EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

The Company holds certain investments where the Company does not control the investee and where the Company is not the primary beneficiary, but can exert significant influence over the financial and operating policies of the investee. Significant influence typically exists if the Company has a 20% to 50% ownership interest in the investee unless predominant evidence to the contrary exists.

Under the equity method of accounting, the Company records its proportionate share of net income or loss based on the investee’s financial results. Given that the Company elected the fair value option to account for these equity method investments, the Company’s share of the investee’s underlying net income or loss predominantly represents fair value adjustments in the investments. Changes in estimated fair value are recorded in net realized and unrealized gain (loss) on investments in the condensed consolidated statements of operations.

As of June 30, 2015 and December 31, 2014, the Company had equity method investments, at estimated fair value, totaling $533.7 million and $534.7 million, respectively. For both periods, the equity method investments were comprised primarily of the following issuers with the respective ownership percentages: (i) Maritime Finance Company, which the Company holds approximately 31% through its ownership of KKR Nautilus Aggregator Limited and (ii) Mineral Acquisition Company, which the Company holds approximately 70% through its ownership of KKR Royalty Aggregator LLC. KKR Royalty Aggregator LLC is an investment company for accounting purposes and accordingly, does not consolidate Mineral Acquisition Company, which it wholly-owns. The Company consolidates both KKR Nautilus Aggregator Limited and KKR Royalty Aggregator LLC and reflects all ownership interests held by third parties as noncontrolling interests in its financial statements.

Summarized Financial Information

The following table shows summarized financial information for the Company’s equity method investment(s), which were reported under the fair value option of accounting and were determined to be significant as defined by accounting guidance, assuming 100% ownership (amounts in thousands):



	Successor Company
	Natural Resources					Commercial Real Estate(1)						Other
	Six months ended June 30, 2015			Two months ended June 30, 2014		Six months ended June 30, 2015			Two months ended June 30, 2014			Six months ended June 30, 2015		Two months ended June 30, 2014
Revenues(2)	$	104,163		$	1,857	$	59,433		$	14,449		$	32,364	$	3,001
Expenses(2)	$	165,945		$	910	$	69,659		$	15,797		$	11,664	$	21
Net income (loss)	$	(42,614	)	$	947	$	(10,226	)	$	(1,348	)	$	16,327	$	8,519

(1) Expenses include operating costs, professional fees, management fees, depreciation and amortization and acquisition costs.

(2) Revenues and expenses exclude realized and unrealized gains and losses.



	Predecessor Company
Four months ended April 30, 2014	Natural Resources		Commercial Real Estate(1)			Other
Revenues(2)	$	2,579	$	29,356		$	1,833
Expenses(2)	$	1,763	$	35,860		$	7
Net income (loss)	$	815	$	(6,504	)	$	13,672

(1) Expenses include operating costs, professional fees, management fees, depreciation and amortization and acquisition costs.

(2) Revenues and expenses exclude realized and unrealized gains and losses.