INCOME TAXES	3 Months Ended
Mar. 31, 2013
INCOME TAXES
INCOME TAXES	9. INCOME TAXES The consolidated entities of KKR are generally treated as partnerships or disregarded entities for U.S. and non-U.S. tax purposes. However, certain consolidated subsidiaries are treated as corporations for U.S. and non-U.S tax purposes and are therefore subject to U.S. federal, state and/or local income taxes and/or non- U.S. taxes at the entity-level. In addition, certain consolidated entities which are treated as partnerships for U.S. tax purposes are subject to the New York City Unincorporated Business Tax or other local taxes. KKR’s tax provision therefore reflects taxes from each of these sources and amounted to $9.4 million and $17.1 million for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate was 0.44% and 0.57% for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate differs from the statutory rate for the three months ended March 31, 2013 and 2012, respectively, primarily due to the following: (a) a substantial portion of the reported net income (loss) before taxes is attributable to noncontrolling interests held in consolidated entities or through KKR Holdings, (b) a significant portion of the amount of the reported net income (loss) before taxes attributable to KKR is from certain subsidiaries that are not subject to U.S. federal, state or local income taxes and/or non- U.S. taxes, and (c) certain compensation charges attributable to KKR are not deductible for tax purposes. During the three month period ended March 31, 2013, there were no material changes to KKR’s uncertain tax positions and KKR believes there will be no significant increase or decrease to the uncertain tax positions within 12 months of the reporting date.

INCOME TAXES

3 Months Ended

Mar. 31, 2013

9. INCOME TAXES

The consolidated entities of KKR are generally treated as partnerships or disregarded entities for U.S. and non-U.S. tax purposes. However, certain consolidated subsidiaries are treated as corporations for U.S. and non-U.S tax purposes and are therefore subject to U.S. federal, state and/or local income taxes and/or non- U.S. taxes at the entity-level. In addition, certain consolidated entities which are treated as partnerships for U.S. tax purposes are subject to the New York City Unincorporated Business Tax or other local taxes. KKR’s tax provision therefore reflects taxes from each of these sources and amounted to $9.4 million and $17.1 million for the three months ended March 31, 2013 and 2012, respectively.

The effective tax rate was 0.44% and 0.57% for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate differs from the statutory rate for the three months ended March 31, 2013 and 2012, respectively, primarily due to the following: (a) a substantial portion of the reported net income (loss) before taxes is attributable to noncontrolling interests held in consolidated entities or through KKR Holdings, (b) a significant portion of the amount of the reported net income (loss) before taxes attributable to KKR is from certain subsidiaries that are not subject to U.S. federal, state or local income taxes and/or non- U.S. taxes, and (c) certain compensation charges attributable to KKR are not deductible for tax purposes.

During the three month period ended March 31, 2013, there were no material changes to KKR’s uncertain tax positions and KKR believes there will be no significant increase or decrease to the uncertain tax positions within 12 months of the reporting date.