SEGMENT REPORTING (Tables)
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9 Months Ended |
Sep. 30, 2018 |
Segment Reporting [Abstract] |
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Schedule of financial data of the entity's reportable segments |
The following tables set forth information regarding KKR's segment results.
| | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Three Months Ended | | As of and for the Nine Months Ended | | | September 30, 2018 | | September 30, 2017 | | September 30, 2018 | | September 30, 2017 | Segment Revenues | | | | | | | | | Fees and Other, Net | | | | | | | | | Management Fees | | $ | 276,595 |
| | $ | 232,954 |
| | $ | 789,630 |
| | $ | 670,807 |
| Transaction Fees | | 289,030 |
| | 179,167 |
| | 609,800 |
| | 578,667 |
| Monitoring Fees | | 20,176 |
| | 14,342 |
| | 63,100 |
| | 58,072 |
| Fee Credits | | (82,187 | ) | | (70,747 | ) | | (178,982 | ) | | (211,148 | ) | Total Fees and Other, Net | | 503,614 |
| | 355,716 |
| | 1,283,548 |
| | 1,096,398 |
| | | | | | | | | | Realized Performance Income (Loss) | | | | | | | | | Carried Interest | | 414,609 |
| | 419,438 |
| | 959,253 |
| | 890,310 |
| Incentive Fees | | 18,001 |
| | 4,074 |
| | 52,059 |
| | 8,384 |
| Total Realized Performance Income (Loss) | | 432,610 |
| | 423,512 |
| | 1,011,312 |
| | 898,694 |
| | | | | | | | | | Realized Investment Income (Loss) | | | | | | | | | Net Realized Gains (Losses) (1) | | 181,026 |
| | 76,053 |
| | 286,381 |
| | 162,684 |
| Interest Income and Dividends | | 61,717 |
| | 70,557 |
| | 205,522 |
| | 195,275 |
| Total Realized Investment Income (Loss) | | 242,743 |
| | 146,610 |
| | 491,903 |
| | 357,959 |
| Total Segment Revenues | | $ | 1,178,967 |
| | $ | 925,838 |
| | $ | 2,786,763 |
| | $ | 2,353,051 |
| | | | | | | | | | Segment Expenses | | | | | | | | | Compensation and Benefits (2) | | 469,107 |
| | 363,247 |
| | 1,138,149 |
| | 933,107 |
| Occupancy and Related Charges | | 14,571 |
| | 14,672 |
| | 42,819 |
| | 42,448 |
| Other Operating Expenses (3) | | 73,402 |
| | 70,517 |
| | 194,868 |
| | 177,084 |
| Total Segment Expenses | | $ | 557,080 |
| | $ | 448,436 |
| | $ | 1,375,836 |
| | $ | 1,152,639 |
| | | | | | | | | | Segment Operating Earnings | | 621,887 |
| | 477,402 |
| | 1,410,927 |
| | 1,200,412 |
| | | | | | | | | | Interest Expense | | 44,696 |
| | 45,613 |
| | 140,362 |
| | 134,348 |
| Preferred Dividends | | 8,341 |
| | 8,341 |
| | 25,023 |
| | 25,023 |
| Income (Loss) Attributable to Noncontrolling Interests | | 2,272 |
| | 1,046 |
| | 4,557 |
| | 3,810 |
| Income Taxes Paid | | 69,880 |
| | 12,869 |
| | 103,868 |
| | 54,228 |
| After-tax Distributable Earnings | | $ | 496,698 |
| | $ | 409,533 |
| | $ | 1,137,117 |
| | $ | 983,003 |
| | | | | | | | | | Total Segment Assets | | $ | 18,772,875 |
| | $ | 15,347,999 |
| | $ | 18,772,875 |
| | $ | 15,347,999 |
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| | (1) | Given the extraordinary nature of the Conversion, the reported segment financial results for the nine months ended September 30, 2018 exclude approximately $729.4 million of losses on certain investments which were realized in the second quarter in advance of the Conversion. |
| | (2) | Includes equity-based compensation of $59,801 and $54,921 for the three months ended September 30, 2018 and 2017, respectively, and $185,795 and $149,840 for the nine months ended September 30, 2018 and 2017, respectively. |
| | (3) | For the nine months ended September 30, 2018, excludes approximately $11.5 million of non-recurring costs in connection with the Conversion. |
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Segment revenues disaggregated by business line |
The following tables provide KKR's segment revenues on a disaggregated basis by business line for the three and nine months ended September 30, 2018 and 2017: | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2018 | | | Private Markets | | Public Markets | | Capital Markets | | Principal Activities | | Total | Fees and Other, Net | | | | | | | | | | | Management Fees | | $ | 176,071 |
| | $ | 100,524 |
| | $ | — |
| | $ | — |
| | $ | 276,595 |
| Transaction Fees | | 93,866 |
| | 8,666 |
| | 186,498 |
| | — |
| | 289,030 |
| Monitoring Fees | | 20,176 |
| | — |
| | — |
| | — |
| | 20,176 |
| Fee Credits | | (73,571 | ) | | (8,616 | ) | | — |
| | — |
| | (82,187 | ) | Total Fees and Other, Net | | 216,542 |
| | 100,574 |
| | 186,498 |
| | — |
| | 503,614 |
| | | | | | | | | | | | Realized Performance Income (Loss) | | | | | | | | | | | Carried Interest | | 404,709 |
| | 9,900 |
| | — |
| | — |
| | 414,609 |
| Incentive Fees | | — |
| | 18,001 |
| | — |
| | — |
| | 18,001 |
| Total Realized Performance Income (Loss) | | 404,709 |
| | 27,901 |
| | — |
| | — |
| | 432,610 |
| | | | | | | | | | | | Realized Investment Income (Loss) | | | | | | | | | | | Net Realized Gains (Losses) | | — |
| | — |
| | — |
| | 181,026 |
| | 181,026 |
| Interest Income and Dividends | | — |
| | — |
| | — |
| | 61,717 |
| | 61,717 |
| Total Realized Investment Income (Loss) | | — |
| | — |
| | — |
| | 242,743 |
| | 242,743 |
| Total | | $ | 621,251 |
| | $ | 128,475 |
| | $ | 186,498 |
| | $ | 242,743 |
| | $ | 1,178,967 |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2017 | | | Private Markets | | Public Markets | | Capital Markets | | Principal Activities | | Total | Fees and Other, Net | | | | | | | | | | | Management Fees | | $ | 153,841 |
| | $ | 79,113 |
| | $ | — |
| | $ | — |
| | $ | 232,954 |
| Transaction Fees | | 82,258 |
| | 11,469 |
| | 85,440 |
| | — |
| | 179,167 |
| Monitoring Fees | | 14,342 |
| | — |
| | — |
| | — |
| | 14,342 |
| Fee Credits | | (59,854 | ) | | (10,893 | ) | | — |
| | — |
| | (70,747 | ) | Total Fees and Other, Net | | 190,587 |
| | 79,689 |
| | 85,440 |
| | — |
| | 355,716 |
| | | | | | | | | | | | Realized Performance Income (Loss) | | | | | | | | | | | Carried Interest | | 419,438 |
| | — |
| | — |
| | — |
| | 419,438 |
| Incentive Fees | | — |
| | 4,074 |
| | — |
| | — |
| | 4,074 |
| Total Realized Performance Income (Loss) | | 419,438 |
| | 4,074 |
| | — |
| | — |
| | 423,512 |
| | | | | | | | | | | | Realized Investment Income (Loss) | | | | | | | | | | | Net Realized Gains (Losses) | | — |
| | — |
| | — |
| | 76,053 |
| | 76,053 |
| Interest Income and Dividends | | — |
| | — |
| | — |
| | 70,557 |
| | 70,557 |
| Total Realized Investment Income (Loss) | | — |
| | — |
| | — |
| | 146,610 |
| | 146,610 |
| Total | | $ | 610,025 |
| | $ | 83,763 |
| | $ | 85,440 |
| | $ | 146,610 |
| | $ | 925,838 |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2018 | | | Private Markets | | Public Markets | | Capital Markets | | Principal Activities | | Total | Fees and Other, Net | | | | | | | | | | | Management Fees | | $ | 490,556 |
| | $ | 299,074 |
| | $ | — |
| | $ | — |
| | $ | 789,630 |
| Transaction Fees | | 189,122 |
| | 21,897 |
| | 398,781 |
| | — |
| | 609,800 |
| Monitoring Fees | | 63,100 |
| | — |
| | — |
| | — |
| | 63,100 |
| Fee Credits | | (158,163 | ) | | (20,819 | ) | | — |
| | — |
| | (178,982 | ) | Total Fees and Other, Net | | 584,615 |
| | 300,152 |
| | 398,781 |
| | — |
| | 1,283,548 |
| | | | | | | | | | | | Realized Performance Income (Loss) | | | | | | | | | | | Carried Interest | | 949,353 |
| | 9,900 |
| | — |
| | — |
| | 959,253 |
| Incentive Fees | | — |
| | 52,059 |
| | — |
| | — |
| | 52,059 |
| Total Realized Performance Income (Loss) | | 949,353 |
| | 61,959 |
| | — |
| | — |
| | 1,011,312 |
| | | | | | | | | | | | Realized Investment Income (Loss) | | | | | | | | | | | Net Realized Gains (Losses) | | — |
| | — |
| | — |
| | 286,381 |
| | 286,381 |
| Interest Income and Dividends | | — |
| | — |
| | — |
| | 205,522 |
| | 205,522 |
| Total Realized Investment Income (Loss) | | — |
| | — |
| | — |
| | 491,903 |
| | 491,903 |
| Total | | $ | 1,533,968 |
| | $ | 362,111 |
| | $ | 398,781 |
| | $ | 491,903 |
| | $ | 2,786,763 |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2017 | | | Private Markets | | Public Markets | | Capital Markets | | Principal Activities | | Total | Fees and Other, Net | | | | | | | | | | | Management Fees | | $ | 419,606 |
| | $ | 251,201 |
| | $ | — |
| | $ | — |
| | $ | 670,807 |
| Transaction Fees | | 237,392 |
| | 41,040 |
| | 300,235 |
| | — |
| | 578,667 |
| Monitoring Fees | | 58,072 |
| | — |
| | — |
| | — |
| | 58,072 |
| Fee Credits | | (177,254 | ) | | (33,894 | ) | | — |
| | — |
| | (211,148 | ) | Total Fees and Other, Net | | 537,816 |
| | 258,347 |
| | 300,235 |
| | — |
| | 1,096,398 |
| | | | | | | | | | | | Realized Performance Income (Loss) | | | | | | | | | | | Carried Interest | | 890,310 |
| | — |
| | — |
| | — |
| | 890,310 |
| Incentive Fees | | — |
| | 8,384 |
| | — |
| | — |
| | 8,384 |
| Total Realized Performance Income (Loss) | | 890,310 |
| | 8,384 |
| | — |
| | — |
| | 898,694 |
| | | | | | | | | | | | Realized Investment Income (Loss) | | | | | | | | | | | Net Realized Gains (Losses) | | — |
| | — |
| | — |
| | 162,684 |
| | 162,684 |
| Interest Income and Dividends | | — |
| | — |
| | — |
| | 195,275 |
| | 195,275 |
| Total Realized Investment Income (Loss) | | — |
| | — |
| | — |
| | 357,959 |
| | 357,959 |
| Total | | $ | 1,428,126 |
| | $ | 266,731 |
| | $ | 300,235 |
| | $ | 357,959 |
| | $ | 2,353,051 |
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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 segment information:
Revenues
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | | September 30, 2018 | | September 30, 2017 | | September 30, 2018 | | September 30, 2017 | Total GAAP Revenues | | $ | 1,129,666 |
| | $ | 749,652 |
| | $ | 2,573,892 |
| | $ | 2,533,207 |
| Add: Management Fees - Consolidated Funds and Other | | 104,356 |
| | 53,454 |
| | 270,383 |
| | 155,418 |
| Deduct: Fee Credits - Consolidated Funds | | 8,283 |
| | 106 |
| | 41,178 |
| | 3,752 |
| Deduct: Capital Allocation-Based Income (GAAP) | | 638,163 |
| | 394,234 |
| | 1,274,149 |
| | 1,416,825 |
| Add: Segment Realized Carried Interest | | 414,609 |
| | 419,438 |
| | 959,253 |
| | 890,310 |
| Add: Segment Realized Investment Income (Loss) | | 242,743 |
| | 146,610 |
| | 491,903 |
| | 357,959 |
| Deduct: Revenue Earned by Other Consolidated Entities | | 27,749 |
| | 21,470 |
| | 84,342 |
| | 76,135 |
| Deduct: Expense Reimbursements | | 38,212 |
| | 27,506 |
| | 108,999 |
| | 87,131 |
| Total Segment Revenues | | $ | 1,178,967 |
| | $ | 925,838 |
| | $ | 2,786,763 |
| | $ | 2,353,051 |
|
Expenses
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | | September 30, 2018 | | September 30, 2017 | | September 30, 2018 | | September 30, 2017 | Total GAAP Expenses | | $ | 740,090 |
| | $ | 530,247 |
| | $ | 1,851,741 |
| | $ | 1,699,989 |
| Deduct: Equity-based and Other Compensation - KKR Holdings L.P. | | 25,327 |
| | 23,807 |
| | 87,269 |
| | 127,864 |
| Deduct: Segment Unrealized Performance Income Compensation | | 57,407 |
| | (19,826 | ) | | 81,376 |
| | 157,162 |
| Deduct: Amortization of Intangibles | | 681 |
| | 2,473 |
| | 7,028 |
| | 13,901 |
| Deduct: Reimbursable Expenses | | 43,382 |
| | 35,098 |
| | 125,787 |
| | 107,335 |
| Deduct: Operating Expenses relating to Other Consolidated Entities | | 37,845 |
| | 43,818 |
| | 135,268 |
| | 121,691 |
| Deduct: One-time Non-recurring Costs (1) | | — |
| | — |
| | 11,501 |
| | — |
| Add: Other | | (18,368 | ) | | 3,559 |
| | (27,676 | ) | | (19,397 | ) | Total Segment Expenses | | $ | 557,080 |
| | $ | 448,436 |
| | $ | 1,375,836 |
| | $ | 1,152,639 |
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| | (1) | Represents non-recurring costs in connection with the Conversion. |
Net Income (Loss) Attributable to KKR & Co. Inc. Class A Common Stockholders | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | | September 30, 2018 | | September 30, 2017 | | September 30, 2018 | | September 30, 2017 | GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Class A Common Stockholders | | $ | 640,198 |
| | $ | 153,563 |
| | $ | 1,490,681 |
| | $ | 818,552 |
| | | | | | | | | | Add: Net Income (Loss) Attributable to Noncontrolling Interests held by KKR Holdings L.P. | | 293,659 |
| | 115,434 |
| | 864,520 |
| | 637,146 |
| Add: Equity-based and Other Compensation - KKR Holdings L.P. | | 25,537 |
| | 23,807 |
| | 87,479 |
| | 127,864 |
| Add: Amortization of Intangibles and Other, net | | 60,948 |
| | 20,464 |
| | 58,014 |
| | 57,825 |
| Add: One-time Non-recurring Costs (1) | | — |
| | — |
| | 11,501 |
| | — |
| Add: Realized Losses on Certain Investments (2) | | — |
| | — |
| | 729,425 |
| | — |
| Deduct: Unrealized Carried Interest | | 130,420 |
| | (59,638 | ) | | 182,130 |
| | 377,707 |
| Deduct: Net Unrealized Gains (Losses) | | 251,346 |
| | (50,902 | ) | | 1,849,077 |
| | 461,111 |
| Add: Unrealized Performance Income Compensation | | 57,407 |
| | (19,826 | ) | | 81,376 |
| | 157,162 |
| Add: Income Tax Provision | | (129,405 | ) | | 18,420 |
| | (50,804 | ) | | 77,500 |
| Deduct: Income Taxes Paid | | 69,880 |
| | 12,869 |
| | 103,868 |
| | 54,228 |
| | | | | | | | | | After-tax Distributable Earnings | | $ | 496,698 |
| | $ | 409,533 |
| | $ | 1,137,117 |
| | $ | 983,003 |
| | | | | | | | | |
| | (1) | Represents non-recurring costs in connection with the Conversion. |
| | (2) | Represents losses on certain investments which were realized in the second quarter in advance of the Conversion. |
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Reconciliation of assets from segment to consolidated |
Assets | | | | | | | | | | As of September 30, | | 2018 | | 2017 | Total GAAP Assets | $ | 50,343,948 |
| | $ | 44,305,639 |
| Deduct: Impact of Consolidation of Funds and Other Entities | 30,354,674 |
| | 27,524,641 |
| Deduct: Carry Pool Reclassification from Liabilities | 1,300,165 |
| | 1,131,071 |
| Add: Tax Reclassifications | 83,766 |
| | — |
| Deduct: Impact of KKR Management Holdings Corp. | — |
| | 301,928 |
| Total Segment Assets | $ | 18,772,875 |
| | $ | 15,347,999 |
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|