Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 28, 2022 (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."

References herein to "KKR," "we," "us" and "our" refer to KKR & Co. Inc. and its subsidiaries, including The Global Atlantic Financial Group LLC ("TGAFG" and, together with its subsidiaries, "Global Atlantic"), unless the context requires otherwise.

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 March 31, 2022, we manage $479 billion of assets for our clients. Throughout our history, we have consistently been a leader in the private equity industry, having completed more than 650 private equity investments in portfolio companies with a total transaction value in excess of $675 billion as of March 31, 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 March 31, 2022, Global Atlantic served approximately three million policyholders.

Asset Management

In our asset management business, we have four business lines: (1) Private Markets, (2) Public Markets, (3) Capital Markets, and (4) Principal Activities.

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 March 31, 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 Markets

Through our Private Markets business line, we manage and sponsor a group of 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, growth equity, and impact investments. We also manage and sponsor investment funds and companies that invest capital in real assets, such as infrastructure, real estate, and energy. Our Private Markets business line includes separately managed accounts that invest in multiple strategies, which may include our credit strategies as well as our private equity and real assets 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 March 31, 2022, our Private Markets business line had $268.2 billion of AUM, consisting of $152.9 billion in private equity (including growth equity, impact and core investments), $93.8 billion in real assets (including real estate, infrastructure and energy) and $21.5 billion in other related strategies.

The table below presents information as of March 31, 2022, relating to our current private equity and real asset funds and other vehicles in our Private Markets business line 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 March 31, 2022.

			Investment Period (1)						Amount ($ in millions)
			Start Date			End Date			Commitment (2)			Uncalled Commitments			Percentage Committed by General Partner			Invested			Realized			Remaining Cost (3)			Remaining Fair Value			Gross Accrued Carried Interest
Private Equity and Growth Equity Funds
North America Fund XIII			6/2021			6/2027			$	18,400		$	18,400		3%			$	—		$	—		$	—		$	—		$	—
Americas Fund XII			1/2017			6/2021			13,500			1,701			6%			12,275			4,712			11,219			23,039			2,183
North America Fund XI			9/2012			1/2017			8,718			425			3%			9,752			17,183			3,453			8,098			920
2006 Fund (4)			9/2006			9/2012			17,642			247			2%			17,309			35,093			1,483			2,371			230
Millennium Fund (4)			12/2002			12/2008			6,000			—			3%			6,000			14,123			—			6			1
European Fund VI			3/2022			3/2028			7,063			7,063			14%			—			—			—			—			—
European Fund V			3/2019			3/2022			6,357			1,637			2%			4,789			732			4,640			6,330			340
European Fund IV			12/2014			3/2019			3,514			66			6%			3,577			4,990			1,838			2,751			173
European Fund III (4)			3/2008			3/2014			5,509			149			5%			5,360			10,604			669			152			(24)
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			12,056			4%			2,679			—			2,679			3,060			1
Asian Fund III			4/2017			7/2020			9,000			2,010			6%			7,393			3,671			6,660			13,477			1,217
Asian Fund II			4/2013			4/2017			5,825			34			1%			6,839			5,946			3,794			3,284			(316)
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			279			3
Next Generation Technology Growth Fund II			12/2019			12/2025			2,088			597			7%			1,688			259			1,544			2,459			162
Next Generation Technology Growth Fund			3/2016			12/2019			659			4			22%			666			810			359			1,285			101
Health Care Strategic Growth Fund II			5/2021			5/2027			3,789			3,657			4%			132			—			132			139			—
Health Care Strategic Growth Fund			12/2016			5/2021			1,331			429			11%			1,032			196			924			1,384			66
Global Impact Fund			2/2019			3/2022			1,242			485			8%			907			155			813			1,381			106
Private Equity and Growth Equity Funds									136,116			48,960						91,133			116,765			40,647			69,551			5,167
Co-Investment Vehicles and Other			Various			Various			14,236			4,995			Various			9,559			7,289			6,245			9,051			1,318
Core Investment Vehicles			Various			Various			24,237			13,310			31%			11,627			712			11,323			18,825			112
Total Private Equity, Growth Equity and Core Funds									174,589			67,265						112,319			124,766			58,215			97,427			6,597
Real Assets
Energy Income and Growth Fund II			6/2018			3/2022			994			—			20%			1,187			193			1,024			1,393			24
Energy Income and Growth Fund			9/2013			6/2018			1,974			—			13%			1,974			932			1,156			880			—
Natural Resources Fund (4)			Various			Various			887			—			Various			887			123			193			63			—
Global Energy Opportunities			Various			Various			915			62			Various			519			166			324			221			—
Global Infrastructure Investors IV			6/2021			6/2027			16,709			16,709			2%			—			—			—			—			10
Global Infrastructure Investors III			6/2018			6/2021			7,176			1,820			4%			5,621			1,175			5,026			5,567			139
Global Infrastructure Investors II			10/2014			6/2018			3,040			124			4%			3,163			4,246			1,281			1,813			53
Global Infrastructure Investors			9/2011			10/2014			1,040			—			5%			1,050			2,228			—			—			—
Asia Pacific Infrastructure Investors			1/2020			1/2026			3,792			2,753			7%			1,324			285			1,161			1,291			33
Diversified Core Infrastructure Fund			12/2020			(5)			7,240			4,599			7%			2,649			77			2,641			2,730			—
Real Estate Partners Americas III			12/2020			1/2025			4,253			2,843			5%			1,410			11			1,399			1,703			43
Real Estate Partners Americas II			5/2017			12/2020			1,921			266			8%			1,892			1,994			813			1,226			160
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			4/2024			2,082			766			10%			1,316			—			1,316			1,618			33
Real Estate Partners Europe			9/2015			12/2019			710			136			10%			652			598			283			364			21
Asia Real Estate Partners			6/2019			6/2023			1,682			1,326			15%			356			3			356			486			11
Real Estate Credit Opportunity Partners II			4/2019			6/2022			950			413			5%			560			91			560			563			10
Real Estate Credit Opportunity Partners			2/2017			4/2019			1,130			122			4%			1,008			347			1,008			1,034			9
Property Partners Americas			12/2019			(5)			2,463			241			20%			2,222			89			2,222			2,981			32
Co-Investment Vehicles and Other			Various			Various			5,141			754			Various			4,134			1,602			3,618			3,887			14
Total Real Assets									65,328			33,073						32,944			15,565			24,492			27,881			593
Other
Unallocated Commitments (6)									3,011			3,011			Various			—			—			—			—			—
Private Markets Total									$	242,928		$	103,349					$	145,263		$	140,331		$	82,707		$	125,308		$	7,190

(1)The start date represents the date on which the general partner of the applicable fund commenced investment of the fund's capital or the date of the first closing. The end date represents the earlier of (i) the 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, and (ii) the date on which the last investment was made.

(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 March 31, 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)Open ended fund.

(6)"Unallocated Commitments" represent unallocated commitments from our strategic investor partnerships.

The table below presents information as of March 31, 2022, relating to the historical performance of certain of our Private Markets investment vehicles since inception, which we believe illustrates the benefits of our investment approach. This data does not reflect additional capital raised since March 31, 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 Markets Investment Funds			Commitment (2)			Invested						Realized (4)			Unrealized						Total Value						Gross IRR (5)			Net IRR (5)									Gross Multiple of Invested 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						35,093			2,371						37,464						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			152						10,756						16.5		%	11.4		%							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			279						1,335						6.7		%	2.6		%							1.3
Natural Resources Fund (2010)			887			887						123			63						186						(24.0)		%	(25.7)		%							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			9,752						17,183			8,098						25,281						24.3		%	19.7		%							2.6
Asian Fund II (2013)			5,825			6,839						5,946			3,284						9,230						8.6		%	6.8		%							1.3
Real Estate Partners Americas (2013)			1,229			1,020						1,405			61						1,466						16.4		%	11.6		%							1.4
Energy Income and Growth Fund (2013)			1,974			1,974						932			880						1,812						(2.9)		%	(5.3)		%							0.9
Global Infrastructure Investors II (2014)			3,040			3,163						4,246			1,813						6,059						20.1		%	17.4		%							1.9
European Fund IV (2015)			3,514			3,577						4,990			2,751						7,741						25.3		%	19.8		%							2.2
Real Estate Partners Europe (2015)			710			652						598			364						962						15.2		%	10.6		%							1.5
Next Generation Technology Growth Fund (2016)			659			666						810			1,285						2,095						38.9		%	33.3		%							3.1
Health Care Strategic Growth Fund (2016)			1,331			1,032						196			1,384						1,580						29.1		%	18.3		%							1.5
Americas Fund XII (2017)			13,500			12,275						4,712			23,039						27,751						40.1		%	33.1		%							2.3
Real Estate Credit Opportunity Partners (2017)			1,130			1,008						347			1,034						1,381						9.8		%	8.5		%							1.4
Core Investment Vehicles (2017)			24,237			11,627						712			18,825						19,537						25.8		%	24.4		%							1.7
Asian Fund III (2017)			9,000			7,393						3,671			13,477						17,148						45.0		%	35.9		%							2.3
Real Estate Partners Americas II (2017)			1,921			1,892						1,994			1,226						3,220						32.8		%	27.4		%							1.7
Global Infrastructure Investors III (2018)			7,176			5,621						1,175			5,567						6,742						12.9		%	9.1		%							1.2
Global Impact Fund (2019)			1,242			907						155			1,381						1,536						50.2		%	37.0		%							1.7
European Fund V (2019)			6,357			4,789						732			6,330						7,062						36.5		%	28.8		%							1.5
Energy Income and Growth Fund II (2019)			994			1,187						193			1,393						1,586						27.4		%	24.5		%							1.3
Asia Real Estate Partners (2019)			1,682			356						3			486						489						44.2		%	19.0		%							1.4
Next Generation Technology Growth Fund II (2019)			2,088			1,688						259			2,459						2,718						52.7		%	41.9		%							1.6
Real Estate Credit Opportunity Partners II (2019)			950			560						91			563						654						13.9		%	12.5		%							1.2
Asia Pacific Infrastructure Investors (2020)			3,792			1,324						285			1,291						1,576						27.2		%	15.3		%							1.2
Asian Fund IV (2020) (3)			14,735			2,679						—			3,060						3,060						—			—									—
Real Estate Partners Americas III (2021) (3)			4,253			1,410						11			1,703						1,714						—			—									—
Real Estate Partners Europe II (2021) (3)			2,082			1,316						—			1,618						1,618						—			—									—
Health Care Strategic Growth Fund II (2021) (3)			3,789			132						—			139						139						—			—									—
Global Infrastructure Investors IV (2021) (3)			16,709			—						—			—						—						—			—									—
North America Fund XIII (2021) (3)			18,400			—						—			—						—						—			—									—
European Fund VI (2022) (3)			7,063			—						—			—						—						—			—									—
Subtotal - Included Funds			213,203			129,461						140,066			106,438						246,504						17.0		%	13.2		%							1.9
All Funds			$	229,678		$	145,936					$	190,335		$	106,438					$	296,773					25.6		%	18.9		%							2.1

(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 March 31, 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 March 31, 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 Markets 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 Markets 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 Markets 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 Markets 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 - Public Markets

Through our Public Markets 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), 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”).

• 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 March 31, 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

Leveraged Credit Strategy						Inception Date												Gross Returns						Net Returns						Benchmark (1)						Benchmark Gross Returns
Bank Loans Plus High Yield						Jul 2008												7.12		%				6.52		%				65% S&P/LSTA Loan Index, 35% BoAML HY Master II Index (2)						5.68		%
Opportunistic Credit (3)						May 2008												11.00		%				9.30		%				50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (3)						5.92		%
Bank Loans						Apr 2011												5.22		%				4.64		%				S&P/LSTA Loan Index (4)						4.16		%
High-Yield						Apr 2011												6.43		%				5.85		%				BoAML HY Master II Index (5)						5.69		%
European Leveraged Loans (6)						Sep 2009												4.54		%				4.02		%				CS Inst West European Leveraged Loan Index (7)						3.54		%
European Credit Opportunities (6)						Sept 2007												5.86		%				5.00		%				S&P European Leveraged Loans (All Loans) (8)						4.06		%

(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.

The following table presents information regarding our credit investment funds where investors are subject to capital commitments from inception to March 31, 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
Public Markets Investment Funds						Inception Date						Commitment						Invested (1)						Realized (1)						Unrealized						Total Value						Gross IRR (2)						Net IRR (2)												Multiple of Invested Capital (3)						Gross Accrued Carried Interest
($ in Millions)
Dislocation Opportunities Fund						May 2020						$	2,967					$	2,056					$	177					$	2,231					$	2,408					N/A						N/A												N/A						$	49
Special Situations Fund II						Dec 2014						3,525						3,241						1,911						2,182						4,093						6.8		%				4.9		%										1.3						—
Special Situations Fund						Dec 2012						2,274						2,273						1,658						474						2,132						(1.5)		%				(3.4)		%										0.9						—
Mezzanine Partners						Mar 2010						1,023						990						1,097						203						1,300						9.2		%				6.0		%										1.3						(20)
Private Credit Opportunities Partners II						Dec 2015						2,245						1,738						621						1,471						2,092						7.2		%				5.6		%										1.2						—
Lending Partners III						Apr 2017						1,498						741						301						819						1,120						15.8		%				13.0		%										1.5						29
Lending Partners II						Jun 2014						1,336						1,179						1,149						134						1,283						3.2		%				1.8		%										1.1						—
Lending Partners						Dec 2011						460						419						451						19						470						3.5		%				1.9		%										1.1						—
Lending Partners Europe II						Jun 2019						837						467						47						491						538						23.2		%				17.1		%										1.2						2
Lending Partners Europe						Mar 2015						848						662						375						258						633						(1.5)		%				(4.1)		%										1.0						—
Other Alternative Credit Vehicles						Various						14,588						6,560						4,696						4,179						8,875						N/A						N/A												N/A						122
All Funds												$	31,601					$	20,326					$	12,483					$	12,461					$	24,944																													$	182

(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.

Public Markets AUM

As of March 31, 2022, our Public Markets business line had $210.8 billion of AUM, comprised of $102.2 billion of assets managed in our leveraged credit strategies, $71.3 billion of assets managed in our private credit strategy, and $8.7 billion of assets managed in our SIG strategy, $27.0 billion of assets managed through our hedge fund platform, and $1.6 billion of assets managed in other Public Markets strategies. We manage $96.1 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 $17.4 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.

($ in millions)						AUM						FPAUM						Typical Management Fee Rate						Incentive Fee / Carried Interest						Preferred Return						Duration of Capital
Leveraged Credit:
Leveraged Credit SMAs/Funds						$	77,825					$	75,906					0.15% - 1.10%						Various (1)						Various (1)						Subject to redemptions
CLOs						22,730						22,730						0.40% - 0.50%						Various (1)						Various (1)						10-14 Years (2)
Total Leveraged Credit						100,555						98,636
Alternative Credit: (3)
Private Credit						57,015						51,520						0.30% - 1.50% (4)						10.00 - 20.00%						5.00 - 8.00%						8-15 Years (2)
SIG						8,818						4,517						0.50% - 1.75%						10.00 - 20.00%						7.00 - 12.00%						7-15 Years (2)
Total Alternative Credit						65,833						56,037
Hedge Funds (5)						27,008						27,008						0.50% - 2.00%						Various (1)						Various (1)						Subject to redemptions
BDCs (6)						17,423						17,423						0.60%						8.00%						7.00%						Indefinite
Total						$	210,819					$	199,104

(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 FS KKR Capital Corp. (NYSE: 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.

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 Markets, Public Markets and Credit Markets business lines.

Typically, the funds in our Private Markets and Public Markets 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 our Private Markets and Public Markets funds as well as Principal Activities investments that do not involve our Private Markets or Public Markets 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.

The chart below presents the holdings of our Principal Activities business line by asset class as of March 31, 2022.

Holdings by Asset Class (1)

(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.

Insurance

Our insurance business is operated by Global Atlantic, which we acquired on February 1, 2021. As of March 31, 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 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 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 March 31, 2022, Global Atlantic served approximately three million policyholders.

The following table represents Global Atlantic’s new business volumes by business and product for the three months ended March 31, 2022 and 2021:

						Three Months Ended March 31, 2022						Three Months Ended March 31, 2021**(1)**
($ in millions)
Individual channel:
Fixed-rate annuities						$	1,039					$	1,038
Fixed-indexed annuities						904						595
Variable annuities						11						8
Total retirement products						$	1,954					$	1,641
Life insurance products						$	7					$	6
Preneed life						$	65					$	38
Institutional channel:
Block						$	2,777					$	1,079
Flow & pension risk transfer						1,699						764
Funding agreements						1,100						—
Total institutional channel						$	5,576					$	1,843

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Note: In Global Atlantic's individual channel, sales of annuities include all money paid into new and existing contracts. Individual channel sales of traditional life products are based on commissionable premium and individual channel sales for preneed life are based on the face amount of insurance. Traditional life sales do not include the recurring premiums that policyholders may pay over time. New business volume from our institutional channel is based on the assets assumed, net of any ceding commission, and is before any retrocession to investment vehicles that participate in qualifying reinsurance transactions sourced by Global Atlantic.

(1)For the three month period ended March 31, 2021, the results of Global Atlantic's insurance operations included in our condensed consolidated results of operations are from February 1, 2021 through March 31, 2021.

The table below represents a breakdown of Global Atlantic’s policy liabilities by business and product type as of March 31, 2022, separated by reserves originated through its individual and institutional markets.

			Reserves as of March 31, 2022
			Individual market						Institutional market**(4)**						Total						Ceded						Total, net						Percentage of total
			($ in thousands, except percentages, if applicable)
Fixed-rate annuity			$	22,196,835					$	43,022,317					$	65,219,152					$	(15,416,304)					$	49,802,848					47.9		%
Fixed-indexed annuity			21,199,795						7,222,995						28,422,790						(3,454,255)						24,968,535						20.9		%
Variable annuity			3,086,313						3,715,421						6,801,734						(643,895)						6,157,839						5.0		%
Indexed universal life			12,188,443						—						12,188,443						(72,575)						12,115,868						9.0		%
Preneed life			2,857,392						—						2,857,392						—						2,857,392						2.1		%
Other life insurance(1)			2,039,329						10,361,283						12,400,612						(3,771,018)						8,629,594						9.1		%
Funding agreements(2)			2,205,897						4,730,611						6,936,508						—						6,936,508						5.1		%
Closed block			—						1,271,351						1,271,351						(1,219,024)						52,327						0.9		%
Other corporate(3)			—						48,447						48,447						(48,088)						359						—		%
Total reserves			$	65,774,004					$	70,372,425					$	136,146,429					$	(24,625,159)					$	111,521,270					100.0		%
Total general account			$	62,976,938					$	68,099,749					$	131,076,687					$	(24,625,159)					$	106,451,528					96.3		%
Total separate account			2,797,066						2,272,676						5,069,742						—						5,069,742						3.7		%
Total reserves			$	65,774,004					$	70,372,425					$	136,146,429					$	(24,625,159)					$	111,521,270					100.0		%

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(1)“Other life products” includes universal life, term and whole life insurance products.

(2)"Funding agreements” includes funding agreements associated with Federal Home Loan Bank borrowings and under our funding-agreement backed-notes 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 March 31, 2022, reserves sourced through for block, flow and PRT transactions were $51.1 billion, $6.8 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.

During the period ended March 31, 2022, the United States showed signs of continued domestic economic momentum, supported by strong consumer demand. Global trade, however, was a headwind for the United States, as exports fell by 5.9% at an annualized rate during the first quarter, hindered by ongoing supply chain tensions (including those due to COVID-19 and the Russian invasion of Ukraine) and more halting demand recoveries in Europe and Asia. Inflation also presented an economic

headwind during the period, as it continued to accelerate from already elevated levels, spurred by multiple factors including high commodity prices, a tight labor market, and low residential vacancy rates. The U.S. Federal Reserve has signaled its intention to tighten monetary conditions in response to higher inflation, and in March 2022 raised interest rates for the first time since December 2018, leading to increased market volatility. The ongoing conflict in Ukraine has also contributed to higher market volatility globally. In the United States, real GDP contracted at a -1.4% seasonally-adjusted annualized rate in the quarter ended March 31, 2022, after expanding at a 6.9% seasonally-adjusted annualized rate in the quarter ended December 31, 2021; the U.S. unemployment rate was 3.6% as of March 31, 2022, down from 3.9% as of December 31, 2021; the U.S. core consumer price index rose 6.5% on a year-over-year basis as of March 31, 2022, up from 5.5% on a year-over-year basis as of December 31, 2021; and the effective federal funds rate set by the U.S. Federal Reserve was 0.3% as of March 31, 2022, up from 0.1% as of December 31, 2021.

During the period ended March 31, 2022, the euro area (also known as the eurozone) economy continued to expand despite headwinds from higher energy prices and the Russian invasion of Ukraine, which are expected to weigh increasingly on the outlook for European economic growth. The economic uncertainty caused by the ongoing conflict in Ukraine is significant. The reliability of future supplies of Russian oil and gas to Europe is under question. Importantly, a sudden disruption of energy flows could spur a contraction in European economic activity. Euro area real GDP rose by 0.2% on a seasonally-adjusted quarter-over-quarter basis in the quarter ended March 31, 2022, down from the 0.3% increase recorded in the quarter ended December 31, 2021. In addition, euro area unemployment was 6.8% as of March 31, 2022, down from 7.0% as of December 31, 2021; euro area core inflation was 2.9% on a year-over-year basis as of March 31, 2022, up from 2.6% on a year-over-year basis as of December 31, 2021; and the short-term benchmark interest rate set by the European Central Bank was 0.0% as of March 31, 2022, unchanged from December 31, 2021. As of March 31, 2022, we have no investments in any portfolio companies whose executive headquarters are located in Russia or Ukraine, and we believe that the direct exposure of our investment portfolio to Russia and Ukraine is insignificant.

During the period ended March 31, 2022, the Chinese economy faced serious headwinds from an ongoing slowdown in China’s property sector, as well as from the government’s zero-COVID policies. The government’s measures to contain COVID-19 outbreaks in Chinese cities are likely to weigh on Chinese growth throughout 2022. Furthermore, demand for China’s exports is beginning to slow, as manufacturing recovers in other parts of the world, particularly in areas with higher baseline levels of COVID-19 vaccinations and prior infections. Real GDP in China grew by 1.3% on a seasonally adjusted quarter-over-quarter basis in the quarter ended March 31, 2022, compared to growth of 1.5% reported for the quarter ended December 31, 2021. Estimated core inflation in China was 1.1% on a year-over-year basis as of March 31, 2022, down from 1.2% on a year-over-year basis as of December 31, 2021.

In Japan, the economic recovery from COVID-19 has slowed recently, with higher energy costs and a weaker currency presenting headwinds to GDP growth in the near term. In Japan, real GDP growth for the quarter ended March 31, 2022 is estimated to have been -0.1% on a seasonally-adjusted quarter-over-quarter basis, down from 1.1% in the quarter ended December 31, 2021; core inflation fell to -1.6% on a year-over-year basis as of March 31, 2022, down from -1.3% as of December 31, 2021; and the short-term benchmark interest rate set by the Bank of Japan was -0.1% as of March 31, 2022, unchanged from December 31, 2021.

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 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 further 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 are likely to further exacerbate these issues and trends. Other key issues include (i) further developments regarding COVID-19, including the spread of variants such as Delta and Omicron, which may prolong the adverse economic impact of the 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, the U.S. Congress is proposing (and after the date of this report may propose other) various significant changes in tax law, including 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 ongoing central bank quantitative easing campaigns and comparatively low interest rates relative to the United States could potentially experience further currency volatility and weakness relative to the U.S. dollar.

With respect to our insurance business, fluctuations in market interest rates can expose Global Atlantic to the risk of reduced income in respect of its investment portfolio, increases in the cost of acquiring or maintaining its insurance liabilities, increases in the cost of hedging, or other fluctuations in Global Atlantic's financial, capital and operating profile which materially and adversely affect the business. 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 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 March 31, 2022, global equity markets were negative, with the S&P 500 down 4.6% and the MSCI World Index down 5.0% 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 20.6 as of March 31, 2022, increasing from 17.2 as of December 31, 2021. For the period between March 31, 2022 and April 30, 2022, global equity markets were negative, with the S&P 500 down 8.7% and the MSCI World Index down 8.3% on a total return basis including dividends. Equity market volatility as evidenced by VIX, ended at 33.4 as of April 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, particularly in asset management, are in non-investment grade credit instruments, and, particularly in insurance, in 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.

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 should increase, and tightening credit spreads 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 March 31, 2022, U.S. investment grade corporate bond spreads (BofA Merrill Lynch US Corporate Index) widened by 24 basis points and U.S. high-yield corporate bond spreads (BofAML HY Master II Index) widened by 33 basis points. The non-investment grade credit indices were down during the quarter ended March 31, 2022, with the S&P/LSTA Leveraged Loan Index down 0.1% and the BAML US High Yield Index down 4.5%. During the quarter ended March 31, 2022, 10-year government bond yields rose 83 basis points in the United States, rose 64 basis points in the United Kingdom, rose 73 basis points in Germany, rose 1 basis point in China, and rose 15 basis points in Japan. In the period between March 31, 2022 and April 30, 2022, U.S. investment grade corporate bond spreads (BofA Merrill Lynch US Corporate Index) widened by 19 basis points and U.S. high-yield corporate bond spreads (BofAML HY Master II Index) widened by 54 basis points. The non-investment grade credit indices were mixed in the period between March 31, 2022 and April 30, 2022, with the S&P/LSTA Leveraged Loan Index up 0.2% and the BAML US High Yield Index down 3.6%. In the period between March 31, 2022 and April 30, 2022, 10-year government bond yields rose 60 basis points in the United States, rose 30 basis points in the United Kingdom, rose 39 basis points in Germany, rose 5 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 March 31, 2022, the euro fell 2.7%, the British pound fell 2.9%, the Japanese yen fell 5.4%, and the Chinese renminbi rose 0.3%, 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 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 on Form 10-K for the year ended December 31, 2021.

Commodity Markets. Our Private Markets portfolio contains energy real asset investments, and certain of our other Private Markets and Public Markets 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 March 31, 2022, the 3-year forward price of WTI crude oil increased approximately 16%, and the 3-year forward price of natural gas increased approximately 21%. The 3-year forward price of WTI crude oil increased from approximately $63 per barrel to $73 per barrel, and the 3-year forward price of natural gas increased from approximately $3.13 per mcf to $3.77 per mcf as of December 31, 2021 and March 31, 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 March 31, 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 on Form 10-K for the year ended December 31, 2021.

Business Conditions

Our operating revenues consist of fees, performance income and investment 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 re-insurance vehicles, as attractive means for capital appreciation or income. Since 2010, we have expanded into strategies such as real assets, credit, core, impact and, through hedge fund partnerships, hedge funds, and insurance. In several of our asset management strategies, our first time funds have begun raising successor funds, and we expect the cost of raising such successor funds to be lower. 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 on Form 10-K for the year ended December 31, 2021.

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 on Form 10-K for the year ended December 31, 2021.

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 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 three months ended March 31, 2021 are from February 1, 2021 (the closing date of the acquisition) through March 31, 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 March 31, 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; (v) revenue earned by oil and gas entities that are consolidated; and (vi) 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) 20‐25% of fee related revenues, (ii) 60‐70% of realized carried interest and incentive fees not included in fee related performance revenues or earned from our hedge fund partnerships, and (iii) 10‐20% of 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 and II Preferred, Common Stock as of March 31, 2022 would have been reduced by approximately $2.33 per share, compared to our reported $24.72 per share on such date, and our book value as of March 31, 2022 would have been reduced by approximately $2.26 per adjusted share, compared to our reported book value of $28.45 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.

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, expenses incurred by oil and gas entities, CLOs and investment funds that are 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."

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 March 31, 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, 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.

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 are consolidated in the financial statements as well as the ownership interests in KKR Group Partnership that are held by KKR Holdings (and holders of other 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 KKR Holdings L.P. (and holders of other 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 collateralized financing entities (“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, Series A and B Preferred Stock dividends (which have been redeemed), Net Income Attributable to Noncontrolling Interests and Income Taxes Paid. Series C Mandatory Convertible Preferred Stock dividends have been 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. Income Taxes Paid represents the implied 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 units in KKR Holdings L.P. and other exchangeable securities were exchanged for common stock of KKR & Co. Inc. Income Taxes Paid includes amounts paid pursuant to the tax receivable agreement and 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 KKR Holdings L.P., 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 the investors of KKR funds and other noncontrolling interest holders and to the holders of preferred stock. KKR's book value includes (x) the net impact of KKR's tax assets and liabilities as prepared under GAAP and (y) 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 is expected to occur upon the completion of the mergers contemplated by the Reorganization Agreement. 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. 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 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 is presented prior to giving effect to the allocation of income (loss) among KKR & Co. Inc., KKR Holdings L.P. and other exchangeable securities, and the consolidation of the investment funds, vehicles and accounts that KKR advises, manages or sponsors (including collateralized financing entities). 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) unrealized carried interest, (ii) net unrealized gains (losses) on investments, and (iii) related unrealized performance income compensation. Management fees earned by KKR as the adviser, manager or sponsor for its investment funds, vehicles and accounts, including management fees paid to KKR by Global Atlantic's insurance companies and

management fees paid to Global Atlantic by reinsurance investment vehicles, 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.

Other Terms and Capital Metrics

Adjusted Shares

Adjusted shares represents shares of common stock of KKR & Co. Inc. outstanding under GAAP adjusted to include shares issuable upon exchange of all units of KKR Holdings L.P. and other exchangeable securities and the number of shares of common stock assumed to be issuable upon conversion of the Series C Mandatory Convertible Preferred Stock. 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.

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; and (vii) the fair 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's 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.

Condensed Consolidated Results of Operations (GAAP Basis - Unaudited)

The following is a discussion of our consolidated results of operations for the three months ended March 31, 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 quarter ended March 31, 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 March 31, 2021.

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Revenues
Asset Management
Fees and Other			$	780,511					$	493,311					$	287,200
Capital Allocation-Based Income (Loss)			(945,743)						2,684,647						(3,630,390)
			(165,232)						3,177,958						(3,343,190)
Insurance
Net Premiums			372,144						1,176,142						(803,998)
Policy Fees			318,436						201,683						116,753
Net Investment Income			812,605						444,781						367,824
Net Investment-Related Gains (Losses)			(368,680)						(455,702)						87,022
Other Income			34,744						18,144						16,600
			1,169,249						1,385,048						(215,799)
Total Revenues			1,004,017						4,563,006						(3,558,989)
Expenses
Asset Management
Compensation and Benefits			283,672						1,306,797						(1,023,125)
Occupancy and Related Charges			18,149						15,200						2,949
General, Administrative and Other			234,665						166,997						67,668
			536,486						1,488,994						(952,508)
Insurance
Policy Benefits and Claims			726,060						1,485,318						(759,258)
Amortization of Policy Acquisition Costs			(7,733)						(20,478)						12,745
Interest Expense			13,219						10,672						2,547
Insurance Expenses			116,743						52,084						64,659
General, Administrative and Other			167,214						79,955						87,259
			1,015,503						1,607,551						(592,048)
Total Expenses			1,551,989						3,096,545						(1,544,556)
Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities			914,261						2,696,200						(1,781,939)
Dividend Income			662,350						75,746						586,604
Interest Income			352,556						367,455						(14,899)
Interest Expense			(281,759)						(251,756)						(30,003)
Total Investment Income (Loss)			1,647,408						2,887,645						(1,240,237)
Income (Loss) Before Taxes			1,099,436						4,354,106						(3,254,670)
Income Tax Expense (Benefit)			(3,166)						438,739						(441,905)

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Net Income (Loss)			1,102,602						3,915,367						(2,812,765)
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests			(63)						—						(63)
Net Income (Loss) Attributable to Noncontrolling Interests			1,159,185						2,245,531						(1,086,346)
Net Income (Loss) Attributable to KKR & Co. Inc.			(56,520)						1,669,836						(1,726,356)
Series A Preferred Stock Dividends			—						5,822						(5,822)
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			$	(73,770)					$	1,644,245					$	(1,718,015)

Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Asset Management

Revenues

For the three months ended March 31, 2022 and 2021, revenues consisted of the following:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Management Fees						$	398,046					$	276,181					$	121,865
Fee Credits						(187,745)						(35,398)						(152,347)
Transaction Fees						466,966						165,893						301,073
Monitoring Fees						39,400						35,388						4,012
Incentive Fees						7,057						3,438						3,619
Expense Reimbursements						41,303						27,729						13,574
Consulting Fees						15,484						20,080						(4,596)
Total Fees and Other						780,511						493,311						287,200
Carried Interest						(783,688)						2,140,426						(2,924,114)
General Partner Capital Interest						(162,055)						544,221						(706,276)
Total Capital Allocation-Based Income (Loss)						(945,743)						2,684,647						(3,630,390)
Total Revenues - Asset Management						$	(165,232)					$	3,177,958					$	(3,343,190)

Fees and Other

Total Fees and Other for the three months ended March 31, 2022 increased compared to the three months ended March 31, 2021 primarily as a result of the increase in transaction fees and management fees.

For a more detailed discussion of the factors that affected our transaction fees during the period, see "—Analysis of Asset Management Segment Operating Earnings."

The increase in management fees was primarily due to management fees earned from North America Fund XIII, Global Infrastructure Investors IV, and Health Care Strategic Growth Fund II, each of which entered its investment period in the second quarter of 2021. These increases were partially offset primarily by a decrease in management fees earned from Americas Fund XII as a result of entering its post-investment period in the second quarter of 2021, which now earns fees based on capital invested rather than capital committed and at a lower fee rate.

Management fees due from consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are funded by, and earned from, noncontrolling interests, KKR's allocated share of the net income from the consolidated investment funds and other vehicles is increased by the amount of fees that are eliminated. Accordingly, the elimination of these fees does not impact the net income (loss) attributable to KKR or KKR stockholders' equity. For a more detailed discussion on the factors that affect our management fees during the period including the fees earned from unconsolidated investment funds and other vehicles see "—Analysis of Asset Management Segment Operating Earnings."

Fee credits increased compared to the prior period as a result of a higher level of transaction fees in our Private Markets and Public Markets business lines. Fee credits owed to consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are owed to noncontrolling interests, KKR's allocated share of the net income from the consolidated investment funds and other vehicles is decreased by the amount of fee credits that are eliminated. Accordingly, the elimination of these fee credits does not impact the net income (loss) attributable to KKR or KKR stockholders' equity.

Transaction and monitoring fees are earned from KKR portfolio companies and are not eliminated upon consolidation because these fees are earned from companies which are not consolidated. Furthermore, transaction fees earned in our Capital Markets business line are not shared with fund investors. Accordingly, certain transaction fees are reflected in revenues without a corresponding fee credit.

Capital Allocation-Based Income (Loss)

Capital Allocation-Based Income (Loss) for the three months ended March 31,2022 was negative primarily due to net depreciation of the underlying investments at certain of our carry earning investment funds, most notably Americas Fund XII and Asian Fund II. Capital Allocation-Based Income (Loss) for the three months ended March 31, 2021 was positive due to the net appreciation of the underlying investments at our carry earning investment funds, most notably Americas Fund XII, North America Fund XI and 2006 Fund.

KKR generally calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (a) positive performance resulting in an increase in the carried interest allocated to the general partner or (b) negative performance that would cause the amount due to KKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner. In each case, it is necessary to calculate the carried interest on cumulative results compared to the carried interest recorded to date and to make the required positive or negative adjustments. Additionally, unrealized carried interest and general partner capital interest reverse upon a realization, and unrealized carried interest and general partner capital interest can be negative if the amount of realized carried interest exceeds total unrealized carried interest generated in the period.

Investment Income (Loss) - Asset Management

Net Gains (Losses) from Investment Activities

For additional information about net gains (losses) from investment activities, see Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" in our financial statements.

Net Gains (Losses) from Investment Activities for the three months ended March 31, 2022

The net gains from investment activities for the three months ended March 31, 2022 were comprised of net realized gains of $279.6 million and net unrealized gains of $634.6 million.

Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.

Realized Gains and Losses from Investment Activities

For the three months ended March 31, 2022, net realized gains related primarily to the sales of our investments in Fiserv Inc. (NASDAQ: FISV) and Söderberg & Partners (financial services sector). Partially offsetting these realized gains were realized losses primarily relating to a real estate equity investment in one of our consolidated US real estate funds and certain investments held in our consolidated SIG funds.

Unrealized Gains and Losses from Investment Activities

For the three months ended March 31, 2022, net unrealized gains were driven primarily by mark-to-market gains from (i) Crescent Energy Company (NYSE: CRGY), (ii) Viridor Limited (infrastructure), and (iii) investments held in our consolidated real estate equity funds. These unrealized gains were partially offset by mark-to-market losses related to (i) certain investments held in our consolidated CLOs and SIG funds, (ii) OutSystems Holdings S.A (technology sector) and (iii) BridgeBio Pharma, Inc. (NASDAQ: BBIO).

For a discussion of other factors that affected KKR's realized investment income for the three months ended March 31, 2022, see "—Analysis of Asset Management Segment Operating Results."

Net Gains (Losses) from Investment Activities for the three months ended March 31, 2021

The net gains from investment activities for the three months ended March 31, 2021 were comprised of net realized gains of $584.4 million and net unrealized gains of $2,111.8 million.

Realized Gains and Losses from Investment Activities

For the three months ended March 31, 2021, net realized gains related primarily to the (i) sale of our investment in Flutter Entertainment PLC (LON: FLTR), (ii) partial sale of our investment in BridgeBio Pharma, Inc., and (iii) sale of our investment in American Equity Investment Life Holding Company (NYSE: AEL). Partially offsetting these realized gains were realized losses primarily relating to certain investments held in our consolidated special situations funds.

Unrealized Gains and Losses from Investment Activities

For the three months ended March 31, 2021, net unrealized gains were driven primarily by (i) mark-to-market gains from private equity, growth equity and core investments held by KKR and certain consolidated funds, the most significant of which were OutSystems Holdings S.A, PetVet Care Centers, LLC (healthcare sector), and USI, Inc. (financial services sector) and (ii) mark-to-market gains for certain investments held in our consolidated energy funds, special situations funds and CLOs. These unrealized gains were partially offset by (i) mark-to-market losses from our investment in BridgeBio Pharma, Inc. and (ii) the reversal of previously recognized unrealized gains relating to the realization activity described above.

For a discussion of other factors that affected KKR's realized investment income for the three months ended March 31, 2022, see "—Analysis of Asset Management Segment Operating Results."

Dividend Income

During the three months ended March 31, 2022, the most significant dividends received included approximately $299.0 million from investments held in our consolidated real estate core plus and opportunistic equity funds and $86.6 million from our investment in Exact Group B.V. (technology sector) held in our consolidated core vehicles. During the three months ended March 31, 2021, the most significant dividends received included $26.6 million from investments held in our consolidated real estate funds and a dividend of $17.7 million from our investment in US Foods Holding Corp. (NYSE: USFD), which is held by a consolidated fund.

Significant dividends from portfolio companies and consolidated funds are generally not recurring quarterly dividends, and while they may occur in the future, their size and frequency are variable. For a discussion of other factors that affected KKR's dividend income, see "—Analysis of Asset Management Segment Operating Results."

Interest Income

The decrease in interest income during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the deconsolidation of KKR Real Estate Finance Trust Inc. (NYSE: KREF) ("KREF") in the fourth quarter of 2021, partial offset by (i) the impact of closing additional CLOs that are consolidated subsequent to March 31, 2021 and (ii) a higher level of interest income from investments held in certain of our consolidated alternative credit funds, primarily related to an increase in the amount of capital deployed. For a discussion of other factors that affected KKR's interest income, see "—Analysis of Asset Management Segment Operating Results."

Interest Expense

The increase in interest expense during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the (i) increase in the amount of borrowings outstanding from consolidated funds and other vehicles, (ii) impact of closing additional CLOs that are consolidated subsequent to March 31, 2021, and (iii) the impact of issuances of our senior notes subsequent to March 31, 2021. Partially offsetting these increases was the deconsolidation of KREF in the fourth quarter of 2021. For a discussion of other factors that affected KKR's interest expense, see "—Analysis of Non-GAAP Performance Measures."

Expenses - Asset Management

Compensation and Benefits Expense

The decrease in compensation and benefits expense during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the reversal of previously recognized accrued carried interest compensation, partially offset by (i) higher equity-based compensation charges and (ii) a higher level of discretionary cash compensation accrued resulting from a higher level of fee revenue and realized performance income in the current period.

General, Administrative and Other

The increase in general, administrative and other expenses during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to a higher level of (i) expenses at our consolidated funds and investment vehicles, (ii) strategic corporate transaction-related charges, (iii) expenses reimbursable by our investment funds, (iv) placement fees incurred related to capital raising activities for various private markets funds and (v) professional fees, information technology and other administrative costs in connection with the overall growth of the firm.

Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Insurance

As discussed above, our Insurance segment consists solely of the operations of Global Atlantic, which was acquired on February 1, 2021. Accordingly, prior periods have been excluded for Insurance segment results. For the three month period ended March 31, 2021, the results of Global Atlantic's insurance operations included in our condensed consolidated results of operations are from February 1, 2021 through March 31, 2021.

Revenues

For the three months ended March 31, 2022, revenues consisted of the following:

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Net Premiums			$	372,144					$	1,176,142					$	(803,998)
Policy Fees			318,436						201,683						116,753
Net Investment Income			812,605						444,781						367,824
Net Investment-Related Losses			(368,680)						(455,702)						87,022
Other Income			34,744						18,144						16,600
Total Insurance Revenues			$	1,169,249					$	1,385,048					$	(215,799)

Net Premiums

Net premiums decreased for the three months ended March 31, 2022 as compared to the prior period primarily due to lower initial premiums related to fewer new reinsurance transactions with life contingencies assumed in the three months ended March 31, 2022 as compared to the prior period. These initial premiums are offset by a comparable increase in policy reserves reported within policy benefits and claims (as discussed below).

Policy fees

Policy fees increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the acquisition of Global Atlantic by KKR (the “GA Acquisition”) on February 1, 2021.

Net investment income

Net investment income increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021 and (ii) increased average assets under management due to growth in our Institutional segment assets as a result of new reinsurance transactions and Individual sales.

Net investment-related losses

The components of net investment-related losses were as follows:

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Equity index options			$	(223,366)					$	104,021					$	(327,387)
Funds withheld payable at interest embedded derivatives			1,180,435						313,230						867,205
Funds withheld receivable embedded derivatives			(33,980)						55,883						(89,863)
Equity future contracts			79,796						(69,583)						149,379
Interest rate contracts			(150,176)						(266,731)						116,555
Foreign currency forwards			8,557						1,810						6,747
Credit risk contracts			(1,532)						(36)						(1,496)
Other			—						9,938						(9,938)
Net gains on derivative instruments			859,734						148,532						711,202
Net other investment gains (losses)			(1,228,414)						(604,234)						(624,180)
Net investment-related gains (losses)			$	(368,680)					$	(455,702)					$	87,022

Net losses on derivative instruments

The increase in the fair value of embedded derivatives on funds withheld at interest payable was primarily driven by the change in fair value of the underlying investments in the funds withheld payable at interest portfolio, which is primarily comprised of fixed maturity securities (designated as trading for accounting purposes).

The increase in the fair value of equity futures and interest rate contracts were driven primarily by the performance of equity markets and interest rates. Global Atlantic purchases equity futures primarily to hedge the market risk in our variable annuity products which are accounted for in policy benefits and claims. The majority of Global Atlantic's equity futures are based on the S&P 500 Index, which decreased during the three months ended March 31, 2022, as compared to an increase during the three months ended March 31, 2021, resulting in respectively, a gain, and a loss, on equity futures contracts in the respective periods. Market interest rates increased during both the three months ended March 31, 2022 and the three months ended March 31, 2021, resulting in a loss on interest rate contracts.

The decrease in the fair value of equity index options was primarily driven by the performance of the indexes upon which call options are based. Global Atlantic purchases equity index options to hedge the market risk of embedded derivatives in indexed universal life and fixed-indexed annuity products (the change in which is accounted for in policy benefits and claims). The majority of Global Atlantic's equity index call options are based on the S&P 500 index, which decreased during the three months ended March 31, 2022, as compared to the increase during the three months ended March 31, 2021.

The decrease in the fair value of embedded derivatives on funds withheld at interest receivable was primarily due to widening of credit spreads during the three months ended March 31, 2022, as compared to the tightening of credit spreads during three months ended March 31, 2021.

Net other investment losses

The components of net other investment losses were as follows:

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Realized gains (losses) on investments not supporting asset-liability matching strategies			$	14,964					$	—					$	14,964
Realized gains (losses) on equity investments			—						2,243						(2,243)
Realized gains (losses) on available-for-sale fixed maturity debt securities			(243,350)						(45,640)						(197,710)
Credit loss allowances			(29,897)						(219,601)						189,704
Unrealized gains (losses) on fixed maturity securities classified as trading			(1,038,446)						(317,052)						(721,394)
Unrealized gains (losses) on investments classified as trading or accounted under a fair-value option			(2,493)						(12,166)						9,673
Unrealized gains (losses) on real estate investments recognized at fair value under investment company accounting			77,692						—						77,692
Realized gains (losses) on funds withheld at interest payable portfolio			(26,387)						(7,378)						(19,009)
Realized gains (losses) on funds withheld at interest receivable portfolio			25,600						354						25,246
Other			(6,097)						(4,994)						(1,103)
Net other investment gains (losses)			$	(1,228,414)					$	(604,234)					$	(624,180)

The increase in net other investment losses were due to (i) the increase in unrealized losses on fixed maturity securities classified as trading is primarily driven by an increase in interest rates and widening credit spreads in the current period, and (ii) the increase in realized losses on available-for-sale fixed maturity debt securities is primarily due to portfolio rotations in a higher interest rate environment.

Offsetting these losses were (i) a higher credit loss allowance on mortgage and other loan receivables in the prior period primarily due to the recognition of an initial credit loan loss allowance upon the adoption of the current expected credit loss accounting standard concurrent with the GA Acquisition, and (ii) unrealized gains on real estate investments recognized at fair value under investment company accounting.

Other income

Other income increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021 and (ii) increased administration, management and distribution fees earned from an increase in the volume of ceded reinsurance.

Expenses

Policy benefits and claims

Policy benefits and claims decreased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) lower initial reserves related to fewer new reinsurance transactions with life contingencies in the three months ended March 31, 2022 as compared to the prior period, and (ii) a decrease in the value of embedded derivatives in our indexed universal life and fixed indexed annuity products, as a result of lower equity market returns (as discussed above under "–Net investment-related losses–Gains on derivatives," Global Atlantic purchases equity index options in order to hedge this risk, the fair value changes of which are accounted for in gains on derivative instruments, and generally offsetting the change in embedded derivative fair value reported in policy benefits and claims). This decrease was offset by (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) an increase in net flows from both individual and institutional channel sales, and (iii) an increase in variable annuity reserves primarily due to lower equity market returns.

Amortization of policy acquisition costs

Amortization of policy acquisition costs increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) a decrease in the net benefit (that is, a reduction to expense) from the amortization of the net negative insurance intangibles recognized as part of purchase accounting of the GA Acquisition, as the underlying business runs off, and (ii) growth in our individual markets channel. Offsetting these increases in expense was (i) a decrease of amortization due to realized investment losses and (ii) the impact of one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021.

Interest expense

Interest expense increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) a net increase in debt outstanding due to the issuance of new senior and subordinated notes, partially offset by the pay-down of other debt and (ii) the impact of one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021.

Insurance expenses

Insurance expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased commission expense related to increased sales in our individual market and increased reinsurance transactions and (iii) increased reinsurance ceding expense allowances paid for policy administration services as a result of an increase in reinsurance transactions.

General, administrative and other

General, administrative and other expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased employee compensation and benefits-related expenses, (iii) increased professional service fees, (iv) increased third-party administrator ("TPA") policy servicing fees, all due to growth of the business, and (v) travel returning to pre-pandemic levels.

Other Condensed Consolidated Results of Operations (GAAP Basis - Unaudited)

Income Tax Expense (Benefit)

For the three months ended March 31, 2022, income tax benefit was $3.2 million compared to an income tax expense of $438.7 million in the prior period. In the current period, a deferred tax benefit was generated primarily due to a net operating loss driven by net capital allocation-based losses. Our effective tax rate under GAAP for the three months ended March 31, 2022 was (0.3)%. For a discussion of factors that impacted KKR's tax provision, see Note 18 "Income Taxes" to the financial statements included elsewhere in this report. The amount of U.S. corporate income taxes we pay in future periods may be materially increased if adverse tax laws become enacted. See “—Business Environment— Economic and Market Conditions” in this report.

Net Income (Loss) Attributable to Noncontrolling Interests

Net Income (Loss) attributable to noncontrolling interests for the three months ended March 31, 2022 relates primarily to net income (loss) attributable to (i) interests of KKR Holdings and other exchangeable securities representing ownership interests in KKR Group Partnership, (ii) third-party limited partner interests in consolidated investment funds and (iii) interests that co-investors and rollover investors hold in Global Atlantic. Net income (loss) attributable to noncontrolling interests for the three months ended March 31, 2022 decreased compared to the prior period primarily due to (i) a lower level of net income generated during the current period allocable to the holders of the noncontrolling interests in our consolidated funds and (ii) a net loss attributable to interests of KKR Holdings and other exchangeable securities in the current period.

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

Net Loss attributable to KKR & Co. Inc. for the three months ended March 31, 2022 was primarily due to (i) net capital allocation-based losses partially offset by a higher level of fees and a reversal of previously recognized accrued carried interest compensation as described above.

Condensed Consolidated Statements of Financial Condition (GAAP Basis - Unaudited)

The following table provides the Condensed Consolidated Statements of Financial Condition on a GAAP basis as of March 31, 2022 and December 31, 2021.

(Amounts in thousands, except per share amounts)
						As of						As of
						March 31, 2022						December 31, 2021
Assets
Asset Management
Cash and Cash Equivalents						$	8,324,897					$	6,699,668
Investments						88,770,480						88,775,514
Other Assets						3,789,249						4,244,894
						100,884,626						99,720,076
Insurance
Cash and Cash Equivalents						4,590,032						3,391,934
Investments						122,799,871						123,763,675
Other Assets						38,016,452						37,409,755
						165,406,355						164,565,364
Total Assets						$	266,290,981					$	264,285,440
Liabilities and Equity
Asset Management
Debt Obligations						$	36,112,872					$	36,669,755
Other Liabilities						7,699,454						8,359,619
						43,812,326						45,029,374
Insurance
Debt Obligations						2,029,769						1,908,006
Other Liabilities						163,151,015						159,208,840
						165,180,784						161,116,846
Total Liabilities						$	208,993,110					$	206,146,220
Redeemable Noncontrolling Interests						81,793						82,491
Stockholders' Equity
KKR & Co. Inc. Stockholders' Equity - Series A and B Preferred Stock						—						—
KKR & Co. Inc. Stockholders' Equity - Series C Mandatory Convertible Preferred Stock						1,115,792						1,115,792
KKR & Co. Inc. Stockholders' Equity - Series I and II Preferred Stock, Common Stock						14,598,495						16,466,372
Noncontrolling Interests						41,501,791						40,474,565
Total Equity						57,216,078						58,056,729
Total Liabilities and Equity						$	266,290,981					$	264,285,440
KKR & Co. Inc. Stockholders' Equity - Common Stock Per Outstanding Share of Common Stock						$	24.72					$	27.64

KKR & Co. Inc. Stockholders’ Equity - Common Stock per Outstanding Share of Common Stock was $24.72 as of March 31, 2022, down from $27.64 as of December 31, 2021. The decrease was primarily due to the (i) unrealized losses on available-for-sale-securities from Global Atlantic that are recorded in other comprehensive income, (ii) repurchases of common stock, (iii) dividends to common stockholders and (iv) net loss attributable to KKR & Co. Inc. common stockholders during the three months ended March 31, 2022.

Condensed Consolidated Statements of Cash Flows (GAAP Basis - Unaudited)

The following is a discussion of our consolidated cash flows for the three months ended March 31, 2022 and 2021. You should read this discussion in conjunction with the financial statements and related notes included elsewhere in this report.

The consolidated statements of cash flows include the cash flows of our consolidated entities, which include certain consolidated investment funds, CLOs and certain variable interest entities formed by Global Atlantic notwithstanding the fact that we may hold only a minority economic interest in those investment funds and CFEs. The assets of our consolidated investment funds and CFEs, on a gross basis, can be substantially larger than the assets of our business and, accordingly, could have a substantial effect on the cash flows reflected in our consolidated statements of cash flows. The primary cash flow activities of our consolidated funds and CFEs involve: (i) capital contributions from fund investors; (ii) using the capital of fund investors to make investments; (iii) financing certain investments with indebtedness; (iv) generating cash flows through the realization of investments; and (v) distributing cash flows from the realization of investments to fund investors. Because our consolidated funds are treated as investment companies for accounting purposes, certain of these cash flow amounts are included in our cash flows from operations.

Net Cash Provided (Used) by Operating Activities

Our net cash provided (used) by operating activities was $0.9 billion and $(0.1) billion during the three months ended March 31, 2022 and 2021, respectively. These amounts primarily included: (i) investments purchased (asset management), net of proceeds from investments (asset management) of $(0.6) billion and $(1.3) billion during the three months ended March 31, 2022 and 2021, respectively, (ii) net realized gains (losses) on asset management investments of $279.6 million and $584.4 million during the three ended March 31, 2022 and 2021, respectively, (iii) change in unrealized gains (losses) on asset management investments of $0.6 billion and $2.1 billion during the three months ended March 31, 2022 and 2021, respectively, (iv) capital allocation-based income (loss) of $(0.9) billion and $2.7 billion during the three months ended March 31, 2022 and 2021, respectively and (v) net realized gains (losses) on insurance operations of $75.0 million and $(441.6) million during the three months ended March 31, 2022 and 2021. Investment funds are investment companies under GAAP and reflect their investments and other financial instruments at fair value.

Net Cash Provided (Used) by Investing Activities

Our net cash provided (used) by investing activities was $(2.0) billion and $(0.4) billion during the three months ended March 31, 2022 and 2021, respectively. Our investing activities included: (i) investments purchased (insurance), net of proceeds from investments (insurance) of $(2.0) billion and $(.04) billion during the three months ended March 31, 2022 and 2021, (ii) acquisitions, net of cash acquired of $(415.6) million during three months ended March 31, 2021 and (iii) the purchase of fixed assets of $(11.9) million and $(27.7) million during the three months ended March 31, 2022 and 2021, respectively.

Net Cash Provided (Used) by Financing Activities

Our net cash provided (used) by financing activities was $4.1 billion and $4.5 billion during the three months ended March 31, 2022 and 2021, respectively. Our financing activities primarily included: (i) contributions by, net of distributions to, our noncontrolling and redeemable noncontrolling interests of $1.6 billion and $2.1 billion during the three months ended March 31, 2022 and 2021, respectively, (ii) proceeds received net of repayment of debt obligations of $0.03 billion and $1.6 billion during the three months ended March 31, 2022 and 2021, respectively, (iii) additions to, net of withdrawals from contractholder deposit funds of $2.4 billion and $1.0 billion during three months ended March 31, 2022 and 2021, (iv) common stock dividends of $(85.7) million and $(77.8) million during the three months ended March 31, 2022 and 2021, respectively; (v) net delivery of common stock of $(55.9) million during the three months ended March 31, 2021, respectively; (vi) repurchases of common stock of $(346.7) million and $(71.4) million during the three months ended March 31, 2022 and 2021, respectively; (vii) Series A and B Preferred Stock dividends of $(8.3) million during the three months ended March 31, 2021; (viii) Series C Mandatory Convertible Preferred Stock dividends of $(17.3) million, during the three months ended March 31, 2022 and 2021, respectively; and (ix) private placement share issuance of $38.5 million during three months ended March 31, 2021.

Analysis of Segment Operating Results

The following is a discussion of the results of our business on a segment basis for the three months ended March 31, 2022 and 2021. You should read this discussion in conjunction with the information included under "—Key Segment and Non-GAAP Performance Measures and Other Terms and Operating Metrics" and the financial statements and related notes included elsewhere in this report. See "—Business Environment" for more information about factors that may impact our business, financial performance, operating results and valuations.

In connection with our acquisition of Global Atlantic on February 1, 2021, management reevaluated the manner in which we manage and assess the performance of our business and allocate resources. As a result, we introduced a new Insurance segment in 2021 and report segment results for two operating and reportable segments: Asset Management and Insurance. See Note 21 "Segment Reporting" in our financial statements.

For the quarter ended March 31, 2021 the results of our Insurance segment are from February 1, 2021 (closing date of the acquisition) through March 31, 2021.

Analysis of Asset Management Segment Operating Results

The following tables set forth information regarding KKR's Asset Management segment operating results and certain key capital metrics for the three months ended March 31, 2022 and 2021:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Management Fees						$	624,928					$	439,740					$	185,188
Transaction and Monitoring Fees, Net						306,038						135,677						170,361
Fee Related Performance Revenues						12,051						10,296						1,755
Fee Related Compensation						(212,220)						(131,785)						(80,435)
Other Operating Expenses						(125,875)						(90,161)						(35,714)
Fee Related Earnings						604,922						363,767						241,155
Realized Performance Income						609,207						171,309						437,898
Realized Performance Income Compensation						(383,635)						(109,986)						(273,649)
Realized Investment Income						349,354						461,273						(111,919)
Realized Investment Income Compensation						(52,403)						(69,191)						16,788
Asset Management Segment Operating Earnings						$	1,127,445					$	817,172					$	310,273

Management Fees

The following table presents management fees by business line:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Management Fees
Private Markets						$	435,997					$	286,967					$	149,030
Public Markets						188,931						152,773						36,158
Total Management Fees						$	624,928					$	439,740					$	185,188

The increase in Private Markets management fees was primarily due to management fees earned from North America Fund XIII, Global Infrastructure Investors IV, and Health Care Strategic Growth Fund II, each of which entered its investment period in the second quarter of 2021. These increases were partially offset by a decrease in management fees earned by Americas Fund XII and European Fund V as a result of entering their post-investment periods in the second quarter of 2021 and the first quarter of 2022, respectively, and now earns fees based on capital invested rather than capital committed and at a lower fee rate.

The increase in Public Markets management fees was primarily attributable to greater overall FPAUM at (i) Global Atlantic, (ii) our opportunistic credit, private credit and dislocation opportunities strategies and (iii) our hedge fund partnership, Marshall Wace.

Transaction and Monitoring Fees, Net

The following table presents transaction and monitoring fees, net by business line:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Transaction and Monitoring Fees, Net
Private Markets						$	40,686					$	22,462					$	18,224
Public Markets						10,096						1,030						9,066
Capital Markets						255,256						112,185						143,071
Total Transaction and Monitoring Fees, Net						$	306,038					$	135,677					$	170,361

Our Capital Markets business line earns transaction fees, which are not shared with fund investors. The increase in transaction fees was primarily due to an increase in the number and average size of capital markets transactions for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. Overall, we completed 87 capital markets transactions for the three months ended March 31, 2022, of which 11 represented equity offerings and 76 represented debt offerings, as compared to 57 transactions for the three months ended March 31, 2021, of which 11 represented equity offerings and 46 represented debt offerings. We earned fees in connection with underwriting, syndication and other capital markets services. While each of the capital markets transactions that we undertake in this business line is separately negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.

Our capital markets fees are generated in connection with our Private Markets and Public Markets business lines as well as from third-party companies. For the three months ended March 31, 2022, approximately 19% of our transaction fees in our Capital Markets business line were earned from unaffiliated third parties as compared to approximately 26% for the three months ended March 31, 2021. Our transaction fees are comprised of fees earned from North America, Europe, and the Asia-Pacific region. For the three months ended March 31, 2022, approximately 37% of our transaction fees were generated outside of North America as compared to approximately 32% for the three months ended March 31, 2021. Our Capital Markets business line is dependent on the overall capital markets environment, which is influenced by equity prices, credit spreads, and market volatility. Our Capital Markets business line does not generate monitoring fees.

Our Private Markets and Public Markets business lines separately earn transaction and monitoring fees from portfolio companies, and under the terms of the management agreements with certain of our investment funds, we are required to share all or a portion of such fees with our fund investors.

The increase in Private Markets transaction and monitoring fees, net, was primarily attributable to an increase in net transaction fees. During the three months ended March 31, 2022, there were 28 transaction fee-generating investments that paid an average fee of $7.3 million compared to 19 transaction fee-generating investments that paid an average fee of $2.0 million during the three months ended March 31, 2021. For the three months ended March 31, 2022, approximately 47% of these transaction fees were paid by companies in North America, 31% were paid from companies in the Asia-Pacific region, and 22% were paid from companies in Europe. Transaction fees vary by investment based upon a number of factors, the most significant of which are transaction size, the particular agreements as to the amount of the fees, the complexity of the transaction, and KKR's role in the transaction. Additionally, transaction fees are generally not earned with respect to energy and real estate investments.

Fee Related Performance Revenues

The following table presents fee related performance revenues by business line:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Fee Related Performance Revenues
Private Markets						$	2,317					$	1,552					$	765
Public Markets						9,734						8,744						990
Total Fee Related Performance Revenues						$	12,051					$	10,296					$	1,755

Fee related performance revenues earned in our Private Markets and Public Markets business lines represent realized incentive fees that (i) are measured and received from an investment fund, vehicle or account on a recurring basis, and (ii) do not require the realization of the investments held by the investment fund, vehicle or account. These incentive fees are primarily earned from our BDC and our investment in KKR Real Estate Select Trust Inc. ("KREST"). Fee related performance revenues were higher for the three months ended March 31, 2022 compared to the prior period primarily due to investment performance.

Fee Related Compensation

The increase in fee related compensation for the three months ended March 31, 2022 compared to the prior period was primarily due to a higher level of compensation recorded in connection with the higher level of revenues included within fee related earnings.

Other Operating Expenses

The increase in other operating expenses for the three months ended March 31, 2022 compared to the prior period was primarily due to a higher level of (i) professional fees, information technology and other administrative costs in connection with the overall growth of the firm and (ii) placement fees related to capital raising activities.

Fee Related Earnings

The increase in fee related earnings for the three months ended March 31, 2022 compared to the prior period was primarily due to a higher level of management fees and transaction fees, partially offset by a higher level of fee related compensation and other operating expenses, as described above.

Realized Performance Income

The following table presents realized performance income by business line:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Realized Performance Income
Private Markets						$	603,823					$	166,418					$	437,405
Public Markets						5,384						4,891						493
Total Realized Performance Income						$	609,207					$	171,309					$	437,898

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Private Markets
Core Investment Vehicles						$	262,219					$	80,937					$	181,282
North America Fund XI						119,942						44,881						75,061
Americas Fund XII						83,016						—						83,016
European Fund IV						68,688						—						68,688
2006 Fund						33,458						19,960						13,498
Co-Investment Vehicles and Other						12,444						15,533						(3,089)
Real Estate Partners Europe						—						3,478						(3,478)
European Fund III						—						353						(353)
Total Realized Carried Interest (1)						579,767						165,142						414,625
Incentive Fees						24,056						1,276						22,780
Total Realized Performance Income						$	603,823					$	166,418					$	437,405

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Public Markets
Total Realized Carried Interest (1)						$	—					$	—					$	—
Incentive Fees						5,384						4,891						493
Total Realized Performance Income						$	5,384					$	4,891					$	493

(1)The above tables exclude any funds for which there was no realized carried interest during both of the periods presented.

Realized performance income includes (i) realized carried interest from our carry earning funds and (ii) incentive fees not included in Fee Related Performance Revenues.

Realized carried interest in our Private Markets business line for the three months ended March 31, 2022 consisted primarily of (i) realized performance income from our core investment vehicles and (ii) realized proceeds from dividends received from our investment in Internet Brands, Inc. (technology sector) and sales of our investments in Hensoldt AG (FRA: HAG) and Resource Environmental Solutions, LLC (energy sector).

Realized carried interest in our Private Markets business line for the three months ended March 31, 2021 consisted primarily of (i) realized performance income from our core investment vehicles, (ii) dividends received from our investment in Internet Brands, Inc. and (iii) realized gains from the partial sale of our investments in BridgeBio Pharma, Inc. and Academy Sports & Outdoors Inc. (NASDAQ: ASO).

During the three months ended March 31, 2022 and March 31, 2021, there was no realized carried interest earned in our Public Markets business line.

Incentive fees earned in our Private Markets and Public Markets business lines consist of incentive fees earned from (i) our hedge fund partnerships, (ii) investment management agreements with KKR sponsored investment vehicles and (iii) investment management agreements involving third party asset management firm not involving a hedge fund partnership. In Private Markets, the increase in incentive fees for the three months ended March 31, 2022 compared to the prior period was primarily attributable to incentive fees earned this period from certain levered multi-asset investment vehicles.

Realized Performance Income Compensation

The increase in realized performance income compensation for the three months ended March 31, 2022 compared to the prior period was primarily due to a higher level of compensation recorded in connection with the higher level of realized performance income.

Realized Investment Income

The following table presents realized investment income in our Principal Activities business line:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Realized Investment Income
Net Realized Gains (Losses)						$	76,136					$	373,120					$	(296,984)
Interest Income and Dividends						273,218						88,153						185,065
Total Realized Investment Income						$	349,354					$	461,273					$	(111,919)

The decrease in realized investment income is primarily due to a lower level of net realized gains partially offset by a higher level of interest income and dividends. The amount of realized investment income depends on the transaction activity of our funds and balance sheet, which can vary from period to period.

For the three months ended March 31, 2022, net realized gains were comprised of realized gains primarily from the sale of our Private Markets investments in Fiserv, Inc. and Hensoldt AG. Partially offsetting these realized gains were realized losses, the most significant of which was a realized loss of an alternative credit investment and real estate equity investment.

For the three months ended March 31, 2021, net realized gains were comprised of realized gains primarily from the partial sales of our Private Markets investments in Flutter Entertainment PLC and BridgeBio Pharma Inc. Partially offsetting these realized gains were realized losses, the most significant of which was a realized loss on the sale of an investment in our special situations funds.

For the three months ended March 31, 2022, interest income and dividends were comprised of (i) $218.9 million of dividend income primarily from levered multi-asset investment vehicles and our investments in Exact Holdings B.V. and Internet Brands, Inc., and (ii) $54.3 million of interest income, primarily from our investments in CLOs.

For the three months ended March 31, 2021, interest income and dividends were comprised primarily of (i) $44.5 million of dividend income primarily from our investments in Internet Brands, Inc. and US Foods Holding Corp. as well as distributions received from our real estate investments including our investment in KREF and (ii) $43.7 million of interest income primarily from our investments in CLOs. See "—Analysis of Non-GAAP Performance Measures—Non-GAAP Balance Sheet Measures."

We expect realized performance income and realized investment income to be greater than $600 million in the second quarter of 2022 relating to realized carried interest and realized investment income from completed, or signed and expected to be completed sales, partial sales or secondary sales subsequent to March 31, 2022 with respect to certain private equity portfolio companies and other investments. Some of these transactions are not complete, and are subject to the satisfaction of closing conditions, including but not limited to regulatory approvals; there can be no assurance if or when any of these transactions will be completed.

Prior to the acquisition of KKR Capstone on January 1, 2020, (i) KKR Capstone's financial results were consolidated with KKR's financial results in accordance with GAAP, and as such the fees and expenses attributable to KKR Capstone were included in KKR's consolidated revenues and expenses, and (ii) KKR Capstone's financial results were excluded from KKR's non-GAAP financial measures, because KKR presented its non-GAAP financial measures prior to the effect to the consolidation of certain entities that were not subsidiaries of KKR. Following the acquisition of KKR Capstone on January 1, 2020, after-tax distributable earnings includes the net income (loss) from KKR Capstone within realized investment income (loss).

For the quarter ended March 31, 2022, total fees attributable to KKR Capstone were $15.5 million, total expenses attributable to KKR Capstone were $18.7 million and income taxes and other income attributable to Capstone were $(0.2) million. For KKR Capstone-related adjustments in reconciling Asset Management segment revenues to GAAP revenues see "—Analysis of Non-GAAP Performance Measures—Reconciliations to GAAP Measures".

Realized Investment Income Compensation

The decrease in realized investment income compensation for the three months ended March 31, 2022 compared to the prior period is primarily due to a lower level of compensation recorded in connection with the lower level of realized investment income.

Other Operating and Capital Measures

The following table presents certain key operating and capital metrics as of March 31, 2022 and December 31, 2021:

						As of
						March 31, 2022						December 31, 2021						Change
						($ in millions)
Assets Under Management						$	479,032					$	470,555					$	8,477
Fee Paying Assets Under Management						$	371,176					$	357,389					$	13,787
Uncalled Commitments						$	114,836					$	111,822					$	3,014

The following table presents one of our key capital metrics for the three months ended March 31, 2022 and 2021:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in millions)
Capital Invested						$	21,376					$	6,892					$	14,484

Assets Under Management

Private Markets

The following table reflects the changes in our Private Markets AUM from December 31, 2021 to March 31, 2022:

			($ in millions)
December 31, 2021			$	257,048
New Capital Raised			17,295
Distributions and Other			(4,283)
Change in Value			(1,847)
March 31, 2022			$	268,213

AUM for the Private Markets business line was $268.2 billion at March 31, 2022, an increase of $11.2 billion, compared to $257.0 billion at December 31, 2021.

The increase was primarily attributable to new capital raised by Global Atlantic, European Fund VI, and IndiGrid, an asset management firm that KKR owns in India. Partially offsetting these increases were distributions to fund investors, primarily as a result of realized proceeds, most notably from North America Fund XI, Americas Fund XII, and European Fund IV and to a lesser extent a decrease in investment value from Americas Fund XII, Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, and Asian Fund II.

For the three months ended March 31, 2022, the value of our traditional private equity investment portfolio decreased 5%. This was comprised of a 26% decrease in share prices of various publicly held or publicly indexed investments and a 3% increase in value of our privately held investments, as discussed further below. See "—Business Environment" for more information about certain factors that impact our business, financial performance, operating results and valuations.

The most significant decreases in share prices of various publicly held or publicly indexed investments were decreases in Applovin Corporation (NASDAQ: APP), Max Healthcare Institute Limited (NSE: MAXHEALTH), and PHC Holdings Corporation (TYO: 6523). These decreases were partially offset by increases in share prices of various publicly held investments, the most significant of which was an increase in Crescent Energy Company, Hensoldt AG and US Foods Holdings Corp. The prices of publicly held or publicly indexed companies may experience volatile changes following the reporting period.

The most significant increases in value of our privately held investments related to Internet Brands, Inc., Viridor Limited, and Wella Co. (consumer products sector). These increases in value were partially offset by decreases in value relating primarily to Magnetti Marelli (industrial sector), Outsystems Holdings S.A., and Koki Holdings Co., Ltd. (industrial sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance, (ii) an increase in the value of market comparables, and with respect to Internet Brands, an increase in valuation reflecting an agreement to monetize a portion of the company. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) an unfavorable business outlook and (ii) a decrease in the value of market comparables, both influenced by economic outlook and market environment.

For the three months ended March 31, 2021, the value of our traditional private equity investment portfolio increased 19%. This was comprised of a 21% increase in value of our privately held investments and a 10% increase in share prices of various publicly held or publicly indexed investments.

The most significant increases in value of our privately held investments related to AppLovin Corporation, OneStream Software, LLC (technology sector), and OutSystems Holdings S.A. These increases in value were partially offset by decreases in value relating primarily to Colonial Enterprises, Inc. (infrastructure), Goodpack Limited (packaging sector), and Channel Control Merchants (retail sector). The increased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) individual company performance and (ii) an increase in the value of market comparables and (iii) transactional activity in the quarter related to new rounds of funding. The decreased valuations of individual companies in our privately held investments, in the aggregate, generally related to (i) an unfavorable business outlook and (ii) a decrease in the value of market comparables, both influenced from the impact of COVID-19 on the economic outlook and overall market environment.

The most significant increases in share prices of various publicly held or publicly indexed investments were increases in Max Healthcare Institute Limited, Fiserv, Inc. and Academy Sports & Outdoor Inc. These increases were partially offset by decreases in share prices of various publicly held investments, the most significant of which were decreases in BridgeBio Pharma, Inc. and Laureate Education, Inc. (NASDAQ: LAUR).

Certain investments included in our AUM are denominated in currencies other than the U.S. dollar. Those investments expose our AUM to the risk that the value of the investments will be affected by changes in exchange rates between the currency in which the investments are denominated and the currency in which the investments are made. We generally seek to reduce these risks by employing hedging transactions in connection with certain investments, including using foreign currency options and foreign exchange forward contracts to reduce exposure to changes in exchange rates when a meaningful amount of capital has been invested in currencies other than the currencies in which the investments are denominated. We do not, however, hedge our currency exposure in all currencies or for all investments. See "Quantitative and Qualitative Disclosures about Market Risk—Exchange Rate Risk" and "Risk Factors—Risks Related to the Assets We Manage—We make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Public Markets

The following table reflects the changes in our Public Markets AUM from December 31, 2021 to March 31, 2022:

			($ in millions)
December 31, 2021			$	213,507
New Capital Raised			8,935
Distributions and Other			(4,280)
Redemptions			(1,933)
Change in Value			(5,410)
March 31, 2022			$	210,819

AUM in our Public Markets business line totaled $210.8 billion at March 31, 2022, a decrease of $2.7 billion compared to $213.5 billion at December 31, 2021.

The decrease was primarily attributable to (i) a decline in investment value in assets managed across our credit portfolio, including for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, (ii) distributions to fund investors at certain liquid and alternative credit funds, (iii) payments to Global Atlantic policyholders and (iv) redemptions at our hedge fund partnerships. Partially offsetting these decreases was new capital raised by our hedge fund partnerships, Global Atlantic and across various liquid and alternative credit funds.

Fee Paying Assets Under Management

Private Markets

The following table reflects the changes in our Private Markets FPAUM from December 31, 2021 to March 31, 2022:

			($ in millions)
December 31, 2021			$	154,855
New Capital Raised			22,907
Distributions and Other			(2,813)
Net Changes in Fee Base of Certain Funds			(1,318)
Change in Value			(1,559)
March 31, 2022			$	172,072

FPAUM in our Private Markets business line was $172.1 billion at March 31, 2022, an increase of $17.2 billion, compared to $154.9 billion at December 31, 2021.

The increase was primarily attributable to new capital raised by European Fund VI, Global Atlantic, and IndiGrid, an asset management firm that KKR owns in India. Partially offsetting this increase were (i) distributions to fund investors, primarily as a result of realized proceeds, most notably from North America Fund XI, (ii) payments to Global Atlantic policyholders (iii) a decrease in investment value for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies and (iv) net change in fee base of European Fund V as a result of entering its post investment period, during which we earn fees on invested capital rather than committed capital.

Uncalled capital commitments from Private Markets investment funds from which KKR is currently not earning management fees amounted to approximately $28.7 billion at March 31, 2022, which includes capital commitments reserved for follow-on investments for funds that have completed their investment periods. This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.0%. We will not begin earning fees on this capital until it is deployed or the related investment period commences, neither of which is guaranteed to occur and which may not occur for an extended period of time. If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.

Public Markets

The following table reflects the changes in our Public Markets FPAUM from December 31, 2021 to March 31, 2022:

			($ in millions)
December 31, 2021			$	202,534
New Capital Raised			7,445
Distributions and Other			(3,591)
Redemptions			(1,933)
Change in Value			(5,351)
March 31, 2022			$	199,104

FPAUM in our Public Markets business line was $199.1 billion at March 31, 2022, a decrease of $3.4 billion, compared to $202.5 billion at December 31, 2021.

The decrease was primarily attributable to (i) a decline in investment value in assets managed across our credit portfolio, including for Global Atlantic under our investment management agreements with Global Atlantic's insurance companies, (ii) distributions to fund investors at certain alternative credit funds, (iii) payments to Global Atlantic policyholders and (iv) redemptions at our hedge fund partnerships. Partially offsetting these decreases was new capital raised by our hedge fund partnerships, Global Atlantic and across various liquid and alternative credit funds.

Uncalled capital commitments from Public Markets investment funds from which KKR is currently not earning management fees amounted to approximately $7.3 billion at March 31, 2022. This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 0.9%. We will not begin earning fees on this capital until it is deployed or the related investment period commences, neither of which is guaranteed to occur. If and when such management fees are earned, which will occur over an extended period of time, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.

Uncalled Commitments

Private Markets

As of March 31, 2022, our Private Markets business line had $103.5 billion of remaining uncalled capital commitments that could be called for investments in new transactions as compared to $101.5 billion as of December 31, 2021. The increase was primarily attributable to new commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.

Public Markets

As of March 31, 2022, our Public Markets business line had $11.4 billion of remaining uncalled capital commitments that could be called for investments in new transactions as compared to $10.3 billion as of December 31, 2021. The increase was primarily attributable to new commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.

Capital Invested

Private Markets

For the three months ended March 31, 2022, Private Markets had $13.4 billion of capital invested as compared to $4.0 billion for the three months ended March 31, 2021. The increase was driven primarily by a $6.9 billion increase in capital invested in our real assets strategies and a $2.5 billion increase in capital invested in our private equity strategies (including core and growth equity (including impact) investments). Generally, the portfolio companies acquired through our private equity funds have higher transaction values and result in higher capital invested relative to transactions in our real assets funds. The number of large private equity investments made in any quarter is volatile and consequently, a significant amount of capital invested in one quarter or a few quarters may not be indicative of a similar level of capital deployment in future quarters. During the three months ended March 31, 2022, 36% of capital deployed in private equity (including core and growth equity (including impact) investments) was in transactions in North America, 34% was in the Asia-Pacific region, and 30% was in Europe.

Public Markets

For the three months ended March 31, 2022, Public Markets had $8.0 billion of capital invested as compared to $2.9 billion for the three months ended March 31, 2021. The increase was primarily due to a higher level of (i) capital deployed under our investment management agreements with Global Atlantic's insurance companies and (ii) capital deployed across our private credit strategies. During the three months ended March 31, 2022, 86% of capital deployed was in transactions in North America, 9% was in Europe, and 5% was in the Asia-Pacific region.

Analysis of Insurance Segment Operating Results

The following tables set forth information regarding KKR's insurance segment operating results and certain key operating metrics as of and for the three months ended March 31, 2022 and 2021:

			Three Months Ended
			March 31, 2022						March 31, 2021						Change
			($ in thousands)
Net Investment Income			$	862,414					$	445,898					$	416,516
Net Cost of Insurance			(493,649)						(250,219)						(243,430)
General, Administrative and Other			(146,002)						(75,489)						(70,513)
Pre-tax Insurance Operating Earnings			222,763						120,190						102,573
Income Taxes			(34,106)						(16,626)						(17,480)
Net Income Attributable to Noncontrolling Interests			(72,669)						(40,299)						(32,370)
Insurance Segment Operating Earnings			$	115,988					$	63,265					$	52,723

Insurance segment operating earnings

Insurance segment operating earnings increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, and (ii) higher net investment income resulting from an increase in average assets under management due to growth of the business. The increase was offset in part by (i) higher net cost of insurance, primarily due to the growth in both our individual market and institutional market channels, (ii) corresponding increase in general and administrative expenses and (iii) an increase in income tax expense.

Net investment income

Net investment income increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased average assets under management due to growth in our Institutional segment assets as a result of new reinsurance transactions and new Individual sales, and (iii) increased variable investment income from net realized gains from the sale of real estate investments.

Net cost of insurance

Net cost of insurance increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) growth in our Institutional segment as a result of new reinsurance transactions and (iii) new Individual sales.

General, administrative and other expenses

General and administrative expenses increased for the three months ended March 31, 2022 as compared to the prior period primarily due to (i) one less month of activity reported in the prior period as a result of the GA Acquisition having occurred on February 1, 2021, (ii) increased employee compensation and benefits related expenses, (iii) increased professional service fees, (iv) increased third-party administrator ("TPA") policy servicing fees, all due to growth of the business, and (v) travel returning to pre-pandemic levels.

Income taxes

Insurance segment income tax expense reflects the annual estimated effective tax rate for the insurance segment on an operating basis, including the benefit of investment tax credits.

Net income (loss) attributable to non-controlling interests

Net income (loss) attributable to non-controlling interests increased for the three months ended March 31, 2022 as compared to the prior period proportional to the increase in insurance segment operating earnings for the comparable period. Net income (loss) attributable to non-controlling interests represent the proportionate interest in the insurance segment operating earnings attributable to rollover and other co-investors in Global Atlantic.

Analysis of Non-GAAP Performance Measures

The following is a discussion of our Non-GAAP performance measures for the three months ended March 31, 2022 and 2021:

						Three Months Ended
						March 31, 2022						March 31, 2021						Change
						($ in thousands)
Asset Management Segment Operating Earnings						$	1,127,445					$	817,172					$	310,273
Insurance Segment Operating Earnings						115,988						63,265						52,723
Distributable Operating Earnings						1,243,433						880,437						362,996
Interest Expense						(69,460)						(57,545)						(11,915)
Preferred Dividends						—						(8,341)						8,341
Net Income Attributable to Noncontrolling Interests						(7,616)						(3,192)						(4,424)
Income Taxes Paid						(197,842)						(151,120)						(46,722)
After-tax Distributable Earnings						$	968,515					$	660,239					$	308,276

For the quarter ended March 31, 2021 the results of our Insurance Segment above are from February 1, 2021 (closing date of the acquisition) through March 31, 2021.

Distributable Operating Earnings

The increase in distributable operating earnings for the three months ended March 31, 2022 compared to the prior period is primarily due to a higher level of Asset Management segment operating earnings and Insurance segment operating earnings. For a discussion of the Asset Management and Insurance segment operating earnings, see "—Analysis of Asset Management Segment Operating Results and Analysis of Insurance Segment Operating Results."

Interest Expense

The increase in interest expense for the three months ended March 31, 2022 compared to the prior period is due primarily to debt issuances by KKR's financing subsidiaries subsequent to March 31, 2021.

Income Taxes Paid

The increase in income taxes paid for the three months ended March 31, 2022 compared to the prior period was primarily due to the higher level of Asset Management segment operating earnings.

After-tax Distributable Earnings

The increase in after-tax distributable earnings for the three months ended March 31, 2022 compared to the prior period was due primarily to a higher level of distributable operating earnings, partially offset by an increase in income taxes paid and interest expense, as described above.

The amount of tax benefit from equity-based compensation included in income taxes paid for the three months ended March 31, 2022 and 2021 was $11.8 million and $43.0 million, respectively, and its inclusion in after-tax distributable earnings had the effect of increasing this measure by 1% and 7%, respectively.

Non-GAAP Balance Sheet Measures

Book Value

The following table presents our calculation of book value as of March 31, 2022 and December 31, 2021:

									As of
									March 31, 2022						December 31, 2021
									($ in thousands)
(+)			Cash and Short-term Investments						$	4,830,014					$	4,869,203
(+)			Investments						17,987,229						17,763,542
(+)			Net Unrealized Carried Interest (1)						4,194,193						4,967,401
(+)			Other Assets (2)						4,910,373						4,706,108
(+)			Global Atlantic Book Value						3,425,241						3,372,498
(-)			Debt Obligations - KKR (excluding KFN and Global Atlantic)						5,804,287						5,836,267
(-)			Debt Obligations - KFN						948,517						948,517
(-)			Tax Liabilities, Net						2,583,489						2,697,317
(-)			Other Liabilities						1,020,430						774,711
(-)			Noncontrolling Interests						29,950						33,058
			Book Value						$	24,960,377					$	25,388,882
			Book Value Per Adjusted Share						$	28.45					$	28.77
			Adjusted Shares						877,397,862						882,589,036

(1)The following table provides net unrealized carried interest by business line:

						As of
						March 31, 2022						December 31, 2021
						($ in thousands)
Private Markets Business Line						$	4,088,533					$	4,856,843
Public Markets Business Line						105,660						110,558
Total						$	4,194,193					$	4,967,401

(2)Other Assets include KKR's ownership interest in FS/KKR Advisor and minority ownership interests in hedge fund partnerships.

Book value per adjusted share decreased (1)% from December 31, 2021. The decrease was primarily attributable to (i) a reduction in net unrealized carried interest from our carried interest eligible investment funds, most notably Americas Fund XII and Asian Fund II, (ii) repurchases of our common stock, and (iii) payment of dividends during the period. Partially offsetting these decreases was the positive impact of our after-tax distributable earnings recognized during the period.

With respect to book value relating to the Asset Management business, for the three months ended March 31, 2022, the value of the Asset Management segment balance sheet portfolio remained flat and KKR's traditional private equity portfolio decreased by 5%. For a further discussion, see "—Unaudited Consolidated Results of Operations (GAAP Basis) - Asset Management—Unrealized Gains and Losses from Investment Activities." For a discussion of the changes in KKR's private equity portfolio, see "—Analysis of Asset Management Segment Operating Results—Assets Under Management." For a discussion of factors that impacted KKR's after-tax distributable earnings, see "—Analysis of Non-GAAP Performance Measures— After-tax Distributable Earnings" and for more information about the factors that may impact our business, financial performance, operating results and valuations, see "—Business Environment."

The following table presents the holdings of our investments in the Asset Management segment by asset class as of March 31, 2022. To the extent investments are realized at values below their cost in future periods, after-tax distributable earnings would be adversely affected by the amount of such loss, if any, during the period in which the realization event occurs.

						As of March 31, 2022
						($ in thousands)
Investments (1)						Cost						Fair Value						Fair Value as a Percentage of Total Investments
Private Equity						$	2,074,296					$	4,394,266					24.4		%
Core Private Equity						2,699,724						5,477,426						30.5		%
Growth						299,662						855,865						4.8		%
Private Equity, Core & Growth Total						5,073,682						10,727,557						59.6		%
Energy						917,409						977,350						5.4		%
Real Estate						2,092,721						2,523,561						14.0		%
Infrastructure						672,591						838,403						4.7		%
Real Assets Total						3,682,721						4,339,314						24.1		%
Leveraged Credit						1,079,195						1,049,791						5.8		%
Alternative Credit						838,108						979,936						5.4		%
Credit Total						1,917,303						2,029,727						11.3		%
Other						980,869						890,631						5.0		%
Total Investments						$	11,654,575					$	17,987,229					100.0		%

(1)Investments is a term used solely for purposes of financial presentation of a portion of KKR's balance sheet and includes majority ownership of subsidiaries that operate KKR's asset management and insurance businesses, including the general partner interests of KKR's investment funds. Investments presented are principally the assets measured at fair value that are held by KKR's asset management segment, which, among other things, does not include the underlying investments held by Global Atlantic and Marshall Wace.

						As of March 31, 2022
						($ in thousands)
Top 20 Investments: (1)						Cost						Fair Value
PetVet Care Centers, LLC						$	243,211					$	1,216,055
USI, Inc.						531,425						1,094,073
Heartland Dental, LLC						320,656						833,705
Fiserv, Inc. (NASDAQ: FISV)						309,988						697,578
Exact Group B.V.						213,362						478,966
Arnott's Biscuits Limited						250,841						452,008
Crescent Energy Company (NYSE: CRGY)						561,818						439,388
1-800 Contacts Inc.						300,178						360,214
Teaching Strategies, LLC						307,162						307,162
Resolution Life Group Holdings, L.P.						262,191						304,136
Roompot B.V.						193,578						258,973
KKR Real Estate Finance Trust Inc. (NYSE: KREF)						231,563						238,625
ERM Worldwide Group Limited						228,710						228,710
Viridor Limited						154,390						226,392
AppLovin Corporation (NASDAQ: APP)						15,495						218,854
GenesisCare Pty Ltd.						177,059						177,059
Veresen Midstream						92,674						154,228
The Bay Clubs Company, LLC						139,001						152,901
Atlantic Aviation FBO Inc.						127,914						145,279
Kokusai Electric Corporation						10,206						143,540
Total Top 20 Investments						$	4,671,422					$	8,127,846

(1)This list of investments identifies the twenty largest companies or assets based on their fair values as of March 31, 2022. It does not deduct fund or vehicle level debt, if any, incurred in connection with funding the investment. This list excludes (i) investments expected to be syndicated, (ii) investments expected to be transferred in connection with a new fundraising, (iii) investments in funds and other entities that are owned by one or more third parties and established for the purpose of making investments and (iv) the portion of any investment that may be held through collateralized loan obligations or levered multi-asset investment vehicles, if any. For additional information about the asset classes of the investments held on KKR's balance sheet see "—Our Business—Principal Activities" for the "Holdings by Asset Class" pie chart. The fair value figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying investment, if applicable.

With respect to KKR's book value relating to its insurance business, KKR includes Global Atlantic's book value, which consists of KKR's pro rata equity interest in Global Atlantic on a GAAP basis, excluding (i) accumulated other comprehensive income and (ii) accumulated change in fair value of reinsurance embedded derivative balances and related assets, net of deferred acquisition costs and income tax. KKR believes this presentation of Global Atlantic's book value is comparable with the corresponding metric presented by other publicly traded companies in Global Atlantic's industry. As of March 31, 2022, KKR's pro rata interest in Global Atlantic's book value was $3.4 billion. For more information about the composition and credit quality of Global Atlantic's investments on a consolidated basis, please see "—Global Atlantic's Investment Portfolio" below.

Global Atlantic's Investment Portfolio

As of March 31, 2022, 96% and 86% of Global Atlantic's AFS fixed maturity securities were considered investment grade under ratings from the Securities Valuation Office of the National Association of Insurance Commissioners ("NAIC") and nationally recognized statistical rating organizations ("NRSROs"), respectively. As of December 31, 2021, 97% and 87% of Global Atlantic's AFS fixed maturity securities were considered investment grade under ratings from NAIC and nationally recognized statistical rating organizations ("NRSROs"), respectively. Securities where a rating by an NRSRO was not available are considered investment grade if they have an NAIC designation of “1” or “2.” The three largest asset categories in Global Atlantic's AFS fixed-maturity security portfolio as of March 31, 2022 were Corporate, RMBS and CMBS securities, comprising 31%, 6% and 5% of Global Atlantic's investment portfolio, respectively. Within these categories, 95%, 97% and 99% of Global Atlantic's Corporate, RMBS and CMBS securities, respectively, were investment grade according to NAIC ratings and 95%, 39% and 52% of its Corporate, RMBS and CMBS securities, respectively, were investment grade according to NRSRO ratings as of March 31, 2022. The three largest asset categories in Global Atlantic's available-for-sale fixed-maturity security portfolio as of December 31, 2021 were Corporate, RMBS and CMBS securities, comprising 34%, 6% and 5% of Global Atlantic's investment portfolio, respectively. Within these categories, 95%, 96% and 99% of Global Atlantic's Corporate, RMBS and

CMBS securities, respectively, were investment grade according to NAIC ratings and 95%, 38% and 62% of its Corporate, RMBS and CMBS securities, respectively, were investment grade according to NRSRO ratings as of December 31, 2021. NRSRO and NAIC ratings have different methodologies. Global Atlantic believes the NAIC ratings methodology, which considers the likelihood of recovery of amortized cost as opposed to the recovery of all contractual payments including the principal at par, as the more appropriate way to view the ratings quality of its AFS fixed maturity portfolio since a large portion of its holdings were purchased at a significant discount to par value. The portion of Global Atlantic's AFS fixed maturity portfolio consisting of floating rate assets was 39% and 36% as of March 31, 2022 and December 31, 2021, respectively.

Within the funds withheld receivable at interest portfolio, 96% of the fixed maturity securities were investment grade by NAIC designation as of both March 31, 2022 and December 31, 2021.

Trading fixed maturity securities back funds withheld payable at interest where the investment performance is ceded to reinsurers under the terms of the respective reinsurance agreements.

Credit quality of AFS fixed maturity securities

The Securities Valuation Office of the NAIC evaluates the AFS fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities to one of six credit quality categories called “NAIC designations.” Using an internally developed rating is permitted by the NAIC if no rating is available. These designations are generally similar to the credit quality designations of NRSROs for marketable fixed maturity securities, except for certain structured securities as described below. NAIC designations of “1,” highest quality, and “2,” high quality, include fixed maturity securities generally considered investment grade by NRSROs. NAIC designations “3” through “6” include fixed maturity securities generally considered below investment grade by NRSROs.

Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was assigned based on the following criteria: (i) the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by three or more NRSROs. If the lowest two NRSROs’ ratings are equal, then such rating will be the assigned rating. NRSROs’ ratings available for the periods presented were S&P, Fitch, Moody’s, DBRS, Inc. and Kroll Bond Rating Agency, Inc. If no rating is available from a rating agency, then an internally developed rating is used.

Substantially all of the AFS fixed maturity securities portfolio, 96% and 97% as of March 31, 2022 and December 31, 2021, respectively, were invested in investment grade assets with a NAIC rating of 1 or 2.

The portion of the AFS fixed maturity securities portfolio that was considered below investment grade by NAIC designation was 4% and 3% as of March 31, 2022 and December 31, 2021, respectively. Pursuant to Global Atlantic's investment guidelines, Global Atlantic actively monitors the percentage of its portfolio that is held in investments rated NAIC 3 or lower and must obtain an additional approval from Global Atlantic's management investment committee before making a significant investment in an asset rated NAIC 3 or lower.

As of March 31, 2022 and December 31, 2021, the non-rated AFS fixed-maturity securities include $145.5 million and $118.8 million, respectively, of private placement securities for which Global Atlantic has not sought individual ratings from the NRSROs.

Corporate fixed maturity securities

Global Atlantic maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. As of March 31, 2022 and December 31, 2021, 58% and 60%, respectively, of the AFS fixed maturity securities portfolio was invested in corporate fixed maturity securities.

As of both March 31, 2022 and December 31, 2021, 95% of the total fair value of corporate fixed maturity securities is rated NAIC investment grade and 95% is rated NRSROs investment grade.

Residential mortgage-backed securities

As of both March 31, 2022 and December 31, 2021, 11% of the AFS fixed maturity securities portfolio was invested in RMBS. RMBS are securities constructed from pools of residential mortgages and backed by payments from those pools. Excluding limitations on access to lending and other extraordinary economic conditions, Global Atlantic would expect prepayments of principal on the underlying loans to accelerate with decreases in market interest rates and diminish with increases in market interest rates.

The NAIC designations for RMBS, including prime, sub-prime, alt-A, and adjustable rate mortgages with variable payment options ("Option ARM"), are based upon a comparison of the bond’s amortized cost to the NAIC’s loss expectation for each security. Accordingly, an investment in the same security at a lower cost may result in a higher quality NAIC designation in recognition of the lower likelihood the investment would result in a realized loss. Prime residential mortgage lending includes loans to the most creditworthy borrowers with high quality credit profiles. Alt-A is a classification of mortgage loans where the risk profile of the borrower is between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.

As of March 31, 2022 and December 31, 2021, 94% and 93%, respectively, of RMBS securities that are below investment grade as rated by the NRSRO, carry an NAIC 1 ("highest quality") designation.

As of March 31, 2022, Alt-A, Option ARM, Re-Performing and Sub-prime represent 33%, 30%, 14% and 12% of the total RMBS portfolio ($7.2 billion), respectively. As of December 31, 2021, Alt-A, Option ARM, Re-Performing and Sub-prime represent 33%, 30%, 14% and 12% of the total RMBS portfolio ($7.7 billion), respectively.

Unrealized gains and losses for AFS fixed maturity securities

Global Atlantic's investments in AFS fixed maturity securities are reported at fair value with changes in fair value recorded in other comprehensive income as unrealized gains or losses, net of taxes and offsets. Unrealized gains and losses can be created by changes in interest rates or by changes in credit spreads.

As of March 31, 2022 and December 31, 2021, Global Atlantic had gross unrealized losses on below investment grade AFS fixed maturity securities of $222.9 million and $80.3 million based on NRSRO rating and $22.9 million and $13.5 million based on NAIC ratings, respectively.

Mortgage and other loan receivables - Credit quality indicators

Mortgage and other loan receivables consist of commercial and residential mortgage loans, and other loan receivables. As of March 31, 2022 and December 31, 2021, 25% and 23%, respectively, of Global Atlantic's total investments consisted of mortgage and other loan receivables. Global Atlantic invests in U.S. mortgage loans, comprised of first lien and mezzanine real estate loans, residential mortgage loans, consumer loans, and other loan receivables.

Global Atlantic's commercial mortgage loans may also be rated based on NAIC designations, with designations “CM1” and “CM2” considered to be investment grade. As of both March 31, 2022 and December 31, 2021, 96% of the commercial mortgage loan portfolio was rated investment grade based on NAIC designation. 100% of the commercial mortgage loan portfolio is in current status.

As of March 31, 2022, 95% of the residential mortgage loan portfolio is in current status, and approximately $213.1 million is over 90 days past due (representing 2% of the total residential mortgage portfolio).

The loan-to-value ratio is expressed as a percentage of the current amount of the loan relative to the value of the underlying collateral. Approximately 84% of the commercial mortgage loans has a loan-to-value ratio of 70% or less and a 0.2% has loan-to-value ratio over 90%.

Changing economic conditions affect Global Atlantic’s valuation of commercial mortgage loans. Changing vacancies and rents are incorporated into the discounted cash flow analysis that Global Atlantic performs for monitored loans and may contribute to the establishment of (or increase or decrease in) a commercial mortgage loan valuation allowance for losses. In addition, Global Atlantic continuously monitors its commercial mortgage loan portfolio to identify risk. Areas of emphasis are properties that have exposure to specific geographic events or have deteriorating credit.

The weighted average loan-to-value ratio for residential mortgage loans was 66% and 68% as of March 31, 2022 and December 31, 2021, respectively.

Global Atlantic's residential mortgage loan portfolio is comprised mainly of re-performing loans that were purchased at a discount after they were modified and returned to performing status, as well as prime jumbo loans and mortgage loans backed by single family rental properties. Global Atlantic has also extended financing to counterparties in the form of repurchase agreements secured by mortgage loans, including performing and non-performing mortgage loans.

Global Atlantic’s consumer loan portfolio is primarily comprised of home improvement loans, solar panel loans, student loans and auto loans.

Reconciliations to GAAP Measures

The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with GAAP to KKR's non-GAAP financial measures for the three months ended March 31, 2022 and 2021:

Revenues

			Three Months Ended
			March 31, 2022						March 31, 2021
			($ in thousands)
Total GAAP Revenues			$	1,004,017					$	4,563,006
Impact of Consolidation and Other			213,400						123,448
Asset Management Adjustments:
Capital Allocation-Based Income (GAAP)			945,743						(2,684,647)
Realized Carried Interest			579,767						165,142
Realized Investment Income			349,354						461,273
Capstone Fees			(15,485)						(20,080)
Expense Reimbursements			(41,303)						(27,729)
Insurance Adjustments:
Net Premiums			(372,144)						(1,176,142)
Policy Fees			(318,436)						(201,683)
Other Income			(34,744)						(18,144)
Investment Gains and Losses			167,102						259,168
Derivative Gains and Losses			286,721						220,581
Total Segment Revenues (1)			$	2,763,992					$	1,664,193

(1)Total Segment Revenues is comprised of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized Performance Income, (v) Realized Investment Income, and (vi) Net Investment Income.

Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders

			Three Months Ended
			March 31, 2022						March 31, 2021
			($ in thousands)
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders (GAAP)			$	(73,770)					$	1,644,245
Preferred Stock Dividends			17,250						25,591
Net Income (Loss) Attributable to Noncontrolling Interests			1,159,122						2,245,531
Income Tax Expense (Benefit)			(3,166)						438,739
Income (Loss) Before Tax (GAAP)			$	1,099,436					$	4,354,106
Impact of Consolidation and Other			(1,239,936)						(1,378,567)
Equity-based Compensation - KKR Holdings			19,821						16,434
Preferred Stock Dividends			—						(8,341)
Income Taxes Paid			(197,842)						(151,120)
Asset Management Adjustments:
Unrealized Carried Interest			1,290,033						(2,109,018)
Net Unrealized (Gains) Losses			322,269						(1,316,644)
Unrealized Carried Interest Compensation (Carry Pool)			(513,987)						896,907
Strategic Corporate Transaction-Related Charges			19,898						4,875
Equity-based Compensation			55,111						49,761
Equity-based Compensation - Performance based			57,953						14,556
Insurance Adjustments:
Net (Gains) Losses from Investments and Derivatives			48,735						289,235
Strategic Corporate Transaction-Related Charges			5,007						4,819
Equity-based and Other Compensation			31,711						7,411
Amortization of Acquired Intangibles			4,412						2,451
Income Taxes			(34,106)						(16,626)
After-tax Distributable Earnings			$	968,515					$	660,239
Interest Expense			69,460						57,545
Preferred Stock Dividends			—						8,341
Net Income Attributable to Noncontrolling Interests			7,616						3,192
Income Taxes Paid			197,842						151,120
Distributable Operating Earnings			$	1,243,433					$	880,437
Insurance Segment Operating Earnings			(115,988)						(63,265)
Realized Performance Income			(609,207)						(171,309)
Realized Performance Income Compensation			383,635						109,986
Realized Investment Income			(349,354)						(461,273)
Realized Investment Income Compensation			52,403						69,191
Fee Related Earnings			$	604,922					$	363,767
Insurance Segment Operating Earnings			115,988						63,265
Realized Performance Income			609,207						171,309
Realized Performance Income Compensation			(383,635)						(109,986)
Realized Investment Income			349,354						461,273
Realized Investment Income Compensation			(52,403)						(69,191)
Depreciation and Amortization			7,565						6,164
Adjusted EBITDA			$	1,250,998					$	886,601

KKR & Co. Inc. Stockholders' Equity - Common Stock

			As of
			March 31, 2022						December 31, 2021
			($ in thousands)
KKR & Co. Inc. Stockholders' Equity - Series I and II Preferred Stock, Common Stock			$	14,598,495					$	16,466,372
Series C Mandatory Convertible Preferred Stock			1,115,792						1,115,792
Impact of Consolidation and Other (1)			(997,841)						(1,048,569)
KKR Holdings and Other Exchangeable Securities			7,955,606						8,595,510
Accumulated Other Comprehensive Income (AOCI) and Other (Insurance)			2,288,325						259,777
Book Value			$	24,960,377					$	25,388,882

(1) Includes an adjustment to book value to reflect 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 is expected to occur upon the completion of the mergers contemplated by the Reorganization Agreement. The impact of this adjustment was a reduction to book value of $1,333 million and $1,396 million as of March 31, 2022 and December 31, 2021, respectively.

The following table provides a reconciliation of KKR's GAAP Shares of Common Stock Outstanding to Adjusted Shares:

			As of
			March 31, 2022						December 31, 2021
GAAP Shares of Common Stock Outstanding			590,472,444						595,663,618
Adjustments:
KKR Holdings Units			258,726,163						258,726,163
Other Exchangeable Securities (1)			1,376,655						1,376,655
Common Stock - Series C Mandatory Convertible Preferred Stock (2)			26,822,600						26,822,600
Adjusted Shares (3)			877,397,862						882,589,036
Unvested Shares of Common Stock and Other Exchangeable Securities (4)			39,551,313						39,000,561

(1)Consists of vested restricted holdings units granted under our 2019 Equity Incentive Plan, which are exchangeable for shares of KKR & Co. Inc. common stock on a one-for-one basis.

(2)Assumes that all shares of Series C Mandatory Convertible Preferred Stock have been converted into shares of KKR & Co. Inc. common stock on March 31, 2022 and December 31, 2021.

(3)Amounts exclude unvested equity awards granted under our Equity Incentive Plans.

(4)Represents equity awards granted under our Equity Incentive Plans. The issuance of common stock of KKR & Co. Inc. pursuant to equity awards under our Equity Incentive Plans dilutes KKR common stockholders and KKR Holdings pro rata in accordance with their respective ownership interests in the KKR business. Excludes market condition awards that did not meet their market-price based vesting conditions as of March 31, 2022 and December 31, 2021.

Liquidity

We manage our liquidity and capital requirements by (i) focusing on our cash flows before the consolidation of our funds and CFEs and the effect of changes in short term assets and liabilities, which we anticipate will be settled for cash within one year, and (ii) seeking to maintain access to sufficient liquidity through various sources. The overall liquidity framework and cash management approach of our insurance business are also based on seeking to build an investment portfolio that is cash flow matched, providing cash inflows from insurance assets that meet our insurance companies' expected cash outflows to pay their liabilities. Our primary cash flow activities typically involve: (i) generating cash flow from operations; (ii) generating income from investment activities, by investing in investments that generate yield (namely interest and dividends), as well as through the sale of investments and other assets; (iii) funding capital commitments that we have made to, and advancing capital to, our funds and CLOs; (iv) developing and funding new investment strategies, investment products, and other growth initiatives, including acquisitions of other investments, assets, and businesses; (v) underwriting and funding commitments in our capital markets business; (vi) distributing cash flow to our stockholders and holders of our preferred stock; and (vii) paying borrowings, interest payments, and repayments under credit agreements, our senior and subordinated notes, and other borrowing arrangements. See "—Liquidity—Liquidity Needs—Dividends."

See "—Business Environment" for more information on factors that may impact our business, financial performance, operating results and valuations.

Sources of Liquidity

Our primary sources of liquidity consist of amounts received from: (i) our operating activities, including the fees earned from our funds, portfolio companies, and capital markets transactions; (ii) realizations on carried interest from our investment funds; (iii) interest and dividends from investments that generate yield, including our investments in CLOs; (iv) in our insurance business, cash inflows in respect of new premiums, policyholder deposits, reinsurance transactions and funding agreements, including through memberships in Federal Home Loan Banks; (v) realizations on and sales of investments and other assets, including the transfers of investments or other assets for fund formations (including CLOs and other investment vehicles); and (vi) borrowings, including advances under our revolving credit facilities, debt offerings, committed repurchase agreements, uncommitted financing, and other borrowing arrangements. In addition, we may generate cash proceeds from issuances of our equity securities.

Many of our investment funds provide carried interest. With respect to our private equity funds, carried interest is distributed to the general partner of a private equity fund with a clawback provision only after all of the following are met: (i) a realization event has occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle has achieved positive overall investment returns since its inception, in excess of performance hurdles where applicable, and is accruing carried interest; and (iii) with respect to investments with a fair value below cost, cost has been returned to fund investors in an amount sufficient to reduce remaining cost to the investments' fair value. As of March 31, 2022, certain of our funds had met the first and second criteria, as described above, but did not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will not be distributed in cash to us as the general partner of an investment fund upon a realization event. For a fund that has a fair value above cost, overall, and is otherwise accruing carried interest, but has one or more investments where fair value is below cost, the shortfall between cost and fair value for such investments is referred to as a "netting hole." When netting holes are present, realized gains on individual investments that would otherwise allow the general partner to receive carried interest distributions are instead used to return invested capital to our funds' limited partners in an amount equal to the netting hole. Once netting holes have been filled with either (a) return of capital equal to the netting hole for those investments where fair value is below cost or (b) increases in the fair value of those investments where fair value is below cost, then realized carried interest will be distributed to the general partner upon a realization event. A fund that is in a position to pay cash carry refers to a fund for which carried interest is expected to be paid to the general partner upon the next material realization event, which includes funds with no netting holes as well as funds with a netting hole that is sufficiently small in size such that the next material realization event would be expected to result in the payment of carried interest. Strategic investor partnerships with fund investors may require netting across the various funds in which they invest, which may reduce the carried interest we otherwise would have earned if such fund investors were to have invested in our funds without the existence of the strategic investor partnership. See "Risk Factors—Risks Related to Our Business—Strategic investor partnerships have longer investment periods and invest in multiple strategies, which may increase the possibility of a 'netting hole,' which will result in less carried interest for us, as well as clawback liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2021.

As of March 31, 2022, netting holes in excess of $50 million existed at none of our private equity funds. In accordance with the criteria set forth above, other funds currently have and may in the future develop netting holes, and netting holes for those and other funds may otherwise increase or decrease in the future.

We have access to funding under various credit facilities, other borrowing arrangements and other sources of liquidity that we have entered into with major financial institutions or which we receive from the capital markets.

For a discussion of our debt obligations, including our debt securities, revolving credit agreements and loans, see Note 17 "Debt Obligations" in our financial statements.

Liquidity Needs

We expect that our primary liquidity needs will consist of cash required to:

• continue to support and grow our Asset Management business lines, including funding our capital commitments made to existing and future funds, pay the costs related to fundraising and launching of new strategies, and otherwise supporting investment vehicles which we sponsor

• to grow and expand our businesses generally, including by acquiring or launching new, complementary or adjacent businesses;

• seed or warehouse investments for the benefit of new strategies or funds, including CLOs, pending the contribution of committed capital by the investors in such funds, and advancing capital to our funds for operational or other needs;

• pay interest expense;

• service debt obligations, including the payment of obligations upon maturity or redemption, as well as any contingent liabilities that may give rise to future cash payments, including funding requirements to levered investment vehicles or structured transactions;

• fund cash operating expenses and contingencies, including litigation matters and guarantees;

• pay corporate income taxes and other taxes;

• pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance or funding agreement activity;

• pay amounts that may become due under our tax receivable agreement with KKR Holdings;

• pay cash dividends in accordance with our dividend policy for our common stock or the terms of our preferred stock;

• underwrite commitments, advance loan proceeds and fund syndication commitments within our capital markets business, and fund any net capital or regulatory requirements of our capital markets companies;

• post or return collateral in respect of derivative contracts;

• support and acquire other assets for our Principal Activities business line, including other businesses, investments and assets, some of which may be required to satisfy risk retention requirements for CLOs (to the extent they may apply); and

• repurchase KKR's common stock or retire equity awards pursuant to the share repurchase program or repurchase or redeem other securities issued by KKR.

For a discussion of KKR's share repurchase program, see Note 22 "Equity" in our financial statements.

Capital Commitments

The agreements governing our active investment funds generally require the general partners of the funds to make minimum capital commitments to such funds, which generally range from 2% to 8% of a fund's total capital commitments at final closing, but may be greater for certain funds (i) where we are pursuing newer strategies, (ii) where third party investor demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy for our Principal Activities business line, including core investments and exposure to the Asia-Pacific region.

The following table presents our uncalled commitments to our active investment funds and other vehicles as of March 31, 2022:

			Uncalled Commitments
Private Markets			($ in millions)
Core Investment Vehicles			$	4,196
European Fund VI			1,000
North America Fund XIII			500
Global Infrastructure Investors IV			464
Asian Fund IV			376
Diversified Core Infrastructure			250
Asia Real Estate Partners			196
Asia Pacific Infrastructure Investors			174
Asian Fund III			144
Real Estate Partners Americas III			143
Health Care Strategic Growth Fund II			137
Americas Fund XII			93
Global Infrastructure Investors III			85
Real Estate Partners Europe II			76
Next Generation Technology Growth Fund II			57
Health Care Strategic Growth Fund			49
European Fund V			42
Global Impact Fund			39
Real Estate Partners Americas II			26
Real Estate Credit Opportunity Partners II			22
Other Private Markets Vehicles			2,051
Total Private Markets Commitments			10,120
Public Markets
Dislocation Opportunities fund			123
Special Situations Fund II			25
Lending Partners Europe II			24
Lending Partners III			13
Private Credit Opportunities Partners II			10
Lending Partners Europe			9
Other Public Markets Vehicles			999
Total Public Markets Commitments			1,203
Total Uncalled Commitments			$	11,323

Other Commitments

In addition to the uncalled commitments to our investment funds as shown above, KKR has entered into contractual commitments primarily with respect to underwriting transactions, debt financing, revolving credit facilities, and equity syndications in our Capital Markets business line. As of March 31, 2022, these commitments amounted to $1.5 billion.

Whether these amounts are actually funded, in whole or in part, depends on the contractual terms of such commitments, including the satisfaction or waiver of any conditions to closing or funding. Our capital markets business has arrangements with third parties, which reduce our risk under certain circumstances when underwriting certain debt transactions, and thus our unfunded commitments as of March 31, 2022 have been reduced to reflect the amount to be funded by such third parties. In the case of purchases of investments or assets in our Principal Activities business line, the amount to be funded includes amounts that are intended to be syndicated to third parties, and the actual amounts to be funded may be less. For more information about our capital markets business line's risks, see "Risks Related to Our Business—Our capital markets activities expose us to risks, and our risk management strategy may not be effective or sufficient" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Tax Receivable Agreement

We are required to acquire KKR Group Partnership Units from time to time pursuant to our exchange agreement with KKR Holdings, which is expected to result in an increase in our tax basis of the assets of KKR Group Partnership at the time of an exchange of KKR Group Partnership Units. We have entered into a tax receivable agreement with KKR Holdings, which requires us to pay to KKR Holdings, or to current and former limited partners who have exchanged KKR Holdings units for KKR's common stock as transferees of KKR Group Partnership Units, 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we realize as a result of the increase in tax basis described above, as well as 85% of the amount of any such savings we realize as a result of increases in tax basis that arise due to future payments under the tax receivable agreement. As of March 31, 2022, an undiscounted payable of $396.1 million has been recorded in due to affiliates in the financial statements representing management's best estimate of the amounts currently expected to be owed under the tax receivable agreement. As of March 31, 2022, approximately $60.4 million of cumulative cash payments have been made under the tax receivable agreement.

Following the closing of the merger transactions contemplated by the Reorganization Agreement, there will be no more exchanges of KKR Group Partnership Units held by KKR Holdings. Additionally, the tax receivable agreement will terminate upon the closing of the mergers contemplated by the Reorganization Agreement, except that the obligations of KKR to make payments under the tax receivable agreement will remain outstanding until paid in full for certain exchanges that took place prior to the termination of the tax receivable agreement. Although our employees who hold restricted holdings units under our 2019 Equity Plan (which includes limited partner interests in KKR Holdings II) will be entitled to exchange those interests for common stock pursuant to the exchange agreement, there will be no payments due for any of those exchanges under the tax receivable agreement.

Dividends

A dividend of $0.155 per share of our common stock has been declared and will be paid on May 31, 2022 to holders of record of our common stock as of the close of business on May 16, 2022.

A dividend of $0.75 per share of Series C Mandatory Convertible Preferred Stock has been declared and set aside for payment on June 15, 2022 to holders of record of Series C Mandatory Convertible Preferred Stock as of the close of business on June 1, 2022.

When KKR & Co. Inc. receives distributions from KKR Group Partnership, other equityholders in KKR Group Partnership including KKR Holdings receive their pro rata share of such distributions from KKR Group Partnership.

The declaration and payment of dividends to our common stockholders will be at the sole discretion of our board of directors, and our dividend policy may be changed at any time. The declaration of dividends is subject to the discretion of our board of directors based on a number of factors, including KKR’s future financial performance and other considerations that the board deems relevant, and compliance with the terms of KKR & Co. Inc.'s certificate of incorporation and applicable law. For U.S. federal income tax purposes, any dividends we pay (including dividends on our preferred stock) generally will be treated as qualified dividend income for U.S. individual stockholders to the extent paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. There can be no assurance that future dividends will be made as intended or at all or that any particular dividend policy for our common stock will be maintained. Furthermore, the declaration and payment of distributions by KKR Group Partnership and our other subsidiaries may also be subject to legal, contractual and regulatory restrictions, including restrictions contained in our debt agreements and the terms of the preferred units of KKR Group Partnership.

Other Liquidity Needs

From time to time, we fund various underwriting, syndication and fronting commitments in our capital markets business in connection with the arranging or underwriting of loans, securities or other financial instruments, for which we may draw all or substantially all of our availability for borrowings under our available credit facilities. We generally expect these borrowings by our Capital Markets business line to be repaid promptly as these commitments are syndicated to third parties or otherwise fulfilled or terminated, although we may in some instances elect to retain a portion of the commitments for our own investment. For more information about our Capital Markets business line's risks, see "Risks Related to Our Business—Our capital markets activities expose us to risks, and our risk management strategy may not be effective or sufficient" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we (including Global Atlantic) and our consolidated funds and CFEs enter into contractual arrangements that may require future cash payments. Contractual arrangements include (1) commitments to fund the purchase of investments or other assets (including obligations to fund capital commitments as the general partner of our investment funds) or to fund collateral for derivative transactions or otherwise, (2) obligations arising under our senior notes, subordinated notes, and other indebtedness, (3) commitments by our capital markets business to underwrite transactions or to lend capital, (4) obligations arising under insurance policies written, (5) other contractual obligations, including servicing agreements with third-party administrators for insurance policy administration, and (6) commitments to fund the business, operations or investments of our subsidiaries.

We may incur contingent liabilities for claims that may be made against us in the future. We enter into contracts that contain a variety of representations, warranties and covenants, including indemnifications. For example, certain of our investment funds and KKR have provided certain indemnities relating to environmental and other matters and have provided nonrecourse carve-out guarantees for violations of bankruptcy remoteness restrictions and for fraud, willful misconduct and other wrongful acts, each in connection with the financing of (i) certain real estate investments that we have made, including KKR's corporate real estate, and (ii) certain investment vehicles we manage or sponsor. KKR has also (i) provided credit support regarding repayment and funding obligations to third party lenders on behalf of certain employees, excluding executive officers, in connection with their personal investments in KKR investment funds and a levered multi-asset investment vehicle and (ii) provided credit support to one of our hedge fund partnerships. We have also indemnified employees and non-employees against potential liabilities, in connection with their service as described under "Certain Relationships and Related Transactions, and Director Independence—Indemnification of Directors, Officers and Others" in our Annual Report on Form 10-K for the year ended December 31, 2021. In addition, we have also provided credit support to certain of our subsidiaries' obligations in connection with certain investment vehicles or partnerships that we manage. For example, KKR has guaranteed the obligations of a general partner to post collateral on behalf of its investment vehicle in connection with such vehicle's derivative transactions. KKR has also agreed to cause various of its general partners to fund their capital commitments to their funds and to be liable for such general partners' compliance with certain covenants, including limitations on their incurrence of certain kinds of indebtedness. We expect to continue to guarantee, from time to time, the obligations of our subsidiaries' funding obligations to our investment vehicles. These include KKR's obligations to fund its capital commitments to various levered multi-asset investment vehicles, which are special purpose entities that invest in various funds and co-investments sponsored by KKR. In addition, we have also agreed for certain of our investment vehicles, including certain levered multi-asset investment vehicles, to fund or otherwise be liable for a portion of their investment losses (up to a maximum of approximately $116 million) and/or to provide them with liquidity upon certain termination events (the maximum amount of which is unknown until the scheduled termination date of the investment vehicle).

The partnership documents governing our carry-paying funds generally include a "clawback" provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the fund for distribution to the fund investors at the end of the life of the fund. See Note 24 "Commitments and Contingencies—Contingent Repayment Guarantees" to our financial statements included elsewhere in this report for further information on KKR's potential clawback obligations.

Off Balance Sheet Arrangements

We do not have any off-balance sheet financings or liabilities other than contractual commitments and other legal contingencies incurred in the normal course of our business.

Critical Accounting Estimates

The preparation of our financial statements in accordance with GAAP requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of fees, expenses and investment income. Our management bases these estimates and judgments on available information, historical experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates, judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or changes in our analyses. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are included in the financial statements in the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying estimates, judgments or assumptions.

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.

Recently Issued Accounting Pronouncements

For a full discussion of recently issued accounting pronouncements, see Note 2 "Summary of Significant Accounting Policies" in our financial statements.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Investments and other financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

Level I

Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.

Level II

Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies.

Level III

Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The valuation of our Level III investments at March 31, 2022 represents management's best estimate of the amounts that we would anticipate realizing on the sale of these investments in an orderly transaction at such date.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Level III Valuation Methodologies

Our investments and financial instruments 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 carried interest and investment income we realize. Additionally, a change in interest rates could have a significant impact on valuations.

Across the total Level III private equity investment portfolio (including core equity investments), and including investments in both consolidated and unconsolidated investment funds, approximately 50% of the fair value is derived from investments that are valued based exactly 50% on market comparables and 50% on a discounted cash flow analysis. Less than 5% of the fair value of this Level III private equity investment portfolio is derived from investments that are valued either based 100% on market comparables or 100% on a discounted cash flow analysis. As of March 31, 2022, the overall weights ascribed to the market comparables methodology, the discounted cash flow methodology, and a methodology based on pending sales for this portfolio of Level III private equity investments were 36%, 51%, and 13%, respectively.

There is inherent uncertainty involved in the valuation of Level III investments, and there is no assurance that, upon liquidation, KKR will realize the values reflected in our valuations. Our valuations may differ significantly from the values that would have been used had an active market for the investments existed, and it is reasonably possible that the difference could be material. See "—Business Environment" for more information on factors that may impact our business, financial performance, operating results and valuations.

Key unobservable inputs that have a significant impact on our Level III valuations as described above are included in Note 10 "Fair Value Measurements" in our financial statements.

Level III Valuation Process

The valuation process involved for Level III measurements is completed on a quarterly basis and is designed to subject the valuation of Level III investments to an appropriate level of consistency, oversight, and review.

For Private Markets investments classified as Level III, investment professionals prepare preliminary valuations based on their evaluation of financial and operating data, company specific developments, market valuations of comparable companies and other factors. KKR begins its procedures to determine the fair values of its Level III assets approximately one month prior to the end of a reporting period, and KKR follows additional procedures to ensure that its determinations of fair value for its Level III assets are appropriate as of the relevant reporting date. These preliminary valuations are reviewed by an independent valuation firm engaged by KKR to perform certain procedures in order to assess the reasonableness of KKR's valuations annually for all Level III investments in Private Markets and quarterly for investments other than certain investments, which have values less than preset value thresholds and which in the aggregate comprise less than 1% of the total value of KKR's Level III Private Markets investments. The valuations of certain real asset investments are determined solely by independent valuation firms without the preparation of preliminary valuations by our investment professionals, and instead such independent valuation firms rely on valuation information available to it as a broker or valuation firm. For credit investments in Public Markets, an independent valuation firm is generally engaged by KKR to assist with the valuations of most investments classified as Level III. The valuation firm either provides a value, provides a valuation range from which KKR's investment professionals select a point in the range to determine the valuation, or performs certain procedures in order to assess the reasonableness of KKR's valuations. After reflecting any input from the independent valuation firm, the valuation proposals are submitted for review and approval by KKR's valuation committees. As of March 31, 2022, less than 3% of the total value of our Level III credit investments were not valued with the engagement of an independent valuation firm.

For Level III investments in Asset Management, KKR has a global valuation committee that is responsible for coordinating and implementing the firm's valuation process to ensure consistency in the application of valuation principles across portfolio investments and between periods. The global valuation committee is assisted by the asset class-specific valuation committees that exist for private equity (including core equity investments and certain impact investments), growth equity (including certain impact investments), real estate, energy, infrastructure and credit. The asset class-specific valuation committees are responsible for the review and approval of all preliminary Level III valuations in their respective asset classes on a quarterly basis. The members of these valuation committees are comprised of investment professionals, including the heads of each respective strategy, and professionals from business operations functions such as legal, compliance and finance, who are not primarily responsible for the management of the investments. All Level III valuations for investments in Asset Management are also subject to approval by the global valuation committee, which is comprised of senior employees including investment professionals and professionals from business operations functions, and includes one of KKR's Co-Chief Executive Officers and its Chief Financial Officer, General Counsel and Chief Compliance Officer. When valuations are approved by the global valuation committee after reflecting any input from it, the valuations of Level III investments, as well as the valuations of Level I and Level II investments, are presented to the Audit Committee of the Board of Directors of KKR & Co. Inc. and are then reported to the Board of Directors.

Level III investments held by Global Atlantic are valued on the basis of pricing services, reputable broker-dealers or internal models. Global Atlantic performs a quantitative and qualitative analysis and review of the information and prices received from independent pricing services as well as broker-dealers to verify that it represents a reasonable estimate of fair value. For all the internally developed models, Global Atlantic seeks to verify the reasonableness of fair values by analyzing the inputs and other assumptions used. As of March 31, 2022, approximately 66% of these investments were priced via external sources, while approximately 34% were valued on the basis of internal models. When valuations are approved by Global Atlantic's management, the valuations of its Level III investments, as well as the valuations of Level I and Level II investments, are presented to the Audit Committee of the Board of Directors of KKR & Co. Inc. and are then reported to the Board of Directors.

As of March 31, 2022, upon completion by, where applicable, independent valuation firms of certain limited procedures requested to be performed by them on certain Level III investments, the independent valuation firms concluded that the fair values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were reasonable. The limited procedures did not involve an audit, review, compilation or any other form of examination or attestation under generally accepted auditing standards and were not conducted on all Level III investments. We are responsible for determining the fair value of investments in good faith, and the limited procedures performed by an independent valuation firm are supplementary to the inquiries and procedures that we are required to undertake to determine the fair value of the commensurate investments.

As described above, Level II and Level III investments were valued using internal models with significant unobservable inputs, and our determinations of the fair values of these investments may differ materially from the values that would have resulted if readily observable inputs had existed. Additional external factors may cause those values, and the values of investments for which readily observable inputs exist, to increase or decrease over time, which may create volatility in our earnings and the amounts of assets and stockholders' equity that we report from time to time.

Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount of investment income that is recognized for investments held directly in Asset Management and through our consolidated funds as described below. We estimate that an immediate 10% decrease in the fair value of investments held directly and through consolidated investment funds generally would result in a commensurate change in the amount of net gains (losses) from investment activities for investments held directly and through investment funds and a more significant impact to the amount of carried interest recognized, regardless of whether the investment was valued using observable market prices or management estimates with significant unobservable pricing inputs. With respect to consolidated investment funds, the impact that the consequential decrease in investment income would have on net income attributable to KKR would generally be significantly less than the amount described above, given that a majority of the change in fair value of our consolidated funds would be attributable to noncontrolling interests and therefore we are only impacted to the extent of our carried interest and our balance sheet investments. With respect to Insurance, a decrease in investment income for certain assets where investment gains and losses are recognized through the statement of operations would impact KKR only to the extent of our economic ownership interest in Global Atlantic.

As of March 31, 2022, there were no investments which represented greater than 5% of total investments on a GAAP basis. On a non-GAAP basis, as of March 31, 2022, investments which represented greater than 5% of total non-GAAP investments consisted of PetVet Care Centers, LLC and USI, Inc. valued at $1,216.1 million and $1,094.1 million, respectively. Our investment income on a GAAP basis and our book value can be impacted by volatility in the public markets related to our holdings of publicly traded securities, including our sizable holdings of Fiserv, Inc., Crescent Energy Company, KREF, and AppLovin Corporation. See "—Business Environment" for a discussion of factors that may impact the valuations of our investments, financial results, operating results and valuations, and "—Non-GAAP Balance Sheet Measures" for additional information regarding our largest holdings on a non-GAAP basis.