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SEGMENT REPORTING
12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
KKR operates through two reportable segments which are presented below and reflect how its chief operating decision-makers allocate resources and assess performance:
Asset Management - the asset management business offers a broad range of investment management services to investment funds, vehicles and accounts (including Global Atlantic) and provides capital markets services to portfolio companies and third parties. This reportable segment also reflects how its business lines operate collaboratively with predominantly a single expense pool.
Insurance - the insurance business is operated by Global Atlantic, which 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 generates income by earning a spread between its investment income and the cost of policyholder benefits.
KKR’s segment profitability measure used to make operating decisions and assess performance across KKR’s reportable segments is presented prior to giving effect to the allocation of income (loss) among KKR & Co. Inc. and holders of any exchangeable securities, and the consolidation of the investment funds, vehicles and accounts that KKR advises, manages or sponsors (including CFEs). KKR's segment profitability measure excludes: (i) equity-based compensation charges, (ii) amortization of acquired intangibles, (iii) strategic transaction-related charges and (iv) non-recurring items, if any. Strategic 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. Segment operating earnings for the asset management and insurance segments is further defined as follows:
Asset Management Segment Operating Earnings is the 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 the impact of: (i) unrealized carried interest, (ii) net unrealized gains (losses) on investments, and (iii) related unrealized carried interest compensation. Management fees earned by KKR as the adviser, manager or sponsor for its investment funds, vehicles and accounts, including its Global Atlantic insurance companies, are included in Asset Management Segment Operating Earnings.
Insurance Segment Operating Earnings is the 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 excludes 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.
Segment Presentation
The following tables set forth information regarding KKR's segment results:
For the Years Ended December 31,
202220212020
Asset Management
Management Fees (1)
$2,656,487 $2,071,440 $1,441,578 
Transaction and Monitoring Fees, Net775,933 1,004,241 632,433 
Fee Related Performance Revenues90,665 45,852 39,555 
Fee Related Compensation(769,735)(702,387)(486,481)
Other Operating Expenses(585,999)(449,155)(346,558)
Fee Related Earnings2,167,351 1,969,991 1,280,527 
Realized Performance Income2,176,658 2,141,596 1,165,699 
Realized Performance Income Compensation(1,333,526)(1,239,177)(697,071)
Realized Investment Income (2)
1,134,419 1,613,244 644,659 
Realized Investment Income Compensation(159,003)(241,994)(106,830)
Asset Management Segment Operating Earnings$3,985,899 $4,243,660 $2,286,984 
Insurance
Net Investment Income (1) (2)
$4,112,244 $3,329,570 $— 
Net Cost of Insurance(2,415,996)(1,566,681)— 
General, Administrative and Other(637,718)(500,410)— 
  Pre-tax Insurance Operating Earnings1,058,530 1,262,479  
Income Taxes(171,744)(199,095)— 
Net Income Attributable to Noncontrolling Interest(341,582)(410,833)— 
Insurance Segment Operating Earnings$545,204 $652,551 $ 
Total Segment Operating Earnings$4,531,103 $4,896,211 $2,286,984 
(1) Includes intersegment management fees of $301.3 million and $158.7 million for the years ended December 31, 2022 and 2021, respectively.
(2) Includes intersegment interest expense and income of $145.3 million and $31.0 million for the years ended December 31, 2022 and 2021, respectively.
As of December 31,
20222021
Segment Assets:
  Asset Management$30,373,666 $32,306,254 
  Insurance173,442,519 166,553,187 
Total Segment Assets$203,816,185 $198,859,441 
For the Years Ended December 31,
Noncash expenses excluded from Segment Operating Earnings202220212020
Equity Based Compensation and Other
  Asset Management$449,685 $261,330 $246,395 
  Insurance152,083 95,344 — 
Total Non-cash expenses $601,768 $356,674 $246,395 
Reconciliations of Total Segment Amounts
The following tables reconcile the Segment Revenues, Segment Operating Earnings, and Segment Assets to their equivalent GAAP measure:
For the Years Ended December 31,
202220212020
Total GAAP Revenues$5,721,195 $16,236,148 $4,230,891 
Impact of Consolidation and Other841,711 808,174 461,244 
Asset Management Adjustments:
Capital Allocation-Based Income (Loss) (GAAP)2,500,509 (6,842,414)(2,224,100)
Realized Carried Interest1,993,860 1,752,130 1,042,204 
Realized Investment Income1,134,419 1,613,244 644,659 
Capstone Fees(86,665)(91,407)(81,452)
Expense Reimbursements(102,927)(178,572)(149,522)
Insurance Adjustments:
Net Premiums(1,182,461)(2,226,078)— 
Policy Fees(1,278,736)(1,147,913)— 
Other Income(139,124)(120,213)— 
Investment Gains and Losses 472,053 544,357 — 
Derivative Gains and Losses 1,072,572 (141,513)— 
Total Segment Revenues (1)
$10,946,406 $10,205,943 $3,923,924 
(1)Total Segment Revenues is comprised of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized Performance Income, (v) Realized Investment Income, and (vi) Net Investment Income.
For the Years Ended December 31,
202220212020
Income (Loss) Before Tax (GAAP)$(1,059,200)$13,648,449 $5,726,695 
Impact of Consolidation and Other (84,554)(5,165,795)(1,696,897)
Interest Expense315,189 250,183 211,037 
Equity-based compensation - KKR Holdings(1)
119,834 161,283 80,739 
Asset Management Adjustments:
Net Unrealized (Gains) Losses2,002,082 (2,590,280)(1,697,740)
Unrealized Carried Interest4,231,359 (4,043,135)(1,070,803)
Unrealized Carried Interest Compensation (Carry Pool)(1,753,396)1,751,912 467,485 
Strategic Corporate Transaction-Related Charges(2)
94,629 25,153 20,073 
Equity-based compensation210,756 183,100 236,199 
Equity-based compensation - Performance based238,929 78,230 10,196 
Insurance Adjustments:(3)
Net (Gains) Losses from Investments and Derivatives 192,743 658,975 — 
Strategic Corporate Transaction-Related Charges 24,746 25,711 — 
Equity-based and Other Compensation 152,083 95,344 — 
Amortization of Acquired Intangibles 17,647 16,176 — 
Income Taxes(171,744)(199,095)— 
Total Segment Operating Earnings$4,531,103 $4,896,211 $2,286,984 
(1)Represents equity-based compensation expense in connection with the allocation of units of KKR Holdings, which were not dilutive to common stockholders of KKR & Co. Inc.
(2)For the year ended December 31, 2022, strategic corporate transaction-related charges include a $40.7 million realized loss from foreign exchange derivatives that were entered in connection with the acquisition of KJRM and that were settled upon closing in the second quarter of 2022.
(3)Amounts include the portion allocable to noncontrolling interests.
As of
December 31, 2022December 31, 2021
Total GAAP Assets$277,077,191 $264,285,440 
Impact of Consolidation and Reclassifications(71,388,438)(61,775,687)
Carry Pool Reclassifications(1,872,568)(3,650,312)
Total Segment Assets$203,816,185 $198,859,441