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KKR & CO. INC. – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – InsuranceNewsNet

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The following discussion and analysis should be read in conjunction with the
unaudited condensed consolidated financial statements of KKR & Co. Inc.,
together with its consolidated subsidiaries, and the related notes included
elsewhere in this report and our Annual Report, including the audited
consolidated financial statements and the related notes and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained therein. In addition, this discussion and analysis contains
forward-looking statements and involves numerous risks and uncertainties,
including those described under "Cautionary Note Regarding Forward-looking
Statements" and "Business Environment" in this report and our Annual Report and
"Risk Factors" in our Annual Report, and our other filings with the SEC. Actual
results may differ materially from those contained in any forward-looking
statements.

The unaudited condensed consolidated financial statements and the related notes
included elsewhere in this report are hereafter referred to as the "financial
statements." Additionally, the condensed consolidated statements of financial
condition are referred to herein as the "consolidated statements of financial
condition"; the condensed consolidated statements of operations are referred to
herein as the "consolidated statements of operations"; the condensed
consolidated statements of comprehensive income (loss) are referred to herein as
the "consolidated statements of comprehensive income (loss)"; the condensed
consolidated statements of changes in equity are referred to herein as the
"consolidated statements of changes in equity"; and the condensed consolidated
statements of cash flows are referred to herein as the "consolidated statements
of cash flows."

Overview

  We are a leading global investment firm that offers alternative asset
management as well as capital markets and insurance solutions. We aim to
generate attractive investment returns by following a patient and disciplined
investment approach, employing world-class people, and supporting growth in our
portfolio companies and communities. We sponsor investment funds that invest in
private equity, credit and real assets and have strategic partners that manage
hedge funds. Our insurance subsidiaries offer retirement, life and reinsurance
products under the management of Global Atlantic.

  Our asset management business offers a broad range of investment management
services to fund investors around the world. As of June 30, 2022, we manage $491
billion of assets for our clients. Throughout our history, we have consistently
been a leader in the private equity industry, having completed approximately 675
private equity investments in portfolio companies with a total transaction value
in excess of $690 billion as of June 30, 2022. Since the inception of our firm
in 1976, we have expanded our investment strategies and product offerings from
traditional private equity to areas such as leveraged credit, alternative
credit, infrastructure, energy, real estate, growth equity, core and impact
investments. We also provide capital markets services for our firm, our
portfolio companies and third parties. Our balance sheet provides a significant
source of capital in the growth and expansion of our business, and it has
allowed us to further align our interests with those of our fund investors.
Building on these efforts and leveraging our industry expertise and intellectual
capital have allowed us to capitalize on a broader range of the opportunities we
source.

Our insurance business is operated by Global Atlantic, in which we acquired a
majority controlling interest on February 1, 2021. Global Atlantic is a leading
U.S. retirement and life insurance company that provides a broad suite of
protection, legacy and savings products and reinsurance solutions to clients
across individual and institutional markets. Global Atlantic primarily offers
individuals fixed-rate annuities, fixed-indexed annuities and targeted life
products through a network of banks, broker-dealers and independent marketing
organizations. Global Atlantic provides its institutional clients customized
reinsurance solutions, including block, flow and pension risk transfer
reinsurance, as well as funding agreements. Global Atlantic primarily generates
income by earning a spread between its investment income and the cost of
policyholder benefits. As of June 30, 2022, Global Atlantic served approximately
three million policyholders.









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Asset Management

In our asset management business, we have historically had four business lines:
(1) Private Markets, (2) Public Markets, (3) Capital Markets, and (4) Principal
Activities. Beginning in this Quarterly Report on Form 10-Q, the Private Markets
business line will be split into two business lines, "Private Equity" and "Real
Assets", each of which was historically included as part of the Private Markets
business line. As a result of this change, our asset management segment's
business lines will increase from four to five. In addition, the Public Markets
business line will, beginning in this Quarterly Report on Form 10-Q, be renamed
Credit and Liquid Strategies.

As an asset management firm, we earn fees, including incentive fees, and carried
interest for providing investment management and other services to our funds,
vehicles, CLOs, managed accounts and portfolio companies, and we generate
transaction-specific income from capital markets transactions. We earn
additional investment income by investing our own capital alongside that of our
fund investors and from other assets on our balance sheet. Carried interest we
receive from our funds and certain other investment vehicles entitles us to a
specified percentage of investment gains that are generated on third-party
capital that is invested.

Our investment teams have deep industry knowledge and are supported by a
substantial and diversified capital base; an integrated global investment
platform; the expertise of operating professionals, senior advisors and other
advisors; and a worldwide network of business relationships that provide a
significant source of investment opportunities, specialized knowledge during due
diligence and substantial resources for creating and realizing value for
stakeholders. These teams invest capital, a substantial portion of which is of a
long duration or not subject to predetermined redemption requirements, which
provides us with significant flexibility to grow investments and select exit
opportunities. As of June 30, 2022, approximately 90% of our AUM consists of
capital that is not subject to redemption for at least 8 years from inception
and what we refer to as perpetual capital. For more information about the
limitations of perpetual capital, please see "Risks Related to Our Business-AUM
referred to as perpetual capital is subject to material reduction, including
through withdrawal, redemption, or dividends, and termination" in our Annual
Report. We believe that these aspects of our business help us continue to grow
our asset management business and deliver strong investment performance in a
variety of economic and financial conditions.

Asset Management – Private Equity

  Through our Private Equity business line, we manage and sponsor a group of
what we call traditional private equity funds that invest capital for long-term
appreciation, either through controlling ownership of a company or strategic
minority positions. In addition to our traditional private equity funds that
invest in large and mid-sized companies, we sponsor investment funds that invest
in core equity and growth equity, which includes our impact investments. Our
Private Equity business line includes separately managed accounts that invest in
multiple strategies, which may include our credit and real asset strategies in
addition to our private equity strategies. These funds and accounts are managed
by Kohlberg Kravis Roberts & Co. L.P., an SEC-registered investment adviser, or
one of its subsidiaries. As of June 30, 2022, our Private Equity business line
had $171.5 billion of AUM.

Asset Management – Real Assets

  Through our Real Assets business line, we manage and sponsor a group of real
assets funds that invest capital in infrastructure, real estate, or energy.
These funds and accounts are managed by Kohlberg Kravis Roberts & Co. L.P., an
SEC-registered investment adviser, or one of its subsidiaries. As of June 30,
2022, our Real Assets business line had $113.8 billion of AUM.

  The table below presents information as of June 30, 2022, relating to our
current private equity and real asset funds for which we have the ability to
earn carried interest. This data does not reflect acquisitions or disposals of
investments, changes in investment values, or distributions occurring after June
30, 2022.



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                                             Investment Period (1)                                                 Amount ($ in millions)
                                                                                                               Percentage                                                              Gross
                                                                                                                Committed                                                             Accrued
                                            Start             End                              Uncalled        by General                                Remaining     Remaining      Carried
                                             Date             Date        

Commitment (2) Commitments Partner Invested Realized

Cost (3) Fair Value Interest

Private Equity Business Line
North America Fund XIII                     6/2021           8/2027      $        18,400    $     15,335           3%         $   3,065    $       -    $   3,065    $     3,096    $      -
Americas Fund XII                           1/2017           6/2021               13,500           1,706           4%            12,292        4,948       11,219         20,105       1,687
North America Fund XI                       9/2012           1/2017                8,718             408           3%             9,769       20,199        2,957          6,197         667
2006 Fund (4)                               9/2006           9/2012               17,642             247           2%            17,309       35,557        1,274          1,708         141
Millennium Fund (4)                        12/2002          12/2008                6,000               -           3%             6,000       14,123            -              6           1
European Fund VI                            3/2022           6/2028                7,120           7,120           11%                -            -            -              -           -
European Fund V                             3/2019           2/2022                6,328           1,604           2%             4,793          782        4,640          5,395         212
European Fund IV                           12/2014           3/2019                3,513              64           6%             3,577        5,122        1,799          2,473         135
European Fund III (4)                       3/2008           3/2014                5,509             145           5%             5,360       10,604          669            129         (25)
European Fund II (4)                       11/2005          10/2008                5,751               -           2%             5,751        8,507            -             34           -
Asian Fund IV                               7/2020           7/2026               14,735          11,353           4%             3,423           41        3,402          3,635           -
Asian Fund III                              4/2017           7/2020                9,000           2,000           6%             7,404        4,199        6,438         11,949         981
Asian Fund II                               4/2013           4/2017                5,825              34           1%             6,839        5,946        3,794          2,778        (346)
Asian Fund (4)                              7/2007           4/2013                3,983               -           3%             3,974        8,728          110             22           4
China Growth Fund (4)                      11/2010          11/2016                1,010               -           1%             1,010        1,056          330            243          (4)
Next Generation Technology Growth Fund
II                                         12/2019           5/2022                2,088             597           7%             1,688          259        1,544          2,210         119
Next Generation Technology Growth Fund      3/2016          12/2019                  659               4           22%              666          834          359          1,050          78
Health Care Strategic Growth Fund II        5/2021           5/2027                3,789           3,657           4%               132            -          132            154           -
Health Care Strategic Growth Fund          12/2016           5/2021                1,331             380           11%            1,081          196          972          1,472          71
Global Impact Fund II                       6/2022           6/2028                1,312           1,312           11%                -            -            -              -           3
Global Impact Fund                          2/2019           3/2022                1,242             350           8%             1,042          168          939          1,466         100
Co-Investment Vehicles and Other           Various          Various               18,161           6,550         Various         11,746        7,648        8,302         10,723       1,164
Core Investment Vehicles                   Various          Various               24,657          13,729           31%           11,627          712       11,323         18,525         108
Unallocated Commitments (5)                                                        4,320           4,320         Various              -            -            -              -           -

Total Private Equity                                                     $       184,593    $     70,915                      $ 118,548    $ 129,629   

$ 63,268 $ 93,370 $ 5,096

Real Assets Business Line
Energy Income and Growth Fund II            6/2018           3/2022      $           994    $          -           20%        $   1,187    $     193    $   1,024    $     1,835    $     52
Energy Income and Growth Fund               9/2013           6/2018                1,974               -           13%            1,974          956        1,134            716           -
Natural Resources Fund (4)                 Various          Various                  887               -         Various            887          123          191             48           -
Global Energy Opportunities                Various          Various                  915              62         Various            519          169          323            213           -
Global Infrastructure Investors IV          8/2021           8/2027               16,603          13,717           2%             2,886            -        2,886          3,053          15
Global Infrastructure Investors III         6/2018           6/2021                7,164           1,667           4%             5,764        1,241        5,137          5,634         121
Global Infrastructure Investors II         10/2014           6/2018                3,039             123           4%             3,163        4,246        1,281          1,767          48
Global Infrastructure Investors             9/2011          10/2014                1,040               -           5%             1,050        2,228            -              -           -
Asia Pacific Infrastructure Investors
II                                           (6)              (7)                  4,122           4,122           9%                 -            -            -              -           -
Asia Pacific Infrastructure Investors       1/2020           1/2026                3,792           2,036           7%             2,041          323        1,848          1,952          32
Diversified Core Infrastructure Fund       12/2020            (8)                  7,636           3,127           7%             4,519          100        4,509          4,609           -
Real Estate Partners Americas III          12/2020           1/2025                4,253           2,065           5%             2,214           92        2,173          2,490          51
Real Estate Partners Americas II            5/2017          12/2020                1,921             265           8%             1,892        2,446          588            820          80
Real Estate Partners Americas               5/2013           5/2017                1,229             139           16%            1,020        1,405          111             61           1
Real Estate Partners Europe II             12/2019           3/2024                2,065             806           10%            1,326          184        1,237          1,432          43
Real Estate Partners Europe                 9/2015          12/2019                  707             131           9%               654          609          285            334          12
Asia Real Estate Partners                   6/2019           7/2023                1,682           1,280           15%              405            7          388            561          16
Real Estate Credit Opportunity
Partners II                                 4/2019           6/2022                  950             413           5%               560          102          560            564          11
Real Estate Credit Opportunity
Partners                                    2/2017           4/2019                1,130             122           4%             1,008          371        1,008          1,039          11
Property Partners Americas                 12/2019            (8)                  2,488             266           20%            2,222          110        2,222          3,117          38
Co-Investment Vehicles and Other           Various          Various                5,681           1,422         Various          4,320        1,670    

3,737 3,858 19

Total Real Assets                                                        $        70,272    $     31,763                      $  39,611    $  16,575    $  30,642    $    34,103    $    550



(1)The start date represents a date on or in between the date on which the
general partner of the applicable fund commenced investment of the fund's
capital and the date of the first closing. The end date represents the
approximate date on which the general partner of the applicable fund was or will
be required by the fund's governing agreement to cease making investments (other
than reserved amounts) on behalf of the fund, unless extended by a vote of the
fund investors.

(2)The commitment represents the aggregate capital commitments to the fund,
including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars
based on (i) the foreign exchange rate at the date of purchase for each
investment and (ii) the exchange rate that prevailed on June 30, 2022, in the
case of uncalled commitments.

(3)The remaining cost represents the initial investment of the general partner
and limited partners, reduced for returns of capital.

(4)The “Invested” and “Realized” columns do not include the amounts of any
realized investments that restored the unused capital commitments of the fund
investors, if any.

(5)”Unallocated Commitments” represent unallocated commitments from our
strategic investor partnerships.

(6)Upon first investment of the fund.

(7)Six years from first investment date.

(8)No pre-determined date of termination.

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The table below presents information as of June 30, 2022, relating to the
historical performance of certain of our Private Equity and Real Assets business
lines investment vehicles since inception, which we believe illustrates the
benefits of our investment approach. This data does not reflect additional
capital raised since June 30, 2022, or acquisitions or disposals of investments,
changes in investment values or distributions occurring after that date.
However, the information presented below is not intended to be representative of
any past or future performance for any particular period other than the period
presented below. Past performance is no guarantee of future results.

                                                              Amount                          Fair Value of Investments
Private Equity and Real Assets Business Lines                                                                                                                 Gross           Net              Gross Multiple of Invested
Investment Funds                                    Commitment (2)     Invested              Realized (4)        Unrealized           Total Value            IRR (5)        IRR (5)                    Capital (5)
                                                                                     ($ in millions)
Legacy Funds (1)
1976 Fund                                         $            31    $      31          $          537          $        -          $        537                 39.5  %        35.5  %                     17.1
1980 Fund                                                     357          357                   1,828                   -                 1,828                 29.0  %        25.8  %                      5.1
1982 Fund                                                     328          328                   1,291                   -                 1,291                 48.1  %        39.2  %                      3.9
1984 Fund                                                   1,000        1,000                   5,964                   -                 5,964                 34.5  %        28.9  %                      6.0
1986 Fund                                                     672          672                   9,081                   -                 9,081                 34.4  %        28.9  %                     13.5
1987 Fund                                                   6,130        6,130                  14,949                   -                14,949                 12.1  %         8.9  %                      2.4
1993 Fund                                                   1,946        1,946                   4,143                   -                 4,143                 23.6  %        16.8  %                      2.1
1996 Fund                                                   6,012        6,012                  12,477                   -                12,477                 18.0  %        13.3  %                      2.1
Subtotal - Legacy Funds                                    16,475       16,475                  50,269                   -                50,269                 26.1  %        19.9  %                      3.1
Included Funds
European Fund (1999)                                        3,085        3,085                   8,758                   -                 8,758                 26.9  %        20.2  %                      2.8
Millennium Fund (2002)                                      6,000        6,000                  14,123                   6                14,129                 22.0  %        16.1  %                      2.4
European Fund II (2005)                                     5,751        5,751                   8,507                  34                 8,541                  6.1  %         4.5  %                      1.5
2006 Fund (2006)                                           17,642       17,309                  35,557               1,708                37,265                 11.9  %         9.3  %                      2.2
Asian Fund (2007)                                           3,983        3,974                   8,728                  22                 8,750                 18.9  %        13.7  %                      2.2
European Fund III (2008)                                    5,509        5,360                  10,604                 129                10,733                 16.5  %        11.3  %                      2.0
E2 Investors (Annex Fund) (2009)                              196          196                     200                   -                   200                  0.6  %         0.5  %                      1.0
China Growth Fund (2010)                                    1,010        1,010                   1,056                 243                 1,299                  6.1  %         2.0  %                      1.3
Natural Resources Fund (2010)                                 887          887                     123                  48                   171                (25.9) %       (27.8) %                      0.2
Global Infrastructure Investors (2011)                      1,040        1,050                   2,228                   -                 2,228                 17.6  %        15.6  %                      2.1
North America Fund XI (2012)                                8,718        9,769                  20,199               6,197                26,396                 24.8  %        20.2  %                      2.7
Asian Fund II (2013)                                        5,825        6,839                   5,946               2,778                 8,724                  7.0  %         5.3  %                      1.3
Real Estate Partners Americas (2013)                        1,229        1,020                   1,405                  61                 1,466                 16.4  %        11.5  %                      1.4
Energy Income and Growth Fund (2013)                        1,974        1,974                     956                 716                 1,672                 (5.7) %        (8.3) %                      0.8
Global Infrastructure Investors II (2014)                   3,039        3,163                   4,246               1,767                 6,013                 19.6  %        16.9  %                      1.9
European Fund IV (2015)                                     3,513        3,577                   5,122               2,473                 7,595                 24.3  %        18.9  %                      2.1
Real Estate Partners Europe (2015)                            707          654                     609                 334                   943                 14.0  %         9.9  %                      1.4
Next Generation Technology Growth Fund (2016)                 659          666                     834               1,050                 1,884                 34.0  %        28.9  %                      2.8
Health Care Strategic Growth Fund (2016)                    1,331        1,081                     196               1,472                 1,668                 27.2  %        17.3  %                      1.5
Americas Fund XII (2017)                                   13,500       12,292                   4,948              20,105                25,053                 32.2  %        26.3  %                      2.0
Real Estate Credit Opportunity Partners (2017)              1,130        1,008                     371               1,039                 1,410                  9.9  %         8.5  %                      1.4
Core Investment Vehicles (2017)                            24,657       11,627                     712              18,525                19,237                 22.8  %        21.5  %                      1.7
Asian Fund III (2017)                                       9,000        7,404                   4,199              11,949                16,148                 38.3  %        30.3  %                      2.2
Real Estate Partners Americas II (2017)                     1,921        1,892                   2,446                 820                 3,266                 32.2  %        27.0  %                      1.7
Global Infrastructure Investors III (2018)                  7,164        5,764                   1,241               5,634                 6,875                 11.2  %         7.9  %                      1.2
Global Impact Fund (2019)                                   1,242        1,042                     168               1,466                 1,634                 39.4  %        28.9  %                      1.6
European Fund V (2019)                                      6,328        4,793                     782               5,395                 6,177                 19.4  %        14.4  %                      1.3
Energy Income and Growth Fund II (2019)                       994        1,187                     193               1,835                 2,028                 42.8  %        39.2  %                      1.7
Asia Real Estate Partners (2019)                            1,682          405                       7                 561                   568                 40.6  %        18.7  %                      1.4
Next Generation Technology Growth Fund II (2019)            2,088        1,688                     259               2,210                 2,469                 33.4  %        25.8  %                      1.5
Real Estate Credit Opportunity Partners II (2019)             950          560                     102                 564                   666                 13.3  %        11.9  %                      1.2
Asia Pacific Infrastructure Investors (2020)                3,792        2,041                     323               1,952                 2,275                 18.4  %        10.4  %                      1.1
Asian Fund IV (2020)                                       14,735        3,423                      41               3,635                 3,676                 10.1  %        (1.7) %                      1.1
Real Estate Partners Europe II (2020)                       2,065        1,326                     184               1,432                 1,616                 30.0  %        19.6  %                      1.2
Real Estate Partners Americas III (2021) (3)                4,253        2,214                      92               2,490                 2,582                    -              -                           -
Health Care Strategic Growth Fund II (2021) (3)             3,789          132                       -                 154                   154                    -              -                           -
Global Infrastructure Investors IV (2021) (3)              16,603        2,886                       -               3,053                 3,053                    -              -                           -
North America Fund XIII (2021) (3)                         18,400        3,065                       -               3,096                 3,096                    -              -                           -
European Fund VI (2022) (3)                                 7,120            -                       -                   -                     -                    -              -                           -
Global Impact Fund II (2022) (3)                            1,312            -                       -                   -                     -                    -              -                           -
Asia Pacific Infrastructure Investors II (2022)
(3)                                                         4,122            -                       -                   -                     -                    -              -                           -
Subtotal - Included Funds                                 218,945      138,114                 145,465             104,953               250,418                 16.6  %        12.8  %                      1.9

All Funds                                         $       235,420    $ 154,589          $      195,734          $  104,953          $    300,687                 25.6  %        18.8  %                      2.0


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(1)These funds were not contributed to KKR as part of 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.

(2)Where commitments are euro-denominated, such amounts have been converted into
U.S. dollars based on (i) the foreign exchange rate at the date of purchase for
each investment and (ii) the exchange rate prevailing on June 30, 2022, in the
case of unfunded commitments.

(3)The gross IRR, net IRR and gross multiple of invested capital are calculated
for our investment funds that made their first investment at least 24 months
prior to June 30, 2022. We therefore have not calculated gross IRRs, net IRRs
and gross multiples of invested capital with respect to these funds.

(4)An investment is considered realized when it has been disposed of or has
otherwise generated disposition proceeds or current income that has been
distributed by the relevant fund.

(5)IRRs measure the aggregate annual compounded returns generated by a fund's
investments over a holding period. Net IRRs are calculated after giving effect
to the allocation of realized and unrealized carried interest and the payment of
any applicable management fees and organizational expenses. Gross IRRs are
calculated before giving effect to the allocation of realized and unrealized
carried interest and the payment of any applicable management fees and
organizational expenses.

The gross multiples of invested capital measure the aggregate value generated by
a fund's investments in absolute terms. Each multiple of invested capital is
calculated by adding together the total realized and unrealized values of a
fund's investments and dividing by the total amount of capital invested by the
fund. Such amounts do not give effect to the allocation of realized and
unrealized carried interest or the payment of any applicable management fees or
organizational expenses.

KKR's private equity and real assets funds may utilize third-party financing
facilities to provide liquidity to such funds. The above net and gross IRRs are
calculated from the time capital contributions are due from fund investors to
the time fund investors receive a related distribution from the fund, and the
use of such financing facilities generally decreases the amount of time that
would otherwise be used to calculate IRRs, which tends to increase IRRs when
fair value grows over time and decrease IRRs when fair value decreases over
time. KKR's private equity and real assets funds also generally provide in
certain circumstances, which vary depending on the relevant fund documents, for
a portion of capital returned to investors to be restored to unused commitments
as recycled capital. For KKR's private equity and real assets funds that have a
preferred return, we take into account recycled capital in the calculation of
IRRs and multiples of invested capital because the calculation of the preferred
return includes the effect of recycled capital. For KKR's private equity and
real assets funds that do not have a preferred return, we do not take recycled
capital into account in the calculation of IRRs and multiples of invested
capital. The inclusion of recycled capital generally causes invested and
realized amounts to be higher and IRRs and multiples of invested capital to be
lower than had recycled capital not been included. The inclusion of recycled
capital would reduce the composite net IRR of all Included Funds by 0.1% and the
composite net IRR of all Legacy Funds by 0.5% and would reduce the composite
multiple of invested capital of Included Funds by less than 0.1 and the
composite multiple of invested capital of Legacy Funds by 0.4.


Asset Management – Credit and Liquid Strategies

Through our Credit and Liquid Strategies business line, we report our credit and
hedge funds platforms on a combined basis.

Our credit business invests capital in a broad range of corporate debt and
collateral-backed investments across asset classes and capital structures. Our
credit strategies are managed by KKR Credit Advisors (US) LLC, which is an
SEC-registered investment adviser, KKR Credit Advisors (Ireland) Unlimited
Company, which is regulated by the Central Bank of Ireland ("CBI"), KKR Credit
Advisors (EMEA) LLP, which is regulated by the Financial Conduct Authority, and
KKR Credit Advisors (Singapore) Pte. Ltd., which is regulated by the Monetary
Authority of Singapore and also registered with the SEC. We also jointly own
with a third party FS/KKR Advisor, LLC, which is the investment adviser for FS
KKR Capital Corp. (NYSE: FSK) ("FSK"), a publicly listed business development
company (a "BDC").

Our hedge funds platform consists of strategic partnerships with third-party
hedge fund managers in which KKR owns a minority stake. Our hedge fund
partnerships offer a range of alternative investment strategies, including
long/short equity, hedge fund-of-funds and energy credit investments.

Credit

Our credit business pursues investments in two principal investment strategies:
leveraged credit and alternative credit.

Leveraged Credit. Our leveraged credit strategy is principally directed at
investing in leveraged loans, high-yield bonds, opportunistic credit, structured
credit and revolving credit investments. Our opportunistic credit strategy seeks
to deploy capital across investment themes that take advantage of credit market
dislocations, spanning asset types and liquidity profiles. Our revolving credit
strategy invests in senior secured revolving credit facilities.

Alternative Credit. Our alternative credit strategy consists of our private
credit strategies and debt and equity investments sourced by our strategic
investments group (“SIG”).

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•Private Credit. Our private credit strategies focus on privately or directly
originated and negotiated transactions. These strategies include direct lending,
mezzanine debt and asset-based finance. Through our direct lending strategy, we
seek to make investments in primarily senior debt financings for middle-market
companies. Through our mezzanine debt strategy, investments typically consist of
subordinated debt, which generates a current yield, coupled with marginal equity
exposure for additional upside potential. Our asset-based finance strategy
focuses on portfolios of financial loans and loans backed by hard assets.

•  SIG. Our SIG strategy seeks to pursue investments in corporate credit and
asset or real estate-backed credit where market volatility or other investment
themes have created the opportunity to generate outsized returns with
downside-protected securities. These investments may include stressed or
distressed investments (including post-restructuring equity), control-oriented
opportunities, rescue financing (debt or equity investments made to address
covenant, maturity or liquidity issues), debtor-in-possession or exit financing,
and other event-driven investments in debt or equity.

Performance

The following table presents information regarding the larger leveraged credit
strategies managed by KKR from inception to June 30, 2022. The information
presented below is not intended to be representative of any past or future
performance for any particular period other than the period presented below.
Past performance is no guarantee of any future result.

Leveraged Credit Strategies: Inception-to-Date Annualized Gross Performance vs.
                             Benchmark by Strategy
                                                                                                                                                    Benchmark
Leveraged Credit                                                  Gross               Net                                                             Gross
Strategy                         Inception Date                  Returns            Returns                      Benchmark (1)                       Returns
Bank Loans Plus High                                                                                 65% S&P/LSTA Loan Index, 35% BoAML HY
Yield                               Jul 2008                        6.45  %            5.85  %       Master II Index (2)                                  5.08  %
                                                                                                     50% S&P/LSTA Loan Index, 50% BoAML HY
Opportunistic Credit (3)            May 2008                       10.08  %            8.40  %       Master II Index (3)                                  5.25  %
Bank Loans                          Apr 2011                        4.69  %            4.12  %       S&P/LSTA Loan Index (4)                              3.65  %
High-Yield                          Apr 2011                        5.24  %            4.67  %       BoAML HY Master II Index (5)                         4.58  %

European Leveraged Loans                                                                             CS Inst West European Leveraged Loan
(6)                                 Sep 2009                        3.86  %            3.34  %       Index (7)                                            2.97  %

European Credit                                                                                      S&P European Leveraged Loans (All
Opportunities (6)                   Sept 2007                       4.47  %            3.64  %       Loans) (8)                                           3.47  %




(1)The benchmarks referred to herein include the S&P/LSTA Leveraged Loan Index
(the "S&P/LSTA Loan Index"), S&P/LSTA U.S. B/BB Ratings Loan Index (the
"S&P/LSTA BB-B Loan Index"), the Bank of America Merrill Lynch High Yield Master
II Index (the "BoAML HY Master II Index"), the BofA Merrill Lynch BB-B US High
Yield Index (the "BoAML HY BB-B Constrained"), the Credit Suisse Institutional
Western European Leveraged Loan Index (the "CS Inst West European Leveraged Loan
Index"), and S&P European Leveraged Loans (All Loans). The S&P/LSTA Loan Index
is a daily tradable index for the U.S. loan market that seeks to mirror the
market-weighted performance of the largest institutional loans that meet certain
criteria. The BoAML HY Master II Index is an index for high-yield corporate
bonds. It is designed to measure the broad high-yield market, including
lower-rated securities. The CS Inst West European Leveraged Loan Index contains
only institutional loan facilities priced above 90, excluding TL and TLa
facilities and loans rated CC, C or are in default. The S&P European Leveraged
Loan Index reflects the market-weighted performance of institutional leveraged
loan portfolios investing in European credits. While the returns of our
leveraged credit strategies reflect the reinvestment of income and dividends,
none of the indices presented in the chart above reflect such reinvestment,
which has the effect of increasing the reported relative performance of these
strategies as compared to the indices. Furthermore, these indices are not
subject to management fees, incentive allocations, or expenses.

(2)Performance is based on a blended composite of Bank Loans Plus High Yield
strategy accounts. The benchmark used for purposes of comparison for the Bank
Loans Plus High Yield strategy is based on 65% S&P/LSTA Loan Index and 35% BoAML
HY Master II Index.

(3)The Opportunistic Credit strategy invests in high-yield securities and
corporate loans with no preset allocation. The benchmark used for purposes of
comparison for the Opportunistic Credit strategy presented herein is based on
50% S&P/LSTA Loan Index and 50% BoAML HY Master II Index. Funds within this
strategy may utilize third-party financing facilities to enhance investment
returns. In cases where financing facilities are used, the amounts drawn on the
facility are deducted from the assets of the fund in the calculation of net
asset value, which tends to increase returns when net asset value grows over
time and decrease returns when net asset value decreases over time.

(4)Performance is based on a composite of portfolios that primarily invest in
leveraged loans. The benchmark used for purposes of comparison for the Bank
Loans strategy is based on the S&P/LSTA Loan Index.

(5)Performance is based on a composite of portfolios that primarily invest in
high-yield securities. The benchmark used for purposes of comparison for the
High Yield strategy is based on the BoAML HY Master II Index.

(6)The returns presented are calculated based on local currency.

(7)Performance is based on a composite of portfolios that primarily invest in
higher quality leveraged loans. The benchmark used for purposes of comparison
for the European Leveraged Loans strategy is based on the CS Inst West European
Leveraged Loan Index.

(8)Performance is based on a composite of portfolios that primarily invest in
European institutional leveraged loans. The benchmark used for purposes of
comparison for the European Credit Opportunities strategy is based on the S&P
European Leveraged Loans (All Loans) Index.

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The following table presents information regarding our credit investment funds
where investors are subject to capital commitments from inception to June 30,
2022. The information presented below is not intended to be representative of
any past or future performance for any particular period other than the period
presented below. Past performance is no guarantee of any future result.

                Alternative Credit Strategies: Fund Performance
                                                                                        Amount                                 Fair Value of Investments
                                                                                                                                                                                                                                                                       Gross
                                                                                                                                                                                                                                             Multiple of              Accrued
Credit and Liquid Strategies                                                                                                                                                Total              Gross                Net                   Invested Capital            Carried
Investment Funds                               Inception Date              Commitment           Invested (1)               Realized (1)               Unrealized            Value             IRR (2)             IRR (2)                        (3)                  Interest
                                                                                                                      ($ in Millions)
Dislocation Opportunities Fund                            May 2020       $     2,967          $       2,286          $         538                  $     2,080          $  2,618                14.4  %             11.4  %                        1.1            $        38
Special Situations Fund II                                Dec 2014             3,525                  3,241                  2,068                        1,863             3,931                 5.5  %              3.5  %                        1.2                      -
Special Situations Fund                                   Dec 2012             2,274                  2,273                  1,700                          390             2,090                (1.9) %             (3.8) %                        0.9                      -
Mezzanine Partners                                        Mar 2010             1,023                    990                  1,157                          131             1,288                 8.9  %              5.6  %                        1.3                    (20)
Asset-Based Finance Partners                              Aug 2020             1,959                      -                      -                            -                 -                    N/A                 N/A                             N/A                 -
Private Credit Opportunities
Partners II                                               Dec 2015             2,245                  1,738                    674                        1,375             2,049                 6.1  %              4.4  %                        1.2                      -
Lending Partners III                                      Apr 2017             1,498                    741                    356                          796             1,152                15.9  %             13.1  %                        1.6                     31
Lending Partners II                                       Jun 2014             1,336                  1,179                  1,149                          131             1,280                 3.0  %              1.5  %                        1.1                      -
Lending Partners                                          Dec 2011               460                    419                    451                           19               470                 3.5  %              1.9  %                        1.1                      -
Lending Partners Europe II                                Jun 2019               837                    551                     52                          552               604                17.4  %             12.6  %                        1.1                      2
Lending Partners Europe                                   Mar 2015               848                    662                    379                          249               628                (1.8) %             (4.3) %                        0.9                      -
Asia Credit                                               Dec 2020             1,084                    271                      -                          280               280                    N/A                 N/A                             N/A                 -
Other Alternative Credit Vehicles                          Various            13,056                  6,654                  4,800                        3,947             8,747                    N/A                 N/A                             N/A                63

All Funds                                                                $    33,112          $      21,005          $      13,324                  $    11,813          $ 25,137                                                                                  $       114

(1)Recycled capital is excluded from the amounts invested and realized.

(2)These credit funds utilize third-party financing facilities to provide
liquidity to such funds, and in such event IRRs are calculated from the time
capital contributions are due from fund investors to the time fund investors
receive a related distribution from the fund. The use of such financing
facilities generally decreases the amount of invested capital that would
otherwise be used to calculate IRRs, which tends to increase IRRs when fair
value grows over time and decrease IRRs when fair value decreases over time.
IRRs measure the aggregate annual compounded returns generated by a fund's
investments over a holding period and are calculated taking into account
recycled capital. Net IRRs presented are calculated after giving effect to the
allocation of realized and unrealized carried interest and the payment of any
applicable management fees. Gross IRRs are calculated before giving effect to
the allocation of carried interest and the payment of any applicable management
fees.

(3)The multiples of invested capital measure the aggregate value generated by a
fund's investments in absolute terms. Each multiple of invested capital is
calculated by adding together the total realized and unrealized values of a
fund's investments and dividing by the total amount of capital invested by the
investors. The use of financing facilities generally decreases the amount of
invested capital that would otherwise be used to calculate multiples of invested
capital, which tends to increase multiples when fair value grows over time and
decrease multiples when fair value decreases over time. Such amounts do not give
effect to the allocation of any realized and unrealized returns on a fund's
investments to the fund's general partner pursuant to a carried interest or the
payment of any applicable management fees and are calculated without taking into
account recycled capital.


Hedge Funds

Our hedge fund platform consists of strategic partnerships with third-party
hedge fund managers in which KKR owns a minority stake. This principally
consists of a 39.6% interest in Marshall Wace LLP (together with its affiliates,
"Marshall Wace"), a global alternative investment manager specializing in
long/short equity products. We also own (i) a 39.9% interest in PAAMCO Prisma
Holdings, LLC ("PAAMCO Prisma"), an investment manager focused on liquid
alternative investment solutions, including hedge fund-of-fund portfolios, and
(ii) a 24.9% interest in BlackGold Capital Management L.P. ("BlackGold"), a
credit-oriented investment manager focused on energy and hard asset investments.


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Credit and Liquid Strategies AUM

  As of June 30, 2022, our Credit and Liquid Strategies business line had $205.4
billion of AUM, comprised of $97.2 billion of assets managed in our leveraged
credit strategies, $71.3 billion of assets managed in our private credit
strategy, and $8.2 billion of assets managed in our SIG strategy, $27.0 billion
of assets managed through our hedge fund platform, and $1.7 billion of assets
managed in other credit and liquid strategies. We manage $90.9 billion of credit
investments for our Global Atlantic insurance companies, which are included in
the amounts described in the preceding sentence. Our BDC has approximately $17.0
billion in assets under management, which is reflected in the AUM of our
leveraged credit and private credit strategies above. We report all of the
assets under management of our BDC in our AUM, but we report only a pro rata
portion of the assets under management of our hedge fund partnerships based on
our percentage ownership in them.

                                                                                        Typical                 Incentive Fee /
                                                                                       Management                   Carried                 Preferred                    Duration
($ in millions)                                 AUM               FPAUM                 Fee Rate                   Interest                  Return                     of Capital
Leveraged Credit:
Leveraged Credit SMAs/Funds                 $  71,442          $  69,292              0.15% - 1.10%               Various (1)              Various (1)            Subject to redemptions
CLOs                                           23,983             23,983              0.40% - 0.50%               Various (1)              Various (1)               10-14 Years (2)
Total Leveraged Credit                         95,425             93,275

Alternative Credit: (3)
Private Credit                                 57,646             51,083            0.30% - 1.50% (4)           10.00 - 20.00%            5.00 - 8.00%                8-15 Years (2)
SIG                                             8,265              4,512              0.50% - 1.75%             10.00 - 20.00%            7.00 - 12.00%               7-15 Years (2)
Total Alternative Credit                       65,911             55,595

Hedge Funds (5)                                27,026             27,026              0.50% - 2.00%               Various (1)              Various (1)            Subject to redemptions
BDCs (6)                                       17,000             17,000                  0.60%                      8.00%                    7.00%                     Indefinite

Total                                       $ 205,362          $ 192,896




(1)Certain funds and CLOs are subject to a performance fee in which the manager
or general partner of the funds share up to 20% of the net profits earned by
investors in excess of performance hurdles (generally tied to a benchmark or
index) and subject to a provision requiring the funds and vehicles to regain
prior losses before any performance fee is earned.

(2)Duration of capital is measured from inception. Inception dates for CLOs were
between 2013 and 2022 and for separately managed accounts and funds investing in
alternative credit strategies from 2009 through 2022.

(3)Our alternative credit funds generally have investment periods of two to five
years and our newer alternative credit funds generally earn management fees on
invested capital throughout their lifecycle.

(4)Lower fees on uninvested capital in certain vehicles.

(5)Hedge Funds represent KKR’s pro rata portion of AUM and FPAUM of our hedge
fund partnerships.

(6)Consists of FSK. We report all of the assets under management of this BDC in
our AUM and FPAUM.

Asset Management – Capital Markets

Our Capital Markets business line is comprised of our global capital markets
business, which is integrated with KKR's other asset management business lines,
and serves our firm, our funds, our 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 that may result
in the firm receiving fees, including underwriting, placement, transaction and
syndication fees, commissions, underwriting discounts, interest payments and
other compensation, which may be payable in cash or securities, in respect of
the activities described above.






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Our capital markets business underwrites credit facilities and arranges loan
syndications and participations. When we are sole arrangers of a credit
facility, we may advance amounts to the borrower on behalf of other lenders,
subject to repayment. When we underwrite an offering of securities on a firm
commitment basis, we commit to buy and sell an issue of securities and generate
revenue by purchasing the securities at a discount or for a fee. When we act in
an agency capacity or best efforts basis, we generate revenue for arranging
financing or placing securities with capital markets investors. We may also
provide issuers with capital markets advice on security selection, access to
markets, marketing considerations, securities pricing, and other aspects of
capital markets transactions in exchange for a fee. Our capital markets business
also provides syndication services in respect of co-investments in transactions
participated in by KKR funds or third-party clients, which may entitle the firm
to receive syndication fees, management fees and/or a carried interest.

The capital markets business has a global footprint, with local presence and
licenses to carry out certain broker-dealer activities in various countries in
North America, Europe, Asia-Pacific and the Middle East. Our flagship capital
markets subsidiary is KKR Capital Markets LLC, an SEC-registered broker-dealer
and a member of the Financial Industry Regulatory Authority ("FINRA").

Asset Management – Principal Activities

Through our Principal Activities business line, we manage the firm's own assets
on our firm's balance sheet and deploy capital to support and grow our Private
Equity, Real Assets, Credit and Liquid Strategies, and Credit Markets business
lines.

Typically, the funds that we manage in our Private Equity, Real Assets and
Credit and Liquid Strategies business lines contractually require us, as general
partner of the funds, to make sizable capital commitments. We believe making
general partner commitments assists us in raising new funds from limited
partners by demonstrating our conviction in a given fund's strategy. Our
commitments to fund capital also occurs where we are the holder of the
subordinated notes or the equity tranche of investment vehicles that we sponsor,
including structured transactions. We also use our balance sheet to bridge
investment activity during fundraising, for example by funding investments for
new funds and acquiring investments to establish a track record for new
investment strategies. We also use our own capital to bridge capital selectively
for our funds' investments or finance strategic transactions, although the
financial results of an acquired business may be reported in our other business
lines.

Our Principal Activities business line also provides the required capital to
fund the various commitments of our Capital Markets business line when
underwriting or syndicating securities, or when providing term loan commitments
for transactions involving our portfolio companies and for third parties. Our
Principal Activities business line also holds assets that are utilized to
satisfy regulatory requirements for our Capital Markets business line and risk
retention requirements for certain investment vehicles.

We also make opportunistic investments through our Principal Activities business
line, which include co-investments alongside the funds we manage as well as
Principal Activities investments that do not involve our funds.

We endeavor to use our balance sheet strategically and opportunistically to
generate an attractive risk-adjusted return on equity in a manner that is
consistent with our fiduciary duties, in compliance with applicable laws, and
consistent with our one-firm approach.

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The chart below presents the holdings of our Principal Activities business line
by asset class as of June 30, 2022.

                          Holdings by Asset Class (1)
                     [[Image Removed: kkr-20220630_g2.jpg]]
(1)General partner commitments in our funds are included in the various asset
classes shown above. Assets and revenues of other asset managers with which KKR
has formed strategic partnerships where KKR does not hold more than 50%
ownership interest are not included in our Principal Activities business line
but are reported in the financial results of our other business lines. Private
Equity includes our investments in private equity funds, co-investments
alongside such KKR-sponsored private equity funds, certain core equity
investments, and other opportunistic investments. Equity investments in other
asset classes, such as real estate, special situations and energy appear in
these other asset classes. Other Credit consists of certain leveraged credit and
specialty finance strategies.

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Insurance

Our insurance business is operated by Global Atlantic, which we acquired on
February 1, 2021. As of June 30, 2022, KKR owns a 61.5% economic interest in
Global Atlantic with the balance of Global Atlantic owned by third-party
investors and Global Atlantic employees. Following the Global Atlantic
acquisition, Global Atlantic continues to operate as a separate business with
its existing brands and management team. Since the first quarter of 2021, we
have presented Global Atlantic's financial results as a separate reportable
segment.

Global Atlantic is a leading U.S. retirement and life insurance company that
provides a broad suite of protection, legacy and savings products to customers
and reinsurance solutions to clients across individual and institutional
markets. Global Atlantic focuses on target markets that it believes supports
issuing products that have attractive risk and return characteristics. These
markets allow Global Atlantic to leverage its strength in distribution and to
deploy capital opportunistically across market conditions.

Global Atlantic primarily offers individual market customers fixed-rate
annuities, fixed-indexed annuities, and targeted life products through a network
of banks, broker-dealers, and insurance agencies. Global Atlantic provides its
institutional market clients customized reinsurance solutions, including block,
flow and pension risk transfer ("PRT") reinsurance, as well as funding
agreements. Subject to changes in asset values, Global Atlantic's assets
generally increase when individual market sales and reinsurance transactions
exceed run-off of in-force policies. Global Atlantic primarily generates income
by earning a spread between its investment income and the cost of policyholder
benefits. As of June 30, 2022, Global Atlantic served approximately three
million policyholders.

Global Atlantic inflows are derived from new business production in its
individual and institutional markets channels. Global Atlantic expects new
business production from its individual markets channel and certain
institutional markets products to be largely consistent quarter over quarter
while exhibiting growth over time, subject to market and business risks. In
contrast, Global Atlantic expects block reinsurance transactions generated in
the institutional markets channel to be episodic rather than steady quarter over
quarter. Similarly, funding agreements issued in the funding agreement backed
note ("FABN") program are subject to capital markets conditions and are not
expected to be consistent quarter over quarter.

The following table represents Global Atlantic's new business volumes by
business and product for the three and six months ended June 30, 2022 and 2021:

                                          Three Months Ended June 30,                   Six Months Ended June 30,
                                          2022                   2021                   2022                 2021(4)
($ in millions)
Individual market channel:
Fixed-rate annuities                $        1,481          $      1,545          $       2,520          $      2,583
Fixed-indexed annuities                      1,117                   901                  2,021                 1,496
Variable annuities                              11                    15                     22                    23

Total retirement products(1) $ 2,609 $ 2,461

      $       4,563          $      4,102

Life insurance products             $           12          $         11          $          19          $         17

Preneed life                                    73                    62                    138                   100

Institutional market channel:
Block                                            5                    10                  2,782                 1,089
Flow & pension risk transfer                 2,143                 1,629                  3,842                 2,393
Funding agreements(3)                          900                   700                  2,000                   700
Total institutional
channel(2)                          $        3,048          $      2,339          $       8,624          $      4,182


_________________

(1)New business volumes in individual markets are referred to as sales. In
Global Atlantic’s individual market channel, sales of annuities include all
money paid into new and existing contracts. Individual channel sales of life
insurance products are based on commissionable premium and individual market

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channel sales for preneed life are based on the face amount of insurance. Life
insurance product sales do not include the recurring premiums that policyholders
may pay over time.
(2)New business volume from Global Atlantic's institutional market channel is
based on the assets assumed, net of any ceding commission, and is gross of any
retrocessions to investment vehicles that participate in qualifying reinsurance
transactions sourced by Global Atlantic and to other third party reinsurers.
(3)Funding agreement new business volumes represents funding agreements issued
in connection with our FABN program only.
(4)For the six month period ended June 30, 2021, the results of Global
Atlantic's insurance operations included in our condensed consolidated results
of operations are from February 1, 2021 through June 30, 2021.

The table below represents a breakdown of Global Atlantic’s policy liabilities
by business and product type as of June 30, 2022, separated by reserves
originated through its individual and institutional markets.

                                                                               Reserves as of June 30, 2022
                                 Individual            Institutional
                                   market                market(4)               Total              Ceded            Total, net         Percentage of total
                                                                    ($ in millions, except percentages, if applicable)
Fixed-rate annuity             $     22,586          $        44,282          $  66,868          $ (17,362)         $   49,506                      48.4  %
Fixed-indexed annuity                21,663                    7,253             28,916             (3,227)             25,689                      20.9  %
Variable annuity                      2,751                    3,411              6,162               (646)              5,516                       4.5  %
Indexed universal life               12,126                        -             12,126                (72)             12,054                       8.8  %
Preneed life                          2,851                        -              2,851                  -               2,851                       2.1  %
Other life insurance(1)               2,007                   10,246             12,253             (3,772)              8,481                       8.9  %
Funding agreements(2)                 2,196                    5,554              7,750                  -               7,750                       5.6  %
Closed block                              -                    1,137              1,137             (1,092)                 45                       0.8  %
Other corporate(3)                        -                       48                 48                (47)                  1                         -  %
Total reserves                 $     66,180          $        71,931          $ 138,111          $ (26,218)         $  111,893                     100.0  %

Total general account $ 63,697 $ 70,051

     133,748          $ (26,218)         $  107,530                      96.8  %
Total separate account                2,483                    1,880              4,363                  -               4,363                       3.2  %
Total reserves                 $     66,180          $        71,931          $ 138,111          $ (26,218)         $  111,893                     100.0  %


_________________
(1)"Other life insurance" includes universal life, term and whole life insurance
products.
(2)"Funding agreements" includes funding agreements associated with Federal Home
Loan Bank advances and under our FABN program.
(3)"Other corporate" primarily includes accident & health reserves that Global
Atlantic assumed as part of a reinsurance transaction in 2009.
(4)Institutional market reserves are sourced using customized reinsurance
solutions such as block, flow and PRT. As of June 30, 2022, reserves sourced
through for block, flow and PRT transactions were $50.3 billion, $8.9 billion,
and $4.1 billion, respectively.

Business Environment

Economic and Market Conditions

Impact of COVID-19. The outbreak of COVID-19 continues to impact various
countries throughout the world. For a description of the impact that COVID-19
had and may in the future have on our business, see "Risk Factors-Risks Related
to Our Business-COVID-19 continues to impact the United States and other
countries throughout the world, and it has caused and may further cause
disruptions to our business and adversely affect our financial results" and
"Risk Factors-Risks Related to the Assets We Manage-Our investments are impacted
by various economic conditions and events outside of our control that are
difficult to quantify or predict, which may have a significant impact on the
valuation of our investments and, therefore, on the investment income we realize
and our results of operations and financial condition" in our Annual Report.

Economic Conditions. As a global investment firm, we are affected by financial
and economic conditions globally. Global and regional economic conditions,
including those caused by the COVID-19 pandemic, have substantial impact on our
financial condition and results of operations, impacting the values of the
investments we make, our ability to exit these investments profitably, our
ability to raise capital from investors, and our ability to make new
investments. Financial and economic conditions in the United States, European
Union, China, Japan, and other major economies are significant contributors to
the global economy.

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During the quarter ended June 30, 2022, the United States showed signs of
slowing economic activity, potentially indicating the early stages of a
recession. Inflation continued to present a headwind for the U.S. economy. In
keeping with its stated intention to bring down inflation, the U.S. Federal
Reserve pursued a more restrictive monetary policy. The Federal Reserve raised
interest rates by 50 basis points in May, 75 basis points in June and 75 basis
points in July, leading to increased market volatility. In the United States,
real GDP is estimated to have expanded at a 0.4% seasonally-adjusted annualized
rate in the quarter ended June 30, 2022, after contracting at a -1.6%
seasonally-adjusted annualized rate in the quarter ended March 31, 2022; the
U.S. unemployment rate was 3.6% as of June 30, 2022, unchanged from March 31,
2022; the U.S. consumer price index rose 9.1% year-over-year as of June 30,
2022, up from 8.5% year-over-year as of March 31, 2022; the U.S. core consumer
price index rose 5.9% on a year-over-year basis as of June 30, 2022, down from
6.5% on a year-over-year basis as of March 31, 2022; and the effective federal
funds rate set by the U.S. Federal Reserve was 1.6% as of June 30, 2022, up from
0.3% as of March 31, 2022.

During the quarter ended June 30, 2022, the Euro Area (also known as the
Eurozone) economy experienced slowing growth and the potential for recession for
countries in the Euro Area is generally high. The European Central Bank (ECB)
has signaled its intention to pursue a more restrictive monetary policy. Euro
Area real GDP is estimated to have risen by 0.1% on a seasonally-adjusted
quarter-over-quarter basis in the quarter ended June 30, 2022, lower than the
0.6% increase recorded in the quarter ended March 31, 2022. In addition, Euro
Area unemployment was estimated to be 6.6% as of June 30, 2022, down from 6.8%
as of March 31, 2022; euro area core inflation was 3.7% as of June 30, 2022, up
from 3.0% as of March 31, 2022; and the short-term benchmark interest rate set
by the European Central Bank was 0.0% as of June 30, 2022, unchanged from March
31, 2022. As of June 30, 2022, we have no investments in any portfolio companies
whose executive headquarters are located in Russia, Ukraine or Belarus, and we
believe that the direct exposure of our investment portfolio to Russia, Ukraine
and Belarus is insignificant.

During the quarter ended June 30, 2020, the Chinese economy contracted due in
part from the ongoing slowdown in China's property sector and the effects of the
government's zero-COVID policies. Real GDP in China fell by 2.6% on a
seasonally-adjusted quarter-over-quarter basis in the quarter ended June 30,
2022, compared to growth of 1.4% reported for the quarter ended March 31, 2022.
Estimated core inflation in China was 1.0% on a year-over-year basis as of June
30, 2022, down from 1.1% on a year-over-year basis as of March 31, 2022.

In Japan, the economic recovery from COVID-19 has slowed, with higher energy
costs and significant volatility in currency markets presenting headwinds to GDP
growth. In Japan, real GDP growth for the quarter ended June 30, 2022 is
estimated to have been 1.0% on a seasonally-adjusted annualized basis, unchanged
from the quarter ended March 31, 2022; core inflation rose to 0.2% on a
year-over-year basis as of June 30, 2022, up from -1.6% as of March 31, 2022;
and the short-term benchmark interest rate set by the Bank of Japan was -0.1% as
of June 30, 2022, unchanged from March 31, 2022.

These and other key issues could have repercussions across regional and global
financial markets, which could adversely affect the valuations of our
investments. In particular, in response to persistent inflationary pressure and
central bank policy designed to combat inflation, short- and medium-term
interest rates may continue to rise, which may adversely impact equity and
credit markets and in turn both increase volatility in equity and debt markets
and reduce economic growth. As noted above, the U.S. Federal Reserve has
recently raised interest rates and has indicated that it is prepared to take
decisive action to manage inflation, including raising interest rates further
and shrinking the size of its balance sheet. In addition, commodity prices are
generally expected to rise in inflationary environments, and foreign exchange
rates are often affected by countries' monetary and fiscal responses to
inflationary trends. The Russia-Ukraine conflict, including the sanctions
imposed in response to Russia's invasion of Ukraine, have exacerbated and may
further exacerbate these issues and trends. Protectionist policies have also
increased globally as a result of the Russian invasion of Ukraine. Other key
issues include (i) further developments regarding infectious diseases, including
COVID-19, which may prolong the adverse economic impact of the COVID-19 pandemic
on the U.S. and global economies, including supply chain disruptions that
promote cost inflation for critical goods and labor shortages, (ii) geopolitical
uncertainty such as U.S.-China relations, (iii) political uncertainty caused by,
among other things, economic nationalist sentiments, tensions surrounding
socioeconomic inequality issues, and partisan sentiments in the United States,
all of which have potentially global ramifications with regards to policy, (iv)
regulatory changes regarding, for example, taxation, international trade,
cross-border investments, immigration, stimulus programs and rising levels of
debt, (v) increased volatility and/or downturn in equity or credit markets, (vi)
unexpected shifts in central banks' monetary policies, and (vii) technological
advancements and innovations that may disrupt marketplaces and businesses. For a
further discussion of how market conditions may affect our businesses, see "Risk
Factors-Risks Related to Our Business-Difficult market and economic conditions
can adversely affect our business in many ways, including by reducing the value
or performance of the investments that we manage or by reducing the ability of
our funds to raise or deploy capital, each of which could negatively impact our
net income and cash flow and adversely affect our financial condition" in our
Annual Report. In addition, members of U.S. Congress and New York State are
proposing (and after the date of this report may propose other) various
significant changes in tax law, including
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significant changes in the way U.S. corporations like ourselves and many of our
U.S. portfolio companies are taxed. If enacted, these changes could materially
increase the amount of taxes we and our portfolio companies are required to pay.
See "Risk Factors-Risks Related to Our Business-Changes in relevant tax laws,
regulations or treaties or an adverse interpretation of these items by tax
authorities could adversely impact our effective tax rate and tax liability" in
our Annual Report.

Equity and Credit Markets. Global equity and credit markets have a substantial
effect on our financial condition and results of operations. In general, a
climate of reasonable interest rates and high levels of liquidity in the debt
and equity capital markets provide a positive environment for us to generate
attractive investment returns, which also impacts our ability to generate
incentive fees and carried interest. Periods of volatility and dislocation in
the capital markets raise substantial risks, but also can present us with
opportunities to invest at reduced valuations that position us for future growth
and investment returns. Low interest rates related to monetary stimulus and
economic stagnation may negatively impact expected returns on all types of
investments. Higher interest rates in conjunction with slower growth or weaker
currencies in some emerging market economies have caused, and may further cause,
the default risk of these countries to increase, and this could impact the
operations or value of our investments that operate in these regions. Areas that
have central bank quantitative easing or tightening campaigns affecting their
interest rates relative to the United States could potentially experience
further currency volatility relative to the U.S. dollar.

In our asset management business, many of our investments are in equities, so a
change in global equity prices or in market volatility directly impacts the
value of our investments and our profitability as well as our ability to realize
investment gains and the receptiveness of fund investors to our investment
products. For the quarter ended June 30, 2022, global equity markets were
negative, with the S&P 500 down 16.1% and the MSCI World Index down 16.1% on a
total return basis including dividends. Equity market volatility as evidenced by
the Chicago Board Options Exchange Market Volatility Index (VIX), a measure of
volatility, ended at 28.7 as of June 30, 2022, increasing from 20.6 as of March
31, 2022. For a discussion of our valuation methods, see "Risk Factors-Risks
Related to the Assets We Manage-Our investments are impacted by various economic
conditions and events outside of our control that are difficult to quantify or
predict, which may have a significant impact on the valuation of our investments
and, therefore, on the investment income we realize and our results of
operations and financial condition" and see also "-Critical Accounting
Policies-Fair Value Measurements-Level III Valuation Methodologies" in our
Annual Report. In our insurance business, a change in equity prices also impacts
Global Atlantic's equity-sensitive annuity and life insurance products,
including with respect to hedging costs related to and fee-income earned on
those products.

Many of our investments in asset management are in non-investment grade credit
instruments and investment grade credit instruments. Our funds, our portfolio
companies and Global Atlantic also rely on credit financing and the ability to
refinance existing debt. Consequently, any decrease in the value of credit
instruments that we have invested in or any increase in the cost of credit
financing reduces our returns and decreases our net income.

Higher interest rates, periods of changes in rates and lower rates each may
result in differing impacts on Global Atlantic's business. See "Risk
Factors-Risks Related to Global Atlantic- Interest rate fluctuations and
sustained periods of low or high interest rates could adversely affect Global
Atlantic's business, financial condition, liquidity, results of operations, cash
flows and prospects" in our Annual Report. In our insurance segment, the
majority of our investments are in investment grade credit instruments. Sales of
those investments at a loss, for example as we rotate out of investments
acquired with new reinsurance transactions during a period of rising rates, is
expected to decrease our net income in that period. In addition, in our
insurance segment, rising interest rates is expected to decrease the fair value
of credit investments and may decrease the value of embedded derivatives
associated with funds withheld reinsurance transactions, resulting in unrealized
losses reported in AOCI. However, we do not expect to incur these unrealized
losses as we intend to hold the investments to maturity as part of our asset
liability cashflow matching strategy. Based on our review of applicable factors,
we determined that it was not more likely than not that goodwill in the
insurance segment was impaired. However, if the market, industry and
company-specific factors relating to these investments deteriorate meaningfully,
Global Atlantic may be required to recognize an impairment to goodwill, which
could have a material adverse effect on our results of operations and financial
condition.

Due in part to holdings of credit instruments such as CLOs on our balance sheet,
the performance of the credit markets has had an amplified impact on our
financial results, as we directly bear the full extent of losses from credit
instruments on our balance sheet. Credit markets can also impact valuations
because a discounted cash flow analysis is generally used as one of the
methodologies to ascertain the fair value of our investments that do not have
readily observable market prices. In addition, with respect to our credit
instruments, tightening credit spreads are generally expected to lead to an
increase, and widening credit spreads are generally expected to lead to a
decrease, in the value of these credit investments, if not offset by hedging or
other factors. In addition, the significant widening of credit spreads is also
typically expected to negatively impact equity markets, which in turn would
negatively impact our portfolio and us as noted above. Conversely, widening
credit spreads may have a positive impact on our insurance business, as the
margin Global Atlantic is able to earn between crediting rates offered on its
insurance products and the investment income it earns from its credit
investments could increase, and tightening credit spreads
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may negatively impact the pricing and therefore competitiveness of Global
Atlantic’s products, adversely impacting sales and growth, or may negatively
impact the margins that Global Atlantic earns on sales and transactions.

During the quarter ended June 30, 2022, U.S. investment grade corporate bond
spreads (BofA Merrill Lynch US Corporate Index) widened by 42 basis points and
U.S. high-yield corporate bond spreads (BofAML HY Master II Index) widened by
244 basis points. The non-investment grade credit indices were down during the
quarter ended June 30, 2022, with the S&P/LSTA Leveraged Loan Index down 4.5%
and the BAML US High Yield Index down 10%. During the quarter ended June 30,
2022, 10-year government bond yields rose 67 basis points in the United States,
rose 62 basis points in the United Kingdom, rose 79 basis points in Germany,
rose 3 basis points in China, and rose 1 basis point in Japan. For a further
discussion of how market conditions may affect our businesses, see "Risk
Factors-Risks Related to Our Business-Difficult market and economic conditions
can adversely affect our business in many ways, including by reducing the value
or performance of the investments that we manage or by reducing the ability of
our funds to raise or deploy capital, each of which could negatively impact our
net income and cash flow and adversely affect our financial condition" and "Risk
Factors-Risks Related to the Assets We Manage-Our investments are impacted by
various economic conditions and events outside of our control that are difficult
to quantify or predict, which may have a significant impact on the valuation of
our investments and, therefore, on the investment income we realize and our
results of operations and financial condition" in our Annual Report.

For further discussion of the impact of global credit markets on our financial
condition and results of operations, see "Risk Factors-Risks Related to the
Assets We Manage-Changes in the debt financing markets may negatively impact the
ability of our investment funds, their portfolio companies and strategies
pursued with our balance sheet assets to obtain attractive financing for their
investments or to refinance existing debt and may increase the cost of such
financing or refinancing if it is obtained, which could lead to lower-yielding
investments and potentially decrease our net income," "Risk Factors-Risks
Related to the Assets We Manage-Our investments are impacted by various economic
conditions and events outside of our control that are difficult to quantify or
predict, which may have a significant impact on the valuation of our investments
and, therefore, on the investment income we realize and our results of
operations and financial condition," "Risk Factors-Risks Related to the Assets
We Manage-Our funds and our firm through our balance sheet may make a limited
number of investments, or investments that are concentrated in certain issuers,
geographic regions or asset types, which could negatively affect our performance
or the performance of our funds to the extent those concentrated assets perform
poorly" and "Risk Factors-Risks Related to Global Atlantic-Interest rate
fluctuations and sustained periods of low or high interest rates could adversely
affect Global Atlantic's business, financial condition, liquidity, results of
operations, cash flows and prospects" in our Annual Report. For a further
discussion of our valuation methods, see "-Critical Accounting Policies-Fair
Value Measurements-Level III Valuation Methodologies."

Foreign Exchange Rates. Foreign exchange rates have a substantial impact on the
valuations of our investments that are denominated in currencies other than the
U.S. dollar. Currency volatility can also affect our businesses and investments
that deal in cross-border trade. The appreciation or depreciation of the U.S.
dollar is expected to contribute to a decrease or increase, respectively, in the
U.S. dollar value of our non-U.S. investments to the extent unhedged. In
addition, an appreciating U.S. dollar would be expected to make the exports of
U.S. based companies less competitive, which may lead to a decline in their
export revenues, if any, while a depreciating U.S. dollar would be expected to
have the opposite effect. Moreover, when selecting investments for our
investment funds that are denominated in U.S. dollars, an appreciating U.S.
dollar may create opportunities to invest at more attractive U.S. dollar prices
in certain countries outside of the United States, while a depreciating U.S.
dollar would be expected to have the opposite effect. For our investments
denominated in currencies other than the U.S. dollar, the depreciation in such
currencies will generally contribute to the decrease in the valuation of such
investments, to the extent unhedged, and adversely affect the U.S. dollar
equivalent revenues of portfolio companies with substantial revenues denominated
in such currencies, while the appreciation in such currencies would be expected
to have the opposite effect. For the quarter ended June 30, 2022, the euro fell
5.3%, the British pound fell 7.3%, the Japanese yen fell 10.3%, and the Chinese
renminbi fell 5.4%, respectively, relative to the U.S. dollar. For additional
information regarding our foreign exchange rate risk, see "Quantitative and
Qualitative Disclosure About Market Risk-Exchange Rate Risk" in our Annual
Report.

LIBOR Transition. On March 15, 2022, the Consolidated Appropriations Act of
2022, which includes the Adjustable Interest Rate (LIBOR) Act of 2021, was
signed into law in the United States. This legislation establishes a uniform
benchmark replacement mechanic for financial contracts that mature after June
30, 2023 which do not contain either clearly defined or practicable fallback
provisions or are contractually silent on a benchmark replacement rate. The
legislation also creates a safe harbor that shields involved parties from
liability if they choose to utilize a replacement rate recommended by the Board
of Governors of the Federal Reserve. For a discussion of the LIBOR transition
that will impact certain debt obligations, see Note 2 "Summary of Significant
Accounting Policies - Adoption of new accounting pronouncements-Reference rate
reform" in our financial statements and for a discussion of the risks related to
the LIBOR transition, see "Risk Factors - Risks Related to Our Business -
Transition away from LIBOR as a benchmark reference for interest rates may
affect the cost of capital and requires amending or restructuring existing debt
instruments and related hedging arrangements for us, our investment funds and
our
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portfolio companies, and may impact the value of floating rate securities or
loans based on LIBOR that we or our investment funds have held, all of which may
result in additional costs or adversely affect our or our funds' liquidity,
results of results of operations and financial condition" in our Annual Report.

Commodity Markets. Our Real Assets business line portfolio contains energy real
asset investments, and certain of our other Private Equity, Real Assets and
Credit and Liquid Strategies business line strategies have investments in or
related to the energy sector. The value of these investments is heavily
influenced by the price of natural gas and oil. As noted above, the actions
taken by Russia in the Ukraine starting in February 2022 have also caused
volatility in the commodities markets. During the quarter ended June 30, 2022,
the 3-year forward price of WTI crude oil increased approximately 1%, and the
3-year forward price of natural gas increased approximately 16%. The 3-year
forward price of WTI crude oil increased from approximately $72.85 per barrel to
$73.46 per barrel, and the 3-year forward price of natural gas increased from
approximately $3.77 per mcf to $4.36 per mcf as of March 31, 2022 and June 30,
2022, respectively.

When commodity prices decline or if a decline is not offset by other factors, we
would expect the value of our energy real asset investments to be adversely
impacted, to the extent unhedged. In general, we expect downward price movements
to have a negative impact on the fair value of our energy portfolio, all other
things being equal, given those commodity prices are an input in our valuation
models. The reverse is true for upward price movements. However, because we
typically use near-term commodity derivative transactions to hedge our
exposures, we expect long-term oil and natural gas prices to be a more
significant driver of the valuation of our energy investments in asset
management than spot prices. In addition, to the extent energy real asset
investments are directly held by our balance sheet, price movements can have an
amplified impact on our financial results, as we would directly bear the full
extent of such gains or losses, subject to hedging. However, as of June 30,
2022, energy investments in oil and gas assets made up only approximately 1% of
our assets under management, 1% of our total GAAP assets and 1% of our total
segment assets. For additional information regarding our energy real assets, see
"-Critical Accounting Policies-Fair Value Measurements-Level III Valuation
Methodologies-Real Asset Investments" and see also "Risk Factors-Risks Related
to the Assets We Manage-Our funds and our firm through our balance sheet may
make a limited number of investments, or investments that are concentrated in
certain issuers, geographic regions or asset types, which could negatively
affect our performance or the performance of our funds to the extent those
concentrated assets perform poorly" in our Annual Report.


Business Conditions

Our operating revenues consist of fees, performance income, investment income
and other operating income.

Our ability to grow our revenues depends in part on our ability to attract new
capital and investors, our successful deployment of capital including from our
balance sheet and our ability to realize investments at a profit.

Our ability to attract new capital and investors. Our ability to attract new
capital and investors in our funds is driven, in part, by the extent to which
they continue to see the alternative asset management industry generally, and
our investment products specifically, as attractive means for capital
appreciation or income. In addition, our ability to attract new capital and
investors in our insurance business is driven, in part, by the extent to which
they continue to see the life and annuity insurance industry generally, and in
certain cases our reinsurance vehicles, as attractive means for capital
appreciation or income. Since 2010, we have expanded into strategies such as
real assets, credit, core, growth and, through hedge fund partnerships, hedge
funds, and insurance. We have also reached out to new fund investors, including
retail and high net worth investors. However, fundraising continues to be
competitive. While our Asian Fund IV, European Fund V, North America Fund XIII,
Real Estate Partners Americas III, Real Estate Partners Europe II, Global
Infrastructure Investors IV, Next Generation Technology Growth Fund II and
Health Care Strategic Growth Fund II exceeded the size of their respective
predecessor funds, there is no assurance that fundraises for our other flagship
investment funds or vehicles or for our newer strategies and their successor
funds will experience similar success. If we are unable to successfully raise
comparably sized or larger funds, our AUM, FPAUM, and associated fees
attributable to new capital raised in future periods may be lower than in prior
years. See "Risk Factors-Risks Related to Our Business-Our inability to raise
additional or successor funds (or raise successor funds of a comparable size as
our predecessor funds) could have a material adverse impact on our business" in
our Annual Report.

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Our ability to successfully deploy capital. Our ability to maintain and grow our
revenue base is dependent upon our ability to successfully deploy the capital
available to us as well as our participation in capital markets transactions.
Greater competition, high valuations, increased overall cost of credit and other
general market conditions may impact our ability to identify and execute
attractive investments. Additionally, because we seek to make investments that
have an ability to achieve our targeted returns while taking on a reasonable
level of risk, we may experience periods of reduced investment activity. We have
a long-term investment horizon and the capital deployed in any one quarter may
vary significantly from the capital deployed in any other quarter or the
quarterly average of capital deployed in any given year. Reduced levels of
transaction activity also tends to result in reduced potential future investment
gains, lower transaction fees and lower fees for our capital markets business
line, which may earn fees in the syndication of equity or debt. In our insurance
business, we deploy capital by investing in assets that are anticipated to
generate net investment income in excess of the net cost of insurance. If we are
unable to originate or source attractive investments, the success and growth in
revenues of our insurance business will be adversely impacted. See "Risk
Factors-Risks Related to the Assets We Manage-Changes in the debt financing
markets may negatively impact the ability of our investment funds, their
portfolio companies and strategies pursued with our balance sheet assets to
obtain attractive financing for their investments or to refinance existing debt
and may increase the cost of such financing or refinancing if it is obtained,
which could lead to lower-yielding investments and potentially decrease our net
income" in our Annual Report.

Our ability to realize investments. Challenging market and economic conditions
may adversely affect our ability to exit and realize value from our investments
and result in lower-than-expected returns. Although the equity markets are not
the only means by which we exit investments from our funds, the strength and
liquidity of the U.S. and relevant global equity markets generally, and the
initial public offering market specifically, affect the valuation of, and our
ability to successfully exit, our equity positions in the portfolio companies of
our funds in a timely manner. We may also realize investments through strategic
sales. When financing is not available or becomes too costly, it may be more
difficult to find a buyer that can successfully raise sufficient capital to
purchase our investments. In addition, volatile debt and equity markets may also
make the exit of our investments more difficult to execute. In our insurance
business, we depend on the ability of our investments to generate their
anticipated returns, through the payment of interest and dividends and interest
as well as return of principal, in the amounts and at the times that we expect
them to be made in order to manage our obligations to make payments to our
policyholders. If policyholder behavior differs from our expectations, we may be
forced to sell our investments earlier than we anticipated and during market
conditions where we may realize losses on the investment. In addition, material
delays in payments or impairments to our anticipated investment returns could
have material adverse effects to our results of operations. For additional
information about how business environment and market conditions affect Global
Atlantic, see "-Global Atlantic's Investment Portfolio."



Basis of Accounting

We consolidate the financial results of KKR Group Partnership and its
consolidated entities, which include the accounts of our investment advisers,
broker-dealers, Global Atlantic's insurance 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 collateralized financing entities ("CFEs").

When an entity is consolidated, we reflect the accounts of the consolidated
entity, including its assets, liabilities, revenues, expenses, investment
income, cash flows and other amounts, on a gross basis. While the consolidation
of an investment fund or entity does not have an effect on the amounts of Net
Income Attributable to KKR or KKR's stockholders' equity that KKR reports, the
consolidation does significantly impact the financial statement presentation
under GAAP. This is due to the fact that the accounts of the consolidated
entities are reflected on a gross basis while the allocable share of those
amounts that are attributable to third parties are reflected as single line
items. The single line items in which the accounts attributable to third parties
are recorded are presented as noncontrolling interests on the consolidated
statements of financial condition and net income (loss) attributable to
noncontrolling interests on the consolidated statements of operations.

The presentation in the financial statements reflect the significant industry
diversification of KKR by its acquisition of Global Atlantic. Global Atlantic
operates an insurance business, and KKR operates an asset management business,
each of which possess distinct characteristics. As a result, KKR developed a
two-tiered presentation approach for the financial statements in this
Management's Discussion and Analysis. KKR believes that these separate
presentations provide a more informative view of the consolidated financial
position and results of operations than traditional aggregated presentations.
KKR believes that reporting Global Atlantic's insurance operations separately is
appropriate given, among other factors, the relative significance of Global
Atlantic's policy liabilities, which are not obligations of KKR (other than the
insurance companies that issued them). If a traditional aggregated presentation
were to be used, KKR would expect to eliminate or combine several
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identical or similar captions, which would condense the presentations but would
reduce transparency. KKR also believes that using a traditional aggregated
presentation would result in no new line items compared to the two-tier
presentation included in the financial statements in this report. We acquired
Global Atlantic on February 1, 2021; accordingly, the results of Global
Atlantic's insurance operations included in our consolidated results of
operations for the six months ended June 30, 2021 are from February 1, 2021 (the
closing date of the acquisition) through June 30, 2021.
All the intercompany transactions have been eliminated.

The summary of the significant accounting policies has been organized
considering the two-tiered approach described above and includes a section for
common accounting policies and an accounting policy section for each of the two
tiers when a policy is specific to one of the tiers.

For a further discussion about our critical accounting policies, see
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies” in the 2021 Form 10-K and Note 2
“Summary of Significant Accounting Policies” in our financial statements.

Key Financial Measures Under GAAP – Asset Management

The following discussion of key financial measures under GAAP is based on KKR’s
asset management business as of June 30, 2022.

Revenues

Fees and Other

Fees and other consist primarily of (i) management and incentive fees from
providing investment management services to unconsolidated funds, CLOs, other
vehicles, and separately managed accounts; (ii) transaction fees earned in
connection with successful investment transactions and from capital markets
activities; (iii) monitoring fees from providing services to portfolio
companies; (iv) expense reimbursements from certain investment funds and
portfolio companies; and (v) consulting fees. These fees are based on the
contractual terms of the governing agreements and are recognized when earned,
which coincides with the period during which the related services are performed
and in the case of transaction fees, upon closing of the transaction. Monitoring
fees may provide for a termination payment following an initial public offering
or change of control. These termination payments are recognized in the period
when the related transaction closes.

Capital Allocation-Based Income (Loss)

Capital allocation-based income (loss) is earned from those arrangements whereby
KKR serves as general partner and includes income or loss from KKR's capital
interest as well as "carried interest" which entitles KKR to a disproportionate
allocation of investment income or loss from an investment fund's limited
partners.

Expenses

Compensation and Benefits

Compensation and Benefits expense includes (i) base cash compensation consisting
of salaries and wages, (ii) benefits, (iii) carry pool allocations, (iv)
equity-based compensation, and (v) discretionary cash bonuses.

To supplement base cash compensation, benefits, carry pool allocations, and
equity-based compensation, we typically pay discretionary cash bonuses, which
are included in Compensation and Benefits expense in the consolidated statements
of operations, based principally on the level of (i) management fees and other
fee revenues (including incentive fees), (ii) realized carried interest and
(iii) realized investment income earned during the year. The amounts paid as
discretionary cash bonuses, if any, are at our sole discretion and vary from
individual to individual and from period to period, including having no cash
bonus. We accrue discretionary cash bonuses when payment becomes probable and
reasonably estimable which is generally in the period when we make the decision
to pay discretionary cash bonuses and is based upon a number of factors,
including the recognition of fee revenues, realized carried interest, realized
investment income and other factors determined during the year.

Beginning in 2021, we expect to pay our employees by assigning a percentage
range to each component of asset management segment revenues. Based on the
current components and blend of our asset management segment revenues on an
annual basis, we expect to use approximately: (i) 20­25% of fee related
revenues, (ii) 60­70% of realized carried interest and incentive fees not
included in fee related performance revenues or earned from our hedge fund
partnerships, and (iii) 10­20% of

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realized investment income and hedge fund partnership incentive fees to pay our
asset management employees. Because these ranges are applied to applicable
distributable revenue components independently, and on an annual basis, the
amount paid as a percentage of total distributable revenues will vary and will,
for example, likely be higher in a period with relatively higher realized
carried interest and lower in a period with relatively lower realized carried
interest. We decide whether to pay a discretionary cash bonus and determine the
percentage of applicable revenue components to pay compensation only upon the
occurrence of the realization event. There is no contractual or other binding
obligation that requires us to pay a discretionary cash bonus to the asset
management employees, except in limited circumstances.

Assuming that we had accrued compensation of (i) 65% of the unrealized carried
interest earned by the funds that allocate 40% and 43% to the carry pool and
(ii) 15% of the unrealized net gains in our Principal Activities business line
(in each case at the mid-point of the ranges above), KKR & Co. Inc.
Stockholders' Equity - Series I Preferred, Common Stock as of June 30, 2022
would have been reduced by approximately $1.79 per share, compared to our
reported $20.88 per share on such date, and our book value as of June 30, 2022
would have been reduced by approximately $1.74 per adjusted share, compared to
our reported book value of $26.78 per adjusted share on such date.

Carry Pool Allocation

With respect to our funds that provide for carried interest, we allocate a
portion of the realized and unrealized carried interest that we earn to a carry
pool established at KKR Associates Holdings L.P., which is not a KKR subsidiary,
from which our asset management employees and certain other carry pool
participants are eligible to receive a carried interest allocation. The
allocation is determined based upon a fixed arrangement between KKR Associates
Holdings and us, and we do not exercise discretion on whether to make an
allocation to the carry pool upon a realization event. These amounts are
accounted for as compensatory profit sharing arrangements in Accrued Expenses
and Other Liabilities within the accompanying consolidated statements of
financial condition in conjunction with the related carried interest income and
are recorded as compensation expense. Upon a reversal of carried interest
income, the related carry pool allocation, if any, is also reversed.
Accordingly, such compensation expense is subject to both positive and negative
adjustments.

In February 2021, with the approval of a majority of our independent directors,
KKR amended the percentage of carried interest that is allocable to the carry
pool to 65% for (i) current investment funds for which no or de minimis amounts
of carried interest was accrued as of December 31, 2020 and (ii) all future
funds. For all other funds, the percentage of carried interest remains 40% or
43%, as applicable. The percentage of carried interest allocable to the carry
pool may be increased above 65% only with the approval of a majority of our
independent directors. To account for the difference in the carry pool
allocation percentages, we expect to use a portion of realized carried interest
from the older funds equal to the difference between 65% and 40% or 43%, as
applicable, to supplement the carry pool and to pay amounts as discretionary
cash bonus compensation as described above to our asset management employees.
The amounts paid as discretionary cash bonuses, if any, are at our discretion
and vary from individual to individual and from period to period, including
having no cash bonus at all for certain employees. See "-Critical Accounting
Policies - Asset Management-Recognition of Carried Interest in the Statement of
Operations" and "-Key Financial Measures Under GAAP - Asset
Management-Expenses-Compensation and Benefits."

On the Sunset Date (as defined in the Reorganization Agreement), KKR will
acquire control of KKR Associates Holdings and will commence making decisions
regarding the allocation of carry proceeds pursuant to the limited partnership
agreement of KKR Associates Holdings. Until the Sunset Date, our Co-Founders
will continue to make decisions regarding the allocation of carry proceeds to
themselves and others, pursuant to the limited partnership agreement of KKR
Associates Holdings, provided that any allocation of carry proceeds to the
Co-Founders will be on a percentage basis consistent with past practice.

Equity-based Compensation

In addition to the cash-based compensation and carry pool allocations as
described above, employees receive equity awards under our Equity Incentive
Plans, most of which are subject to service-based vesting typically over a three
to five-year period from the date of grant, and some of which are also subject
to the achievement of market-based conditions. Certain of these awards are
subject to post-vesting transfer restrictions and minimum retained ownership
requirements.


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General, Administrative and Other

General, administrative and other expense consists primarily of professional
fees paid to legal advisors, accountants, advisors and consultants, insurance
costs, travel and related expenses, communications and information services,
depreciation and amortization charges, CLOs and investment funds that were
consolidated, costs incurred in connection with pursuing potential investments
that do not result in completed transactions ("broken-deal expenses"), expense
reimbursements, placement fees and other general operating expenses. A portion
of these general administrative and other expenses, in particular broken-deal
expenses, are borne by fund investors.

Investment Income (Loss)

Net Gains (Losses) from Investment Activities

Net gains (losses) from investment activities consist of realized and unrealized
gains and losses arising from our investment activities as well as income earned
from certain equity method investments. Fluctuations in net gains (losses) from
investment activities between reporting periods is driven primarily by changes
in the fair value of our investment portfolio as well as the realization of
investments. The fair value of, as well as the ability to recognize gains from,
our investments is significantly impacted by the global financial markets,
which, in turn, affects the net gains (losses) from investment activities
recognized in any given period. Upon the disposition of an investment,
previously recognized unrealized gains and losses are reversed and an offsetting
realized gain or loss is recognized in the current period. Since our investments
are carried at fair value, fluctuations between periods could be significant due
to changes to the inputs to our valuation process over time. For a further
discussion of our fair value measurements and fair value of investments, see
"-Critical Accounting Policies - Combined-Fair Value Measurements."

Dividend Income

Dividend income consists primarily of distributions that we and our consolidated
investment funds receive from portfolio companies or real assets investments in
which we and our consolidated investment funds invest. Dividend income is
recognized primarily in connection with (i) dispositions of operations by
portfolio companies, (ii) distributions of cash generated from operations from
portfolio investments or real assets investments, and (iii) other significant
refinancings undertaken by portfolio investments.

Interest Income

Interest income consists primarily of interest that is received on our credit
instruments in which we and our consolidated investment funds, CLOs and other
entities invest as well as interest on our cash and other investments.

Interest Expense

Interest expense is incurred from (i) debt issued by KKR, including debt issued
by KFN, (ii) credit facilities entered into by KKR, (iii) debt securities issued
by consolidated CFEs, (iv) financing arrangements at our majority owned
investment vehicles that have been funded with borrowings that are
collateralized by the investments and assets they own and (v) financing
arrangements at our consolidated funds entered into primarily with the objective
of managing cash flow. KFN's debt obligations are non-recourse to KKR beyond the
assets of KFN. Debt securities issued by consolidated CFEs are supported solely
by the investments held at the CFE and are not collateralized by assets of any
other KKR entity. Our obligations under financing arrangements at our
consolidated investment funds are generally limited to our pro rata equity
interest in such funds. However, in some circumstances, we may provide limited
guarantees of the obligations of our general partners in an amount equal to its
pro rata equity interest in such funds. Our management companies bear no
obligations with respect to financing arrangements at our consolidated funds. We
also may provide other kinds of guarantees. See "-Liquidity."







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Key Financial Measures Under GAAP – Insurance

The following discussion of key financial measures under GAAP is based on KKR’s
insurance business as conducted by Global Atlantic as of June 30, 2022.

Revenues

Premiums

Premiums primarily relate to payout annuities with life contingencies and whole
life and term life insurance policies, recognized when due from the
policyholders. Premiums are reported net of premiums ceded under reinsurance
agreements.

Policy fees

Policy fees include charges assessed against policyholder account balances for
mortality, administration, separate account, benefit rider and surrender fees.

Net investment income

Net investment income reflects the income earned on our investments, net of any
associated investment expenses (including management fees charged by the asset
management segment) and net of ceded amounts under reinsurance agreements. Net
investment income includes, amongst other things (i) interest earned on our
fixed income available-for-sale and fixed-income trading investments, (ii)
interest income and other related fees from our mortgage and other loan
receivables, (iii) interest on funds withheld at interest receivables, (iv)
proportional share of income from equity-method investments and (v) income from
physical assets, such as renewable energy plants, real estate, railcars, and
airplanes (net of depreciation and operating expenses).

Net investment-related gains

Net investment-related gains primarily consists of (i) realized gains and losses
from the disposal of investments, including realized gains and losses on the
disposal of investments not related to asset/liability matching strategies
("variable investment income"), (ii) unrealized gains and losses from
investments held for trading, real estate investments accounted under investment
company accounting, and investments with fair value re-measurements recognized
in earnings as a result of the election of a fair-value option, (iii) unrealized
gains and losses on funds withheld at interest receivable and payable, (iv)
unrealized gains and losses from derivatives not designated in an hedging
relationship and (v) allowances for credit losses, and other impairments of
investments.

Other income

Other income is primarily comprised of expense allowances on ceded reinsurance,
administration, management fees and distribution fees.

Expenses

Policy benefits and claims

Policy benefits and claims represent the current period expense associated with
providing insurance benefits to policyholders, including claims and benefits
paid, interest credited to policyholders, changes in policy liability reserves
(including fair value reserves), amortization of cost of reinsurance
liabilities, and amortization of deferred sales inducements.

Amortization of policy acquisition costs

Amortization of policy acquisition costs primarily consist of amortization of
value of business acquired and deferred policy acquisition costs.

Insurance expense

Insurance expenses are primarily comprised of commissions expense, net of
amounts capitalized, reinsurance ceding allowances, premium taxes, amortization
of acquired intangibles and captive financing charges.

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Interest expense

Interest expense is incurred from insurance segment debt issued, including
related interest rate swaps, credit facilities and other financing agreements.

General, administrative and other

General, administrative and other expenses are primarily comprised of employee
compensation and benefit expenses, third-party administrator ("TPA") policy
servicing fees, administrative and professional services, and other operating
expenses.

Other Key Financial Measures Under GAAP

Income Taxes

KKR & Co. Inc. is a domestic corporation for U.S. federal income tax purposes
and is subject to U.S. federal, state and local income taxes at the entity level
on its share of taxable income. In addition, KKR Group Partnership and certain
of its subsidiaries operate as partnerships for U.S. federal tax purposes but as
taxable entities for certain state, local or non-U.S. tax purposes. Moreover,
certain corporate subsidiaries of KKR, including certain Global Atlantic
subsidiaries, are domestic corporations for U.S. federal income tax purposes and
are subject to U.S. federal, state, and local income taxes.

Tax laws are complex and subject to different interpretations by the taxpayer
and respective governmental taxing authorities. Significant judgment is required
in determining tax expense and in evaluating tax positions including evaluating
uncertainties. We review our tax positions quarterly and adjust our tax balances
as new information becomes available.

For a further discussion of our income tax policies, see Note 18 “Income Taxes”
in our financial statements.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests primarily represents
the ownership interests that certain third parties hold in entities that were
consolidated in the financial statements as well as the ownership interests in
KKR Group Partnership represented by exchangeable securities. The allocable
share of income and expense attributable to these interests is accounted for as
net income (loss) attributable to noncontrolling interests. Given the
consolidation of certain of our investment funds and the significant ownership
interests in KKR Group Partnership held by KKR Holdings, we expect a portion of
net income (loss) will continue to be attributed to noncontrolling interests in
our business.

For a further discussion of our noncontrolling interests policies, see Note 22
“Equity” in the financial statements.

Key Segment and Non-GAAP Performance Measures

The following key segment and non-GAAP performance measures are used by
management in making operational and resource deployment decisions as well as
assessing the performance of KKR's businesses. They include certain financial
measures that are calculated and presented using methodologies other than in
accordance with GAAP. These performance measures as described below are
presented prior to giving effect to the allocation of income (loss) between KKR
& Co. Inc. and holders of exchangeable securities and as such represent the
entire KKR business in total. In addition, these performance measures are
presented without giving effect to the consolidation of the investment funds and
CFEs that KKR manages.

We believe that providing these segment and non-GAAP performance measures on a
supplemental basis to our GAAP results is helpful to stockholders in assessing
the overall performance of KKR's business. These non-GAAP measures should not be
considered as a substitute for financial measures calculated in accordance with
GAAP. Reconciliations of these non-GAAP measures to the most directly comparable
financial measures calculated and presented in accordance with GAAP, where
applicable are included under "-Reconciliations to GAAP Measures."

After-tax Distributable Earnings

After-tax distributable earnings is a non-GAAP performance measure of KKR's
earnings, which is derived from KKR's reported segment results. After-tax
distributable earnings is used to assess the performance of KKR's business
operations and measures the earnings potentially available for distribution to
its equity holders or reinvestment into its business. After-tax distributable
earnings is equal to Distributable Operating Earnings less Interest Expense, Net
Income Attributable to Noncontrolling Interests and Income Taxes Paid. Series C
Mandatory Convertible Preferred Stock dividends have been

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excluded from After-tax Distributable Earnings, because the definition of
Adjusted Shares used to calculate After-tax Distributable Earnings per Adjusted
Share assumes that all shares of Series C Mandatory Convertible Preferred Stock
have been converted to shares of common stock of KKR & Co. Inc. Income Taxes
Paid represents the amount of income taxes that would be paid assuming that all
pre-tax distributable earnings were allocated to KKR & Co. Inc. and taxed at the
same effective rate, which assumes that all exchangeable securities were
exchanged for shares of common stock of KKR & Co. Inc. Income Taxes Paid
includes the benefit of tax deductions arising from equity-based compensation,
which reduces income taxes paid or payable during the period. Equity based
compensation expense is excluded from After-tax Distributable Earnings, because
(i) KKR believes that the cost of equity awards granted to employees does not
contribute to the earnings potentially available for distributions to its equity
holders or reinvestment into its business and (ii) excluding this expense makes
KKR's reporting metric more comparable to the corresponding metric presented by
other publicly traded companies in KKR's industry, which KKR believes enhances
an investor's ability to compare KKR's performance to these other companies. If
tax deductions from equity-based compensation were to be excluded from Income
Taxes Paid, KKR's After-tax Distributable Earnings would be lower and KKR's
effective tax rate would appear to be higher, even though a lower amount of
income taxes would have actually been paid or payable during the period. KKR
separately discloses the amount of tax deduction from equity-based compensation
for the period reported and the effect of its inclusion in After-tax
Distributable Earnings for the period. KKR makes these adjustments when
calculating After-tax Distributable Earnings in order to more accurately reflect
the net realized earnings that are expected to be or become available for
distribution to KKR's equity holders or reinvestment into KKR's business.
However, After-tax Distributable Earnings does not represent and is not used to
calculate actual dividends under KKR's dividend policy, which is a fixed amount
per period, and After-tax Distributable Earnings should not be viewed as a
measure of KKR's liquidity.

Book Value

Book Value is a non-GAAP performance measure of the net assets of KKR and is
used by management primarily in assessing the unrealized value of KKR's net
assets presented on a basis that (i) deconsolidates KKR's investment funds and
CFEs that KKR manages, (ii) includes the net assets that are attributable to
exchangeable securities, and (iii) includes KKR's ownership of the net assets of
Global Atlantic. We believe this measure is useful to stockholders as it
provides additional insight into the net assets of KKR excluding those net
assets that are allocated to investors in KKR's investment funds and other
noncontrolling interest holders. KKR's book value includes the net impact of
KKR's tax assets and liabilities as prepared under GAAP. Prior to the
Reorganization Mergers, KKR's book value included the implied amount of (1) tax
assets and liabilities attributable to KKR Holdings L.P. as if it was subject to
corporate income taxes and (2) the recognition of deferred tax liabilities
relating to certain assets of KKR Group Partnership L.P. that was expected to
occur upon the completion of the Reorganization Mergers. Series C Mandatory
Convertible Preferred Stock has been included in book value, because the
definition of adjusted shares used to calculate book value per adjusted share
assumes that all shares of Series C Mandatory Convertible Preferred Stock have
been converted to shares of common stock of KKR & Co. Inc. To calculate Global
Atlantic book value and to make it more comparable with the corresponding metric
presented by other publicly traded companies in Global Atlantic's industry,
Global Atlantic book value excludes (i) accumulated other comprehensive income
and (ii) accumulated change in fair value of reinsurance balances and related
assets, net of deferred acquisition costs and income tax.

Distributable Operating Earnings

  Distributable operating earnings is a non-GAAP performance measure that KKR
believes is useful to stockholders as it provides a supplemental measure of our
operating performance without taking into account items that KKR does not
believe arise from or relate directly to KKR's operations. Distributable
Operating Earnings excludes: (i) equity-based compensation charges, (ii)
amortization of acquired intangibles, (iii) strategic corporate
transaction-related charges and (iv) non-recurring items, if any. Strategic
corporate transaction-related items arise from corporate actions and consist
primarily of (i) impairments, (ii) non-monetary gains or losses on divestitures,
(iii) transaction costs from strategic acquisitions, and (iv) depreciation on
real estate that KKR owns and occupies. Inter-segment transactions are not
eliminated from segment results when management considers those transactions in
assessing the results of the respective segments. These transactions include (i)
management fees earned by KKR as the investment adviser for Global Atlantic
insurance companies and (ii) interest income and expense based on lending
arrangements where one or more KKR subsidiaries borrow from a Global Atlantic
insurance subsidiary. Inter-segment transactions are recorded by each segment
based on the definitive documents that contain arms' length terms and comply
with applicable regulatory requirements. Distributable Operating Earnings
represents operating earnings of KKR's Asset Management and Insurance segments,
which are comprised of the following:

•Asset Management Segment Operating Earnings is the segment profitability
measure used to make operating decisions and to assess the performance of the
Asset Management segment and is comprised of: (i) Fee Related Earnings, (ii)
Realized Performance Income, (iii) Realized Performance Income Compensation,
(iv) Realized Investment Income, and (v) Realized Investment Income
Compensation. Asset Management Segment Operating Earnings excludes (i)

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unrealized carried interest, (ii) net unrealized gains (losses) on investments,
and (iii) related unrealized carried interest. Management fees earned by KKR as
the adviser, manager or sponsor for its investment funds, vehicles and accounts,
including its Global Atlantic insurance companies and co-investment vehicles
that participate in qualifying reinsurance transactions sourced by Global
Atlantic (Ivy Re Limited and Ivy Re II Limited), which are , are included in
Asset Management Segment Operating Earnings.

•Insurance Segment Operating Earnings is the segment profitability measure used
to make operating decisions and to assess the performance of the Insurance
segment and is comprised of: (i) Net Investment Income, (ii) Net Cost of
Insurance, (iii) General, Administrative, and Other Expenses, (iv) Income Taxes,
and (v) Net Income Attributable to Noncontrolling Interests. The non-operating
adjustments made to derive Insurance Segment Operating Earnings eliminate the
impact of: (i) realized (gains) losses related to asset/liability matching
investments strategies, (ii) unrealized investment (gains) losses, (iii) changes
in the fair value of derivatives, embedded derivatives, and fair value
liabilities for fixed-indexed annuities, indexed universal life contracts and
variable annuities, and (iv) the associated income tax effects of all exclusions
from Insurance Segment Operating Earnings except for equity-based compensation
expense. Insurance Segment Operating Earnings includes (i) realized gains and
losses not related to asset/liability matching investments strategies and (ii)
the investment management fee expenses that are earned by KKR as the investment
adviser of the Global Atlantic insurance companies.

Fee Related Earnings (“FRE”)

Fee related earnings is a performance measure used to assess the Asset
Management segment's generation of profits from revenues that are measured and
received on a recurring basis and are not dependent on future realization
events. KKR believes this measure is useful to stockholders as it provides
additional insight into the profitability of KKR's fee generating asset
management and capital markets businesses and other recurring revenue streams.
FRE equals (i) Management Fees, including fees paid by the Insurance segment to
the Asset Management segment and fees paid by certain insurance co-investment
vehicles, (ii) Transaction and Monitoring Fees, Net and (iii) Fee Related
Performance Revenues, less (x) Fee Related Compensation, and (y) Other Operating
Expenses.

•Fee Related Performance Revenues refers to the realized portion of Incentive
Fees from certain AUM that has an indefinite term and for which there is no
immediate requirement to return invested capital to investors upon the
realization of investments. Fee-related performance revenues consists of
performance fees (i) to be received from our investment funds, vehicles and
accounts on a recurring basis, and (ii) that are not dependent on a realization
event involving investments held by the investment fund, vehicle or account.

•Fee Related Compensation refers to the compensation expense, excluding
equity-based compensation, paid from (i) Management Fees, (ii) Transaction and
Monitoring Fees, Net, and (iii) Fee Related Performance Revenues.

•Other Operating Expenses represents the sum of (i) occupancy and related
charges and (ii) other operating expenses.

Total Asset Management Segment Revenues

Total Asset Management Segment Revenues is a performance measure that represents
the realized revenues of the Asset Management segment (which excludes unrealized
carried interest and unrealized net gains (losses) on investments) and is the
sum of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee
Related Performance Revenues, (iv) Realized Performance Income, and (v) Realized
Investment Income. KKR believes that this performance measure is useful to
stockholders as it provides additional insight into the realized revenues
generated by KKR's Asset Management segment.

Other Terms and Capital Metrics

Adjusted Shares

Adjusted shares represents shares of common stock of KKR & Co. Inc. outstanding
under GAAP adjusted to include (i) the number of shares of common stock of KKR &
Co. Inc. assumed to be issuable upon conversion of the Series C Mandatory
Convertible Preferred Stock and (ii) shares of common stock of KKR & Co. Inc.
issuable upon exchange of all exchangeable securities. Weighted average adjusted
shares is used in the calculation of After-tax Distributable Earnings per
Adjusted Share, and Adjusted Shares is used in the calculation of Book Value per
Adjusted Share.

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Assets Under Management (“AUM”)

  Assets under management represent the assets managed, advised or sponsored by
KKR from which KKR is entitled to receive management fees or performance income
(currently or upon a future event), general partner capital, and assets managed,
advised or sponsored by our strategic BDC partnership and the hedge fund and
other managers in which KKR holds an ownership interest. We believe this measure
is useful to stockholders as it provides additional insight into the capital
raising activities of KKR and its hedge fund and other managers and the overall
activity in their investment funds and other managed or sponsored capital. KKR
calculates the amount of AUM as of any date as the sum of: (i) the fair value of
the investments of KKR's investment funds and the Global Atlantic insurance
companies; (ii) uncalled capital commitments from these funds, including
uncalled capital commitments from which KKR is currently not earning management
fees or performance income; (iii) the fair value of investments in KKR's
co-investment vehicles; (iv) the par value of outstanding CLOs; (v) KKR's pro
rata portion of the AUM of hedge fund and other managers in which KKR holds an
ownership interest; (vi) all AUM of KKR's strategic BDC partnership; (vii) the
acquisition cost of invested assets of certain non-US real estate investment
trusts, and (viii) the value of other assets managed or sponsored by KKR. The
pro rata portion of the AUM of hedge fund and other managers is calculated based
on KKR's percentage ownership interest in such entities multiplied by such
entity's respective AUM. KKR's definition of AUM (i) is not based on any
definition of AUM that may be set forth in the governing documents of the
investment funds, vehicles, accounts or other entities whose capital is included
in this definition, (ii) includes assets for which KKR does not act as an
investment adviser, and (iii) is not calculated pursuant to any regulatory
definitions.

Capital Invested

  Capital invested is the aggregate amount of capital invested by (i) KKR's
investment funds and Global Atlantic insurance companies, (ii) KKR's Principal
Activities business line as a co-investment, if any, alongside KKR's investment
funds, and (iii) KKR's Principal Activities business line in connection with a
syndication transaction conducted by KKR's Capital Markets business line, if
any. Capital invested is used as a measure of investment activity at KKR during
a given period. We believe this measure is useful to stockholders as it provides
a measure of capital deployment across KKR's business lines. Capital invested
includes investments made using investment financing arrangements like credit
facilities, as applicable. Capital invested excludes (i) investments in certain
leveraged credit strategies, (ii) capital invested by KKR's Principal Activities
business line that is not a co-investment alongside KKR's investment funds, and
(iii) capital invested by KKR's Principal Activities business line that is not
invested in connection with a syndication transaction by KKR's Capital Markets
business line. Capital syndicated by KKR's Capital Markets business line to
third parties other than KKR's investment funds or Principal Activities business
line is not included in capital invested.

Fee Paying AUM (“FPAUM”)

  Fee paying AUM represents only the AUM from which KKR is entitled to receive
management fees. We believe this measure is useful to stockholders as it
provides additional insight into the capital base upon which KKR earns
management fees. FPAUM is the sum of all of the individual fee bases that are
used to calculate KKR's and its hedge fund and BDC partnership management fees
and differs from AUM in the following respects: (i) assets and commitments from
which KKR is not entitled to receive a management fee are excluded (e.g., assets
and commitments with respect to which it is entitled to receive only performance
income or is otherwise not currently entitled to receive a management fee) and
(ii) certain assets, primarily in its private equity funds, are reflected based
on capital commitments and invested capital as opposed to fair value because
fees are not impacted by changes in the fair value of underlying investments.

Uncalled Commitments

  Uncalled commitments is the aggregate amount of unfunded capital commitments
that KKR's investment funds and carry-paying co-investment vehicles have
received from partners to contribute capital to fund future investments. We
believe this measure is useful to stockholders as it provides additional insight
into the amount of capital that is available to KKR's investment funds and carry
paying co-investment vehicles to make future investments. Uncalled commitments
are not reduced for investments completed using fund-level investment financing
arrangements or investments we have committed to make but remain unfunded at the
reporting date.

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Condensed Consolidated Results of Operations (GAAP Basis – Unaudited)

The following is a discussion of our consolidated results of operations on a
GAAP basis for the three months ended June 30, 2022 and 2021. You should read
this discussion in conjunction with the financial statements and related notes
included elsewhere in this report. For a more detailed discussion of the factors
that affected our segment results in these periods, see "-Analysis of Segment
Operating Results." See "Business Environment" for more information about
factors that may impact our business, financial performance, operating results
and valuations.

The presentation of our consolidated results of operations that follows reflects
the significant industry diversification of KKR by its acquisition of Global
Atlantic. Global Atlantic operates an insurance business, and KKR operates an
asset management business, each of which possess distinct characteristics. As a
result, KKR developed a two-tiered presentation approach, where Global
Atlantic's insurance business is presented separately from KKR's asset
management business. Additionally, for the six months ended June 30, 2021, the
results of Global Atlantic's insurance operations included in our consolidated
results of operations are from February 1, 2021 (closing date of the
acquisition) through June 30, 2021.

                                                                                 Three Months Ended
                                                             June 30, 2022           June 30, 2021             Change
                                                                                  ($ in thousands)
Revenues
Asset Management
Fees and Other                                             $      615,264          $      675,526          $    (60,262)
Capital Allocation-Based Income (Loss)                           (923,474)              1,525,393            (2,448,867)
                                                                 (308,210)              2,200,919            (2,509,129)
Insurance
Net Premiums                                                     (225,502)               (452,133)              226,631
Policy Fees                                                       325,707                 312,262                13,445
Net Investment Income                                             931,889                 716,497               215,392
Net Investment-Related Gains (Losses)                            (426,326)                326,558              (752,884)
Other Income                                                       32,512                  32,078                   434
                                                                  638,280                 935,262              (296,982)
Total Revenues                                                    330,070               3,136,181            (2,806,111)

Expenses
Asset Management
Compensation and Benefits                                         250,876               1,099,423              (848,547)
Occupancy and Related Charges                                      18,861                  18,651                   210
General, Administrative and Other                                 253,832                 237,296                16,536
                                                                  523,569               1,355,370              (831,801)

Insurance

Net Policy Benefits and Claims                                    (45,407)                411,199              (456,606)
Amortization of Policy Acquisition Costs                           13,204                 (20,031)               33,235
Interest Expense                                                   18,970                  11,373                 7,597
Insurance Expenses                                                131,065                 100,973                30,092
General, Administrative and Other                                 170,892                 132,828                38,064
                                                                  288,724                 636,342              (347,618)
Total Expenses                                                    812,293               1,991,712            (1,179,419)

Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities                  (1,885,469)              3,220,053            (5,105,522)
Dividend Income                                                   147,355                 125,821                21,534
Interest Income                                                   391,549                 381,254                10,295
Interest Expense                                                 (328,726)               (265,056)              (63,670)
Total Investment Income (Loss)                                 (1,675,291)              3,462,072            (5,137,363)

Income (Loss) Before Taxes                                     (2,157,514)              4,606,541            (6,764,055)

Income Tax Expense (Benefit)                                     (153,104)                343,667              (496,771)


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                                                                        Three Months Ended
                                                    June 30, 2022           June 30, 2021             Change
                                                                         ($ in thousands)

Net Income (Loss)                                     (2,004,410)              4,262,874            (6,267,284)
Net Income (Loss) Attributable to Redeemable
Noncontrolling Interests                                       8                   1,337                (1,329)
Net Income (Loss) Attributable to Noncontrolling
Interests                                             (1,193,734)              2,946,262            (4,139,996)

Net Income (Loss) Attributable to KKR & Co. Inc. (810,684)

    1,315,275            (2,125,959)

Series A Preferred Stock Dividends                             -                  17,834               (17,834)
Series B Preferred Stock Dividends                             -                   2,519                (2,519)
Series C Mandatory Convertible Preferred Stock
Dividends                                                 17,250                  17,250                     -

Net Income (Loss) Attributable to KKR & Co. Inc.
Common Stockholders                               $     (827,934)         $    1,277,672          $ (2,105,606)




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