction Fees, Net | |||
Management Fees | 0 | 0 | |
Monitoring Fees | 0 | 0 | |
Transaction Fees | 0 | 0 | |
Fee Credits | 0 | 0 | |
Total Fees and Other | 0 | 0 | |
Performance Income (Loss) | |||
Realized Incentive Fees | 0 | 0 | |
Realized Carried Interest | 0 | 0 | |
Unrealized Carried Interest | 0 | 0 | |
Total Performance Income (Loss) | 0 | 0 | |
Investment Income (Loss) | |||
Net Realized Gains (Losses) | 7,875 | 79,451 | |
Net Unrealized Gains (Losses) | 207,862 | 204,036 | |
Total Realized and Unrealized | 215,737 | 283,487 | |
Interest Income and Dividends | 72,577 | 56,882 | |
Interest Expense | (50,192) | (41,709) | |
Net Interest and Dividends | 22,385 | 15,173 | |
Total Investment Income (Loss) | 238,122 | 298,660 | |
Total Revenues | 238,122 | 298,660 | |
Segment Expenses | |||
Cash Compensation and Benefits | 34,640 | 37,082 | |
Realized Performance Income Compensation | 0 | 0 | |
Unrealized Performance Income Compensation | 0 | 0 | |
Total Compensation and Benefits | 34,640 | 37,082 | |
Occupancy and Related Charges | 3,355 | 3,742 | |
Other Operating Expenses | 13,267 | 12,945 | |
Total Expenses | 51,262 | 53,769 | |
Income (Loss) attributable to noncontrolling interests | 0 | 0 | |
Economic Net Income (Loss) | 186,860 | 244,891 | |
Total Assets | $ 11,847,241 | $ 10,758,695 |
SEGMENT REPORTING - Fees (Detai
SEGMENT REPORTING - Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total Revenues | $ 394,394 | $ 380,179 |
Less: General partner capital interest - unconsolidated funds | 15,465 | 51,803 |
Plus: Total investment income (loss) | 584,530 | 610,695 |
Less: Revenue earned by oil & gas producing entities | 14,507 | 17,273 |
Total Segment Revenues | 472,606 | 767,755 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Plus: Management fees relating to consolidated funds and placement fees | 63,858 | 47,102 |
Less: Fee credits relating to consolidated funds | 14,721 | 939 |
Plus: Net realized and unrealized carried interest - consolidated funds | 28,076 | 11,057 |
Less: General partner capital interest - unconsolidated funds | 15,465 | 51,803 |
Plus: Total investment income (loss) | 238,122 | 298,660 |
Less: Revenue earned by oil & gas producing entities | 14,507 | 17,273 |
Less: Expense reimbursements | 20,211 | 23,549 |
Less: Other | 10,220 | 8,312 |
Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Total Revenues | 382,186 | 375,522 |
Plus: Net realized and unrealized carried interest - consolidated funds | 107,230 | 348,516 |
Plus: Total investment income (loss) | 238,122 | 298,660 |
Total Segment Revenues | $ 727,538 | $ 1,022,698 |
SEGMENT REPORTING - Expenses (D
SEGMENT REPORTING - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total Segment Expenses | $ 436,601 | $ 540,014 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Less: Equity-based and other non-cash compensation | 96,227 | 111,036 |
Less: Reimbursable expenses and placement fees | 27,761 | 36,123 |
Less: Operating expenses relating to consolidated funds, CFEs and other entities | 21,805 | 13,430 |
Less: Expenses incurred by oil & gas producing entities | 11,101 | 11,177 |
Less: Intangible amortization | 5,030 | 6,366 |
Less: Other | 13,628 | 9,299 |
Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Total Segment Expenses | $ 261,049 | $ 352,583 |
SEGMENT REPORTING - Income (Los
SEGMENT REPORTING - Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders | $ 170,102 | $ 259,343 |
Plus: Preferred Distributions | 8,341 | 8,341 |
Plus: Equity-based and other non-cash compensation | 96,227 | 111,036 |
Plus: Income tax (benefit) | 17,641 | 40,542 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Plus: Preferred Distributions | 8,341 | 8,341 |
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. | 121,002 | 216,432 |
Plus: Equity-based and other non-cash compensation | 100,491 | 111,036 |
Plus: Amortization of intangibles, placement fees and other, net | 47,709 | 32,837 |
Plus: Income tax (benefit) | 17,641 | 40,542 |
Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Economic Net Income (Loss) | $ 465,286 | $ 668,531 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total Assets | $ 47,579,153 | $ 45,834,719 | $ 41,635,712 |
Less: Carry pool reclassification from liabilities | 1,176,070 | 1,220,559 | |
Less: Impact of KKR Management Holdings Corp. | 2,103,303 | $ 2,531,075 | |
Segment Reconciling Items | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Less: Impact of consolidation of funds and other entities | 29,972,064 | 25,963,256 | |
Less: Carry pool reclassification from liabilities | 1,035,671 | ||
Less: Impact of KKR Management Holdings Corp. | 187,416 | 298,325 | |
Accounting basis difference for oil & natural gas properties | 10,738 | 7,700 | |
Reportable segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total Assets | $ 16,243,603 | $ 14,338,460 |
EQUITY (Details)
EQUITY (Details) - USD ($) | May 07, 2018 | May 03, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 |
Common Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.68 | ||
2015 Unit Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Unit repurchase program, authorized amount | $ 750,000,000 | |||||||||||
Units repurchased (in units) | 0 | |||||||||||
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] | ||||||||||||
Unit repurchase program, authorized amount | $ 500,000,000 | |||||||||||
Payments to repurchase common units | $ 459,000,000 | |||||||||||
Units repurchased (in units) | 31,700,000 |
GOODWILL AND INTANGIBLE ASSET82
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | ||
Carrying value of goodwill | $ 83,500 | $ 83,500 |
Public Markets | ||
Goodwill [Line Items] | ||
Carrying value of goodwill | 53,500 | 53,500 |
Principal Activities | ||
Goodwill [Line Items] | ||
Carrying value of goodwill | $ 30,000 | $ 30,000 |
GOODWILL AND INTANGIBLE ASSET83
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net consists of the following: | ||
Finite-Lived Intangible Assets | $ 191,526 | $ 190,526 |
Accumulated Amortization | (67,012) | (61,348) |
Intangible Assets, Net | $ 124,514 | $ 129,178 |
GOODWILL AND INTANGIBLE ASSET84
GOODWILL AND INTANGIBLE ASSETS - Change in Intangible Assets (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance, Beginning of Period | $ 129,178 |
Amortization Expense | (5,030) |
Foreign Exchange | 366 |
Balance, End of Period | $ 124,514 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contingent Repayment Guarantees (Details) | Mar. 31, 2018USD ($) |
Contingent Repayment Guarantees | |
Private equity fund carried interest amount subject to clawback provision assuming liquidation at fair value | $ 12,600,000 |
Liquidation value for clawback obligation | 0 |
Clawback obligation amount if private equity vehicles liquidated at fair value | 1,800,000,000 |
Private Equity | |
Investment Commitments | |
Unfunded commitments | 5,720,800,000 |
Principal Activities | |
Investment Commitments | |
Unfunded commitments | 275,100,000 |
Capital Markets | |
Investment Commitments | |
Unfunded commitments | $ 1,114,100,000 |
REGULATORY CAPITAL REQUIREMEN86
REGULATORY CAPITAL REQUIREMENTS (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)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 | $ | $ 180.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | May 03, 2018USD ($)$ / shares | Sep. 30, 2018$ / shares | Jun. 30, 2018USD ($)Commercial_Mortgage_Backed_Security | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2017$ / shares | Mar. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Sep. 30, 2016$ / shares | Jun. 30, 2016$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2017$ / shares | May 02, 2018USD ($) |
Common Units | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ / shares | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.68 | ||||
Subsequent Event | Common Units | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ / shares | $ 0.17 | |||||||||||||
Subsequent Event | Capital - Series A Preferred Units | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit distribution to be paid (in dollars per unit) | $ / shares | 0.421875 | |||||||||||||
Subsequent Event | Capital - Series B Preferred Units | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit distribution to be paid (in dollars per unit) | $ / shares | $ 0.406250 | |||||||||||||
2015 Unit Repurchase Program | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit repurchase program, authorized amount | $ | $ 750,000,000 | |||||||||||||
2015 Unit Repurchase Program | Subsequent Event | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit repurchase program, authorized amount | $ | $ 500,000,000 | |||||||||||||
Unit repurchase program, remaining authorized amount | $ | $ 291,000,000 | |||||||||||||
Forecast | ||||||||||||||
Subsequent Events | ||||||||||||||
Number of CMBS consolidated | Commercial_Mortgage_Backed_Security | 1 | |||||||||||||
Forecast | Common Units | ||||||||||||||
Subsequent Events | ||||||||||||||
Unit distribution announced per quarter (in dollars per unit) | $ / shares | $ 0.50 | |||||||||||||
Collateralized Mortgage Backed Securities | Forecast | ||||||||||||||
Subsequent Events | ||||||||||||||
Decrease in investments | $ | $ 4,100,000,000 | |||||||||||||
Decrease in debt obligations | $ | $ 4,000,000,000 |