EQUITY INVESTMENTS AND INTERESTS IN JOINT VENTURES AND PARTNERSHIPS

The Company holds interests in joint ventures and partnerships, certain of which (i) the Company participates alongside affiliates of the Manager through which the Company contributes capital for assets, including development projects related to commercial real estate and specialty lending focused businesses or (ii) are held as interests in private or public funds managed by KKR. Refer to Note 11 to these consolidated financial statements for further discussion. As of December 31, 2016 and December 31, 2015, the Company held $794.0 million and $888.4 million, respectively, of interests in joint ventures and partnerships carried at estimated fair value.

In addition, as of December 31, 2016 and December 31, 2015, the Company held $168.7 million and $262.9 million, respectively, of equity investments, which were carried at estimated fair value and comprised primarily of common and preferred stock.

Net Realized and Unrealized Gains (Losses)

The following tables present the Company’s realized and unrealized gains (losses), which are accounted for similarly to securities and loans, from equity investments and interests in joint ventures and partnerships (amounts in thousands):



	Year ended December 31, 2016						Year ended December 31, 2015						Eight months ended December 31, 2014
	Equity Investments			Interests in Joint Ventures and Partnerships(1)			Equity Investments			Interests in Joint Ventures and Partnerships(1)			Equity Investments			Interests in Joint Ventures and Partnerships (1)
Net realized gains (losses)	$	(18,209	)	$	18,253		$	12,456		$	16,986		$	(556	)	$	4,272
Net (increase) decrease in unrealized losses	(27,729		)	(60,670		)	(28,297		)	(135,811		)	(30,168		)	(112,038		)
Net realized and unrealized gains (losses)	$	(45,938	)	$	(42,417	)	$	(15,841	)	$	(118,825	)	$	(30,724	)	$	(107,766	)

(1) Includes net loss attributable to noncontrolling interests of $11.8 million, $23.4 million and $6.0 million for the years ended December 31, 2016 and 2015, and eight months ended December 31, 2014, respectively.

For the four months ended April 30, 2014, net realized gains and net decrease in unrealized losses for equity investments totaled $12.0 million and $12.4 million, respectively. For the four months ended April 30, 2014, net realized gains (losses) and net increase in unrealized losses for interests in joint ventures and partnerships totaled zero and $1.4 million, respectively.

Equity Method Investments

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 consolidated statements of operations.

As of December 31, 2016 and December 31, 2015, the Company had equity method investments, at estimated fair value, totaling $408.3 million and $506.5 million, respectively. The Company's equity method investments are comprised primarily of the following issuers with the respective ownership percentages: (i) Maritime Credit Corporation Ltd., which the Company holds approximately 31% through its ownership of KKR Nautilus Aggregator Limited, (ii) LCI Helicopters Limited, which the Company holds approximately 33% common equity interest in and (iii) 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.

Separate financial information for two of the Company's equity method investments: Trinity River Energy, LLC held through KNR Trinity Holdings LLC and Maritime Credit Corporation Ltd. held through KKR Nautilus Aggregator Limited are included as exhibits to this Annual Report on Form 10-K.

Summarized Financial Information

The following table shows summarized financial information for the Company’s equity method investments reported under the fair value option of accounting assuming 100% ownership (amounts in thousands):



	Credit				Commercial Real Estate				Natural Resources
As of December 31,	2016		2015		2016		2015		2016		2015
Total assets	$	761,512	$	628,165	$	710,688	$	878,878	$	137,518	$	137,128
Total liabilities	$	532,693	$	418,281	$	682,865	$	812,935	$	—	$	90
Redeemable stock	$	—	$	—	$	—	$	—	$	—	$	—
Noncontrolling interests	$	—	$	—	$	—	$	—	$	—	$	—

The following table shows summarized financial information for the Company’s equity method investments, 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
	Credit								Commercial Real Estate							Natural Resources
	Year ended December 31, 2016		Year ended December 31, 2015			Eight months ended December 31, 2014			Year ended December 31, 2016		Year ended December 31, 2015		Eight months ended December 31, 2014			Year ended December 31, 2016		Year ended December 31, 2015			Eight months ended December 31, 2014
Revenues	$	45,332	$	29,503		$	14,157		$	186,252	$	138,431	$	77,661		$	6,479	$	4,673		$	5,057
Expenses (1)	$	55,412	$	40,408		$	19,325		$	124,070	$	148,463	$	80,685		$	791	$	5,685		$	3,600
Net income (loss) (2)	$	12,709	$	(20,796	)	$	(19,118	)	$	62,181	$	21,629	$	(3,024	)	$	5,688	$	(1,012	)	$	1,457



	Predecessor Company
	Credit		Commercial Real Estate			Natural Resources
	Four months ended April 30, 2014		Four months ended April 30, 2014			Four months ended April 30, 2014
Revenues	$	3,967	$	30,338		$	2,579
Expenses (1)	$	4,350	$	36,914		$	1,763
Net income (loss) (2)	$	8,741	$	(6,576	)	$	815

(1)

Expenses include items such as operating costs, professional fees, management fees, depreciation and amortization, compensation, acquisition costs and other general and administrative costs for Credit and Commercial Real Estate. Expenses include items such as lease operating, production taxes, depreciation, depletion and amortization, and other general and administrative costs for Natural Resources.


(2)	Net income (loss) includes realized and unrealized gains and losses, as well as other than temporary impairment.