OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES |
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OTHER ASSETS AND ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES | OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES Other Assets consist of the following:
(1)Primarily includes 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)Net of accumulated depreciation and amortization of $292.4 million and $257.4 million as of June 30, 2024 and December 31, 2023, respectively. Depreciation and amortization expense of $17.9 million and $16.6 million for the three months ended June 30, 2024 and 2023, respectively, and $35.8 million and $32.4 million, for the six months ended June 30, 2024 and 2023, respectively, are included in General, Administrative and Other in the accompanying consolidated statements of operations. Additionally, KKR’s fixed assets are predominantly located in the United States. (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 consolidated statements of operations. See Note 4 "Net Gains (Losses) from Investment Activities - Asset Management and Strategic Holdings" in our financial statements for the net changes in fair value associated with these instruments. (5)As of June 30, 2024, the carrying value of goodwill is recorded and assessed for impairment at the reporting unit. As of June 30, 2024, there are approximately $(92.6) million of cumulative foreign currency translation adjustments included in AOCI related to the goodwill recorded as result of the acquisition of KJRM. (6)As of June 30, 2024, there are approximately $(315.7) million of cumulative foreign currency translation adjustments included in AOCI related to the intangible assets recorded as result of the acquisition of KJRM. (7)For Asset Management, non-cancelable operating leases consist of leases for office space in North America, Europe, Asia and Australia. KKR is the lessee under the terms of the operating leases. The operating lease cost was $16.7 million and $17.7 million for the three months ended June 30, 2024 and 2023, respectively, and $33.3 million and $33.4 million for the six months ended June 30, 2024 and 2023, respectively. For Insurance, non-cancelable operating leases consist of leases for office space and land in the U.S. For the three months ended June 30, 2024 and 2023, the operating lease cost was $6.3 million and $6.8 million, respectively, and for the six months ended June 30, 2024 and 2023, the operating lease cost was $9.9 million and $13.6 million, respectively. (8)The definite life intangible assets are amortized using the straight-line method over the useful life of the assets which is an average of 14 years. The indefinite life intangible assets are not subject to amortization. The amortization expense of definite life intangible assets was $4.4 million for both the three months ended June 30, 2024 and 2023 and $8.8 million for both the six months ended June 30, 2024 and 2023. Accrued Expenses and Other Liabilities consist of the following:
(1)Represents the amount of carried interest payable to current and former KKR employees arising from KKR's investment funds and co-investment vehicles that provide for carried interest. (2)Primarily includes 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 consolidated statements of operations. See Note 4 "Net Gains (Losses) from Investment Activities - Asset Management and Strategic Holdings" in our financial statements 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 consolidated statements of operations. See Note 4 "Net Gains (Losses) from Investment Activities - Asset Management and Strategic Holdings" in our financial statements for the net changes in fair value associated with these instruments. (5)For Asset Management, operating leases for office space have remaining lease terms that range from approximately 1 year to 17 years, some of which include options to extend the leases from 5 years to 10 years. The weighted average remaining lease terms were 10.2 years and 10.3 years as of June 30, 2024 and December 31, 2023, respectively. The weighted average discount rates were 2.9% and 2.9% as of June 30, 2024 and December 31, 2023, respectively. For Insurance, operating leases for office space have remaining lease terms that range from approximately 1 year to 11 years, some of which include options to extend the leases for up to 10 years. The weighted average remaining lease terms were 7.6 years as of both June 30, 2024 and December 31, 2023. The weighted average discount rates were 4.7% and 4.4% as of June 30, 2024 and December 31, 2023, respectively. The weighted average remaining lease terms for land were 42.8 years and 43.7 years as of June 30, 2024 and December 31, 2023, respectively.
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