KKR & Co. L.P. Barclays Conference: September 14, 2016 - KKR & Co. Inc.
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KKR Today Private Markets Public Markets Capital Markets Principal Activities $75 bn AUM $56 bn AUM Global Franchise $13.0 bn of Assets • Private Equity • Credit • Portfolio • Modest leverage Leveraged credit Refinancing profile • Energy Alternative credit • PE and Non- PE • $11.33 Book Syndication • Infrastructure • Hedge Funds Value/Unit • Equity • Real Estate Underwriting • Third Party Capital Markets Balance Sheet ($9.1 bn book value) • 40-year history of superior investment performance • $12bn market capitalization • Stable management fee earnings base with significant incentive and investment income upside potential • Core strategies provide foundation for continued organic growth • Substantial balance sheet value relative to share price Note: Assets and book value are presented on a non-GAAP basis. For a reconciliation to financial results prepared in accordance with GAAP see Appendix of this presentation, which is available on the Investor Center of kkr.com. Figures as of June 30, 2016. Market capitalization as of September 1, 2016. 2
What You May Not Know About KKR • We invest on behalf of over half of U.S. state pensioners(1) • We have raised more capital over the last 12 months than we have in any other 12-month period in our history • We have greater management fee growth visibility today relative to any other point in our history • Through the scaling of our newer initiatives, we are focused on increasing AUM while limiting headcount growth • Employees own/control ~45% of KKR (1) Total U.S. state pensioners based on the 2015 Annual Survey of Public Pensions (U.S. Census Bureau as of June 14, 2016). Pensioners represented by limited partners of KKR funds and vehicles based on information reported by such respective limited partners as of recent dates. 3
Simple Business Model Management fees stable with visibility Management Fees $95bn of FPAUM ~$20bn of capital commitments not yet earning economics ~80% of third party managed assets are carry or incentive fee Performance Fees eligible 25 consecutive quarters of realized carry Invested across our asset classes Balance Sheet Seed new efforts Strategic weapon Note: Figures as of June 30, 2016. 4
Simple Execution Model / Topics for Today 1 Generate strong investment performance • Strong returns across our largest carry paying funds • Revenue and earnings growth in Private Equity portfolio outperforming S&P 500 2 Scale our businesses • Meaningful AUM growth in the non-private equity business, including credit and real estate • Opportunity for continued management fee growth 3 Monetize our business model • Combination of third party managed capital, Balance Sheet and KCM creates value • Potential to utilize the balance sheet for creative transactions that increase liquidity and AUM 5
1 Generate strong investment performance
1 $1B+ Carry Paying Funds—Q2 and YTD Performance Alternative Market Indices Private Equity Real Assets Credit 15% 14% 13% 12% 12% 10% 10% 9% 9% 8% Gross Returns 6% 5%6% 4% 4% 3% 3% 3% 3% 3% 2% 2% 1%1% 1% 0% 0% 0% -1% -2% -5% -7% S&P 500 Russell 3000 MSCI World MSCI Europe MSCI Asia US High HFRX North Asia II European III Real Estate I Infrastructure Energy Income Special Mezzanine Lending Pacific Yield Special Sits America XI & Growth Situations I Partners II Q2 2016 YTD Note: The strategies shown above consist of KKR’s strategies that generate carry. The funds shown within each strategy represent the flagship funds within each sub-strategy with at least $1 billion in committed capital and that have been investing for at least two years. For Private Equity the funds represent the flagship funds within each major geographic region. For a complete list of our carry paying funds, see the Investment Vehicle Summary on page 14 of KKR’s second quarter earnings release, dated July 26, 2016. 7
1 Strong Private Equity Investment Performance Since inception, investment performance on behalf of our recent Private Equity fund LPs has been strong NAXI Asia II Europe III 36% 25% 23% 17% 16% 10% 11% 5% -1% NAXI Gross NAXI Net S&P 500 Asia II Asia II Net MSCI Asia Europe III Europe III MSCI IRR IRR Gross IRR IRR Pacific Gross IRR Net IRR Europe Note: Performance data as of June 30, 2016. All indexes include reinvesting of dividends. The funds represent the flagship funds within each major geographic region with at least $1 billion in committed capital and that have been investing for at least two years. 8
1 Private Equity Portfolio – Revenue and EBITDA Growth KKR PE Portfolio Company Revenue Growth KKR PE Portfolio Company EBITDA Growth Relative to the S&P 500 Relative to the S&P 500 PE Portfolio Company Revenue Growth PE Portfolio Company EBITDA Growth S&P 500 Revenue Growth S&P 500 EBITDA Growth 10% 10% ~8% ~7% 5% 5% 0% 0% -0.5% -5% -5% -4.8% Q2 2016 LTM YoY % Change Q2 2016 LTM YoY % Change Note: The year-over-year percentage change is computed based on the difference between the aggregate LTM revenue and LTM EBITDA of portfolio companies held in KKR managed private equity funds at the beginning and end of the period, weighted by remaining value as of June 30, 2016. S&P 500 data sourced from Bloomberg. 9
2 Scale our businesses
2 Our Progress Since 2010 2010 Today AUM $52 bn $131 bn Book Value / Unit $6.08 $11.33 Private Public Capital Private Public Capital Product Offerings Markets Markets Markets Markets Markets Markets • North America PE • Bank Loans, • Portfolio • Americas PE • Bank Loans, • Portfolio High Yield Refinancing High Yield Refinancing • Asia PE • Asia PE • PE Syndication US Direct • PE Syndication • Europe PE • Europe PE Lending Equity China Growth Europe Direct Underwriting Infrastructure Lending Non-PE Natural Resources Mezzanine Syndication Energy Income Special India NBFC and Growth Situations Third Party Americas Real KKR Prisma Capital Estate Markets Strategic Europe Real Estate Partnerships Real Estate Credit Note: Book value is presented on a non-GAAP basis. For a reconciliation to financial results prepared in accordance with GAAP see Appendix of this presentation, which is available on the Investor Center of kkr.com. 2010 reflects January 1, 2010. Today reflects June 30, 2016. 11
2 AUM Growth Across Businesses • AUM growth has occurred across KKR’s business units, particularly in newer asset classes and strategies Private Markets Private Equity Energy / Infra Real Estate $64bn $8.4bn $45bn $3bn 1.4x 6.1x NM $1.4bn $0bn 2010 Q2 2016 2010 Q2 2016 2010 Q2 2016 Public Markets Hedge Funds Leveraged Credit (1) Private Credit / SS (1) $20bn $19bn $17bn $13bn NM 1.5x 8.0x $2bn $0bn 2010 Q2 2016 2010 Q2 2016 2010 Q2 2016 Note: Includes pro rata share of strategic partnership AUM and AUM acquired through acquisitions. (1) Q2 2016 AUM for Leveraged Credit and Private Credit/SS include $1.2bn and $3.0bn, respectively, of AUM attributable to CCT. 12
2 Meaningful Growth in our Non-Private Equity Business Non-PE AUM Non-PE Management Fees $383mm $67bn 6.3x 4.2x $16bn $61mm Q4 2010 Q2 FY 2010 LTM 2016 Q2 2016 13
2 Credit Platform Growth KKR Credit AUM $36bn $34bn $29bn • Blended Mgmt Fee: ~115 bps • Carry/Incentive Fee Eligible: ~100% $23bn $18bn • Blended Mgmt Fee: ~45 bps • Carry/Incentive Fee Eligible: ~10% 2012 2013 2014 2015 Q2 2016 Leveraged Credit Private Credit, SS and Other Note: Blended management fee calculated based on the standard contracted management fee per investment vehicle as in effect as of June 30, 2016, weighted by FPAUM of the applicable investment vehicle as of June 30, 2016. It does not take into account varying rates for different classes of investors, fee holidays and other fund terms that may reduce the standard management fee rate. 14
2 Build-Out of Real Estate Platform Today Closed first dedicated European fund REPE - $705mm final close 2014 - Established RE credit platform 2016: Raised $590mm for the strategy • Closed first flagship fund REPA $1.2bn • At 6/30/2016: 2011 - 24.4% IRR(1) - Top quartile 2016: Raised $610mm for the Americas real estate strategy • KKR established performing fund(2) dedicated real estate platform with a balance sheet commitment of $300mm Strategies include: • Value Add & Opportunistic Equity • Strategic Platforms (Core-Plus, Office, Healthcare) • Credit Strategies (Whole Loans, Subordinate Debt, CMBS B-Pieces, Non-Bank Finance Company) 15 Note: 1) Performance data as of June 30, 2016. Gross returns. 2) Cambridge, Q1 2016 rankings for value add/opportunistic real estate funds.
2 Continued Fundraising Success Gross New Capital Raised ($ in billions) Total AUM: $83 $97 $107 $120 $131 $25 $19 $17 $16 $17 2012 2013 2014 2015 LTM Q2 2016 Private Markets Public Markets Note: Capital raised excludes GP capital and carry-only vehicles. 16
2 Visibility on Management Fee Growth Capital Commitments Not Yet Earning Management Fee Profile Economics ($ in millions) ~$20bn $800 28% Across all strategies, $600 ~$22bn of capital commitments not yet earning economics (assuming Americas Fund $400 XII at hard cap) would contribute over $200mm of net incremental annual 72% management fees over time – equivalent to 30% $200 gross increase before runoff(1,2) $0 2009 2010 2011 2012 2013 2014 2015 2Q16 LTM Private Markets Public Markets Blended annual fee rate of 1.3%, ~100% of which is carry or incentive fee eligible(2) (1) This assumes KKR achieves a fundraising hard cap of $12 billion of limited partner commitments for Americas Fund XII. (2) This calculation uses a blended management fee, which was derived from a weighted average of management fees payable on the ~$22 billion of uncalled capital commitments that are not yet earning economics as of June 30, 2016. For certain funds, the blended management fee rate is calculated based on the standard contractual management fee of certain funds applicable during their investment period and does not take into account varying rates for different classes of investors, fee holidays and other fund terms that may reduce the standard management fee rate. The percentage shown is not intended to forecast any actual increases in management fees in any quarter or other period, because, among other things, a portion of existing AUM would pay lower fees when certain uncalled capital commitments begin to pay a management fee, and there can be no assurance whether or when such commitments will begin paying fees, which may occur over an extended period of time. 17
2 LP Base Growth and Success in Cross Selling Number of LPs 947 895 795 693 456 380 344 2010 2011 2012 2013 2014 2015 YTD Q2 2016 Cross Selling 2010 Q2 2016 % Increase Number of Investors 344 947 175% Products per Client 1.5 1.7 13% Fund Investors in Multiple Products 130 303 133% 18
3 Monetize our business model
3 Our Model Ways We Monetize 3rd Party Balance KCM Ideas Managed Capital Sheet Strategic Partnerships / JVs / Other Relationships Adjacent Other Idea PE Infra Energy RE Leveraged Alternative HFS Asset Mgmt Originators Credit Credit Businesses / JVs • Scale what we have that is or can be differentiated • Partner with others who are best in class and who we can help and who can help us • Maintain best-in-class Distributable Earnings margin Note: Our model and the associated goals above are subject to uncertainty and change and constitute forward looking statements. See Legal Disclosures regarding forward looking statements. 20
3 Our Model – What We’ve Been Up To… Ways We Monetize Ideas • Unique, family-owned • Leading provider of mid- 3rd Party Midwestern value-based market enterprise resource Managed Capital retailer acquired in February planning software acquired in 2016 August 2016 • KKR marketed the debt • Meaningful equity syndication component of the capital structure directly to end • KKR arranged $300mm of buyers first and second lien term loans Balance • Arranged over $600mm Sheet of first lien and second lien debt as sole arranger • Additional sale/leaseback transaction KCM 21
3 How We Use Our Balance Sheet to Drive Growth • Americas XII Sizable Fund • Special Situations II Commitments • Infrastructure II • European Fund IV • Real Estate (Equity and Credit) Drop-Down Funds • Energy Income & Growth Seed Capital • Prisma New Products Capital Markets • KCM Underwriting • Acquisitions Strategic M&A • Strategic Partnerships Opportunistic • PE Co-Investments Investments • Growth Equity 22
3 Recent Balance Sheet Transactions • Creative balance sheet transactions create AUM, expand the LP base, improve the liquidity profile of the firm and contribute to the Balance Sheet evolution strategy in reaching target asset class allocations KKR KKR Receives: KKR Sells: • Pools of Assets • Cash from the Balance consideration Sheet • Portion of upside • PE co-investments in the • Alternative credit investments co-investments • Growth equity • New LP investments commitments to • CLO Equity Growth strategies Separately Managed Accounts 23
Thoughts on our trading profile
KKR: NYSE Listing (2010) – Today KKR Stock Price Chart $28 $26 $24 $22 $20 $18 $16 $14 $12 $10 $8 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 25
Current Trading Profile S&P 500 S&P 500 Financials KKR Fixed distribution of $0.16 per unit per quarter 18 5% 16.4x 16 4.3% 14.0x 14 12 10 Yield P/E 2.3% 2.1% 7.1x 8 6 4 2 0 0% Category 1 Category 2 Category 3 2017E P/E Yield Note: Data as of September 1, 2016. 2017E P/E based on Bloomberg consensus data as of September 1, 2016. 26
Our Business is Built to Withstand Volatile Markets FPAUM Diversified Across Long-Term, Locked Up Capital Strategies 2% 4% 5% 24% 20% 76% Locked Up, 20% 9% locked up for 8+ years at Diversified 3% 2% 7% inception Capital Base 8% 23% 72% PE NA PE Asia PE Europe Lev. Credit Alternative Credit Real Estate Energy Hedge Funds Permanent(1) 8-18 Years
In Our Experience… • Volatility can be good for our business • During periods of market volatility, investors are overly focused on quarterly mark-to-market • Our AUM, management fees and Distributable Earnings profile have been more stable than many investors realize • Important to separate fundamentals from quarterly mark-to- market “noise” 28
AUM Growth AUM ($ in billions) $140 $120 $100 $80 $60 $40 $20 $0 2009 2010 2011 2012 2013 2014 2015 2Q16 29
Management Fee Growth Management Fees ($ in millions) $800 $600 $400 $200 $0 2009 2010 2011 2012 2013 2014 2015 2Q16 LTM 30
Realized Performance Fee Profile Realized Performance Fees ($ in millions) $1,400 $1,200 $1,000 $800 $600 $400 +213% $200 $0 2010 2011 2012 2013 2014 2015 Q1 Q2 2016 31
KKR: 2010 – 2013 KKR Stock Price Chart $26 $24 $22 European financial volatility | U.S. $20 debt ceiling crisis $18 Greek concerns roil markets $16 $14 $12 $10 $8 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 32
Q3 2011 • The U.S. debt ceiling crisis combined with European financial concerns resulted in significant market volatility; the MSCI World Index declined 16.5% in the quarter KKR vs. MSCI World Index 2011 Financial Summary Q2 Q3 % Change $17 1,400 AUM $62 $59 -5% $16 1,350 FPAUM 46 46 0% $15 Management Fees $126 $134 6% 1,300 After-tax DE 117 152 30% $14 1,250 ENI 315 (592) -288% $13 1,200 $12 1,150 $11 1,100 $10 $9 1,050 $8 1,000 6/30/2011 7/31/2011 8/31/2011 9/30/2011 KKR MSCI World Index Note: After-tax Distributable Earnings and ENI are presented on a non-GAAP basis. For a reconciliation to financial results prepared in accordance with GAAP see Appendix of this presentation, which is available on the Investor Center of kkr.com. 33
Q3 2011 – 10 Largest PE Investments Final/Current MOICs of 10 Largest PE Investments 8x 7x 6.7x 6x 5.3x 5.3x 5x 4x 3.3x 3.2x 3x 2.1x 2.1x 2x 1.8x 1x 0.7x 1.0x 0x Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Q2 Q3 F Our model allows us to strategically time exits and withstand periods of volatility Note: “F” represents Q2 2016 gross MOIC or if the portfolio company has been exited, the gross MOIC at the time of exit. Largest PE investments are based on remaining fair value as of September 31, 2011, a time period when KKR common units experienced significant volatility. 34
Q2 2012 • The financial crisis in Greece and concerns around Grexit resulted in significant market volatility; the MSCI World Index declined 6.5% in the quarter KKR vs. MSCI World Index 2012 Financial Summary Q1 Q2 % Change $16 1,350 AUM $62 $61 -2% FPAUM 47 47 0% $15 1,300 Management Fees $129 $130 1% After-tax DE 152 394 159% $14 ENI 727 546 -25% 1,250 $13 1,200 $12 1,150 $11 $10 1,100 3/30/2012 4/30/2012 5/31/2012 6/30/2012 KKR MSCI World Index Note: After-tax Distributable Earnings and ENI are presented on a non-GAAP basis. For a reconciliation to financial results prepared in accordance with GAAP see Appendix of this presentation, which is available on the Investor Center of kkr.com. 35
Q2 2012 – 10 Largest PE Investments Final/Current MOICs of 10 Largest PE Investments 8x 7x 6.7x 6x 5.3x 5.3x 5x 4x 3.3x 3x 2.1x 2.2x 2x 1.8x 1x 0.7x 1.0x 0.0x 0x Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Q1 Q2 F Note: “F” represents Q2 2016 gross MOIC or if the portfolio company has been exited, the gross MOIC at the time of exit. Largest PE investments are based on remaining fair value as of June 30, 2012, a time period when KKR common units experienced significant volatility. 36
LTM Performance KKR Stock Price Chart Q2 2015 Compared to Q2 2016 $26 +48% $24 $22 $20 $18 $16 +14% $14 +12% +8% +9% $12 $10 LP Base FPAUM Mgmt Fees AUM Dry Powder 10/1/15 11/1/15 12/1/15 7/1/15 8/1/15 9/1/15 1/1/16 2/1/16 3/1/16 4/1/16 5/1/16 6/1/16 7/1/16 8/1/16 9/1/16 37
Performance Since 2010 $28 $140 $26 $120 $24 $100 $22 $20 $80 $18 ($ in billions) $60 $16 $14 $40 $12 $20 $10 $8 $0 2010 2011 2012 2013 2014 2015 2Q16 KKR Stock AUM 38
Performance Since 2010 $28 $800 $26 $24 $600 $22 $20 $18 $400 ($ in millions) $16 $14 $200 $12 $10 $8 $0 2010 2011 2012 2013 2014 2015 2Q16 KKR Stock Management Fees 39
Performance Since 2010 $28 $1,400 $26 $1,200 $24 $1,000 $22 $20 $800 $18 ($ in millions) $600 $16 $14 $400 $12 $200 $10 $8 $0 2010 2011 2012 2013 2014 2015 2016E KKR Stock Realized Performance Fees Note: 2016E based on consensus estimates as of July 27, 2016. 40
Performance Since 2010 2010 Q2 2016 % Change AUM $61bn $131bn 115% Management Fees $453mm $796mm(1) 76% Realized Performance Fees $346mm $818mm(1) 136% After-tax Distributable Earnings $577mm $1.4bn(1) 134% Book Value Per Unit $8.38 $11.33 35% Unit Price $14.20 $14.74 4% Note: Distributable Earnings and book value are presented on a non-GAAP basis. For a reconciliation to financial results prepared in accordance with GAAP see Appendix of this presentation, which is available on the Investor Center of kkr.com. Unit price as of 12/31/2010 and 9/09/2016. (1) 1H 2016 annualized. 41
Appendix 42
Reconciliation of Condensed Consolidated Statements of Financial Condition (GAAP Basis) To Total Reportable Segments Balance Sheet Condensed Consolidated Statements of Total Reportable Segments Balance 1 2 3 4 5 Financial Condition (GAAP Basis) Sheet Assets Cash & Short-term Cash & Cash Equivalents $1,512,475 - - 364,275 - - $1,876,750 Investments Investments 30,375,163 (19,992,654) (1,107,578) (1,300,899) - - 7,974,032 Investments - - 1,300,899 - - 1,300,899 Unrealized Carry Other Assets 5,619,233 (3,093,511) - (525,500) - (289,957) 1,710,265 Other Assets - - 161,225 - - 161,225 Corporate Real Estate Total Assets $37,506,871 (23,086,165) (1,107,578) - - (289,957) $13,023,171 Liabilities and Equity Debt Obligations – KKR Debt Obligations 17,894,036 (15,236,726) - (657,310) - - 2,000,000 (ex-KFN) - - 657,310 - - 657,310 Debt Obligations – KFN - - 373,750 - - 373,750 Preferred Shares – KFN Other Liabilities 3,928,882 (2,325,229) (1,107,578) - - (142,230) 353,845 Other Liabilities Total Liabilities 21,822,918 (17,561,955) (1,107,578) 373,750 - (142,230) 3,384,905 Redeemable Noncontrolling Interests 339,637 (339,637) - - - - Equity Series A Preferred Units 332,988 - - (332,988) - - Series B Preferred Units 149,566 - - (142,566) - - KKR & Co. L.P. Capital – Common Unitholders 5,001,602 173,451 - (17,446) 4,107,160 (147,727) 9,117,040 Book Value Noncontrolling Interests 9,860,160 (5,358,024) - (373,750) (4,107,160) - 21,226 Noncontrolling Interests - - 500,000 - - 500,000 Preferred Units Total Liabilities and Equity $37,506,871 (23,086,165) (1,107,578) - - (289,957) $13,023,171 43Note: As of June 30, 2016. Amounts in thousands. Please see next page for notes related to columns 1-5 above
Reconciliation of Condensed Consolidated Statements of Financial Condition (GAAP Basis) To Total Reportable Segments Balance Sheet (cont.) 1 IMPACT OF CONSOLIDATION OF INVESTMENT VEHICLES AND OTHER ENTITIES 2 CARRY POOL RECLASSIFICATION 3 OTHER RECLASSIFICATIONS 4 NONCONTROLLING INTERESTS HELD BY KKR HOLDINGS L.P. AND OTHER 5 EQUITY IMPACT OF KKR MANAGEMENT HOLDINGS CORP. 44Note: As of June 30, 2016. Amounts in thousands.
Reconciliation of KKR & Co. L.P. Capital – Common Unitholders (GAAP Basis) to Book Value per Adjusted Unit As Of December 31, December 31, June 30, 2016 2009 2010 KKR & Co. L.P. Capital – Common Unitholders $1,013,849 $1,326,493 $5,001,602 Impact of consolidation of investment vehicles and other entities - - 173,451 Other reclassifications - - (17,446) Noncontrolling interests held by KKR Holdings L.P. and 3,072,360 4,346,388 4,107,160 other Equity impact of KKR Management Holdings Corp. 66,675 52,745 (147,727) Book value 4,152,884 5,725,626 $9,117,040 Adjusted units 683,007,420 683,037,420 804,877,154 Book Value per adjusted unit $6.08 $8.38 $11.33 Note: Amounts in thousands, except adjusted units and book value per unit amounts. 45
Reconciliation of Net Income (Loss) Attributable to KKR & Co. L.P. (GAAP Basis) to Economic Net Income (Loss) and After-tax Distributable Earnings 2016 Year Ended Quarter Ended (Annualized) As of YTD June 12/31/2010 6/30/2011 9/30/2011 3/31/2012 6/30/2012 30, 2016 Net income (loss) attributable to KKR & Co. L.P. $333,178 $39,621 $(243,402) $190,436 $146,261 $(472,098) Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P. 899,277 128,026 (484,879) 404,191 292,833 (396,350) Plus: Non-cash equity-based charges 824,193 120,693 123,858 114,341 93,540 248,960 Plus: Amortization of intangibles and other, net 7,785 1,081 797 1,162 2,388 76,052 Plus: Preferred Distribution - - - - - 22,772 Plus: Income taxes 75,360 25,605 11,535 17,072 11,093 15,870 Economic net income (loss) 2,139,793 315,026 (592,091) 727,202 546,115 (504,794) Less: Total investment income (loss) 1,218,128 (149,956) 494,412 (419,907) (340,103) (1,152,686) Less: Net performance income (loss) 607,752 (89,888) 194,081 (237,150) (137,517) 236,582 Plus: Net interest and dividends & realized gains 252,184 39,681 81,001 52,618 301,580 572,192 Plus: Realized performance income (loss) 184,153 32,725 12,937 44,927 39,360 490,562 Less: Corporate and local income taxes paid 173,312 30,723 38,752 15,448 15,565 98,644 Less: Preferred Unit Distributions - - - - - 22,772 After-tax Distributable Earnings $576,938 $116,865 $151,588 $152,242 $393,870 $1,352,648 Note: Amounts in thousands 46
Legal Disclosures This presentation is prepared for KKR & Co. L.P. (NYSE: KKR) for the benefit of its public unitholders. This presentation is solely for informational purposes in connection with evaluating the business, operations and financial results of KKR & Co. L.P. and its consolidated subsidiaries (collectively, “KKR”). Any discussion of specific KKR entities is provided solely to demonstrate such entities’ role within the KKR organization and their contributions to the business, operations and financial results of KKR & Co. L.P. This presentation is not and shall not be construed as an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities, any investment funds, vehicles or accounts, any investment advice, or any other service by any KKR entities, including Kohlberg Kravis Roberts & Co. L.P., KKR Credit Advisors (US) LLC, Prisma Capital Partners LP, KKR Credit Advisors (Ireland) or KKR Capital Markets LLC. Nothing in this presentation constitutes the provision of any tax, accounting, financial, investment, regulatory, legal or other advice by KKR or its advisors. This presentation may not be referenced, quoted or linked by website, in whole or in part, except as agreed to in writing by KKR & Co. L.P. This presentation contains certain forward-looking statements pertaining to KKR, including certain investment funds, vehicles and accounts that are managed by KKR (each, a “fund”). Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, including the statements with respect to the declaration and payment of distributions on common units of KKR and the timing, manner and volume of repurchase of common units pursuant to a repurchase program. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations, including but not limited to assets under management, fee paying assets under management, capital invested and syndicated capital, uncalled commitments, total distributable earnings, economic net income, after-tax economic net income, fee related earnings, fee and yield segment EBITDA, core interest expense, cash and short-term investments, book value, and return on equity may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. All forward looking statements speak only as of the date of this presentation. KKR does not undertake any obligation to update any forward- looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s business strategy is focused on the long-term and financial results are subject to significant volatility. Additional information about factors affecting KKR, including a description of risks that may be important to a decision to purchase or sell any common units of KKR & Co. L.P., can be found in KKR & Co. L.P.’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its other filings with the SEC, which are available at www.sec.gov. The statements contained in this presentation are made as of September 14, 2016, unless another time is specified in relation to them, and access to this presentation at any given time shall not give rise to any implication that there has been no change in the facts set forth in this presentation since that date. All financial information in this presentation is as of September 14, 2016 unless otherwise indicated. Certain information presented in this presentation have been developed internally or obtained from sources believed to be reliable; however, KKR does not give any representation or warranty as to the accuracy, adequacy, timeliness or completeness of such information, and assumes no responsibility for independent verification of such information. 47
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