SEGMENT REPORTING

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Operating segments are defined as components of a company that engage in business activities that may earn revenues and incur expenses for which separate financial information is available and reviewed by the chief operating decision maker or group in determining how to allocate resources and assessing performance. The Company operates its business through the following reportable segments: credit (“Credit”), natural resources (“Natural Resources”) and other (“Other”).

The Company’s reportable segments are differentiated primarily by their investment focuses. The Credit segment consists primarily of below investment grade corporate debt comprised of senior secured and unsecured loans, mezzanine loans, high yield bonds, private and public equity investments, and distressed and stressed debt securities. The Natural Resources segment consists of non-operated working and overriding royalty interests in oil and natural gas properties, as well as interests in joint ventures and partnerships focused on the oil and gas sector. The Other segment includes all other portfolio holdings, consisting solely of commercial real estate. The segments currently reported are consistent with the way decisions regarding the allocation of resources are made, as well as how operating results are reviewed by the Company.

The Company evaluates the performance of its reportable segments based on several net income (loss) components. Net income (loss) includes (i) revenues, (ii) related investment costs and expenses, (iii) other income (loss), which is comprised primarily of unrealized and realized gains and losses on investments, debt and derivatives, and (iv) other expenses, including related party management compensation and general and administrative expenses. Certain corporate assets and expenses that are not directly related to the individual segments, including interest expense and related costs on borrowings, base management fees and professional services are allocated to individual segments based on the investment portfolio balance in each respective segment as of the most recent period-end. Certain other corporate assets and expenses, including prepaid insurance, incentive fees, insurance expenses, directors’ expenses and share-based compensation expense are not allocated to individual segments in the Company’s assessment of segment performance. Collectively, these items are included as reconciling items between reported segment amounts and consolidated totals.

The following tables present the net income (loss) components of our reportable segments reconciled to amounts reflected in the consolidated statements of operations (amounts in thousands):

	Successor Company
	Credit						Natural Resources						Other				Reconciling Items(1)						Total Consolidated
	Year ended December 31, 2015			Eight months ended December 31, 2014			Year ended December 31, 2015			Eight months ended December 31, 2014			Year ended December 31, 2015		Eight months ended December 31, 2014		Year ended December 31, 2015			Eight months ended December 31, 2014			Year ended December 31, 2015			Eight months ended December 31, 2014
Total revenues	$	339,809		$	279,639		$	15,677		$	57,616		$	19,770	$	13,090	$	—		$	—		$	375,256		$	350,345
Total investment costs and expenses	214,464			142,204			7,625			38,117			1,568		815		—			—			223,657			181,136
Total other income (loss)	(391,187		)	(241,035		)	(70,630		)	(115,141		)	29,174		11,794		—			—			(432,643		)	(344,382		)
Total other expenses	50,631			40,703			1,179			2,219			412		476		219			174			52,441			43,572
Income tax expense (benefit)	154			49			—			—			1,036		435		—			—			1,190			484
Net income (loss)	$	(316,627	)	$	(144,352	)	$	(63,757	)	$	(97,861	)	$	45,928	$	23,158	$	(219	)	$	(174	)	$	(334,675	)	$	(219,229	)
Net income (loss) attributable to noncontrolling interests	(16,071		)	(1,797		)	(7,358		)	(4,159		)	—		—		—			—			(23,429		)	(5,956		)
Net income (loss) attributable to KKR Financial Holdings LLC and Subsidiaries	$	(300,556	)	$	(142,555	)	$	(56,399	)	$	(93,702	)	$	45,928	$	23,158	$	(219	)	$	(174	)	$	(311,246	)	$	(213,273	)

(1) Consists of insurance and directors’ expenses which are not allocated to individual segments.

	Predecessor Company
	Credit				Natural Resources						Other					Reconciling Items(1)						Total Consolidated
	Four months ended April 30, 2014		Year ended December 31, 2013		Four months ended April 30, 2014			Year ended December 31, 2013			Four months ended April 30, 2014			Year ended December 31, 2013		Four months ended April 30, 2014			Year ended December 31, 2013			Four months ended April 30, 2014		Year ended December 31, 2013
Total revenues	$	134,255	$	425,209	$	61,782		$	119,178		$	21,205		$	1,519	$	—		—			$	217,242	$	545,906
Total investment costs and expenses	62,485		218,600		38,915			86,174			425			931		—			—			101,825		305,705
Total other income (loss)	76,046		171,006		(8,123		)	(13,642		)	(11,589		)	13,576		—			(20,015		)	56,334		150,925
Total other expenses	23,121		60,870		1,633			4,835			230			606		40,625			31,118			65,609		97,429
Income tax expense (benefit)	146		450		—			—			16			17		—			—			162		467
Net income (loss)	$	124,549	$	316,295	$	13,111		$	14,527		$	8,945		$	13,541	$	(40,625	)	$	(51,133	)	$	105,980	$	293,230

(1) Consists of certain expenses not allocated to individual segments including (i) other income (loss) comprised of losses on restructuring and extinguishment of debt of zero and $20.0 million for the four months ended April 30, 2014 and year ended December 31, 2013, respectively and (ii) other expenses comprised of incentive fees of $12.9 million and $22.7 million for the four months ended April 30, 2014 and year ended December 31, 2013, respectively, and merger related transaction costs of $22.7 million and zero for the four months ended April 30, 2014 and year ended December 31, 2013, respectively. The remaining reconciling items include insurance expenses, directors’ expenses and share-based compensation expense.

The following table shows total assets of our reportable segments reconciled to amounts reflected in the consolidated balance sheets as of December 31, 2015 and December 31, 2014 (amounts in thousands):

	Successor Company
	Credit				Natural Resources				Other				Reconciling Items				Total Consolidated(1)
As of	December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014
Total assets	$	7,303,305	$	8,438,227	$	230,815	$	300,281	$	254,275	$	213,006	$	—	$	111	$	7,788,395	$	8,951,625

(1) Total consolidated assets as of December 31, 2015 included $82.9 million of noncontrolling interests, of which $50.3 million was related to the Credit segment and $32.6 million was related to the Natural Resources segment. Total consolidated assets as of December 31, 2014 included $100.2 million of noncontrolling interests, of which $62.7 million was related to the Credit segment and $37.4 million was related to the Natural Resources segment.