KKR & CO. INC. – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
consolidated financial statements of KKR & Co. Inc., together with its
consolidated subsidiaries, and the related notes included elsewhere in this
report. In addition, this discussion and analysis contains forward-looking
statements and involves numerous risks and uncertainties, including those
described under "Cautionary Note Regarding Forward-looking Statements" and "Risk
Factors." Actual results may differ materially from those contained in any
forward-looking statements.

Business Environment

Economic and Market Conditions

Our asset management and insurance businesses are materially affected by the
economic conditions of, and financial markets in, the United States, the EU,
China, Japan, and other countries. Global and regional economic conditions can
each have substantial impact on our business, financial condition and results of
operations in various ways, including the valuations of our investments, our
ability to exit these investments profitably, our ability to raise capital from
investors, and our ability to make new investments.

Economic Conditions

During the year ended December 31, 2022, the global economy continued to recover
from the impact of the COVID-19 pandemic; however, many countries and regions,
including the United States, showed signs of slowing economic activity,
potentially indicating the early stages of a recession. Economic activity began
to be adversely impacted by the effects of monetary and fiscal policy tightening
as years of fiscal stimulus from governments and accommodative monetary policy
from global central banks began to wane as central banks took measures to combat
significant inflationary pressures at multi-decade highs in many major economies
around the world. Inflation presented a headwind for many country and regional
economies in which we operate. The Federal Reserve Board has continued to raise
interest rates and has indicated that it is prepared to take decisive action to
manage inflation, including raising interest rates further and shrinking the
size of its balance sheet. As a result of these and other actions by central
banks, overall macro conditions began to transition by the fourth quarter of
2022 with less focus on inflation's impact on repricing capital markets and
moving towards a period where high rates and inflation began to put significant
pressure on corporate profits and consumer balance sheets. By year-end 2022,
inflation began to show signs of peaking on a year-over-year basis in the U.S.
and in certain other regions, but remained elevated in absolute terms.

Higher interest rates in conjunction with slower growth or weaker currencies in
some emerging market economies have caused, and may further cause, the default
risk of these countries to increase, and this could impact the operations or
value of our investments that operate in these regions. Areas that have central
bank quantitative easing or tightening campaigns affecting their interest rates
relative to the United States could potentially experience further currency
volatility relative to the U.S. dollar. Relatedly, foreign exchange rates are
often affected by countries' monetary and fiscal responses to inflationary
trends. Foreign exchange rates have a substantial impact on the valuations of
our investments that are denominated in currencies other than the U.S. dollar.
Currency volatility can also affect our businesses and investments that deal in
cross-border trade. Labor disputes, shortages of material and skilled labor,
work stoppages and increasing labor costs can also adversely impact us and the
assets we manage. Despite various economic headwinds, several key economic
indicators in the U.S., including employment have demonstrated resilience in
2022.

During 2022, the growth in economic activity and demand for goods and services,
alongside supply chain complications, contributed to these significant
inflationary pressures. Various supply bottlenecks ranging from dynamic
zero-COVID policy to shifting Russia-Ukraine supply chains to U.S. domestic
semiconductor industry output shortages as a result of restrictions on trade
with Chinese semiconductor companies contributed to inflationary pressure
throughout much of 2022. In the United States and many other countries, laws
designed to protect national security or to restrict foreign direct investment
continued to proliferate in 2022, which adversely affected the business and
investment environments in various ways. These and related concerns, such as
rising interest rates and geopolitical uncertainty in countries such as China,
Russia, Belarus and the Ukraine, contributed to substantial market volatility,
equity and credit market declines and increased pressures on labor supply.

In the Eurozone, disruptions to European energy markets and Russia's ongoing
invasion of Ukraine adversely affected the business environment. The
Russia-Ukraine conflict, including the sanctions imposed in response to Russia's
invasion of Ukraine, have exacerbated and may further exacerbate these issues
and trends globally, including by increasing oil and gas prices and price
volatility. Protectionist policies, such as restrictions on exports of food,
have also increased globally as a result of Russia's invasion of Ukraine. As of
December 31, 2022, we have no investments in any portfolio companies whose
executive

                                      132

--------------------------------------------------------------------------------

Table of Co n tents

headquarters are located in Russia, Ukraine or Belarus, and we believe that the
direct exposure of our investment portfolio to Russia, Ukraine and Belarus is
insignificant. In addition, the Chinese economy experienced headwinds related to
the ongoing slowdown in China's property sector and the effects of the
government's zero-COVID policies. In Japan, the economic recovery from COVID-19
continued, despite higher energy costs and significant volatility in currency
markets.

Several relevant key economic indicators in the U.S. and in other countries and
areas in which our business operates include:

•Inflation. The U.S. core consumer price index rose 5.7% on a year-over-year
basis as of December 31, 2022, up from 5.5% on a year-over-year basis as of
December 31, 2021. Core inflation in China was 0.7% on a year-over-year basis as
of December 31, 2022, down from 1.2% on a year-over-year basis as of December
31, 2021. In Japan, core inflation rose to 1.6% on a year-over-year basis as of
December 31, 2022, up from -1.3% on a year-over-year basis as of December 31,
2021. Euro Area core inflation was 5.2% as of December 31, 2022, up from 2.6% as
of December 31, 2021.

•Interest Rates. The effective federal funds rate set by the Federal Reserve
Board was 4.33% as of December 31, 2022, up from 0.1% as of December 31, 2021.
The Federal Reserve raised interest rates by 75 basis points in November, and 50
basis points in December, leading to increased market volatility. The short-term
benchmark interest rate set by the Bank of Japan was -0.1% as of December 31,
2022, unchanged from December 31, 2021. The short-term benchmark interest rate
set by the European Central Bank was 2.5% as of December 31, 2022, up from 0.0%
as of December 31, 2021.

•GDP. In the United States, real GDP is estimated to have expanded by 2.1% for
the year ended December 31, 2022, compared to an expansion of 5.9% for the year
ended December 31, 2021. Real GDP in China is estimated to have increased by
3.0% for the year ended December 31, 2022, compared to growth of 8.4% reported
for the year ended December 31, 2021. In Japan, real GDP growth for the year
ended December 31, 2022, is estimated to have been 1.3%, down from 2.3% for the
year ended December 31, 2021. Euro Area real GDP growth was 3.2% as of December
31, 2022, up from 5.3% as of December 31, 2021.

•Unemployment. The U.S. unemployment rate was 3.5% as of December 31, 2022, down
from 3.9% as of December 31, 2021. The unemployment rate in China was 5.5% as of
December 31, 2022, up from 5.1% as of December 31, 2021. The unemployment rate
in Japan was 2.5% as of December 31, 2022, down from 2.7% as of December 31,
2021. In addition, Euro Area unemployment was 6.5% as of December 31, 2022, up
from 7.0% as of December 31, 2021.

Market Conditions

Equity, credit, commodity and foreign exchange markets in the United States and
in other countries and areas in which we have made investments each can have a
material effect on our financial condition and results of operations.

In our asset management segment, many of our investments are in equities, so a
change in global equity prices or in market volatility directly impacts the
value of our investments and our profitability as well as our ability to realize
investment gains and the receptiveness of fund investors to our investment
products. Volatility across global equity and credit markets, alongside shifting
liquidity conditions in new issue activity across equity and non-investment
grade credit markets, have adversely impacted (and may continue to adversely
impact) our financial results and the volume of capital markets activity, the
level of transaction fees that our Capital Markets business line is able to
earn, the valuation of our portfolio companies, the investment income that we
recognize and our ability to deploy our, and our funds', capital. For our
investments that are publicly listed and thus have readily observable market
prices, global equity market price declines had (and may continue to have) a
direct impact on valuation. For many other of our investments, these markets had
an indirect materially adverse impact on many of our investment valuations as we
typically utilize market multiples as a critical input to ascertain fair value
of our investments that do not have readily observable market prices.

In addition, many of our investments are in non-investment grade credit
instruments and investment grade credit instruments. Many of our funds invest or
have the flexibility to invest a significant portion of their assets in the
equity, debt, loans or other securities of issuers that are based outside of the
United States. A substantial amount of these investments consist of private
equity investments made by our private equity funds. For example, as of December
31, 2022, approximately 50% of the capital invested in those funds was
attributable to non-U.S. investments. In our insurance business, a change in
equity prices also impacts Global Atlantic's equity-sensitive annuity and life
insurance products, including with respect to hedging costs related to and
fee-income earned on those products. Our funds, our portfolio companies and
Global Atlantic also rely on credit financing and the ability to refinance
existing debt. Consequently, any decrease in the value of credit instruments
that we have

                                      133

--------------------------------------------------------------------------------

Table of Co n tents

invested in or any increase in the cost of credit financing reduces our returns
and decreases our net income. Tightening liquidity conditions in equity and
credit capital markets affect the availability and cost of capital for us and
our portfolio companies, and the increased cost of credit or degradation in debt
financing terms may impact our ability to identify and execute investments on
attractive terms.

In our insurance segment, periods of rising or higher interest rates as we are
currently experiencing may result in differing impacts on Global Atlantic's
business. Periods of rising or higher interest rates can benefit Global
Atlantic's results of operations and financial condition, as we generally expect
the yield on new investment purchases and income from any floating rate
investments held in Global Atlantic's investment portfolio to increase as
interest rates rise. Higher interest rates also generally tend to increase the
demand for certain of Global Atlantic's products, as the benefits and solutions
Global Atlantic can offer to clients may become more attractive, potentially
resulting in higher new business volumes. Rising rates are also expected to
result in decreases to certain policy liabilities as a result of new accounting
guidance which we adopted effective January 1, 2023 (with a transition date of
January 1, 2021) for insurance companies that issue or reinsure long-duration
contracts such as life insurance and annuities. For a further discussion of this
guidance, see Note 2 "Summary of Significant Accounting Policies-Future
application of accounting standards" in our financial statements.

Higher interest rates can also have a negative impact on Global Atlantic. For
example, higher policyholder surrenders may occur in response to rising interest
rates as more attractive products become available to policyholders in a higher
rate environment. The majority of our investments at Global Atlantic are in
investment grade credit instruments. Sales of those investments at a loss, for
example to raise cash to meet policyholder obligations upon surrender earlier
than expected maturity or as we rotate out of investments acquired with new
reinsurance transactions to our desired asset mix during a period of rising or
higher rates compared to when the investment was acquired, is expected to
decrease our net income in that period and such decrease could be significant.
We also expect that in a higher rate environment we will generally have a higher
cost of insurance on new business, including higher hedging costs, as the
benefits to policyholders on new business will be generally higher. If Global
Atlantic fails to adequately cash flow match liabilities sold with higher
benefits and interest rates fall while Global Atlantic holds that liability,
Global Atlantic may not generate its expected earnings on those liabilities. In
addition, rising interest rates will decrease the fair value of Global
Atlantic's credit investments and the value of embedded derivatives associated
with funds withheld reinsurance transactions. Global Atlantic expects that
substantially all of its unrealized losses will not be realized as it intends to
hold these investments until recovery of the losses, which may be at maturity,
as part of its asset liability cash-flow matching strategy. However, if the
market, industry and company-specific factors relating to these investments
deteriorate meaningfully, Global Atlantic may be required to recognize an
impairment to goodwill and may realize losses as a result of credit defaults or
impairments on investments, either of which could have a material adverse effect
on our results of operations and financial condition.

In addition, commodity prices are generally expected to rise in inflationary
environments. Our Real Assets business line portfolio contains energy real asset
investments, and certain of our other Private Equity, Real Assets and Credit and
Liquid Strategies business line strategies have investments in or related to the
energy sector. The value of these investments is heavily influenced by the price
of natural gas and oil. As noted above, the actions taken by Russia in the
Ukraine starting in February 2022 have caused volatility in the commodities
markets. To the extent energy real asset investments are directly held by our
balance sheet, price movements can have an amplified impact on our financial
results, as we directly bear the full extent of such gains or losses, subject to
hedging.

Although the recent bankruptcies and financial distress among crypto asset
market participants and the resulting price volatility of crypto assets have
caused widespread disruption in those markets, as of December 31, 2022, these
events have had no material impact on our business, financial condition or
results of operations. Neither we through our balance sheet, nor the limited
partner funds we manage, have material direct exposure to crypto asset market
participants that we are aware of that have: commenced insolvency, receivership,
reorganization or bankruptcy proceedings; experienced excessive redemptions or
suspended redemptions or withdrawals of crypto assets; the crypto assets of
their customers unaccounted for; or experienced material corporate compliance
failures. While, to date, our business has only minimal crypto exposure, the
level of exposure may shift over time, and we cannot predict the broader impact,
including to us, of the recent bankruptcies and financial distress among crypto
asset market participants and coverage of new regulatory developments related to
crypto assets and crypto asset markets.

Several relevant key market indicators in the U.S. and in other countries and
areas which constitute our business environment include:

•Equity Markets. For the year ended December 31, 2022, global equity markets
were negative, with the S&P 500 down 18.1% and the MSCI World Index down 17.7%
on a total return basis including dividends. Equity market volatility as
evidenced by the Chicago Board Options Exchange Market Volatility Index (VIX), a
measure of volatility, ended at 21.7 as of December 31, 2022, increasing from
17.2 as of December 31, 2021.

                                      134

--------------------------------------------------------------------------------

Table of Co n tents

•Credit Markets. During the year ended December 31, 2022, U.S. investment grade
corporate bond spreads (BofA Merrill Lynch US Corporate Index) widened by 40
basis points and U.S. high-yield corporate bond spreads (BofAML HY Master II
Index) widened by 171 basis points. The non-investment grade credit indices were
down during the year ended December 31, 2022, with the S&P/LSTA Leveraged Loan
Index down 0.6% and the BAML US High Yield Index down 11.2%. During the year
ended December 31, 2022, 10-year government bond yields rose 236 basis points in
the United States, rose 6 basis points in China, rose 35 basis points in Japan,
rose 270 basis points in the UK and rose 275 basis points in Germany.

•Commodity Markets. During the year ended December 31, 2022, the 3-year forward
price of WTI crude oil increased approximately 11.3%, and the 3-year forward
price of natural gas increased from approximately $3.43 per MMBtu to $4.99 per
MMBtu as of December 31, 2021 and December 31, 2022. The Japan spot LNG import
price decreased to approximately $28.46 per MMBtu as of December 31, 2022 from
approximately $31.26 per MMBtu as of December 31, 2021.

•Foreign Exchange Rates. For the year ended December 31, 2022, the euro fell
5.8%, the British pound 10.7%, the Japanese yen 12.2%, and the Chinese renminbi
fell 7.9%, respectively, relative to the U.S. dollar.

Other Trends, Uncertainties and Risks Related to Our Business

Please refer to the "Risk Factors" section of this report for important
additional detail regarding the known trends or uncertainties and competitive
conditions that have had or that are reasonably likely to have a material
favorable or unfavorable impact on our businesses, including the impact of
economic and market conditions on valuations of investments. These known trends,
uncertainties and competitive conditions should be read in conjunction with this
Business Environment section and the entire Risk Factor section.

Basis of Accounting and Key Financial Measures under GAAP

We manage our business using certain financial measures and key operating
metrics since we believe these metrics measure the productivity of our
investment activities. We prepare our Consolidated Financial Statements in
accordance with accounting principles generally accepted in the United States of
America ("GAAP"). See Note 2 " Summary of Significant Accounting Policies" in
our financial statements and "Critical Accounting Policies and Estimates"
contained in this section below. Our key Segment and non-GAAP financial measures
and operating metrics are discussed below.

Key Segment and Non-GAAP Performance Measures

The following key segment and non-GAAP performance measures are used by
management in making operational and resource deployment decisions as well as
assessing the performance of KKR's business. They include certain financial
measures that are calculated and presented using methodologies other than in
accordance with GAAP. These performance measures as described below are
presented prior to giving effect to the allocation of income (loss) between KKR
& Co. Inc. and holders of exchangeable securities and as such represent the
entire KKR business in total. In addition, these performance measures are
presented without giving effect to the consolidation of the investment funds and
collateralized financing entities ("CFEs") that KKR manages.

We believe that providing these segment and non-GAAP performance measures on a
supplemental basis to our GAAP results is helpful to stockholders in assessing
the overall performance of KKR's business. These non-GAAP measures should not be
considered as a substitute for financial measures calculated in accordance with
GAAP. Reconciliations of these non-GAAP measures to the most directly comparable
financial measures calculated and presented in accordance with GAAP, where
applicable are included under "-Analysis of Non-GAAP Performance
Measures-Reconciliations to GAAP Measures."

After-tax Distributable Earnings

After-tax distributable earnings is a non-GAAP performance measure of KKR's
earnings, which is derived from KKR's reported segment results. After-tax
distributable earnings is used to assess the performance of KKR's business
operations and measures the earnings potentially available for distribution to
its equity holders or reinvestment into its business. After-tax distributable
earnings is equal to Distributable Operating Earnings less Interest Expense, Net
Income Attributable to Noncontrolling Interests and Income Taxes Paid. Series C
Mandatory Convertible Preferred Stock dividends have been excluded from
After-tax Distributable Earnings, because the definition of Adjusted Shares used
to calculate After-tax Distributable Earnings per Adjusted Share assumes that
all shares of Series C Mandatory Convertible Preferred Stock have been converted
to shares of common stock of KKR & Co. Inc. Income Taxes Paid represents the
amount of income taxes that

                                      135

--------------------------------------------------------------------------------

Table of Co n tents

would be paid assuming that all pre-tax distributable earnings were allocated to
KKR & Co. Inc. and taxed at the same effective rate, which assumes that all
securities exchangeable into shares of common stock of KKR & Co. Inc. were
exchanged. Income Taxes Paid includes the benefit of tax deductions arising from
equity-based compensation, which reduces income taxes paid or payable during the
period. Equity based compensation expense is excluded from After-tax
Distributable Earnings, because (i) KKR believes that the cost of equity awards
granted to employees does not contribute to the earnings potentially available
for distributions to its equity holders or reinvestment into its business and
(ii) excluding this expense makes KKR's reporting metric more comparable to the
corresponding metric presented by other publicly traded companies in KKR's
industry, which KKR believes enhances an investor's ability to compare KKR's
performance to these other companies. If tax deductions from equity-based
compensation were to be excluded from Income Taxes Paid, KKR's After-tax
Distributable Earnings would be lower and KKR's effective tax rate would appear
to be higher, even though a lower amount of income taxes would have actually
been paid or payable during the period. KKR separately discloses the amount of
tax deduction from equity-based compensation for the period reported and the
effect of its inclusion in After-tax Distributable Earnings for the period. KKR
makes these adjustments when calculating After-tax Distributable Earnings in
order to more accurately reflect the net realized earnings that are expected to
be or become available for distribution to KKR's equity holders or reinvestment
into KKR's business. However, After-tax Distributable Earnings does not
represent and is not used to calculate actual dividends under KKR's dividend
policy, which is a fixed amount per period, and After-tax Distributable Earnings
should not be viewed as a measure of KKR's liquidity.

Book Value

Book Value is a non-GAAP performance measure of the net assets of KKR and is
used by management primarily in assessing the unrealized value of KKR's net
assets presented on a basis that (i) deconsolidates KKR's investment funds and
CFEs that KKR manages, (ii) includes the net assets that are attributable to
certain securities exchangeable into shares of common stock of KKR & Co. Inc.,
and (iii) includes KKR's ownership of the net assets of Global Atlantic. We
believe this measure is useful to stockholders as it provides additional insight
into the net assets of KKR excluding those net assets that are allocated to
investors in KKR's investment funds and other noncontrolling interest holders.
KKR's book value includes the net impact of KKR's tax assets and liabilities as
calculated under GAAP. Series C Mandatory Convertible Preferred Stock has been
included in book value, because the definition of adjusted shares used to
calculate book value per adjusted share assumes that all shares of Series C
Mandatory Convertible Preferred Stock have been converted to shares of common
stock of KKR & Co. Inc. To calculate Global Atlantic book value and to make it
more comparable with the corresponding metric presented by other publicly traded
companies in Global Atlantic's industry, Global Atlantic book value excludes (i)
accumulated other comprehensive income and (ii) accumulated change in fair value
of reinsurance balances and related assets, net of deferred acquisition costs
and income tax.

Distributable Operating Earnings

Distributable operating earnings is a non-GAAP performance measure that KKR
believes is useful to stockholders as it provides a supplemental measure of our
operating performance without taking into account items that KKR does not
believe arise from or relate directly to KKR's operations. Distributable
Operating Earnings excludes: (i) equity-based compensation charges, (ii)
amortization of acquired intangibles, (iii) strategic corporate
transaction-related charges and (iv) non-recurring items, if any. Strategic
corporate 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. Distributable Operating Earnings
represents operating earnings of KKR's Asset Management and Insurance segments,
which are comprised of the following:

•Asset Management Segment Operating Earnings is the segment 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 Global Atlantic insurance
companies, are included in Asset Management Segment Operating Earnings.

                                      136

--------------------------------------------------------------------------------

Table of Co n tents

•Insurance Segment Operating Earnings is the segment 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 exclude 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.

Fee Related Earnings

Fee related earnings is a performance measure used to assess the Asset
Management segment's generation of profits from revenues that are measured and
received on a recurring basis and are not dependent on future realization
events. KKR believes this measure is useful to stockholders as it provides
additional insight into the profitability of KKR's fee generating asset
management and capital markets businesses and other recurring revenue streams.
FRE equals (i) Management Fees, including fees paid by the Insurance segment to
the Asset Management segment and fees paid by certain insurance co-investment
vehicles, (ii) Transaction and Monitoring Fees, Net and (iii) Fee Related
Performance Revenues, less (x) Fee Related Compensation, and (y) Other Operating
Expenses.

•Fee Related Performance Revenues refers to the realized portion of Incentive
Fees from certain AUM that has an indefinite term and for which there is no
immediate requirement to return invested capital to investors upon the
realization of investments. Fee-related performance revenues consists of
performance fees (i) to be received from our investment funds, vehicles and
accounts on a recurring basis, and (ii) that are not dependent on a realization
event involving investments held by the investment fund, vehicle or account.

•Fee Related Compensation refers to the compensation expense, excluding
equity-based compensation, paid from (i) Management Fees, (ii) Transaction and
Monitoring Fees, Net, and (iii) Fee Related Performance Revenues.

•Other Operating Expenses represents the sum of (i) occupancy and related
charges and (ii) other operating expenses.

Total Asset Management Segment Revenues

Total Asset Management Segment Revenues is a performance measure that represents
the realized revenues of the Asset Management segment (which excludes unrealized
carried interest and unrealized net gains (losses) on investments) and is the
sum of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee
Related Performance Revenues, (iv) Realized Performance Income, and (v) Realized
Investment Income. KKR believes that this performance measure is useful to
stockholders as it provides additional insight into the realized revenues
generated by KKR's asset management segment.

Other Terms and Capital Metrics

Adjusted Shares

Adjusted shares represents shares of common stock of KKR & Co. Inc. outstanding
under GAAP adjusted to include (i) the number of shares of common stock of KKR &
Co. Inc. assumed to be issuable upon conversion of the Series C Mandatory
Convertible Preferred Stock and (ii) certain securities exchangeable into shares
of common stock of KKR & Co. Inc. Weighted average adjusted shares is used in
the calculation of After-tax Distributable Earnings per Adjusted Share, and
Adjusted Shares is used in the calculation of Book Value per Adjusted Share.

Assets Under Management

Assets under management represent the assets managed, advised or sponsored by
KKR from which KKR is entitled to receive management fees or performance income
(currently or upon a future event), general partner capital, and assets managed,
advised or sponsored by our strategic BDC partnership and the hedge fund and
other managers in which KKR holds an ownership interest. We believe this measure
is useful to stockholders as it provides additional insight into the capital
raising activities of KKR and its hedge fund and other managers and the overall
activity in their investment funds and other managed or sponsored capital. KKR
calculates the amount of AUM as of any date as the sum of: (i) the fair value of
the investments of KKR's investment funds and certain co-investment vehicles;
(ii) uncalled capital commitments from these funds, including

                                      137

--------------------------------------------------------------------------------

Table of Co n tents

uncalled capital commitments from which KKR is currently not earning management
fees or performance income; (iii) the asset value of the Global Atlantic
insurance companies; (iv) the par value of outstanding CLOs; (v) KKR's pro rata
portion of the AUM of hedge fund and other managers in which KKR holds an
ownership interest; (vi) all of the AUM of KKR's strategic BDC partnership;
(vii) the acquisition cost of invested assets of certain non-U.S. real estate
investment trusts; and (viii) the value of other assets managed or sponsored by
KKR. The pro rata portion of the AUM of hedge fund and other managers is
calculated based on KKR's percentage ownership interest in such entities
multiplied by such entity's respective AUM. KKR's definition of AUM (i) is not
based on any definition of AUM that may be set forth in the governing documents
of the investment funds, vehicles, accounts or other entities whose capital is
included in this definition, (ii) includes assets for which KKR does not act as
an investment adviser, and (iii) is not calculated pursuant to any regulatory
definitions.

Capital Invested

Capital invested is the aggregate amount of capital invested by (i) KKR's
investment funds and Global Atlantic insurance companies, (ii) KKR's Principal
Activities business line as a co-investment, if any, alongside KKR's investment
funds, and (iii) KKR's Principal Activities business line in connection with a
syndication transaction conducted by KKR's Capital Markets business line, if
any. Capital invested is used as a measure of investment activity at KKR during
a given period. We believe this measure is useful to stockholders as it provides
a measure of capital deployment across KKR's business lines. Capital invested
includes investments made using investment financing arrangements like credit
facilities, as applicable. Capital invested excludes (i) investments in certain
leveraged credit strategies, (ii) capital invested by KKR's Principal Activities
business line that is not a co-investment alongside KKR's investment funds, and
(iii) capital invested by KKR's Principal Activities business line that is not
invested in connection with a syndication transaction by KKR's Capital Markets
business line. Capital syndicated by KKR's Capital Markets business line to
third parties other than KKR's investment funds or Principal Activities business
line is not included in capital invested.

Fee Paying AUM

Fee paying AUM represents only the AUM from which KKR is entitled to receive
management fees. We believe this measure is useful to stockholders as it
provides additional insight into the capital base upon which KKR earns
management fees. FPAUM is the sum of all of the individual fee bases that are
used to calculate KKR's and its hedge fund and BDC partnership management fees
and differs from AUM in the following respects: (i) assets and commitments from
which KKR is not entitled to receive a management fee are excluded (e.g., assets
and commitments with respect to which it is entitled to receive only performance
income or is otherwise not currently entitled to receive a management fee) and
(ii) certain assets, primarily in its private equity funds, are reflected based
on capital commitments and invested capital as opposed to fair value because
fees are not impacted by changes in the fair value of underlying investments.

Uncalled Commitments

Uncalled commitments is the aggregate amount of unfunded capital commitments
that KKR's investment funds and carry-paying co-investment vehicles have
received from partners to contribute capital to fund future investments. The
amount of uncalled commitments is not reduced by capital invested using
borrowings under an investment fund's subscription facility until capital is
called from our fund investors. We believe this measure is useful to
stockholders as it provides additional insight into the amount of capital that
is available to KKR's investment funds and carry paying co-investment vehicles
to make future investments. Uncalled commitments are not reduced for investments
completed using fund-level investment financing arrangements or investments we
have committed to make but remain unfunded at the reporting date.

                                      138

--------------------------------------------------------------------------------

Table of Co n tents

Consolidated Results of Operations (GAAP Basis)

The following is a discussion of our consolidated results of operations on a
GAAP basis for the years ended December 31, 2022 and 2021. You should read this
discussion in conjunction with the financial statements and related notes
included elsewhere in this report. See "-Business Environment" for more
information about factors that may affect our business, financial performance,
operating results and valuations.

                                                                                       Years Ended
                                                           December 31, 2022           December 31, 2021              Change
                                                                                     ($ in thousands)
Revenues
Asset Management
Fees and Other                                           $        2,821,627 

$ 2,850,154 $ (28,527)
Capital Allocation-Based Income (Loss)

                           (2,500,509)                  6,842,414             (9,342,923)
                                                                    321,118                   9,692,568             (9,371,450)
Insurance
Net Premiums                                                      1,182,461                   2,226,078             (1,043,617)
Policy Fees                                                       1,278,736                   1,147,913                130,823
Net Investment Income                                             4,118,246                   2,845,623              1,272,623
Net Investment-Related Gains (Losses)                            (1,318,490)                    203,753             (1,522,243)
Other Income                                                        139,124                     120,213                 18,911
                                                                  5,400,077                   6,543,580             (1,143,503)
Total Revenues                                                    5,721,195                  16,236,148            (10,514,953)

Expenses
Asset Management
Compensation and Benefits                                         1,144,666                   4,428,743             (3,284,077)
Occupancy and Related Charges                                        77,271                      69,084                  8,187
General, Administrative and Other                                   993,548                     959,077                 34,471
                                                                  2,215,485                   5,456,904             (3,241,419)

Insurance

Net Policy Benefits and Claims                                    3,184,427                   5,055,709             (1,871,282)
Amortization of Policy Acquisition Costs                             10,990                     (65,949)                76,939
Interest Expense                                                     87,182                      61,661                 25,521
Insurance Expenses                                                  565,304                     358,878                206,426
General, Administrative and Other                                   718,422                     555,321                163,101
                                                                  4,566,325                   5,965,620             (1,399,295)
Total Expenses                                                    6,781,810                  11,422,524             (4,640,714)

Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities                    (1,665,537)                  7,720,923             (9,386,460)
Dividend Income                                                   1,322,447                     698,800                623,647
Interest Income                                                   1,895,282                   1,485,470                409,812
Interest Expense                                                 (1,550,777)                 (1,070,368)              (480,409)
Total Investment Income (Loss)                                        1,415                   8,834,825             (8,833,410)

Income (Loss) Before Taxes                                       (1,059,200)                 13,648,449            (14,707,649)

Income Tax Expense (Benefit)                                        (35,672)                  1,353,270             (1,388,942)


                                      139

--------------------------------------------------------------------------------

  Table of Co    n    tents

                                                                              Years Ended
                                                  December 31, 2022           December 31, 2021             Change
                                                                           ($ in thousands)
Net Income (Loss)                                       (1,023,528)                 12,295,179           (13,318,707)
Net Income (Loss) Attributable to Redeemable
Noncontrolling Interests                                     2,792                       4,060                (1,268)
Net Income (Loss) Attributable to
Noncontrolling Interests                                  (185,190)                  7,624,643            (7,809,833)
Net Income (Loss) Attributable to KKR & Co.
Inc.                                                      (841,130)                  4,666,476            (5,507,606)

Series A Preferred Stock Dividends                               -                      23,656               (23,656)
Series B Preferred Stock Dividends                               -                      12,991               (12,991)
Series C Mandatory Convertible Preferred Stock
Dividends                                                   69,000                      69,000                     -

Net Income (Loss) Attributable to KKR & Co.
Inc.
Common Stockholders                             $         (910,130)         $        4,560,829          $ (5,470,959)


                                      140

--------------------------------------------------------------------------------

Table of Co n tents

Consolidated Results of Operations (GAAP Basis) - Asset Management

Revenues

For the years ended December 31, 2022 and 2021, revenues consisted of the
following:

                                                                                         Years Ended
                                                             December 31, 2022           December 31, 2021             Change
                                                                                      ($ in thousands)

Management Fees                                            $        1,682,466          $        1,301,975          $    380,491
Fee Credits                                                          (532,355)                   (464,594)              (67,761)
Transaction Fees                                                    1,316,637                   1,552,621              (235,984)
Monitoring Fees                                                       131,750                     134,472                (2,722)
Incentive Fees                                                         33,537                      55,701               (22,164)
Expense Reimbursements                                                102,927                     178,572               (75,645)

Consulting Fees                                                        86,665                      91,407                (4,742)
Total Fees and Other                                                2,821,627                   2,850,154               (28,527)

Carried Interest                                                   (2,068,662)                  5,388,354            (7,457,016)
General Partner Capital Interest                                     (431,847)                  1,454,060            (1,885,907)
Total Capital Allocation-Based Income (Loss)                       (2,500,509)                  6,842,414            (9,342,923)

Total Revenues - Asset Management                          $          321,118          $        9,692,568          $ (9,371,450)


Fees and Other

Total Fees and Other for the year ended December 31, 2022 decreased compared to
the year ended December 31, 2021 primarily as a result of a lower level of
transaction fees, which was partially offset by an increase in management fees.

For a more detailed discussion of the factors that affected our transaction fees
during the period, see "-Analysis of Asset Management Segment Operating
Earnings."

The increase in management fees was primarily attributable to management fees
earned from North America Fund XIII, Global Infrastructure Investors IV and
European Fund VI. This increase was partially offset by a decrease in management
fees earned from European Fund V and Americas Fund XII as a result of entering
their post-investment periods and, consequently, we now earn fees based on
capital invested rather than capital committed and at a lower fee rate.

Management fees due from consolidated investment funds and other vehicles are
eliminated upon consolidation under GAAP. However, because these amounts are
funded by, and earned from, noncontrolling interests, upon consolidation under
GAAP, KKR's allocated share of the net income from the consolidated investment
funds and other vehicles is increased by the amount of fees that are eliminated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such
investment funds and other vehicles were not consolidated. For a more detailed
discussion on the factors that affect our management fees during the period, see
"-Analysis of Asset Management Segment Operating Earnings."

Fee credits increased compared to the prior period as a result of a higher level
of transaction fees from infrastructure transaction fee-generating investments
in our Real Asset business line. Fee credits owed to consolidated investment
funds are eliminated upon consolidation under GAAP. However, because these
amounts are owed to noncontrolling interests, upon consolidation under GAAP,
KKR's allocated share of the net income from the consolidated investment funds
is decreased by the amount of fee credits that are eliminated. Accordingly, net
income (loss) attributable to KKR would be unchanged if such investment funds
and other vehicles were not consolidated. Transaction and monitoring fees earned
from KKR portfolio companies are not eliminated upon consolidation because those
fees are earned from companies which are not consolidated. Furthermore,
transaction fees earned in our capital markets business are not shared with fund
investors. Accordingly, certain transaction fees are reflected in our revenues
without a corresponding fee credit.


                                      141

--------------------------------------------------------------------------------

Table of Co n tents

Capital Allocation-Based Income (Loss)

Capital Allocation-Based Income (Loss) for the year ended December 31, 2022 was
negative primarily due to the net depreciation of the underlying investments in
many of our carry-earning investment funds, most notably Americas Fund XII,
Asian Fund II, and Asian Fund III. Capital Allocation-Based Income (Loss) for
the year ended December 31, 2021 was positive primarily due to the net
appreciation of the underlying investments at our carry earning investment
funds, most notably Americas Fund XII, Asian Fund III, and North America Fund
XI.

KKR calculates the carried interest that would be due to KKR for each investment
fund, pursuant to the fund agreements, as if the fair value of the underlying
investments were realized as of the reporting date, irrespective of whether such
amounts have been realized. Since the fair value of the underlying investments
varies between reporting periods, it is necessary to make adjustments to the
amounts recorded as carried interest to reflect either (a) positive performance,
resulting in an increase in the carried interest allocated to the general
partner or (b) negative performance that would cause the amount due to KKR to be
less than the amount previously recognized, resulting in a negative adjustment
to carried interest allocated to the general partner. In each case, it is
necessary to calculate the carried interest on cumulative results compared to
the carried interest recorded to date and to make the required positive or
negative adjustments.

Investment Income (Loss) - Asset Management

Net Gains (Losses) from Investment Activities for the year ended December 31,
2022

The net losses from investment activities for the year ended December 31, 2022
were comprised of net realized gains of $1,298.5 million and net unrealized
losses of $(2,964.0) million.

Investment gains and losses relating to our general partner capital interest in
our unconsolidated funds are not reflected in our discussion and analysis of Net
Gains (Losses) from Investment Activities. Our economics associated with these
gains and losses are reflected in Capital Allocation-Based Income (Loss) as
described above.

Realized Gains and Losses from Investment Activities

For the year ended December 31, 2022, net realized gains related primarily to
(i) the sale of our investment in Fiserv, Inc. (NASDAQ: FISV), which was a
significant contributor to gains from investment activities in 2022 but has now
been completely sold and will no longer contribute to gains from investment
activities, (ii) realizations on certain foreign exchange forward contracts, and
(iii) the sale of real estate investments held in certain consolidated
opportunistic real estate equity funds. Partially offsetting these realized
gains were realized losses primarily relating to (i) various investments held in
our consolidated alternative credit funds, (ii) a realized loss on Magneti
Marelli CK Holdings (industrials sector) held in certain consolidated funds and
(iii) realized losses from the sales of revolving credit facilities.

Unrealized Gains and Losses from Investment Activities

For the year ended December 31, 2022, net unrealized losses were driven
primarily by mark-to-market losses from (i) investments held in our consolidated
CLOs and in certain consolidated alternative credit funds, (ii) OutSystems
Holdings S.A. (technology sector) held in certain consolidated funds and (iii)
the reversal of previously recognized unrealized gains relating to the
realization activity described above. These unrealized losses were partially
offset by mark-to-market gains related to (i) investments held in certain
consolidated energy funds, (ii) USI, Inc. (financial services sector), and (iii)
ERM Worldwide Group Limited (services sector).

The extent and the factors that affect each investment strategy vary depending
on the nature of the asset class and the valuation methodology employed. For the
year ended December 31, 2022 net unrealized losses were primarily generated in
the following asset classes:

•Private equity (excluding core private equity), which was primarily impacted by
(i) the negative returns of global equity markets and the related reduction of
market multiples used in the market comparables methodology for the valuation of
Level III investments, and (ii) the negative impact of higher interest rates and
a higher market risk premium in 2022 on discount rates used in the discounted
cash flow methodology for the valuation of Level III investments;

•Credit, which were primarily impacted by the widening of the credit spreads
observed in the credit markets in 2022; and

                                      142

--------------------------------------------------------------------------------

Table of Co n tents

•Real estate, which, notwithstanding the positive operating performance of
certain properties, was negatively impacted by the reversal of previously
recognized unrealized gains relating to the realization activity described above
and the capitalization rates widening in the fourth quarter of 2022.

Partially offsetting the losses in the asset classes above, there were the
unrealized gains generated in the following asset classes:

•Infrastructure and energy, which benefited from (i) higher oil and gas prices
and (ii) the positive operating performance of certain infrastructure assets;
and

•Core private equity, which benefited from the positive operating performance of
its portfolio companies.

For a discussion of other factors that affected KKR's realized investment
income, see "-Analysis of Asset Management Segment Operating Results".

Net Gains (Losses) from Investment Activities for the year ended December 31,
2021

The net gains from investment activities for the year ended December 31, 2021
were comprised of net realized gains of $2,382.2 million and net unrealized
gains of $5,338.7 million.

Realized Gains and Losses from Investment Activities

For the year ended December 31, 2021, net realized gains related primarily to
the sales of investments held by KKR and certain consolidated funds, the most
significant of which were in FanDuel Inc. (technology sector), Mr. Cooper Group
Inc. (NASDAQ: COOP), and Darktrace Limited (LSE: DARK). Partially offsetting
these realized gains were realized losses, the most significant of which were
realized losses from various investments held in our consolidated credit funds
and realized losses on certain hedging instruments.

Unrealized Gains and Losses from Investment Activities

For the year ended December 31, 2021, net unrealized gains related primarily to
mark-to-market gains from investments held by KKR and certain consolidated
funds, the most significant of which were PetVet Care Centers, LLC (health care
sector), Heartland Dental LLC (health care sector) and OutSystems Holdings S.A.
Partially offsetting these unrealized gains were unrealized losses, the most
significant of which were (i) the reversal of previously recognized unrealized
gains relating to the realization activity described above and (ii) an
unrealized loss on BridgeBio Pharma, Inc. (NASDAQ: BBIO).

For a discussion of other factors that affected KKR's realized investment
income, see "-Analysis of Asset Management Segment Operating Results". For
additional information about net gains (losses) from investment activities, see
Note 5 "Net Gains (Losses) from Investment Activities - Asset Management" in our
financial statements.

Dividend Income

During the year ended December 31, 2022, the most significant dividends received
included (i) $441.2 million from investments held in our consolidated core plus
and opportunistic real estate equity funds and (ii) $86.6 million from our
investment in Exact Group B.V. (technology sector) held in our consolidated core
vehicles. During the year ended December 31, 2021, the most significant
dividends received included (i) $215.5 million from our consolidated real estate
funds, (ii) $138.7 million from our investment in Viridor Limited
(Infrastructure: energy and energy transition sector), and (iii) $70.9 million
from our investment in Arnott's Biscuits Limited (consumer products sector).

Significant dividends from portfolio companies and consolidated funds are
generally not recurring quarterly dividends, and while they may occur in the
future, their size and frequency are variable. For a discussion of other factors
that affected KKR's dividend income, see "-Analysis of Asset Management Segment
Operating Results."

Interest Income

The increase in interest income during the year ended December 31, 2022 compared
to the year ended December 31, 2021 was primarily due to the (i) impact of
closing additional CLOs that were consolidated during 2022 and higher interest
rates on assets held in consolidated CLOs and (ii) a higher level of interest
income from investments held in certain of our consolidated alternative credit
funds, primarily related to an increase in the amount of capital deployed and
higher interest rates. Partially offsetting these increases was the
deconsolidation of KREF in the fourth quarter of 2021. For a discussion of other
factors that affected KKR's interest income, see "-Analysis of Asset Management
Segment Operating Results."

                                      143

--------------------------------------------------------------------------------

Table of Co n tents

Interest Expense

The increase in interest expense during the year ended December 31, 2022
compared to the year ended December 31, 2021 was primarily due to (i) an
increase in the amount of borrowings outstanding from consolidated funds and
other vehicles, (ii) the impact of closing additional CLOs that were
consolidated during 2022 and higher interest rates on debt obligations held in
consolidated CLOs, and (iii) the impact of issuances of our notes after December
31, 2021. Partially offsetting these increases was the deconsolidation of KREF
in the fourth quarter of 2021. For a discussion of other factors that affected
KKR's interest expense, see "-Analysis of Non-GAAP Performance Measures."

Expenses - Asset Management

Compensation and Benefits Expenses

The decrease in compensation and benefits expense during the year ended December
31, 2022 compared to the year ended December 31, 2021 was primarily due to the
reversal of previously recognized accrued carried interest, partially offset by
(i) higher equity-based compensation charges and (ii) a higher level of
discretionary cash compensation resulting from a higher level of segment fee
related revenue and realized performance income in the current period.

General, Administrative and Other

The increase in general, administrative and other expenses during the year ended
December 31, 2022 compared to the year ended December 31, 2021 was primarily due
to a higher level of (i) expenses at our consolidated funds and investment
vehicles, (ii) strategic corporate transaction-related charges, (iii)
professional fees, information technology and other administrative costs in
connection with the growth of the firm, and (iv) travel related expenses as a
result of a return of travel activity to pre-COVID-19 pandemic levels.

In periods of significant fundraising and to the extent that we use third
parties to assist in our capital raising efforts, our General, Administrative
and Other are expected to increase accordingly. Similarly, our General,
Administrative and Other expenses are expected to increase as a result of
increased levels of professional and other fees incurred as part of due
diligence related to strategic acquisitions and new product development.

Consolidated Results of Operations (GAAP Basis) - Insurance

For the year ended December 31, 2021, the results of Global Atlantic's insurance
operations included in our consolidated results of operations are from the
acquisition date, February 1, 2021, through December 31, 2021.

Assumption review

The assumptions on which reserves, deferred revenue and expenses are based are
intended to represent an estimation of the benefits that are expected to be
payable to, and fees or premiums that are expected to be collectible from,
policyholders in future periods. Global Atlantic reviews the adequacy of its
reserves, deferred revenue and expenses and the assumptions underlying those
items at least annually, usually in the third quarter. As Global Atlantic
analyzes its assumptions, to the extent Global Atlantic chooses to update one or
more of those assumptions, there may be an "unlocking" impact. Generally,
favorable unlocking means the change in assumptions required a reduction in
reserves, or in deferred revenue liabilities or an increase in deferred
expenses, and unfavorable unlocking means the change in assumptions required an
increase in reserves or in deferred revenue liabilities, or a reduction in
deferred expenses.

                                      144

--------------------------------------------------------------------------------

Table of Co n tents

The following table reflects the impact on net income by financial statement
line item and to insurance segment adjusted operating earnings from Global
Atlantic's assumption review:

                                                                                 Years Ended
                                                     December 31, 2022           December 31, 2021             Change
                                                                              ($ in thousands)
Impacts of assumption review, by statement
of income line item:
Policy fees                                        $              (14)         $              182          $       (196)
Policy benefits and claims                                    (23,079)                     20,904               (43,983)
Amortization of policy acquisition costs                        7,686                      (2,119)                9,805
Income tax impact                                               3,236                      (3,983)                7,219

Total assumption review impact on net income $ (12,171)

    $           14,984          $    (27,155)
Assumption review impact on adjustments to
derive insurance segment adjusted operating
earnings                                                         (157)                        (97)                  (60)
Noncontrolling interests' share of
assumption review impact                                        4,749                      (5,734)               10,483
Total assumption review impact on insurance
segment adjusted operating earnings                $           (7,579)         $            9,153          $    (16,732)


For the year ended December 31, 2022, the net unfavorable unlocking impact on
net income and insurance segment adjusted operating earnings was primarily due
to an increase in expected future surrender experience of annuity policies,
partially as a result of higher interest rates, and a decrease in expected
future surrender experience of life insurance policies. For the year ended
December 31, 2021, the net favorable unlocking impact on net income and
insurance segment adjusted operating earnings was primarily due to lower
expected future mortality rates.

Revenues

For the years ended December 31, 2022 and 2021, revenues consisted of the
following:

                                                             Years Ended
                                     December 31, 2022       December 31, 2021          Change
                                                           ($ in thousands)
  Net Premiums                      $        1,182,461      $       

2,226,078 $ (1,043,617)

  Policy Fees                                1,278,736               1,147,913           130,823
  Net Investment Income                      4,118,246               

2,845,623 1,272,623

  Net Investment-Related Gains              (1,318,490)                203,753        (1,522,243)
  Other Income                                 139,124                 120,213            18,911
  Total Insurance Revenues          $        5,400,077      $        6,543,580      $ (1,143,503)


Net Premiums

Net premiums decreased for the year ended December 31, 2022 as compared to the
year ended December 31, 2021 primarily due to lower initial premiums related to
fewer reinsurance transactions with life contingencies assumed during the year
ended December 31, 2022 as compared to the year ended December 31, 2021. The
decrease was partially offset by lower retrocessions to third party reinsurers
during the year ended December 31, 2022 as compared to the year ended
December 31, 2021. The initial premiums on assumed reinsurance were offset by a
comparable increase in policy reserves reported within net policy benefits and
claims (as discussed below).

Policy fees

Policy fees increased for the year ended December 31, 2022 as compared to the
year ended December 31, 2021 primarily due to one less month of activity
reported in the prior financial reporting period as a result of the GA
Acquisition on February 1, 2021.

                                      145

--------------------------------------------------------------------------------

Table of Co n tents

Net investment income

Net investment income increased for the year ended December 31, 2022 as compared
to the year ended December 31, 2021 primarily due to (i) higher yields on
floating-rate investments due to higher market interest rates, (ii) rotation
into higher yielding assets, (iii) increased average assets under management due
to growth in assets in our institutional market channel as a result of new
reinsurance transactions and individual market channel sales, and (iv) one less
month of activity reported in the prior financial reporting period as a result
of the GA Acquisition having occurred on February 1, 2021.

Net investment-related losses

The components of net investment-related losses were as follows:

                                                                                          Years Ended
                                                                                            December 31,
                                                                 December 31, 2022              2021                 Change
                                                                                       ($ in thousands)
Funds withheld payable embedded derivatives                    $        

3,448,710 $ 49,491 $ 3,399,219
Equity futures contracts

                                                  167,924              (263,637)              431,561
Foreign currency forwards                                                  18,929                 2,484                16,445
Credit risk contracts                                                        (108)                 (400)                  292
Equity index options                                                     (895,602)              549,987            (1,445,589)
Interest rate contracts                                                  (333,937)             (146,920)             (187,017)
Funds withheld receivable embedded derivatives                            (29,390)               31,740               (61,130)
Other                                                                     (29,779)                    -               (29,779)
Net gains on derivative instruments                                     2,346,747               222,745             2,124,002
Net other investment losses                                            (3,665,237)              (18,992)           (3,646,245)
Net investment-related losses                                  $       

(1,318,490) $ 203,753 $ (1,522,243)

Net gains on derivative instruments

The increase in the fair value of embedded derivatives on funds withheld at
interest payable for the year ended December 31, 2022 was primarily driven by
the change in fair value of the underlying investments in the funds withheld at
interest payable portfolio, which is primarily comprised of fixed maturity
securities (designated as trading for accounting purposes), mortgage and other
loan receivables, and other investments. The underlying investments in the funds
withheld at interest payable portfolio declined in value in the current period
primarily due to an increase in market interest rates and wider credit spreads.

The increase in the fair value of equity futures was driven primarily by the
performance of equity markets. Global Atlantic purchases equity futures
primarily to hedge the market risk in our variable annuity products which are
accounted for in net policy benefits and claims. The majority of Global
Atlantic's equity futures are based on the S&P 500 Index, which decreased during
the year ended December 31, 2022, as compared to an increase during the year
ended December 31, 2021, resulting in, respectively, a gain and a loss on equity
futures contracts in the respective periods.

The decrease in the fair value of equity index options was primarily driven by
the performance of the indexes upon which call options are based. Global
Atlantic purchases equity index options to hedge the market risk of embedded
derivatives in indexed universal life and fixed-indexed annuity products (the
change in which is accounted for in net policy benefits and claims). The
majority of Global Atlantic's equity index call options are based on the S&P 500
Index, which decreased during the year ended December 31, 2022, as compared to
the increase during the year ended December 31, 2021.

The decrease in the fair value of interest rate contracts was driven by an
increase in market interest rates during both the year ended December 31, 2022
and the prior financial reporting period, resulting in a loss on interest rate
contracts.

The decrease in the fair value of embedded derivatives on funds withheld at
interest receivable was primarily due to widening of credit spreads during the
year ended December 31, 2022, as compared to the tightening of credit spreads in
the year ended December 31, 2021.

                                      146

--------------------------------------------------------------------------------

Table of Co n tents

Net other investment losses

The components of net other investment losses were as follows:

                                                                                           Years Ended
                                                                                             December 31,
                                                                  December 31, 2022              2021                 Change
                                                                                        ($ in thousands)
Realized gains on investments not supporting
asset-liability matching strategies                             $           

87,198 $ 527,788 $ (440,590)

Realized losses on available-for-sale fixed maturity debt
securities

                                                                (559,987)             (201,411)             (358,576)
Credit loss allowances                                                    (456,176)             (249,338)             (206,838)

Unrealized losses on fixed maturity securities classified
as trading

                                                              (2,603,874)             (118,714)           (2,485,160)

Unrealized gains on investments classified as trading or
fair-value option

                                                           60,237                39,758                20,479

Unrealized (losses) gains on real estate investments
recognized at fair value under investment company
accounting

                                                                 (42,870)               35,418               (78,288)

Realized gains (losses) on funds withheld at interest,
payable portfolio

                                                           38,074               (30,015)               68,089

Realized gains (losses) on funds withheld at interest,
receivable portfolio

                                                        (3,176)               12,418               (15,594)
Other                                                                     (184,663)              (34,896)             (149,767)
Net investment-related gains                                    $       

(3,665,237) $ (18,992) $ (3,646,245)

The increase in net other investment losses for the year ended December 31, 2022
were primarily due to (i) an increase in unrealized losses on fixed maturity
securities classified as trading was primarily due to an increase in interest
rates and widening credit spreads in the current period, (ii) a decrease in
realized gains on investments not supporting asset-liability matching strategies
primarily due to the non-recurrence of a gain from the disposition of Origis
USA, LLC (Infrastructure: energy and energy transition sector) in the prior
financial reporting period, (iii) the increase in realized losses on
available-for-sale fixed maturity debt securities primarily due to portfolio
rotation in a higher interest rate environment, (iv) an increase in credit loss
allowances on mortgage and other loan receivables in the current period
primarily due to an increase in credit risk of our loan portfolio, offset in
part by the recognition of an initial credit loan loss allowance upon the
adoption of the current expected credit loss accounting standard concurrent with
the GA Acquisition in the prior financial reporting period, and (v) realized
losses on renewable energy investments in the current period.

Offsetting these losses were realized gains on funds withheld at interest
payable portfolio.

Other income

Other income increased for the year ended December 31, 2022 as compared to the
prior financial reporting period primarily due to one less month of activity
reported in the prior financial reporting period as a result of the GA
Acquisition having occurred on February 1, 2021.

Expenses

Net policy benefits and claims

Net policy benefits and claims decreased for the year ended December 31, 2022 as
compared to the year ended December 31, 2021 primarily due to (i) lower initial
reserves assumed related to fewer new reinsurance transactions with life
contingencies in the year ended December 31, 2022 as compared to the year ended
December 31, 2021, and (ii) a decrease in the value of embedded derivatives in
Global Atlantic's indexed universal life and fixed indexed annuity products, as
a result of lower equity market returns (as discussed above under "Revenues-Net
gains on derivatives instruments," Global Atlantic purchases equity index
options in order to hedge this risk, the fair value changes of which are
accounted for in gains on derivative instruments, and generally offsetting the
change in embedded derivative fair value reported in net policy benefits and
claims). This decrease was offset by (i) one less month of activity reported in
the prior financial reporting period as a result of the GA Acquisition having
occurred on February 1, 2021, (ii) an increase in net flows from both individual
and institutional market channel sales, (iii) an increase in variable annuity
reserves primarily due to lower equity market returns, (iv) higher funding costs
on new business, and (v) unfavorable unlocking related to the assumption review
described above under "-Consolidated Results of Operations (GAAP
Basis)-Insurance (Unaudited)-Assumption Review."

                                      147

--------------------------------------------------------------------------------

Table of Co n tents

Amortization of policy acquisition costs

Amortization of policy acquisition costs increased for the year ended
December 31, 2022 as compared to the year ended December 31, 2021 primarily due
to (i) a decrease in the net benefit (that is, a reduction to expense) from the
amortization of the net negative insurance intangibles recognized as part of
purchase accounting of the GA Acquisition, as the underlying business runs off,
and (ii) growth in our individual market channel. Offsetting these increases in
expense was (i) a decrease of amortization due to realized investment losses in
the current period, and (ii) favorable unlocking related to the assumption
review described above under "-Consolidated Results of Operations (GAAP
Basis)-Insurance (Unaudited)-Assumption Review."

Interest expense

Interest expense increased for the year ended December 31, 2022 as compared to
the year ended December 31, 2021 primarily due to (i) a net increase in debt
outstanding, including a draw on Global Atlantic's revolving credit facility in
the quarter ended March 31, 2022, (ii) an increase in interest expense on
floating rate debt (Global Atlantic's revolving facility and fixed-to-floating
swaps on Global Atlantic's fixed rate debt) due to higher market rates, and
(iii) the impact of one less month of activity reported in the prior financial
reporting period as a result of the GA Acquisition having occurred on February
1, 2021.

Insurance expenses

Insurance expenses increased for the year ended December 31, 2022 as compared to
the year ended December 31, 2021 primarily due to (i) one less month of activity
reported in the prior financial reporting period as a result of the GA
Acquisition having occurred on February 1, 2021, (ii) increased commission
expense related to increased sales in our individual market and increased
reinsurance transactions, and (iii) increased reinsurance ceding expense
allowances paid for policy administration services as a result of an increase in
reinsurance transactions.

General, administrative and other

General, administrative and other expenses increased for the year ended
December 31, 2022 as compared to the year ended December 31, 2021 primarily due
to (i) one less month of activity reported in the prior financial reporting
period as a result of the GA Acquisition having occurred on February 1, 2021,
(ii) increased employee compensation and benefits related expenses, (iii)
increased professional service fees, and (iv) increased third-party
administrator ("TPA") policy servicing fees, all due to growth of the business.

Other Consolidated Results of Operations (GAAP Basis)

Income Tax Expense (Benefit)

For the year ended December 31, 2022, income tax was a benefit of $35.7 million
compared to an income tax expense of $1,353.3 million in the prior period. The
tax benefit in the current period was generated primarily from deferred tax
benefits recorded in connection with pre-tax unrealized losses driven by net
capital allocation-based losses and investment losses offset by income tax
expense relating to Global Atlantic's insurance operations. For a discussion of
factors that impacted KKR's tax provision, see Note 19 "Income Taxes" to the
financial statements included elsewhere in this report. The amount of U.S.
federal and state corporate income taxes we pay in future periods may be
materially increased if adverse tax laws become enacted. See "-Business
Environment- Economic and Market Conditions" in this report.

Net Income (Loss) Attributable to Noncontrolling Interests

Net Income (Loss) attributable to noncontrolling interests for the year ended
December 31, 2022 relates primarily to net income (loss) attributable to (i)
exchangeable securities representing ownership interests in KKR Group
Partnership, (ii) third-party limited partner interests in consolidated
investment funds, and (iii) interests that co-investors and rollover investors
hold in Global Atlantic. The net loss attributable to noncontrolling interests
for the year ended December 31, 2022 was primarily due to (i) net losses from
investment activities at our consolidated investment funds and (ii) a net loss
attributable to exchangeable securities in the current period.

Net Income (Loss) Attributable to KKR & Co. Inc.

The net loss attributable to KKR & Co. Inc. for the year ended December 31, 2022
was primarily due to (i) net capital allocation-based losses and (ii) net losses
from investment activities, partially offset by (i) a higher level of management
fees and (ii) a reversal of previously recognized accrued carried interest
compensation, as described above.

                                      148

--------------------------------------------------------------------------------

Table of Co n tents

Consolidated Results of Operations (GAAP Basis)

The following is a discussion of our consolidated results of operations for the
years ended December 31, 2021 and 2020. You should read this discussion in
conjunction with the financial statements and related notes included elsewhere
in this report. See also "-Business Environment" for more information about
factors that may affect our business, financial performance, operating results
and valuations.

                                                                                    Years Ended
                                                             December 31,          December 31,
                                                                 2021                  2020                 Change
                                                                                 ($ in thousands)
Revenues
Asset Management
Fees and Other                                              $  2,850,154          $  2,006,791          $    843,363
Capital Allocation-Based Income (Loss)                         6,842,414             2,224,100             4,618,314
                                                               9,692,568             4,230,891             5,461,677
Insurance
Net Premiums                                                   2,226,078                     -             2,226,078
Policy Fees                                                    1,147,913                     -             1,147,913
Net Investment Income                                          2,845,623                     -             2,845,623
Net Investment-Related Gains (Losses)                            203,753                     -               203,753
Other Income                                                     120,213                     -               120,213
                                                               6,543,580                     -             6,543,580
Total Revenues                                                16,236,148             4,230,891            12,005,257

Expenses
Asset Management
Compensation and Benefits                                      4,428,743             2,152,490             2,276,253
Occupancy and Related Charges                                     69,084                72,100                (3,016)
General, Administrative and Other                                959,077               708,542               250,535
                                                               5,456,904             2,933,132             2,523,772

Insurance

Net Policy Benefits and Claims                                 5,055,709                     -             5,055,709
Amortization of Policy Acquisition Costs                         (65,949)                    -               (65,949)
Interest Expense                                                  61,661                     -                61,661
Insurance Expenses                                               358,878                     -               358,878
General, Administrative and Other                                555,321                     -               555,321
                                                               5,965,620                     -             5,965,620
Total Expenses                                                11,422,524             2,933,132             8,489,392

Investment Income (Loss) - Asset Management
Net Gains (Losses) from Investment Activities                  7,720,923             3,642,804             4,078,119
Dividend Income                                                  698,800               352,563               346,237
Interest Income                                                1,485,470             1,403,440                82,030
Interest Expense                                              (1,070,368)             (969,871)             (100,497)
Total Investment Income (Loss)                                 8,834,825             4,428,936             4,405,889

Income (Loss) Before Taxes                                    13,648,449             5,726,695             7,921,754

Income Tax Expense (Benefit)                                   1,353,270               609,097               744,173


                                      149

--------------------------------------------------------------------------------

  Table of Co    n    tents

                                                                          Years Ended
                                                    December 31,          December 31,
                                                        2021                  2020                 Change
                                                                        ($ in thousands)
Net Income (Loss)                                    12,295,179             5,117,598            7,177,581
Net Income (Loss) Attributable to Redeemable
Noncontrolling Interests                                  4,060                     -                4,060
Net Income (Loss) Attributable to Noncontrolling
Interests                                             7,624,643             3,115,089            4,509,554
Net Income (Loss) Attributable to KKR & Co. Inc.      4,666,476             2,002,509            2,663,967

Series A Preferred Stock Dividends                       23,656                23,288                  368
Series B Preferred Stock Dividends                       12,991                10,076                2,915
Series C Mandatory Convertible Preferred Stock
Dividends                                                69,000                23,191               45,809

Net Income (Loss) Attributable to KKR & Co. Inc.
Common Stockholders                                $  4,560,829          $  

1,945,954 $ 2,614,875

                                      150

--------------------------------------------------------------------------------

Table of Co n tents

Consolidated Results of Operations (GAAP Basis) - Asset Management

Revenues

For the years ended December 31, 2021 and 2020, revenues consisted of the
following:

                                                                                    Years Ended
                                                              December 31,          December 31,
                                                                  2021                  2020                 Change
                                                                                  ($ in thousands)
Management Fees                                              $  1,301,975          $    965,664          $   336,311
Fee Credits                                                      (464,594)             (299,415)            (165,179)
Transaction Fees                                                1,552,621               950,205              602,416
Monitoring Fees                                                   134,472               127,907                6,565
Incentive Fees                                                     55,701                10,404               45,297
Expense Reimbursements                                            178,572               149,522               29,050
Oil and Gas Revenue                                                     -                21,054              (21,054)
Consulting Fees                                                    91,407                81,450                9,957
Total Fees and Other                                            2,850,154             2,006,791              843,363

Carried Interest                                                5,388,354             1,719,527            3,668,827
General Partner Capital Interest                                1,454,060               504,573              949,487
Total Capital Allocation-Based Income (Loss)                    6,842,414             2,224,100            4,618,314

Total Revenues - Asset Management                            $  9,692,568          $  4,230,891          $ 5,461,677


Fees and Other

Total Fees and Other for the year ended December 31, 2021 increased compared to
the year ended December 31, 2020 primarily as a result of the increase in
transaction fees and management fees.

For a more detailed discussion of the factors that affected our transaction fees
during the period, see "-Analysis of Asset Management Segment Operating
Results."

The increase in management fees was primarily attributable to management fees
earned from (i) North America Fund XIII, Global Infrastructure Investors IV, and
Health Care Strategic Growth Fund II, all of which entered their investment
periods in 2021 and (ii) Asian Fund IV, which entered its investment period in
the third quarter of 2020. These increases were partially offset by a decrease
in management fees earned from Asian Fund III, Americas Fund XII, and Global
Infrastructure Investors III as a result of entering their post-investment
periods in the third quarter of 2020, second quarter of 2021 and second quarter
of 2021, respectively, with all three investment funds now earning fees based on
capital invested rather than capital committed and at a lower fee rate for Asian
Fund III and Americas Fund XII.

Management fees due from consolidated investment funds and other vehicles are
eliminated upon consolidation under GAAP. However, because these amounts are
funded by, and earned from, noncontrolling interests, upon consolidation under
GAAP, KKR's allocated share of the net income from the consolidated investment
funds and other vehicles is increased by the amount of fees that are eliminated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such
investment funds and other vehicles were not consolidated. For a more detailed
discussion on the factors that affect our management fees during the period, see
"-Analysis of Asset Management Segment Operating Results."

Fee credits increased compared to the prior period as a result of a higher level
of transaction fees in our Private Equity, Real Assets, and Credit and Liquid
Strategies business lines. Fee credits owed to consolidated investment funds are
eliminated upon consolidation under GAAP. However, because these amounts are
owed to noncontrolling interests, upon consolidation under GAAP, KKR's allocated
share of the net income from the consolidated investment funds is decreased by
the amount of fee credits that are eliminated. Accordingly, net income (loss)
attributable to KKR would be unchanged if such investment funds and other
vehicles were not consolidated. Transaction and monitoring fees earned from KKR
portfolio companies are not eliminated upon consolidation because those fees are
earned from companies which are not consolidated. Furthermore,

                                      151

--------------------------------------------------------------------------------

Table of Co n tents

transaction fees earned in our Capital Markets business line are not shared with
fund investors. Accordingly, certain transaction fees are reflected in revenues
without a corresponding fee credit.

Capital Allocation-Based Income (Loss)

The increase in carried interest and general partner capital interest during the
year ended December 31, 2021 compared to the prior period was due primarily to a
higher level of net appreciation in the value of our investment portfolio as
compared to the year ended December 31, 2020. Capital Allocation-Based Income
(Loss) for the year ended December 31, 2021 was positive primarily due to the
net appreciation of the underlying investments at our carry-earning investment
funds, most notably Americas Fund XII, Asian Fund III and North America Fund XI.
Capital Allocation-Based Income (Loss) for the year ended December 31, 2020 was
positive due to the net appreciation of the underlying investments at our
carry-earning investment funds, most notably Americas Fund XII, Asian Fund III
and North America Fund XI.

KKR generally calculates the carried interest that would be due to KKR for each
investment fund, pursuant to the fund agreements, as if the fair value of the
underlying investments were realized as of the reporting date, irrespective of
whether such amounts have been realized. Since the fair value of the underlying
investments varies between reporting periods, it is necessary to make
adjustments to the amounts recorded as carried interest to reflect either (a)
positive performance resulting in an increase in the carried interest allocated
to the general partner or (b) negative performance that would cause the amount
due to KKR to be less than the amount previously recognized, resulting in a
negative adjustment to carried interest allocated to the general partner. In
each case, it is necessary to calculate the carried interest on cumulative
results compared to the carried interest recorded to date and to make the
required positive or negative adjustments.

Investment Income (Loss) - Asset Management

Net Gains (Losses) from Investment Activities for the year ended December 31,
2021

The net gains from investment activities for the year ended December 31, 2021
were comprised of net realized gains of $2,382.2 million and net unrealized
gains of $5,338.7 million.

Investment gains and losses relating to our general partner capital interest in
our unconsolidated funds are not reflected in our discussion and analysis of Net
Gains (Losses) from Investment Activities. Our economics associated with these
gains and losses are reflected in Capital Allocation-Based Income (Loss) as
described above. For a discussion and analysis of the investment gains or losses
relating to the investments in our unconsolidated funds, see "-Analysis of Asset
Management Segment Operating Results."

Realized Gains and Losses from Investment Activities

For the year ended December 31, 2021, net realized gains related primarily to
the sales of our investments held by KKR and certain consolidated funds, the
most significant of which were in FanDuel Inc., Mr. Cooper Group Inc., and
Darktrace Limited. Partially offsetting these realized gains were realized
losses, the most significant of which were realized losses from certain
investments held in our consolidated credit funds and realized losses on certain
hedging instruments.

Unrealized Gains and Losses from Investment Activities

For the year ended December 31, 2021, net unrealized gains related primarily to
mark-to-market gains from our investments held by KKR and certain consolidated
funds, the most significant of which were PetVet Care Centers, LLC, Heartland
Dental LLC, and OutSystems Holdings S.A. Partially offsetting these unrealized
gains were unrealized losses, the most significant of which are (i) the reversal
of previously recognized unrealized gains relating to the realization activity
described above and (ii) an unrealized loss on BridgeBio Pharma, Inc.

For a discussion of other factors that affected KKR's realized investment
income, see "-Analysis of Asset Management Segment Operating Results" and Note 5
"Net Gains (Losses) from Investment Activities - Asset Management" in our
financial statements.

Net Gains (Losses) from Investment Activities for the year ended December 31,
2020

The net gains from investment activities for the year ended December 31, 2020
were comprised of net realized gains of $162.9 million and net unrealized gains
of $3,479.9 million.

                                      152

--------------------------------------------------------------------------------

Table of Co n tents

Realized Gains and Losses from Investment Activities

For the year ended December 31, 2020, net realized gains related primarily to
(i) the sale of our investment in The Hut Group Limited (LSE: THG), (ii) partial
sales of our investment in Fiserv, Inc., and (iii) the sale of our investment in
Ivalua SAS (technology sector). Partially offsetting these realized gains were
realized losses primarily relating to (i) an $88.3 million impairment charge
taken on one of our investments that is accounted for under the equity method of
accounting, (ii) a realized loss on the partial sale of our investment in LCI
Helicopters Limited (financial services sector) and (iii) the realization of
losses on certain investments held through consolidated CLOs and alternative
credit funds.

Unrealized Gains and Losses from Investment Activities

For the year ended December 31, 2020, net unrealized gains were driven primarily
by (i) mark-to-market gains in our growth equity and core investments held by
KKR and certain consolidated entities, the most significant of which were
BridgeBio Pharma, Inc., FanDuel Inc., and PetVet Care Centers, LLC. Partially
offsetting these unrealized gains were unrealized losses relating to (i) the
reversal of previously recognized unrealized gains relating to the realization
activity described above, (ii) mark-to-market losses on our investment in
Fiserv, Inc., which is held both in our funds and as a coinvestment by KKR, and
(iii) mark-to-market losses on certain investments held through consolidated
alternative credit and real estate funds.

For a discussion of other factors that affected KKR's realized investment
income, see "-Analysis of Asset Management Segment Operating Results" and Note 5
"Net Gains (Losses) from Investment Activities - Asset Management" in our
financial statements.

Dividend Income

During the year ended December 31, 2021, the most significant dividends received
included (i) $215.5 million from our consolidated real estate funds, (ii) $138.7
million from our investment in Viridor Limited, and (iii) $70.9 million from our
investment in Arnott's Biscuits Limited. During the year ended December 31,
2020, the most significant dividends received included $152.4 million from our
consolidated real estate funds, $62.5 million from our investment in Fiserv,
Inc. part of which is held as a co-investment by KKR, and $48.9 million from our
investment in Epicor Software Corporation (technology sector).

Significant dividends from portfolio companies and consolidated funds are
generally not recurring quarterly dividends, and while they may occur in the
future, their size and frequency are variable. For a discussion of other factors
that affected KKR's dividend income, see "-Analysis of Asset Management Segment
Operating Results."

Interest Income

The increase in interest income during the year ended December 31, 2021 compared
to the year ended December 31, 2020 was primarily due to (i) a higher level of
interest income from certain of our consolidated credit funds, primarily related
to an increase in the amount of capital deployed, and (ii) the impact of closing
additional CLOs that are consolidated subsequent to December 31, 2020. Partially
offsetting these increases was a lower level of reported interest income from
investments at KREF as a result of the deconsolidation of KREF in the fourth
quarter of 2021. For a discussion of other factors that affected KKR's interest
income, see "-Analysis of Asset Management Segment Operating Results."

Interest Expense

The increase in interest expense during the year ended December 31, 2021
compared to the year ended December 31, 2020 was primarily due to (i) the impact
of issuances of our senior notes, (ii) an increase in the amount of borrowings
outstanding from the financing arrangements of consolidated investment funds and
other vehicles, and (iii) the impact of closing additional CLOs that were
consolidated subsequent to December 31, 2020. Partially offsetting these
increases was a lower level of reported interest expense on debt obligations at
KREF as a result of the deconsolidation of KREF in the fourth quarter of 2021.
For a discussion of other factors that affected KKR's interest expense, see
"-Analysis of Non-GAAP Performance Measures."

                                      153

--------------------------------------------------------------------------------

Table of Co n tents

Expenses - Asset Management

Compensation and Benefits Expenses

The increase in compensation and benefits expenses during the year ended
December 31, 2021 compared to the prior period was primarily due to (i) a higher
level of accrued carried interest compensation resulting from a higher level of
carried interest from the appreciation in the value of our investment portfolio
in the current period, (ii) a higher level of accrued discretionary compensation
and benefits resulting from a higher level of fee revenue, realized performance
income and realized investment income in the current period, and (iii) a higher
level of equity-based compensation.

General, Administrative and Other

The increase in general, administrative and other expenses during the year ended
December 31, 2021 compared to the prior period was primarily due to (i) a higher
level of expenses at our consolidated CLOs, investment funds and other vehicles,
(ii) a higher level of broken-deal expenses, (iii) a higher level of expenses
reimbursable by our investment funds, and (iv) placement fees incurred related
to capital raising activities.

The level of broken-deal expenses can vary significantly period to period based
upon a number of factors, the most significant of which are the number of
potential investments being pursued for our investment funds, the size and
complexity of investments being pursued and the number of investment funds
currently in their investment period. Also, in periods of significant
fundraising and to the extent that we use third parties to assist in our capital
raising efforts, our General, Administrative and Other may increase accordingly.
Similarly, our General, Administrative and Other may increase as a result of
professional and other fees incurred as part of due diligence related to
strategic acquisitions and new product development.

Consolidated Results of Operations (GAAP Basis) - Insurance

For the year-ended December 31, 2021, the results of Global Atlantic's insurance
operations included in our consolidated results of operations are from the
acquisition date, February 1, 2021, through December 31, 2021.

Assumption review

The assumptions on which reserves, deferred revenue and expenses are based are
intended to represent an estimation of the benefits that are expected to be
payable to, and fees or premiums that are expected to be collectible from,
policyholders in future periods. Global Atlantic reviews the adequacy of its
reserves, deferred revenue and expenses and the assumptions underlying those
items at least annually, usually in the third quarter. As Global Atlantic
analyzes its assumptions, to the extent Global Atlantic chooses to update one or
more of those assumptions, there may be an "unlocking" impact. Generally,
favorable unlocking means the change in assumptions required a reduction in
reserves, or in deferred revenue liabilities or an increase in deferred
expenses, and unfavorable unlocking means the change in assumptions required an
increase in reserves or in deferred revenue liabilities, or a reduction in
deferred expenses.

The following table reflects the impact on net income by financial statement
line item and to insurance segment adjusted operating earnings from Global
Atlantic's assumption review:

                                                                                   Year Ended
                                                                                December 31, 2021
                                                                           

($ in thousands)
Impacts of assumption review, by statement of income line item:
Policy fees

                                                                   $              182
Policy benefits and claims                                                                20,904
Amortization of policy acquisition costs                                                  (2,119)
Income tax impact                                                                         (3,983)
Total assumption review impact on net income                                  $           14,984

Assumption review impact on adjustments to derive insurance segment
adjusted operating earnings

                                                                  (97)
Noncontrolling interests' share of assumption review impact                               (5,734)

Total assumption review impact on insurance segment adjusted operating
earnings

                                                                      $            9,153


For the year ended December 31, 2021, the net favorable unlocking impact on net
income and insurance segment adjusted operating earnings was primarily due to
favorable mortality experience.

                                      154

--------------------------------------------------------------------------------

Table of Co n tents

Revenues

For the year ended December 31, 2021, revenues consisted of the following:

                                                        Year Ended
                                                    December 31, 2021
                                                     ($ in thousands)
                 Net Premiums                      $        2,226,078
                 Policy Fees                                1,147,913
                 Net Investment Income                      2,845,623
                 Net Investment-Related Gains                 203,753
                 Other Income                                 120,213
                 Total Insurance Revenues          $        6,543,580


Net Premiums

Net premiums were primarily driven by initial premiums related to new
reinsurance transactions with life contingencies assumed during the year ended
December 31, 2021. These initial premiums were wholly offset by a comparable
increase in policy reserves reported within policy benefits and claims (as
discussed below).

Policy fees

Policy fees were primarily driven by cost of insurance, administrative, and
rider fees during the year ended December 31, 2021.

Net investment income

Net investment income was primarily driven by insurance segment investments and
the effective book yield (as determined, in part, by the allocated fair value of
the investment portfolio as determined as of the GA Acquisition on February 1,
2021). Average insurance segment investments were primarily driven by net
inflows of assets from the individual markets and institutional channels. In
addition to the impact of higher asset balances, net investment income was also
positively impacted by income from bond call and loan prepayment activity.

Net investment-related gains (losses)

The components of net investment-related gains (losses) were as follows:

                                                         Year Ended
                                                     December 31, 2021
                                                      ($ in thousands)
Equity index options                                $          549,987
Funds withheld payable embedded derivatives                     49,491

Funds withheld receivable embedded derivatives                  31,740
Equity future contracts                                       (263,637)
Interest rate contracts                                       (146,920)
Foreign currency forwards                                        2,484
Credit risk contracts                                             (400)
Net gains on derivative instruments                            222,745
Net other investment losses                                    (18,992)
Net investment-related gains                        $          203,753

Net gains on derivative instruments

The increase in the fair value of equity index options were primarily driven by
the performance of the indexes upon which call options are based. Global
Atlantic purchases equity index options to hedge the market risk of embedded
derivatives in indexed universal life and fixed-indexed annuity products (the
change for which is accounted for in policy benefits and claims). The majority
of Global Atlantic's equity index call options are based on the S&P 500 Index,
which increased during the year ended December 31, 2021.

                                      155

--------------------------------------------------------------------------------

Table of Co n tents

The decrease in the fair value of equity futures and interest rate contracts
were driven primarily by the performance of equity markets and interest rates.
Global Atlantic purchases equity futures primarily to hedge the market risk in
our variable annuity products which are accounted for in policy benefits and
claims. The majority of Global Atlantic's equity futures are based on the S&P
500 Index, which increased during the year ended December 31, 2021, resulting in
a loss on equity futures contracts. Market interest rates increased during the
year ended December 31, 2021, resulting in a loss on interest rate contracts.

The increase in the fair value of embedded derivatives on funds withheld at
interest payable and receivable were primarily driven by the change in fair
value of the underlying investments in the respective funds withheld at interest
payable and receivable portfolios.

Net other investment losses

The components of net other investment losses were as follows:

                                                                                             Year Ended
                                                                                          December 31, 2021
                                                                                          ($ in thousands)

Realized gains (losses) on investments not supporting asset-liability matching
strategies

                                                                              $          527,788

Realized gains (losses) on available-for-sale fixed maturity debt securities

                      (201,411)
Credit loss allowances                                                                            (249,338)

Unrealized gains (losses) on fixed maturity securities classified as trading

                      (118,714)

Unrealized gains (losses) on investments classified as trading or accounted under
a fair-value option

                                                                                 39,758

Unrealized gains (losses) on real estate investments recognized at fair value
under investment company accounting

                                                                 35,418

Realized gains (losses) on funds withheld at interest payable portfolio

                        (30,015)

Realized gains (losses) on funds withheld at interest receivable portfolio

                         12,418
Other                                                                                              (34,896)
Net other investment losses                                                             $          (18,992)


Net other investment losses for the year ended December 31, 2021 were primarily
due to (i) the recognition of a credit loan loss allowances as a result of the
application of the current expected credit loss accounting standard adopted
concurrent with the GA Acquisition, (ii) losses on the sale of
available-for-sale ("AFS") securities as a result of portfolio rotation
strategies, and (iii) net unrealized losses on trading fixed maturity securities
underlying a portion of the funds withheld payable at interest portfolio due to
an increase in market interest rates. These losses were almost wholly offset by
realized gains (losses) on investments not supporting asset-liability matching
strategies, including in particular a gain from the disposition of Origis USA,
LLC.

Other income

Other income is mainly driven by expense allowances on ceded reinsurance,
administration, management fees and distribution fees.

Expenses

Policy benefits and claims

Policy benefits and claims were primarily driven by (i) initial reserves related
to new reinsurance transactions with life contingencies during the year ended
December 31, 2021, (ii) an increase in the value of embedded derivatives in
Global Atlantic's indexed universal life and fixed indexed annuity products, as
a result of higher equity market returns (as discussed above under "Revenues-Net
gains on derivative instruments," Global Atlantic purchases equity index options
in order to hedge this risk, the fair value changes of which are accounted for
in gains on derivative instruments, and generally offsetting the change in
embedded derivative fair value reported in policy benefits and claims), and
(iii) an increase in net flows in the institutional and individual channels, all
offset by a decrease in variable annuity reserves primarily due to higher equity
market returns and market interest rates.

                                      156

--------------------------------------------------------------------------------

Table of Co n tents

Amortization of policy acquisition costs

Amortization of policy acquisition costs during the year ended December 31, 2021
was primarily driven by the amortization of insurance intangibles recognized as
part of purchase accounting of the Global Atlantic acquisition. Amortization is
negative (that is, a reduction to expense) as a result of the net negative
value-of-business-acquired insurance intangible recognized as part of the
aforementioned purchase accounting.

Interest expense

Interest expense for the year ended December 31, 2021 reflects a net increase in
debt outstanding due to the issuance of new senior and subordinated notes which
was partially offset by the pay-down of other debt, and the favorable impact to
interest expense as a result of the lower average coupon due on new debt added
at lower interest rates.

Insurance expenses

Insurance expenses were primarily driven by (i) commission expense related to
sales, and (ii) reinsurance ceding expense allowances paid for policy
administration services during the year ended December 31, 2021.

General, administrative and other

General, administrative and other expenses were driven primarily by (i) employee
compensation and benefits related expenses, (ii) TPA policy servicing fees,
(iii) technology hardware and software related charges, and (iv) professional
fees during the year ended December 31, 2021.

Other Consolidated Results of Operations (GAAP Basis)

Income Tax Expense (Benefit)

For the year ended December 31, 2021, income tax expense was $1,353.3 million
compared to $609.1 million in the prior period. The increase in the income tax
expense was primarily due to (i) a higher level of fees, capital
allocation-based income and investment income as described above earned from
asset management operations and (ii) the inclusion of income taxes relating to
Global Atlantic's insurance operations. Our effective tax rate under GAAP for
the year ended December 31, 2021 was 9.9%. For a discussion of factors that
impacted KKR's tax provision, see Note 19 "Income Taxes" in our financial
statements. The amount of U.S. federal and state corporate income taxes we pay
in future periods may be materially increased if adverse tax laws become
enacted. See also "-Business Environment-Economic and Market Conditions" in this
report.

Net Income (Loss) Attributable to Noncontrolling Interests

Net Income (Loss) attributable to noncontrolling interests for the year ended
December 31, 2021 relates primarily to net income (loss) attributable to (i)
interests of KKR Holdings and other exchangeable securities representing
ownership interests in KKR Group Partnership, (ii) third-party limited partner
interests in consolidated investment funds and (iii) interests that co-investors
and rollover investors hold in Global Atlantic. Net income (loss) attributable
to noncontrolling interests for the year ended December 31, 2021 increased
compared to the prior period primarily due to a higher level of net income
generated during the year ended December 31, 2021, allocable to the holders of
the noncontrolling interests.

Net Income (Loss) Attributable to KKR & Co. Inc.

Net Income (loss) attributable to KKR & Co. Inc. for the year ended December 31,
2021 increased compared to the prior period primarily due to (i) a higher level
of net gains from investment activities, capital allocation-based income, and
fees earned from asset management operations during the year ended December 31,
2021 as described above and (ii) the acquisition of Global Atlantic, which was
completed in February 2021. These increases were partially offset by accrued
carried interest compensation and income tax expense, each as described above.

                                      157

--------------------------------------------------------------------------------

Table of Co n tents

Condensed Consolidated Statements of Financial Condition (GAAP Basis)

The following table provides our condensed consolidated statements of financial
condition on a GAAP basis as of December 31, 2022 and December 31, 2021.

                               (Amounts in thousands, except per share amounts)
                                                                     As of                       As of
                                                               December 31, 2022           December 31, 2021

Assets
Asset Management
Cash and Cash Equivalents                                    $        6,705,325          $        6,699,668
Investments                                                          92,375,463                  88,775,514
Other Assets                                                          7,114,360                   4,244,894
                                                                    106,195,148                  99,720,076
Insurance
Cash and Cash Equivalents                                             6,118,231                   3,391,934
Investments                                                         124,199,176                 123,763,675
Other Assets                                                         40,564,636                  37,409,755
                                                                    170,882,043                 164,565,364
Total Assets                                                 $         277,077,191       $         264,285,440

Liabilities and Equity
Asset Management
Debt Obligations                                             $       40,598,613          $       36,669,755
Other Liabilities                                                     6,937,832                   8,359,619
                                                                     47,536,445                  45,029,374
Insurance
Debt Obligations                                                      2,128,166                   1,908,006
Other Liabilities                                                   173,753,695                 159,208,840
                                                                    175,881,861                 161,116,846
Total Liabilities                                            $      223,418,306          $      206,146,220

Redeemable Noncontrolling Interests                                     152,065                      82,491

Stockholders' Equity

Stockholders' Equity - Series C Mandatory Convertible
Preferred Stock

                                                       1,115,792                   1,115,792
Stockholders' Equity - Common Stock                                  16,613,028                  16,466,372
Noncontrolling Interests                                             35,778,000                  40,474,565
Total Equity                                                         53,506,820                  58,056,729
Total Liabilities and Equity                                 $      

277,077,191 $ 264,285,440

KKR & Co. Inc. Stockholders' Equity - Common Stock
Per Outstanding Share of Common Stock

                        $            19.29          $            27.64


KKR & Co. Inc. Stockholders' Equity - Common Stock per Outstanding Share of
Common Stock was $19.29 as of December 31, 2022, down from $27.64 as of December
31, 2021. The decrease was primarily due to the (i) unrealized losses on
available-for-sale-securities from Global Atlantic that are recorded in other
comprehensive income, (ii) dividends to common stockholders, and (iii) a net
loss attributable to KKR & Co. Inc. common stockholders during the year ended
December 31, 2022.

                                      158

--------------------------------------------------------------------------------

Table of Co n tents

Consolidated Statements of Cash Flows (GAAP Basis)

The following is a discussion of our consolidated cash flows for the years ended
December 31, 2022 and 2021. You should read this discussion in conjunction with
the financial statements and related notes included elsewhere in this report.

The consolidated statements of cash flows include the cash flows of our
consolidated entities, which include certain consolidated investment funds, CLOs
and certain variable interest entities formed by Global Atlantic notwithstanding
the fact that we may hold only a minority economic interest in those investment
funds and CFEs. The assets of our consolidated investment funds and CFEs, on a
gross basis, can be substantially larger than the assets of our business and,
accordingly, could have a substantial effect on the cash flows reflected in our
consolidated statements of cash flows. The primary cash flow activities of our
consolidated funds and CFEs involve: (i) capital contributions from fund
investors; (ii) using the capital of fund investors to make investments;
(iii) financing certain investments with indebtedness; (iv) generating cash
flows through the realization of investments; and (v) distributing cash flows
from the realization of investments to fund investors. Because our consolidated
funds are treated as investment companies for accounting purposes, certain of
these cash flow amounts are included in our cash flows from operations.

Net Cash Provided (Used) by Operating Activities

Our net cash provided (used) by operating activities was $(5.3) billion and
$(7.2) billion during the years ended December 31, 2022 and 2021, respectively.
These amounts primarily included: (i) investments purchased (asset management),
net of proceeds from investments (asset management) of $(10.4) billion and
$(10.6) billion during the years ended December 31, 2022 and 2021, respectively,
(ii) net realized gains (losses) on asset management investments of $1.3 billion
and $2.4 billion during the years ended December 31, 2022 and 2021,
respectively, (iii) change in unrealized gains (losses) on investments (asset
management) of $(3.0) billion and $5.3 billion during the years ended December
31, 2022 and 2021, respectively, (iv) capital allocation-based income (loss) of
$(2.5) billion and $6.8 billion during the years ended December 31, 2022 and
2021, respectively, and (v) net realized gains (losses) on insurance operations
of $(1.0) billion and $(0.9) billion during the years ended December 31, 2022
and 2021, respectively. Investment funds are investment companies under GAAP and
reflect their investments and other financial instruments at fair value.

Net Cash Provided (Used) by Investing Activities

Our net cash provided (used) by investing activities was $(13.6) billion and
$(9.6) billion during the years ended December 31, 2022 and 2021, respectively.
Our investing activities included: (i) investments purchased (insurance), net of
proceeds from investments (insurance), of $(11.8) billion and $(9.1) billion
during the years ended December 31, 2022 and 2021, respectively, (ii)
acquisitions, net of cash acquired, of $(1.7) billion and $(473.8) million
during the years ended December 31, 2022 and 2021, respectively, and (iii) the
purchase of fixed assets of $(85.1) million and $(102.0) million during the
years ended December 31, 2022 and 2021, respectively.

Net Cash Provided (Used) by Financing Activities

Our net cash provided (used) by financing activities was $22.1 billion and $20.4
billion during the years ended December 31, 2022 and 2021, respectively. Our
financing activities primarily included: (i) contributions by, net of
distributions to, our noncontrolling and redeemable noncontrolling interests of
$6.6 billion and $6.4 billion during the years ended December 31, 2022 and 2021,
respectively, (ii) proceeds received, net of repayment of debt obligations, of
$6.5 billion and $8.9 billion during the years ended December 31, 2022 and 2021,
respectively, (iii) additions to, net of withdrawals from, contractholder
deposit funds of $9.3 billion and $5.9 billion during years ended December 31,
2022 and 2021, respectively, (iv) common stock dividends of $(444.3) million and
$(331.4) million during the years ended December 31, 2022 and 2021,
respectively, (v) net delivery of common stock of $(65.7) million and $(166.8)
million during the years ended December 31, 2022 and 2021, respectively, (vi)
repurchases of common stock of $(346.7) million and $(269.7) million during the
years ended December 31, 2022 and 2021, respectively, (vii) Series A and B
Preferred Stock dividends of $(19.2) million during the year ended December 31,
2021, (viii) Series C Mandatory Convertible Preferred Stock dividends of $(69.0)
million during each of the years ended December 31, 2022 and 2021, and (ix)
private placement share issuance of $38.5 million during year ended December 31,
2021.

                                      159

--------------------------------------------------------------------------------

Table of Co n tents

Analysis of Segment Operating Results

The following is a discussion of the results of our business on a segment basis
for the years ended December 31, 2022, 2021, and 2020. You should read this
discussion in conjunction with the information included under "-Key Segment and
Non-GAAP Performance Measures" and the financial statements and related notes
included elsewhere in this report. See "-Business Environment" for more
information about factors that may impact our business, financial performance,
operating results and valuations.

For the year ended December 31, 2021, the results of our insurance segment are
from February 1, 2021 (closing date of the GA Acquisition) through December 31,
2021.

Analysis of Asset Management Segment Operating Results

The following tables set forth information regarding KKR's asset management
segment operating results and certain key capital metrics as of and for the
years ended December 31, 2022 and 2021.

                                                                           Years Ended
                                                     December 31,          December 31,
                                                         2022                  2021                 Change
                                                                         ($ in thousands)
Management Fees                                     $  2,656,487          $  2,071,440          $   585,047
Transaction and Monitoring Fees, Net                     775,933             1,004,241             (228,308)
Fee Related Performance Revenues                          90,665                45,852               44,813
Fee Related Compensation                                (769,735)             (702,387)             (67,348)
Other Operating Expenses                                (585,999)             (449,155)            (136,844)
Fee Related Earnings                                   2,167,351             1,969,991              197,360
Realized Performance Income                            2,176,658             2,141,596               35,062
Realized Performance Income Compensation              (1,333,526)           (1,239,177)             (94,349)
Realized Investment Income                             1,134,419             1,613,244             (478,825)
Realized Investment Income Compensation                 (159,003)             (241,994)              82,991

Asset Management Segment Operating Earnings $ 3,985,899 $

 4,243,660          $  (257,761)


Management Fees

The following table presents management fees by business line:

                                                              Years Ended
                                       December 31, 2022       December 31, 2021        Change
                                                           ($ in thousands)
  Management Fees
  Private Equity                      $        1,188,463      $          967,038      $ 221,425
  Real Assets                                    679,890                 437,102        242,788
  Credit and Liquid Strategies                   788,134                 667,300        120,834
  Total Management Fees               $        2,656,487      $        2,071,440      $ 585,047


The increase in Private Equity business line management fees was primarily
attributable to a higher level of management fees earned from North America Fund
XIII and European Fund VI. The increase was partially offset by a decrease in
management fees earned from European Fund V and Americas Fund XII as a result of
entering their post-investment periods and, consequently, we now earn fees based
on capital invested rather than capital committed and at a lower fee rate.
During the fourth quarter of 2022, approximately $11 million of management fees
were earned on new capital raised that is retroactive to the start of the fund's
investment period.

                                      160

--------------------------------------------------------------------------------

Table of Co n tents

The increase in Real Assets business line management fees was primarily due to
(i) a higher level of management fees earned from Global Infrastructure
Investors IV, (ii) an increase in management fees earned from Global Atlantic
and (iii) management fees earned on assets managed by KJRM, which we acquired in
2022. These increases were partially offset by a decrease in management fees
earned from (i) Real Estate Partners Americas II as a result of a decline in
capital invested from investment realizations (of which this investment fund's
fee base is invested capital) and (ii) Global Infrastructure Investors III as a
result of entering its post-investment period and, consequently, we now earn
fees based on capital invested rather than capital committed.

The increase in Credit and Liquid Strategies business line management fees was
primarily attributable to (i) an increase in management fees earned from Global
Atlantic and (ii) a higher level of management fees earned from FS KKR Capital
Corp. ("FSK"), our business development company.

Transaction and Monitoring Fees, Net

The following table presents transaction and monitoring fees, net by business
line:

                                                                          Years Ended
                                                    December 31,          December 31,
                                                        2022                  2021                 Change
                                                                        ($ in thousands)
Transaction and Monitoring Fees, Net
Private Equity                                     $    120,410          $    122,478          $    (2,068)
Real Assets                                              33,202                20,687               12,515
Credit and Liquid Strategies                             22,018                14,181                7,837
Capital Markets                                         600,303               846,895             (246,592)

Total Transaction and Monitoring Fees, Net $ 775,933 $ 1,004,241 $ (228,308)

Our Capital Markets business line earns transaction fees, which are not shared
with fund investors. The decrease in capital markets transaction fees was
primarily due to a decrease in the number of capital markets transactions for
the year ended December 31, 2022, compared to the year ended December 31, 2021.
Overall, we completed 240 capital markets transactions for the year ended
December 31, 2022, of which 29 represented equity offerings and 211 represented
debt offerings, as compared to 358 transactions for the year ended December 31,
2021, of which 60 represented equity offerings and 298 represented debt
offerings. We earned fees in connection with underwriting, syndication and other
capital markets services. While each of the capital markets transactions that we
undertake in this business line is separately negotiated, our fee rates are
generally higher with respect to underwriting or syndicating equity offerings
than with respect to debt offerings, and the amount of fees that we earn for
similar transactions generally correlates with overall transaction sizes.

Our capital markets fees are generated in connection with activity involving our
private equity, real assets and credit funds as well as from third-party
companies. For the year ended December 31, 2022, approximately 14% of our
transaction fees in our Capital Markets business line were earned from
unaffiliated third parties as compared to approximately 23% for the year ended
December 31, 2021. Our transaction fees are comprised of fees earned from North
America, Europe, and the Asia-Pacific region. For the year ended December 31,
2022, approximately 46% of our transaction fees were generated outside of North
America as compared to approximately 38% for the year ended December 31, 2021.
Our Capital Markets business line is dependent on the overall capital markets
environment, which is influenced by equity prices, credit spreads, and
volatility. Our Capital Markets business line does not generate monitoring fees.

Our Private Equity, Real Assets and Credit and Liquid Strategies business lines
separately earn transaction and monitoring fees from portfolio companies, and
under the terms of the management agreements with certain of our investment
funds, we are generally required to share all or a portion of such fees with our
fund investors. Additionally, transaction fees are generally not earned with
respect to energy and real estate investments.

The decrease in our Private Equity business line transaction and monitoring
fees, net, was primarily attributable to a lower average transaction fee earned
in 2022. During the year ended December 31, 2022, there were 77 transaction
fee-generating investments that paid an average fee of $5.3 million compared to
76 transaction fee-generating investments that paid an average fee of $5.5
million during the year ended December 31, 2021. For the year ended December 31,
2022, approximately 46% of Private Equity transaction fees were paid by
companies in North America, 31% were paid from companies in the Asia-Pacific
region, and 23% were paid from companies in Europe. Transaction fees vary by
investment based upon a number of factors, the most significant of which are
transaction size, the amount of the fees as set forth in the transaction
agreements, the complexity of the transaction, and KKR's role in the
transaction.

                                      161

--------------------------------------------------------------------------------

Table of Co n tents

Fee Related Performance Revenues

The following table presents fee related performance revenues by business line:

                                                                                Years Ended
                                                     December 31, 2022           December 31, 2021             Change
                                                                              ($ in thousands)
Fee Related Performance Revenues
Private Equity                                     $                -          $                -          $         -
Real Assets                                                    51,183                       9,068               42,115
Credit and Liquid Strategies                                   39,482                      36,784                2,698
Total Fee Related Performance Revenues             $           90,665          $           45,852          $    44,813


Fee related performance revenues represent performance fees that are (i)
expected to be received from our investment funds, vehicles and accounts on a
recurring basis, and (ii) not dependent on a realization event involving
investments held by the investment fund, vehicle or account. These performance
fees are primarily earned from FSK (our business development company), KKR
Property Partners Americas ("KPPA") (our open-ended core plus real estate fund),
KREST (our registered closed-end real estate equity fund), KREF (our real estate
credit investment trust), and KJRM (our Japanese real estate investment trust
asset manager). Fee related performance revenues were higher for the year ended
December 31, 2022 compared to the prior period primarily due to performance
revenues earned from KPPA and KJRM in the current period.

Fee Related Compensation

The increase in fee related compensation for the year ended December 31, 2022
compared to the prior period was primarily due to a higher level of compensation
recorded in connection with the higher level of revenues included within fee
related earnings.

Other Operating Expenses

The increase in other operating expenses for the year ended December 31, 2022
compared to the prior period was primarily due to (i) a higher level of
professional fees, information technology and other administrative costs in
connection with the growth of the firm and (ii) an increase in travel related
expenses as a result of a return of travel activity to pre-COVID-19 pandemic
levels.

Fee Related Earnings

The increase in fee related earnings for the year ended December 31, 2022
compared to the prior period is primarily due to a higher level of management
fees from our Private Equity, Real Assets, and Credit and Liquid Strategies
business lines and a higher level of fee related performance revenues, partially
offset by a lower level of transaction and monitoring fees, net, and a higher
level of fee related compensation and other operating expenses, as described
above.

Realized Performance Income

The following table presents realized performance income by business line:

                                                                Years Ended
                                         December 31, 2022       December 31, 2021        Change
                                                             ($ in thousands)
Realized Performance Income
Private Equity                          $        1,903,580      $        1,678,753      $ 224,827
Real Assets                                        113,465                  97,312         16,153
Credit and Liquid Strategies                       159,613                

365,531 (205,918)
Total Realized Performance Income $ 2,176,658 $ 2,141,596 $ 35,062

                                      162

--------------------------------------------------------------------------------

  Table of Co    n    tents

                                                                           Years Ended
                                                     December 31,          December 31,
                                                         2022                  2021                 Change
                                                                         ($ in thousands)
Private Equity
North America Fund XI                               $    932,428          $    433,708          $   498,720
Core Investment Vehicles                                 262,219                80,937              181,282
2006 Fund                                                231,689               219,737               11,952
Americas Fund XII                                        197,023               207,559              (10,536)
Asian Fund III                                           104,601               387,863             (283,262)
European Fund IV                                          86,233               186,476             (100,243)
Co-Investment Vehicles and Other                          55,868                90,305              (34,437)
Next Generation Technology Growth Fund                         -                32,544              (32,544)
European Fund III                                              -                   353                 (353)

Total Realized Carried Interest (1)                    1,870,061             1,639,482              230,579

Incentive Fees                                            33,519                39,271               (5,752)
Total Realized Performance Income                   $  1,903,580          $  1,678,753          $   224,827


                                                                Years Ended
                                          December 31, 2022       December 31, 2021        Change
                                                              ($ in thousands)
Real Assets
Real Estate Partners Americas II         $           95,772      $                -      $ 95,772
Global Infrastructure Investors II                   17,693                  72,862       (55,169)
Real Estate Partners Europe                               -                  18,200       (18,200)
Co-Investment Vehicles and Other                          -                   3,283        (3,283)
Global Infrastructure Investors                           -                 

2,967 (2,967)

Total Realized Carried Interest (1)                 113,465                 

97,312 16,153

Incentive Fees                                            -                       -             -

Total Realized Performance Income $ 113,465 $

 97,312      $ 16,153


                                                                          Years Ended
                                                    December 31,          December 31,
                                                        2022                  2021                 Change
                                                                        ($ in thousands)
Credit and Liquid Strategies

Alternative Credit and Other Funds                 $     10,334          $     15,336          $    (5,002)
Total Realized Carried Interest (1)                      10,334                15,336               (5,002)

Incentive Fees                                          149,279               350,195             (200,916)
Total Realized Performance Income                  $    159,613          $  

365,531 $ (205,918)

(1)The above tables exclude any funds for which there was no realized carried
interest during both of the periods presented.

Realized performance income includes (i) realized carried interest from our
carry-earning funds and (ii) incentive fees not included in Fee Related
Performance Revenues.

Realized carried interest in our Private Equity business line for the year ended
December 31, 2022 consisted primarily of realized proceeds from the sales of our
investments in Internet Brands, Inc. (technology sector) and CHI Overhead Doors,
Inc. (manufacturing sector) held by North America Fund XI, Fiserv, Inc. held by
2006 Fund, and performance income from our core investment vehicles.

                                      163

--------------------------------------------------------------------------------

Table of Co n tents

Realized carried interest in our Private Equity business line for the year ended
December 31, 2021 consisted primarily of realized proceeds from the sales of our
investments in Kokusai Electric Corporation (manufacturing sector), The
Bountiful Company (consumer products sector), Ingersoll Rand Inc. (NYSE: IR),
Academy Sports & Outdoors Inc. (NASDAQ: ASO), and Endeavor Group Holdings, Inc.
(NASDAQ: EDR).

Realized carried interest in our Real Assets business line for the year ended
December 31, 2022 consisted primarily of realized proceeds from dividends
received and sales of various investments held by Real Estate Partners Americas
II.

Realized carried interest in our Real Assets business line for the year ended
December 31, 2021 consisted primarily of realized proceeds from (i) the sale of
our infrastructure investments, Calisen PLC (LSE: CLSN LN) and Telxius Telecom
S.A.U. (Infrastructure: telecommunications infrastructure sector) and (ii)
dividends received from and sales of various investments held by Real Estate
Partners Europe.

Incentive fees consist of performance fees earned from (i) our hedge fund
partnerships, (ii) investment management agreements with KKR sponsored
investment vehicles, and (iii) investment management agreements to provide KKR's
investment strategies to funds managed by a UK investment fund manager.

Incentive fees in our Private Equity business line decreased for the year ended
December 31, 2022 compared to the prior period as a result of a lower level of
incentive fees being earned from assets we manage under a sub-advisory agreement
with a UK investment fund manager in 2022. Incentive fees in our Credit and
Liquid Strategies business line decreased for the year ended December 31, 2022
compared to the prior period primarily as a result of a lower level of
performance fees earned from our hedge fund partnership, Marshall Wace.

Realized Performance Income Compensation

The increase in realized performance income compensation for the year ended
December 31, 2022 compared to the prior period is primarily due to a higher
level of compensation recorded in connection with the higher level of realized
performance income.

Realized Investment Income

The following table presents realized investment income from our Principal
Activities business line:

                                                               Years Ended
                                        December 31, 2022       December 31, 2021         Change
                                                             ($ in thousands)
Realized Investment Income
Net Realized Gains (Losses)            $          530,284      $        1,199,414      $ (669,130)
Interest Income and Dividends                     604,135                

413,830 190,305
Total Realized Investment Income $ 1,134,419 $ 1,613,244 $ (478,825)

The decrease in realized investment income is primarily due to a lower level of
net realized gains, partially offset by a higher level of interest income and
dividends. The amount of realized investment income depends on the transaction
activity of our funds and our subsidiaries, which can vary from period to
period.

For the year ended December 31, 2022, net realized gains were comprised of
realized gains primarily from the sale of our investments in Fiserv, Inc.,
Internet Brands, Inc., Viridor Limited, and CHI Overhead Doors, Inc. Partially
offsetting these realized gains were realized losses, the most significant of
which were (i) a realized loss on our alternative credit investment, Hilding
Anders International AB (consumer products sector), (ii) a realized loss on
Magneti Marelli CK Holdings, and (iii) realized losses from the sales of various
revolving credit facilities.

For the year ended December 31, 2021, net realized gains were comprised of
realized gains primarily from the sale of our investments in FanDuel Inc., Mr.
Cooper Group Inc., Fiserv, Inc., The Bountiful Company, and BridgeBio Pharma
Inc. Partially offsetting these realized gains were realized losses, the most
significant of which were realized losses on certain hedging instruments.


                                      164

--------------------------------------------------------------------------------

Table of Co n tents

For the year ended December 31, 2022, interest income and dividends were
comprised of (i) $362.6 million of dividend income primarily from levered
multi-asset investment vehicles, our investments in Exact Holdings B.V.,
Internet Brands, Inc. and Pembina Gas Infrastructure Inc. (midstream sector),
and our real estate investments, including our investment in KPPA and KREF, and
(ii) $241.5 million of interest income primarily from our investments in CLOs.

For the year ended December 31, 2021, interest income and dividends were
comprised of (i) $261.3 million of dividend income primarily from our real
estate investments, including our investment in KREF, as well as our investments
in Viridor Limited, Kokusai Electric Corporation, and Arnott's Biscuits Limited
and (ii) $152.5 million of interest income primarily from our investments in
CLOs and, to a lesser extent, our other credit investments. See "-Analysis of
Non-GAAP Performance Measures-Non-GAAP Balance Sheet Measures."

We expect realized performance income and realized investment income to be
greater than $250 million in the first quarter of 2023 relating to realized
carried interest and realized investment income from completed, or signed and
expected to be completed sales, partial sales or secondary sales subsequent to
December 31, 2022 with respect to certain private equity portfolio companies and
other investments. Some of these transactions are not complete, and are subject
to the satisfaction of closing conditions, including, but not limited, to
regulatory approvals; there can be no assurance if or when any of these
transactions will be completed.

For the year ended December 31, 2022, total fees attributable to KKR Capstone
were $86.7 million and total expenses attributable to KKR Capstone were $81.7
million. For KKR Capstone-related adjustments in reconciling asset management
segment revenues to GAAP revenues see "-Analysis of Non-GAAP Performance
Measures-Reconciliations to GAAP Measures".

Realized Investment Income Compensation

The decrease in realized investment income compensation for the year ended
December 31, 2022 compared to the prior period is primarily due to a lower level
of compensation recorded in connection with the lower level of realized
investment income.

Other Operating and Capital Metrics

The following table presents certain key operating and capital metrics as of
December 31, 2022 and December 31, 2021:

                                                                                  As of
                                                   December 31, 2022           December 31, 2021             Change
                                                                             ($ in millions)
Assets Under Management                          $          503,897          $          470,555          $     33,342
Fee Paying Assets Under Management               $          411,923          $          357,389          $     54,534
Uncalled Commitments                             $          107,679          $          111,822          $     (4,143)


The following table presents one of our key capital metrics for the year ended
December 31, 2022 and 2021:

                                                        Years Ended
                                  December 31, 2022       December 31, 2021        Change
                                                      ($ in millions)
         Capital Invested        $           71,411      $           73,318      $ (1,907)



                                      165

--------------------------------------------------------------------------------

  Table of Co    n    tents

Assets Under Management

Private Equity

The following table reflects the changes in the AUM of our Private Equity
business line from December 31, 2021 to December 31, 2022:

                                               ($ in millions)
                    December 31, 2021         $        173,745
                    New Capital Raised                  18,087

                    Distributions and Other            (16,171)
                    Change in Value                    (10,514)
                    December 31, 2022         $        165,147

AUM of our Private Equity business line was $165.1 billion at December 31, 2022,
a decrease of $8.6 billion, compared to $173.7 billion at December 31, 2021.

The decrease was primarily attributable to (i) distributions to fund investors
primarily as a result of realized proceeds, most notably from North America Fund
XI, 2006 Fund, and Americas Fund XII, (ii) the liquidation of KKR Acquisition
Holdings I, our special purpose acquisition company, and (iii) a decrease in
investment value from Americas Fund XII, Asian Fund III, and Asian Fund II.
Partially offsetting these decreases was new capital raised from European Fund
VI, a new strategic investor partnership investing across multi-strategies, and
Next Generation Technology Growth Fund III.

For the year ended December 31, 2022, the value of our traditional private
equity investment portfolio decreased by 14%. This was comprised of a 57%
decrease in share prices of various publicly held investments and a 1% decrease
in value of our privately held investments. For the year ended December 31,
2022, the value of our growth equity investment portfolio decreased 11% and our
core private equity investment portfolio increased 7%.

The most significant decreases in share prices of our publicly held investments
were decreases in AppLovin Corporation (NASDAQ: APP), Max Healthcare Institute
Limited (NSE: MAXHEALTH), and GoTo Gojek Tokopedia PT Tbk (IDX: GOTO). These
decreases were partially offset by increases in share prices of other publicly
held investments, the most significant of which were Hensoldt AG (FRA: HAG) and
KnowBe4, Inc. (NASDAQ: KNBE). The prices of publicly held companies may
experience volatile changes following the reporting period. See "-Business
Environment" for more information about the factors, such as volatility, that
may impact our business, financial performance, operating results and
valuations.

The most significant decreases in the value of our privately held investments
were decreases in Kokusai Electric Corporation, OneStream Software, LLC
(technology sector), and Unzer GmbH (financial services sector). These decreases
in value on our privately held investments were partially offset by increases in
the value of certain other privately held investments, the most significant of
which were CHI Overhead Doors, Inc., ERM Worldwide Group Limited, and Internet
Brands, Inc. The decreased valuations of individual companies in our privately
held investments, in the aggregate, generally related to (i) an unfavorable
business outlook and (ii) a decrease in the value of market comparables, both
influenced by the economic outlook and overall market environment. The increased
valuations of individual companies in our privately held investments, in the
aggregate, generally related to (i) individual company performance, (ii) with
respect to CHI Overhead Doors, Inc., an increase in valuation reflecting an
agreement to exit the investment, which was executed in the period, and (iii)
with respect to Internet Brands, Inc. an increase in valuation driven by a
partial sale transaction, which was executed in the period. See "-Business
Environment" for more information about the factors, that may impact our
business, financial performance, operating results and valuations



                                      166

--------------------------------------------------------------------------------

Table of Co n tents

Real Assets

The following table reflects the changes in the AUM of our Real Assets business
line from December 31, 2021 to December 31, 2022:

                                                ($ in millions)
                   December 31, 2021           $         83,303
                   New Capital Raised                    29,244
                   Acquisitions and Other(1)             13,779
                   Distributions and Other               (6,369)
                   Change in Value                       (1,365)
                   December 31, 2022           $        118,592

(1)Reflects the AUM of KJRM at closing of $12,730 million and represents an
adjustment reflecting a change in the fee base of Global Atlantic's management
fees from market value to book value.

AUM of our Real Assets business line was $118.6 billion at December 31, 2022, an
increase of $35.3 billion, compared to $83.3 billion at December 31, 2021.

The increase was primarily attributable to (i) assets managed by KJRM, which we
acquired in 2022, and (ii) new capital raised from Global Atlantic, Asia Pacific
Infrastructure Investors II and our open-ended core infrastructure fund,
Diversified Core Infrastructure Fund. Partially offsetting these increases were
payments to Global Atlantic policyholders and distributions to fund investors as
a result of realized proceeds, most notably from Global Infrastructure Investors
III and Real Estate Partners Americas II. The decrease in investment value was
due to the impact of the (i) decline in the value of the Japanese yen associated
with assets managed by KJRM and the decline in value of our real estate credit
portfolio partially offset by the increase in value across our energy,
infrastructure and opportunistic real estate equity investment portfolios.

For the year ended December 31, 2022, the value of our energy investment
portfolio increased by 18%, the value of our infrastructure investment portfolio
increased 5%, and the value of our opportunistic real estate equity investment
portfolio increased by 3%.

The most significant increases in the value of our privately held investments
related to various assets held in our energy portfolio, Sempra Global, L.P.
(Infrastructure: energy and energy transition sector), and Viridor Limited.
These increases in value were partially offset by decreases in value relating
primarily to Colonial Enterprises, Inc. (midstream sector) and various assets
held in our opportunistic real estate equity investment portfolio. The increased
valuations of individual companies or assets in our privately held investments,
in the aggregate, generally related to individual company or asset performance.
The decreased valuations of individual companies or assets in our privately held
investments, in the aggregate, generally related to (i) a decrease in the value
of market comparables and (ii) an unfavorable business outlook, both influenced
by economic outlook and market environment. See "-Business Environment" for more
information about the factors that may impact our business, financial
performance, operating results and valuations.

The most significant decrease in share prices of our publicly held investments
was a decrease in First Gen Corporation (PM: FGEN). The prices of publicly held
companies may experience volatile changes following the reporting period. See
"-Business Environment" for more information about factors, such as volatility,
that may impact our business, financial performance, operating results and
valuations.

                                      167

--------------------------------------------------------------------------------

Table of Co n tents

Credit and Liquid Strategies

The following table reflects the changes in the AUM of our Credit and Liquid
Strategies business line from December 31, 2021 to December 31, 2022:

                                                ($ in millions)
                   December 31, 2021           $        213,507
                   New Capital Raised                    33,883
                   Acquisitions and Other(1)              7,997

                   Distributions and Other              (15,854)
                   Redemptions                           (6,030)
                   Change in Value                      (13,345)
                   December 31, 2022           $        220,158

(1)Represents an adjustment reflecting a change in the fee base of Global
Atlantic's management fees from market value to book value.

AUM of our Credit and Liquid Strategies business line totaled $220.2 billion at
December 31, 2022, an increase of $6.7 billion compared to AUM of $213.5 billion
at December 31, 2021.

The increase was primarily attributable to (i) new capital raised from Global
Atlantic and various alternative and leveraged credit investment vehicles and
(ii) the change in fee base for Global Atlantic's management fees from fair
market value to book value. Partially offsetting these increases were (i)
payments to Global Atlantic policyholders, (ii) redemptions at our hedge fund
partnership, Marshall Wace, (iii) distributions to fund investors at certain
alternative credit funds and (iv) a decline in investment value on the assets
managed across our leveraged credit portfolio.

See also "-Business Environment" for more information about the factors that may
impact our business, financial performance, operating results and valuations.

Fee Paying Assets Under Management

Private Equity

The following table reflects the changes in the FPAUM of our Private Equity
business line from December 31, 2021 to December 31, 2022:

                                                        ($ in millions)
            December 31, 2021                          $         87,890
            New Capital Raised                                   20,735

            Distributions and Other                              (3,887)
            Net Changes in Fee Base of Certain Funds             (1,573)
            Change in Value                                        (904)
            December 31, 2022                          $        102,261


FPAUM of our Private Equity business line was $102.3 billion at December 31,
2022, an increase of $14.4 billion, compared to $87.9 billion at December 31,
2021.

The increase was primarily attributable to new capital raised from European Fund
VI, Next Generation Technology Growth Fund III, and Global Impact Fund II.
Partially offsetting this increase were decreases from (i) distributions to fund
investors, primarily as a result of realized proceeds, most notably from North
America Fund XI and Asian Fund III, and (ii) a change in fee base for European
Fund V as a result of entering its post-investment period, during which we earn
fees on invested capital rather than committed capital.

                                      168

--------------------------------------------------------------------------------

Table of Co n tents

Uncalled capital commitments from private equity and multi-strategy investment
funds from which KKR is currently not earning management fees amounted to
approximately $18.6 billion at December 31, 2022, which includes capital
commitments reserved for follow-on investments for funds that have completed
their investment periods. This capital will generally begin to earn management
fees upon deployment of the capital or upon the commencement of the fund's
investment period. The average annual management fee rate associated with this
capital is approximately 1.0%. The date on which we begin to earn fees (as
specified above) is not guaranteed to occur and may not occur for an extended
period of time.  If and when such management fees are earned, a portion of
existing FPAUM may cease paying fees or pay lower fees, thus offsetting a
portion of any new management fees earned.

Real Assets

The following table reflects the changes in the FPAUM of our Real Assets
business line from December 31, 2021 to December 31, 2022:

                                                        ($ in millions)
            December 31, 2021                          $         66,965
            New Capital Raised                                   32,315
            Acquisitions and Other(1)                            13,779
            Distributions and Other                              (4,685)
            Net Changes in Fee Base of Certain Funds             (1,125)
            Change in Value                                      (3,717)
            December 31, 2022                          $        103,532


(1)Reflects the FPAUM of KJRM at closing of $12,730 million and represents an
adjustment reflecting a change in the fee base of Global Atlantic's management
fees from market value to book value.

FPAUM of our Real Assets business line was $103.5 billion at December 31, 2022,
an increase of $36.5 billion, compared to $67.0 billion at December 31, 2021.

The increase was primarily attributable to (i) assets managed by KJRM, which we
acquired in 2022, and (ii) new capital raised from Global Atlantic, Asia Pacific
Infrastructure Investors II, and Diversified Core Infrastructure Fund. Partially
offsetting these increases were (i) payments to Global Atlantic policyholders,
(ii) a change in fee base for Asia Pacific Infrastructure Investors as a result
of entering its post-investment period, during which we earn fees on invested
capital rather than committed capital, and (iii) distributions to fund investors
as a result of realized proceeds, most notably from Global Infrastructure
Investors III.

Uncalled capital commitments from real assets investment funds from which KKR is
currently not earning management fees amounted to approximately $10.3 billion at
December 31, 2022, which includes capital commitments reserved for follow-on
investments for funds that have completed their investment periods. This capital
will generally begin to earn management fees upon deployment of the capital or
upon the commencement of the fund's investment period. The average annual
management fee rate associated with this capital is approximately 1.2%. The date
on which we begin to earn fees (as specified above) is not guaranteed to occur
and may not occur for an extended period of time. If and when such management
fees are earned, a portion of existing FPAUM may cease paying fees or pay lower
fees, thus offsetting a portion of any new management fees earned.

                                      169

--------------------------------------------------------------------------------

Table of Co n tents

Credit and Liquid Strategies

The following table reflects the changes in the FPAUM of our Credit and Liquid
Strategies business line from December 31, 2021 to December 31, 2022:

                                                ($ in millions)
                   December 31, 2021           $        202,534
                   New Capital Raised                    29,430
                   Acquisitions and Other(1)              7,997

                   Distributions and Other              (15,097)
                   Redemptions                           (6,030)
                   Change in Value                      (12,704)
                   December 31, 2022           $        206,130

(1)Represents an adjustment reflecting a change in the fee base of Global
Atlantic's management fees from market value to book value.

FPAUM of our Credit and Liquid Strategies business line was $206.1 billion at
December 31, 2022, an increase of $3.6 billion compared to $202.5 billion at
December 31, 2021.

The increase was primarily attributable to (i) new capital raised from Global
Atlantic and various alternative and leveraged credit investment vehicles and
(ii) the change in fee base for Global Atlantic's management fees from fair
market value to book value. Partially offsetting these increases were (i)
payments to Global Atlantic policyholders, (ii) redemptions at our hedge fund
partnership, Marshall Wace, (iii) distributions to fund investors at certain
alternative credit funds and (iv) a decline in investment value on the assets
managed across our leveraged credit portfolio.

Uncalled capital commitments from investment funds in our Credit and Liquid
Strategies business line from which KKR is currently not earning management fees
amounted to approximately $10.3 billion at December 31, 2022. This capital will
generally begin to earn management fees upon deployment of the capital or upon
the commencement of the fund's investment period. The average annual management
fee rate associated with this capital is approximately 0.7%. The date on which
we begin to earn fees (as specified above) is not guaranteed to occur and may
not occur for an extended period of time. If and when such management fees are
earned, which will occur over an extended period of time, a portion of existing
FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any
new management fees earned.

See "-Business Environment" for more information about the factors that may
impact our business, financial performance, operating results and valuations.

Uncalled Commitments

Private Equity

As of December 31, 2022, our Private Equity business line had $65.9 billion of
remaining uncalled capital commitments that could be called for investments in
new transactions as compared to $66.3 billion as of December 31, 2021. The
decrease was primarily attributable to capital called from fund investors to
make investments during the period, which was partially offset by new capital
commitments from fund investors.

Real Assets

As of December 31, 2022, our Real Assets business line had $27.5 billion of
remaining uncalled capital commitments that could be called for investments in
new transactions as compared to $35.2 billion as of December 31, 2021. The
decrease was primarily attributable to capital called from fund investors to
make investments during the period, which was partially offset by new capital
commitments from fund investors.

Credit and Liquid Strategies

As of December 31, 2022, our Credit and Liquid Strategies business line had
$14.3 billion of remaining uncalled capital commitments that could be called for
investments in new transactions as compared to $10.3 billion as of December 31,
2021. The increase was primarily attributable to new commitments from fund
investors, which was partially offset by capital called from fund investors to
make investments during the period.

                                      170

--------------------------------------------------------------------------------

  Table of Co    n    tents

Capital Invested

Private Equity

For the year ended December 31, 2022, $18.8 billion of capital was invested by
our Private Equity business line, as compared to $17.6 billion for the year
ended December 31, 2021. The increase was driven primarily by a $2.4 billion
increase in capital invested in our traditional private equity strategy,
partially offset by a $1.5 billion decrease in capital invested in our core
private equity strategy. During the year ended December 31, 2022, 56% of capital
deployed in private equity was in transactions in North America, 26% was in the
Asia-Pacific region, and 18% was in Europe. The number of large private equity
investments made in any quarterly or year-to-date period is volatile and,
consequently, a significant amount of capital invested in one period or a few
periods may not be indicative of a similar level of capital deployment in future
periods.

Real Assets

For the year ended December 31, 2022, $27.8 billion of capital was invested by
our Real Assets business line, as compared to $21.4 billion for the year ended
December 31, 2021. The increase was driven primarily by a $4.1 billion increase
in capital invested in our infrastructure strategy and a $1.6 billion increase
in capital invested in our real estate strategy. During the year ended December
31, 2022, 69% of capital deployed in real assets was in transactions in North
America, 23% was in Europe, and 8% was in the Asia-Pacific region. The number of
large Real Asset investments made in any quarterly or year-to-date period is
volatile and, consequently, a significant amount of capital invested in one
period or a few periods may not be indicative of a similar level of capital
deployment in future periods.

Credit and Liquid Strategies

For the year ended December 31, 2022, $24.7 billion of capital was invested by
our Credit and Liquid Strategies business line, as compared to $34.4 billion for
the year ended December 31, 2021. The decrease was primarily due to a lower
level of capital deployed across our direct lending and SIG strategies. During
the year ended December 31, 2022, 87% of capital deployed was in transactions in
North America, 9% was in Europe, and 4% was in the Asia-Pacific region.

Analysis of Insurance Segment Operating Results

As discussed above, our insurance segment consists solely of the operations of
Global Atlantic, which was acquired on February 1, 2021. For the year ended
December 31, 2021, the results of our insurance segment is from the acquisition
date, February 1, 2021, through December 31, 2021.

The following tables set forth information regarding KKR's insurance segment
operating results and certain key operating metrics as of and for the years
ended December 31, 2022 and 2021:

                                                                        Years Ended
                                           December 31, 2022           December 31, 2021              Change
                                                                     ($ in thousands)
Net Investment Income                    $        4,112,244          $        3,329,570          $      782,674
Net Cost of Insurance                            (2,415,996)                 (1,566,681)               (849,315)
General, Administrative and Other                  (637,718)                   (500,410)               (137,308)
Pre-tax Insurance Operating Earnings              1,058,530                   1,262,479                (203,949)
Income Taxes                                       (171,744)                   (199,095)                 27,351
Net Income Attributable to
Noncontrolling Interests                           (341,582)                   (410,833)                 69,251

Insurance Segment Operating Earnings $ 545,204 $

652,551 $ (107,347)

Insurance segment operating earnings

Insurance segment operating earnings decreased for the year ended December 31,
2022 as compared to the year ended December 31, 2021 primarily due to (i) higher
net cost of insurance, primarily due to the growth in both our individual market
and institutional market channels and higher funding cost on new business, and
(ii) a corresponding increase in general and administrative expenses. The
decrease was offset in part by (i) higher net investment income resulting from
an increase in average assets under management due to growth of the business,
and higher average yields, (ii) one less month of activity reported in the prior
financial reporting period as a result of the GA Acquisition having occurred on
February 1, 2021, and (iii) a decrease in income tax expense.

                                      171

--------------------------------------------------------------------------------

Table of Co n tents

Net investment income

Net investment income increased for the year ended December 31, 2022 as compared
to the year ended December 31, 2021 primarily due to (i) one less month of
activity reported in the prior financial reporting period as a result of the GA
Acquisition having occurred on February 1, 2021, (ii) growth in portfolio yields
due to higher market interest rates on floating rate investments, (iii) rotation
into higher yielding assets, and (iv) increased average assets under management
due to growth in assets in our institutional market channel as a result of new
reinsurance transactions and individual market channel sales from new business
growth. Offsetting these increases to net investment income was a decrease in
variable investment income, primarily due to the non-recurrence of net realized
gains from the sale of investments not related to asset/liability matching
strategies, including in particular the disposition of Origis USA, LLC, reported
in the prior financial reporting period.

Net cost of insurance

Net cost of insurance increased for the year ended December 31, 2022 as compared
to the year ended December 31, 2021 primarily due to (i) one less month of
activity reported in the prior financial reporting period as a result of the GA
Acquisition having occurred on February 1, 2021, (ii) growth in reserves in the
institutional market as a result of new reinsurance transactions and in the
individual market as a result of new business volumes, and (iii) higher funding
costs on new business originated, and (iv) the impact of assumption review (as
described in "-Consolidated Results of Operations (GAAP Basis)-Insurance
(Unaudited)-Assumption Review" above).

General, administrative and other expenses

General and administrative expenses increased for the year ended December 31,
2022 as compared to the year ended December 31, 2021 primarily due to (i) one
less month of activity reported in the prior financial reporting period as a
result of the GA Acquisition having occurred on February 1, 2021, (ii) increased
employee compensation and benefits-related expenses, (iii) increased
professional service fees, and (iv) increased TPA policy servicing fees, all due
to growth of the business.

Income taxes

Insurance segment income tax expense reflects the effective tax rate for the
insurance segment on an operating basis, including the benefit of investment tax
credits for the prior year period.

Net Income attributable to noncontrolling interests

Net income attributable to noncontrolling interests decreased for the year ended
December 31, 2022 as compared to the year ended December 31, 2021 in proportion
to the decrease in insurance segment operating earnings for the comparable
period. Net income attributable to noncontrolling interests represents the
proportionate interest in the insurance segment operating earnings attributable
to other investors in Global Atlantic.

                                      172

--------------------------------------------------------------------------------

Table of Co n tents

Analysis of Non-GAAP Performance Measures

The following is a discussion of our Non-GAAP performance measures for the years
ended December 31, 2022 and 2021:

                                                                              Year Ended
                                                       December 31,          December 31,
                                                           2022                  2021                 Change
                                                                           ($ in thousands)
Asset Management Segment Operating Earnings           $  3,985,899          $  4,243,660          $  (257,761)
Insurance Segment Operating Earnings                       545,204               652,551             (107,347)
Distributable Operating Earnings                         4,531,103             4,896,211             (365,108)

Interest Expense                                          (315,189)             (250,183)             (65,006)
Preferred Dividends                                              -               (19,201)              19,201
Net Income Attributable to Noncontrolling
Interests                                                  (23,200)              (23,664)                 464
Income Taxes Paid                                         (738,841)             (687,572)             (51,269)
After-tax Distributable Earnings                      $  3,453,873          

$ 3,915,591 $ (461,718)

For the year ended December 31, 2021, the results of our insurance segment above
are from February 1, 2021 (closing date of the GA Acquisition) through December
31, 2021.

Distributable Operating Earnings

The decrease in distributable operating earnings for the year ended December 31,
2022 compared to the prior period is primarily due to a lower level of asset
management segment operating earnings and insurance segment operating earnings.
For a discussion of the asset management and insurance segment operating
earnings, see "-Analysis of Asset Management Segment Operating Results" and
"-Analysis of Insurance Segment Operating Results."

Interest Expense

The increase in interest expense for the year ended December 31, 2022 compared
to the prior period is due primarily to debt issuances by KKR's financing
subsidiaries.

Preferred Dividends

The decrease in preferred dividends for the year ended December 31, 2022
compared to the prior period was attributable to the redemption of all of our
Series A and B preferred stock.

Income Taxes Paid

The increase in income taxes paid for the year ended December 31, 2022 compared
to the prior period was primarily due to a lower tax benefit from equity-based
compensation and an increase in U.S. state and local taxes.

After-tax Distributable Earnings

The decrease in after-tax distributable earnings for the year ended December 31,
2022 compared to the prior period was primarily due to a lower level of
distributable operating earnings and an increase in interest expense and income
taxes paid, partially offset by a decrease in preferred dividends, as discussed
above.

For the years ended December 31, 2022 and 2021, the amount of the tax benefit
from equity-based compensation included in income taxes paid was $65.4 million
and $123.1 million, respectively. The inclusion of the tax benefit from
equity-based compensation in After-tax Distributable Earnings had the effect of
increasing this measure by 2% and 3%, respectively, for the years ended December
31, 2022 and 2021.

                                      173

--------------------------------------------------------------------------------

Table of Co n tents

Analysis of Asset Management Segment Operating Results

The following tables set forth information regarding KKR's asset management
segment operating results for the years ended December 31, 2021 and 2020:

                                                                            Year Ended
                                                     December 31,          December 31,
                                                         2021                  2020                 Change
                                                                         ($ in thousands)
Management Fees                                     $  2,071,440          $  1,441,578          $   629,862
Transaction and Monitoring Fees, Net                   1,004,241               632,433              371,808
Fee Related Performance Revenues                          45,852                39,555                6,297
Fee Related Compensation                                (702,387)             (486,481)            (215,906)
Other Operating Expenses                                (449,155)             (346,558)            (102,597)
Fee Related Earnings                                   1,969,991             1,280,527              689,464
Realized Performance Income                            2,141,596             1,165,699              975,897
Realized Performance Income Compensation              (1,239,177)             (697,071)            (542,106)
Realized Investment Income                             1,613,244               644,659              968,585
Realized Investment Income Compensation                 (241,994)             (106,830)            (135,164)

Asset Management Segment Operating Earnings $ 4,243,660 $

 2,286,984          $ 1,956,676


Management Fees

The following table presents management fees by business line:

                                                              Year Ended
                                       December 31, 2021       December 31, 2020        Change
                                                           ($ in thousands)
  Management Fees
  Private Equity                      $          967,038      $          714,070      $ 252,968
  Real Assets                                    437,102                 262,537        174,565
  Credit and Liquid Strategies                   667,300                 464,971        202,329
  Total Management Fees               $        2,071,440      $        1,441,578      $ 629,862


The increase in Private Equity business line management fees was primarily
attributable to management fees earned from North America Fund XIII, Asian Fund
IV, and Health Care Strategic Growth Fund II. The increase was partially offset
by a decrease in management fees earned from Americas Fund XII and Asian Fund
III as a result of entering their post-investment periods and, consequently, we
now earn fees based on capital invested rather than capital committed and at a
lower fee rate.

The increase in Real Assets business line management fees was primarily due to
(i) management fees earned from Global Infrastructure Investors IV and Real
Estate Partners Americas III, and (ii) an increase in management fees earned
from Global Atlantic. These increases were partially offset by a decrease in
management fees earned from Global Infrastructure Investors III as a result of
entering its post-investment period and, consequently, we now earn fees based on
capital invested rather than capital committed.

The increase in Credit and Liquid Strategies business line management fees was
primarily attributable to (i) management fees earned from Global Atlantic during
the period February 1, 2021 through December 31, 2021, (ii) the issuance of new
CLOs subsequent to December 31, 2020, (iii) higher overall FPAUM at our hedge
fund partnerships from investment appreciation and, to a lesser extent, net
capital inflows, and (iv) net capital inflows in certain leveraged credit
strategy accounts.

                                      174

--------------------------------------------------------------------------------

Table of Co n tents

Transaction and Monitoring Fees, Net

The following table presents transaction and monitoring fees, net by business
line:

                                                                           Year Ended
                                                    December 31,          December 31,
                                                        2021                  2020                 Change
                                                                        ($ in thousands)
Transaction and Monitoring Fees, Net
Private Equity                                     $    122,478          $    135,235          $   (12,757)
Real Assets                                              20,687                13,172                7,515
Credit and Liquid Strategies                             14,181                 3,543               10,638
Capital Markets                                         846,895               480,483              366,412

Total Transaction and Monitoring Fees, Net $ 1,004,241 $

632,433 $ 371,808

Our Capital Markets business line earns transaction fees, which are not shared
with fund investors. The increase in transaction fees was primarily due to an
increase in the number of capital markets transactions for the year ended
December 31, 2021, compared to the year ended December 31, 2020. Overall, we
completed 358 capital markets transactions for the year ended December 31, 2021,
of which 60 represented equity offerings and 298 represented debt offerings, as
compared to 193 transactions for the year ended December 31, 2020, of which 36
represented equity offerings and 157 represented debt offerings. We earned fees
in connection with underwriting, syndication and other capital markets services.
While each of the capital markets transactions that we undertake in this
business line is separately negotiated, our fee rates are generally higher with
respect to underwriting or syndicating equity offerings than with respect to
debt offerings, and the amount of fees that we earn for similar transactions
generally correlates with overall transaction sizes.

Our capital markets fees are generated in connection with our Private Equity,
Real Assets, and Credit and Liquid Strategies business lines as well as from
third-party companies. For the year ended December 31, 2021, approximately 23%
of our transaction fees in our Capital Markets business line were earned from
unaffiliated third parties as compared to approximately 18% for the year ended
December 31, 2020. Our transaction fees are comprised of fees earned from North
America, Europe, and the Asia-Pacific region. For the year ended December 31,
2021, approximately 38% of our transaction fees were generated outside of North
America as compared to approximately 58% for the year ended December 31, 2020.
Our Capital Markets business line is dependent on the overall capital markets
environment, which is influenced by equity prices, credit spreads, and
volatility. Our Capital Markets business line does not generate monitoring fees.

Our Private Equity, Real Assets, and Credit and Liquid Strategies business lines
separately earn transaction and monitoring fees from portfolio companies, and
under the terms of the management agreements with certain of our investment
funds, we are required to share all or a portion of such fees with our fund
investors. Additionally, transaction fees are generally not earned with respect
to energy and real estate investments.

The decrease in Private Equity business line transaction and monitoring fees,
net was primarily attributable to the write-off of outstanding monitoring fee
receivables for two portfolio companies, partially offset by an increase in net
transaction fees. During the year ended December 31, 2021, there were 76
transaction fee-generating investments that paid an average fee of $5.5 million
compared to 54 transaction fee-generating investments that paid an average fee
of $6.5 million during the year ended December 31, 2020. For the year ended
December 31, 2021, approximately 52% of these transaction fees were paid by
companies in North America, 25% were paid from companies in Europe, and 23% of
these transaction fees were paid from companies in the Asia-Pacific region.
Transaction fees vary by investment based upon a number of factors, the most
significant of which are transaction size, amount of the fees as set forth in
the governing agreements, the complexity of the transaction, and KKR's role in
the transaction.

                                      175

--------------------------------------------------------------------------------

Table of Co n tents

Fee Related Performance Revenues

The following table presents fee related performance revenues by business line:

                                                                                 Year Ended
                                                     December 31, 2021           December 31, 2020             Change
                                                                              ($ in thousands)
Fee Related Performance Revenues
Private Equity                                     $                -          $                -          $         -
Real Assets                                                     9,068                       4,797                4,271
Credit and Liquid Strategies                                   36,784                      34,758                2,026
Total Fee Related Performance Revenues             $           45,852          $           39,555          $     6,297


Fee related performance revenues represent performance fees that are (i) to be
received from our investment funds, vehicles, and accounts on a recurring basis
and (ii) not dependent on a realization event involving investments held by the
investment fund, vehicle or account. Fee related performance revenues were
higher for the year ended December 31, 2021 compared to the prior period
primarily due to a higher level of performance revenues earned from KREF and
FSK.

Fee Related Compensation

The increase in fee related compensation for the year ended December 31, 2021
compared to the prior period is primarily due to a higher level of compensation
recorded in connection with the higher level of revenues included within fee
related earnings.

Other Operating Expenses

The increase in other operating expenses for the year ended December 31, 2021
compared to the prior period is primarily due to a higher level of (i)
professional fees and other administrative costs in connection with the overall
growth of the firm and (ii) placement fees related to capital raising
activities.

Fee Related Earnings

The increase in fee related earnings for the year ended December 31, 2021
compared to the prior period is primarily due to a higher level of management
fees in our Private Equity, Real Assets and Credit and Liquid Strategies
business lines and transaction fees from our Capital Markets business line,
partially offset by a higher level of fee related compensation and other
operating expenses, as described above.

Realized Performance Income

The following table presents realized performance income by business line:

                                                                Year Ended
                                         December 31, 2021       December 31, 2020        Change
                                                             ($ in thousands)
Realized Performance Income
Private Equity                          $        1,678,753      $          807,275      $ 871,478
Real Assets                                         97,312                 208,590       (111,278)
Credit and Liquid Strategies                       365,531                

149,834 215,697
Total Realized Performance Income $ 2,141,596 $ 1,165,699 $ 975,897

                                      176

--------------------------------------------------------------------------------

  Table of Co    n    tents

                                                                           Year Ended
                                                    December 31,          December 31,
                                                        2021                  2020                 Change
                                                                        ($ in thousands)
Private Equity
North America Fund XI                              $    433,708          $    203,606          $   230,102
Asian Fund III                                          387,863                46,347              341,516
2006 Fund                                               219,737               181,899               37,838
Americas Fund XII                                       207,559                     -              207,559
European Fund IV                                        186,476               139,948               46,528
Co-Investment Vehicles and Other                         90,305                93,648               (3,343)
Core Investment Vehicles                                 80,937                57,484               23,453
Next Generation Technology Growth Fund                   32,544                13,964               18,580
European Fund III                                           353                     -                  353
Asian Fund II                                                 -                60,647              (60,647)
Asian Fund                                                    -                   431                 (431)

Total Realized Carried Interest (1)                   1,639,482               797,974              841,508

Incentive Fees                                           39,271                 9,301               29,970
Total Realized Performance Income                  $  1,678,753          $    807,275          $   871,478


                                                                                Year Ended
                                                                                  December 31,
                                                       December 31, 2021              2020                 Change
                                                                             ($ in thousands)
Real Assets
Global Infrastructure Investors II                   $           72,862          $    148,882          $   (76,020)
Real Estate Partners Europe                                      18,200                     -               18,200
Co-Investment Vehicles and Other                                  3,283                     2                3,281
Global Infrastructure Investors                                   2,967                54,729              (51,762)
Real Estate Partners Americas                                         -                 4,977               (4,977)

Total Realized Carried Interest (1)                              97,312               208,590             (111,278)

Incentive Fees                                                        -                     -                    -
Total Realized Performance Income                    $           97,312          $    208,590          $  (111,278)


                                                                           Year Ended
                                                    December 31,          December 31,
                                                        2021                  2020                 Change
                                                                        ($ in thousands)
Credit and Liquid Strategies
Alternative Credit and Other Funds                 $     15,336          $     25,740          $   (10,404)
Mezzanine Partners                                            -                 9,900               (9,900)
Total Realized Carried Interest (1)                      15,336                35,640              (20,304)

Incentive Fees                                          350,195               114,194              236,001
Total Realized Performance Income                  $    365,531          $  

149,834 $ 215,697

(1)The above tables exclude any funds for which there was no realized carried
interest during both of the periods presented.

Realized performance income includes (i) realized carried interest from our
carry earning funds and (ii) incentive fees not included in Fee Related
Performance Revenues.

                                      177

--------------------------------------------------------------------------------

Table of Co n tents

Realized carried interest in our Private Equity business line for the year ended
December 31, 2021 consisted primarily of realized proceeds from the sales of our
investments in The Bountiful Company, Ingersoll Rand Inc., Academy Sports &
Outdoors Inc., Kokusai Electric Corporation, and Endeavor Group Holdings, Inc.

Realized carried interest in our Private Equity business line for the year ended
December 31, 2020 consisted primarily of realized proceeds from the sales of our
investments in Privilege Underwriters, Inc. (financial services sector), Fiserv,
Inc., LGC Science Group Limited (health care sector), and Epicor Software
Corporation.

Realized carried interest in our Real Assets business line for the year ended
December 31, 2021 consisted primarily of realized proceeds from (i) the sale of
our infrastructure investments, Calisen PLC and Telxius Telecom S.A.U. and (ii)
dividends received from and sales of various investments in our European real
estate strategy.

Realized carried interest in our Real Assets business line for the year ended
December 31, 2020 consisted primarily of realized proceeds from the sales of our
investments in Deutsche Glasfaser (Infrastructure: telecommunications
infrastructure sector), ELL Group (Infrastructure: asset leasing sector), and
X-Elio Energy, S.L. (power and utilities sector).

Realized carried interest in our Credit and Liquid Strategies Markets business
line decreased for the year ended December 31, 2021 compared to the prior period
as a result of a lower level of realization activity at certain alternative
credit investment funds, from which we are eligible to take cash carry.

Incentive fees consist of performance fees earned from (i) our hedge fund
partnerships, (ii) investment management agreements with KKR sponsored
investment vehicles, and (iii) investment management agreements to provide KKR's
investment strategies to funds managed by a third party asset management firm.

Incentive fees in our Private Equity business line increased for the year ended
December 31, 2021 compared to the prior period primarily attributable to a
higher level of investment appreciation at funds managed by a UK investment
manager.

Incentive fees in our Credit and Liquid Strategies business line increased for
the year ended December 31, 2021 compared to the prior period primarily due to a
higher level of incentive fees earned from our hedge fund partnership, Marshall
Wace.

Realized Performance Income Compensation

The increase in realized performance income compensation for the year ended
December 31, 2021 compared to the prior period was primarily due to a higher
level of compensation recorded in connection with the higher level of realized
performance income.

Realized Investment Income

The following table presents realized investment income from our Principal
Activities business line for the years ended December 31, 2021 and 2020:

                                                               Year Ended
                                        December 31, 2021       December 31, 2020        Change
                                                            ($ in thousands)
Realized Investment Income
Net Realized Gains (Losses)            $        1,199,414      $          284,521      $ 914,893
Interest Income and Dividends                     413,830                

360,138 53,692
Total Realized Investment Income $ 1,613,244 $ 644,659 $ 968,585

The increase in realized investment income was primarily due to a higher level
of net realized gains and, to a lesser extent, a higher level of interest income
and dividends. The amount of realized investment income depends on the
transaction activity of our funds and our subsidiaries, which can vary from
period to period.

For the year ended December 31, 2021, net realized gains were comprised of
realized gains primarily from the sale of our investments in FanDuel Inc., Mr.
Cooper Group Inc., Fiserv, Inc., The Bountiful Company, and BridgeBio Pharma
Inc. Partially offsetting these realized gains were realized losses, the most
significant of which were realized losses on certain hedging instruments.

                                      178

--------------------------------------------------------------------------------

Table of Co n tents

For the year ended December 31, 2020, net realized gains were comprised of
realized gains primarily from the sale of our investments in The Hut Group
Limited, Deutsche Glasfaser, Ivalua SAS, Fiserv, Inc., and BridgeBio Pharma,
Inc. Partially offsetting these realized gains were realized losses, the most
significant of which were realized losses on our investment in LCI Helicopters
Limited, Yorktown Center (real estate), and various alternative credit strategy
investments.

For the year ended December 31, 2021, interest income and dividends were
comprised of (i) $261.3 million of dividend income primarily from our real
estate investments, including our investment in KREF, as well as our investments
in Viridor Limited, Kokusai Electric Corporation, and Arnott's Biscuits Limited
and (ii) $152.5 million of interest income primarily from our investments in
CLOs and, to a lesser extent, our other credit investments.

For the year ended December 31, 2020, interest income and dividends were
comprised of (i) $225.4 million of dividend income from our investments in
Fiserv, Inc., Epicor Software Corporation, and our real assets investments,
including our investment in KREF and (ii) $134.7 million of interest income from
our investments in CLOs, other credit investments and, to a lesser extent, our
cash balances. See "-Analysis of Non-GAAP Performance Measures-Non-GAAP Balance
Sheet Measures."

For the year ended December 31, 2021, total fees attributable to KKR Capstone
were $91.4 million and total expenses attributable to KKR Capstone were $94.6
million. For KKR Capstone-related adjustments in reconciling Asset Management
segment revenues to GAAP revenues see "-Analysis of Non-GAAP Performance
Measures-Reconciliations to GAAP Measures".

Realized Investment Income Compensation

The increase in realized investment income compensation for the year ended
December 31, 2021 compared to the prior period is primarily due to a higher
level of compensation recorded in connection with the higher level of realized
investment income.

Other Operating and Capital Metrics

The following table presents certain key operating and capital metrics as of
December 31, 2021 and December 31, 2020:

                                                                                  As of
                                                   December 31, 2021           December 31, 2020             Change
                                                                             ($ in millions)
Assets Under Management                          $          470,555          $          251,679          $    218,876
Fee Paying Assets Under Management               $          357,389          $          186,217          $    171,172
Uncalled Commitments                             $          111,822          $           66,960          $     44,862


The following table presents one of our key capital metrics for the year ended
December 31, 2021 and 2020:

                                                         Year Ended
                                  December 31, 2021       December 31, 2020        Change
                                                      ($ in millions)
         Capital Invested        $           73,318      $           29,517      $ 43,801


Assets Under Management

Private Equity

The following table reflects the changes in the AUM of our Private Equity
business line from December 31, 2020 to December 31, 2021:

                                               ($ in millions)
                    December 31, 2020         $        113,477
                    New Capital Raised                  44,478

                    Distributions and Other            (17,524)
                    Change in Value                     33,314
                    December 31, 2021         $        173,745


                                      179

--------------------------------------------------------------------------------

Table of Co n tents

AUM of our Private Equity business line was $173.7 billion at December 31, 2021,
an increase of $60.2 billion, compared to $113.5 billion at December 31, 2020.

The increase was primarily attributable to (i) new capital raised from North
America Fund XIII, our core investment strategy and European Fund VI and (ii) an
increase in investment value from Americas Fund XII, Asian Fund III, and our
core investment strategy. Partially offsetting these increases were
distributions to fund investors, primarily as a result of realized proceeds,
most notably from Americas Fund XII, North America Fund XI, and Asian Fund III.

For the year ended December 31, 2021, the value of our traditional private
equity investment portfolio increased by 46%. This was comprised of a 71%
increase in share prices of various publicly held investments and a 37% increase
in value of our privately held investments. For the year ended December 31,
2021, the value of our growth equity and core equity investment portfolios
increased 45% and 42%, respectively.

The most significant increases in the value of our publicly held investments
across our Private Equity business line were increases in AppLovin Corporation,
Max Healthcare Institute Limited, and J.B. Chemicals and Pharmaceuticals Limited
(NSE: JBCP). These increases were partially offset by decreases in share prices
of certain other publicly held investments, the most significant of which were
BridgeBio Pharma, Inc., PHC Holdings Corporation (TYO: 6523), and Fiserv, Inc.
The prices of publicly held or publicly indexed companies may experience
volatile changes following the reporting period. See "-Business Environment" for
more information about factors, such as volatility, that may impact our
business, financial performance, operating results and valuations.

The most significant increases in the value of our privately held investments
across our Private Equity business line were increases in Internet Brands, Inc.,
Kokusai Electric Corporation, and PetVet Care Centers, LLC. These increases in
value on our privately held investments were partially offset by decreases in
value of certain other privately held investments, the most significant of which
were Magneti Marelli CK Holdings, Envision Healthcare Corporation (health care
sector), and Upfield (consumer products). The increased valuations of individual
companies in our privately held investments, in the aggregate, generally related
to (i) individual company performance, (ii) an increase in the value of market
comparables, and (iii) with respect to Kokusai Electric Corporation, an increase
in valuation reflecting an agreement to sell a minority stake in the company.
The decreased valuations of individual companies in our privately held
investments, in the aggregate, generally related to (i) an unfavorable business
outlook and (ii) a decrease in the value of market comparables, both influenced
by the impact of COVID-19 on the economic outlook and overall market
environment. See "-Business Environment" for more information about factors,
that may impact our business, financial performance, operating results and
valuations.

Real Assets

The following table reflects the changes in the AUM of our Real Assets business
line from December 31, 2020 to December 31, 2021:

                                                ($ in millions)
                   December 31, 2020           $         35,212
                   New Capital Raised                    39,380
                   Acquisitions and Other(1)             12,012
                   Distributions and Other               (6,364)
                   Change in Value                        3,063
                   December 31, 2021           $         83,303

(1)Reflects the AUM of Global Atlantic at February 1, 2021.

AUM of our Real Assets business line was $83.3 billion at December 31, 2021, an
increase of $48.1 billion, compared to $35.2 billion at December 31, 2020.

The increase was primarily attributable to (i) new capital raised from Global
Infrastructure Investors IV, Global Atlantic and Diversified Core Infrastructure
Fund and (ii) assets we now manage under our investment agreements with Global
Atlantic's insurance companies. Partially offsetting these increases were
payments to Global Atlantic policyholders and distributions to fund investors as
a result of realized proceeds, most notably from Global Infrastructure Investors
II and Real Estate Partners Americas II.

                                      180

--------------------------------------------------------------------------------

Table of Co n tents

For the year ended December 31, 2021, the value of our opportunistic real estate
equity investment portfolio increased by 27%, and the value of our
infrastructure investment portfolio increased 12%, and the value of our energy
investment portfolio decreased by 15%.

The most significant increases in the value of our privately held investments
were KRE AIP LLC (real estate), Telxius Telecom, S.A.U, Hivory SAS
(Infrastructure: telecommunications infrastructure sector), and Viridor Limited.
These increases in value were partially offset by decreases in the value of
certain other privately held investments, the most significant of which were
Colonial Enterprises, Inc. and River Plaza (real estate). The increased
valuations of individual companies or assets in our privately held investments,
in the aggregate, generally related to individual company performance. The
decreased valuations of individual companies or assets in our privately held
investments, in the aggregate, generally related to (i) a decrease in the value
of market comparables and (ii) an unfavorable business outlook, both influenced
by economic outlook and market environment. See "-Business Environment" for more
information about factors, that may impact our business, financial performance,
operating results and valuations.

The most significant decrease in share prices of our publicly held investments
was a decrease in Crescent Energy. See "-Business Environment" for more
information about factors, such as volatility, that may impact our business,
financial performance, operating results and valuations.

Credit and Liquid Strategies

The following table reflects the changes in the AUM of our Credit and Liquid
Strategies business line from December 31, 2020 to December 31, 2021:

                                                ($ in millions)
                   December 31, 2020           $        102,990
                   New Capital Raised                    36,706
                   Acquisitions and Other(1)             85,491

                   Distributions and Other              (11,271)
                   Redemptions                           (8,196)
                   Change in Value                        7,788
                   December 31, 2021           $        213,507

(1)Reflects the AUM of Global Atlantic at February 1, 2021.

AUM of our Credit and Liquid Strategies business line totaled $213.5 billion at
December 31, 2021, an increase of $110.5 billion compared to AUM of $103.0
billion at December 31, 2020.

The increase was primarily attributable to (i) assets we now manage under our
investment management agreements with Global Atlantic's insurance companies,
(ii) new capital raised from Global Atlantic since February 1, 2021, CLO
issuances, and our hedge fund partnerships, and (iii) to a lesser extent, an
increase in investment value across our leveraged and alternative credit
portfolios and at our hedge fund partnerships. Partially offsetting these
increases were (i) payments made to Global Atlantic to satisfy its obligations
to policyholders, (ii) redemptions at our hedge fund partnerships and leveraged
credit separately managed accounts and (iii) distributions to fund investors as
a result of realized proceeds at certain leveraged and alternative credit funds.

See also "-Business Environment" for more information about the factors that may
impact our business, financial performance, operating results and valuations.

                                      181

--------------------------------------------------------------------------------

Table of Co n tents

Fee Paying Assets Under Management

Private Equity

The following table reflects the changes in the FPAUM of our Private Equity
business line from December 31, 2020 to December 31, 2021:

                                                        ($ in millions)
            December 31, 2020                          $         68,506
            New Capital Raised                                   29,649

            Distributions and Other                              (7,428)
            Net Changes in Fee Base of Certain Funds             (2,569)
            Change in Value                                        (268)
            December 31, 2021                          $         87,890

FPAUM of our Private Equity business line was $87.9 billion at December 31,
2021, an increase of $19.4 billion, compared to $68.5 billion at December 31,
2020.

The increase was primarily attributable to new capital raised from North America
Fund XIII, Health Care Strategic Growth Fund II, and our core investment
strategy. Partially offsetting this increase were (i) distributions to fund
investors, primarily as a result of realized proceeds, most notably from 2006
Fund, North America Fund XI, and Americas Fund XII and (ii) a change in fee base
for Americas Fund XII and Health Care Growth Fund as a result of these funds
entering its post-investment period, during which we earn fees on invested
capital rather than committed capital.

Uncalled capital commitments from private equity and multi-strategy investment
funds from which KKR is currently not earning management fees amounted to
approximately $19.6 billion at December 31, 2021, which includes capital
commitments reserved for follow-on investments for funds that have completed
their investment periods. This capital will generally begin to earn management
fees upon deployment of the capital or upon the commencement of the fund's
investment period. The average annual management fee rate associated with this
capital is approximately 1.0%. The date on which we begin to earn fees (as
specified above) is not guaranteed to occur and may not occur for an extended
period of time.  If and when such management fees are earned, a portion of
existing FPAUM may cease paying fees or pay lower fees, thus offsetting a
portion of any new management fees earned.

Real Assets

The following table reflects the changes in the FPAUM of our Real Assets
business line from December 31, 2020 to December 31, 2021:

                                                        ($ in millions)
            December 31, 2020                          $         25,690
            New Capital Raised                                   35,615
            Acquisitions and Other(1)                            12,012
            Distributions and Other                              (4,264)
            Net Changes in Fee Base of Certain Funds             (2,829)
            Change in Value                                         741
            December 31, 2021                          $         66,965

(1)Reflects the FPAUM of Global Atlantic at February 1, 2021.

FPAUM of our Real Assets business line was $67.0 billion at December 31, 2021,
an increase of $41.3 billion, compared to $25.7 billion at December 31, 2020.

The increase was primarily attributable to (i) new capital raised by Global
Infrastructure Investors IV, Global Atlantic, Real Estate Partners Americas III
and Diversified Core Infrastructure Fund and (ii) assets we now manage under our
investment agreements with Global Atlantic's insurance companies. Partially
offsetting these increases were (i) payments to Global Atlantic policyholders
and distributions to fund investors as a result of realized proceeds, most
notably from Global Infrastructure Investors II and Real Estate Partners
Americas II and (ii) a change in fee base for Global Infrastructure Investors
III as a result of entering its post-investment period, during which we earn
fees on invested capital rather than committed capital.

                                      182

--------------------------------------------------------------------------------

Table of Co n tents

Uncalled capital commitments from real assets investment funds from which KKR is
currently not earning management fees amounted to approximately $11.7 billion at
December 31, 2021, which includes capital commitments reserved for follow-on
investments for funds that have completed their investment periods. This capital
will generally begin to earn management fees upon deployment of the capital or
upon the commencement of the fund's investment period. The average annual
management fee rate associated with this capital is approximately 1.1%. The date
on which we begin to earn fees (as specified above) is not guaranteed to occur
and may not occur for an extended period of time. If and when such management
fees are earned, a portion of existing FPAUM may cease paying fees or pay lower
fees, thus offsetting a portion of any new management fees earned.

Credit and Liquid Strategies

The following table reflects the changes in the FPAUM of our Credit and Liquid
Strategies business line from December 31, 2020 to December 31, 2021:

                                                ($ in millions)
                   December 31, 2020           $         92,021
                   New Capital Raised                    38,644
                   Acquisitions and Other(1)             85,491

                   Distributions and Other              (12,989)
                   Redemptions                           (6,590)
                   Change in Value                        5,957
                   December 31, 2021           $        202,534

(1)Reflects the FPAUM of Global Atlantic at February 1, 2021.

FPAUM of our Credit and Liquid Strategies business line was $202.5 billion at
December 31, 2021, an increase of $110.5 billion compared to $92.0 billion at
December 31, 2020.

The increase was primarily attributable to (i) assets we now manage under our
investment management agreements with Global Atlantic's insurance companies,
(ii) new capital raised from Global Atlantic, CLO issuances, and our alternative
credit funds and (iii) to a lesser extent, an increase in investment value at
our hedge fund partnerships and from leveraged credit investments we manage
under our investment management agreements with Global Atlantic's insurance
companies. Partially offsetting these increases were (i) payments made to Global
Atlantic policyholders, (ii) redemptions at our hedge fund partnerships and
leveraged credit separately managed accounts and (iii) distributions to fund
investors as a result of realized proceeds at certain leveraged and alternative
credit funds.

Uncalled capital commitments from investment funds in our Credit and Liquid
Strategies business line from which KKR is currently not earning management fees
amounted to approximately $6.7 billion at December 31, 2021. This capital will
generally begin to earn management fees upon deployment of the capital or upon
the commencement of the fund's investment period. The average annual management
fee rate associated with this capital is approximately 0.9%. The date on which
we begin to earn fees (as specified above) is not guaranteed to occur and may
not occur for an extended period of time. If and when such management fees are
earned, which will occur over an extended period of time, a portion of existing
FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any
new management fees earned.

See "-Business Environment" for more information about the factors that may
impact our business, financial performance, operating results and valuations.

Uncalled Commitments

Private Equity

As of December 31, 2021, our Private Equity business line had $66.3 billion of
remaining uncalled capital commitments that could be called for investments in
new transactions as compared to $38.8 billion as of December 31, 2020. The
increase was primarily attributable to new capital commitments from fund
investors, which were partially offset by capital called from fund investors to
make investments during the period.

                                      183

--------------------------------------------------------------------------------

Table of Co n tents

Real Assets

As of December 31, 2021, our Real Assets business line had $35.2 billion of
remaining uncalled capital commitments that could be called for investments in
new transactions as compared to $17.9 billion as of December 31, 2020. The
increase was primarily attributable to new capital commitments from fund
investors, which were partially offset by capital called from fund investors to
make investments during the period.

Credit and Liquid Strategies

As of December 31, 2021 and 2020, our Credit and Liquid Strategies business line
had $10.3 billion of remaining uncalled capital commitments that could be called
for investments in new transactions. Uncalled commitments remained flat against
the comparable period as new capital commitments from fund investors were offset
by capital called from fund investors to make investments during the period.

Capital Invested

Private Equity

For the year ended December 31, 2021, $17.6 billion of capital was invested by
our Private Equity business line, as compared to $14.5 billion for the year
ended December 31, 2020. The increase was driven primarily by a $1.5 billion
increase in capital invested in our core investment strategy. During the year
ended December 31, 2021, 60% of capital deployed in private equity was in
transactions in North America, 21% was in Europe, and 19% was in the
Asia-Pacific region. The number of large private equity investments made in any
quarterly or year-to-date period is volatile and, consequently, a significant
amount of capital invested in one period or a few periods may not be indicative
of a similar level of capital deployment in future periods.

Real Assets

For the year ended December 31, 2021, $21.4 billion of capital was invested by
our Real Assets business line, as compared to $4.7 billion for the year ended
December 31, 2020. The increase was driven primarily by a $9.6 billion increase
in capital invested in our real estate strategy and a $6.8 billion increase in
capital invested in our infrastructure strategy. During the year ended December
31, 2021, 71% of capital deployed in real assets was in transactions in North
America, 23% was in Europe, and 6% was in the Asia-Pacific region. The number of
large Real Asset investments made in any quarterly or year-to-date period is
volatile and, consequently, a significant amount of capital invested in one
period or a few periods may not be indicative of a similar level of capital
deployment in future periods.

Credit and Liquid Strategies

For the year ended December 31, 2021, $34.4 billion of capital was invested by
our Credit and Liquid Strategies business line, as compared to $10.3 billion for
the year ended December 31, 2020. The increase was primarily due to (i) capital
deployed under our investment management agreements with Global Atlantic's
insurance companies and (ii) a higher level of capital deployed across our
direct lending and SIG strategies. During the year ended December 31, 2021, 90%
of capital deployed was in transactions in North America, 9% was in Europe and
1% was in the Asia-Pacific region.

                                      184

--------------------------------------------------------------------------------

Table of Co n tents

Analysis of Insurance Segment Operating Results

As discussed above, our Insurance segment consists solely of the operations of
Global Atlantic, which was acquired on February 1, 2021. Accordingly, prior
financial reporting periods have been excluded for Insurance segment results.
For the year ended December 31, 2021, the results of our Insurance segment is
from the acquisition date, February 1, 2021, through December 31, 2021.

The following tables set forth information regarding KKR's insurance segment
operating results and certain key operating metrics as of and for the year ended
December 31, 2021:

                                                              Year Ended
                                                          December 31, 2021
($ in thousands)

Net Investment Income                                    $        3,329,570
Net Cost of Insurance                                            (1,566,681)
General, Administrative and Other                                  

(500,410)

Pre-tax Insurance Operating Earnings                              1,262,479
Income Taxes                                                       

(199,095)

Net Income Attributable to Noncontrolling Interests                

(410,833)

Insurance Segment Operating Earnings                     $          652,551

Insurance segment operating earnings

Insurance segment operating earnings were primarily driven by net investment
income and stable net cost of insurance.

Net investment income

Net investment income was primarily driven by (i) insurance segment investments
and the effective book yield (as determined, in part, by the allocated fair
value of the investment portfolio as of the closing date of the GA Acquisition),
and (ii) variable investment income from net realized gains from the sale of
investments not related to asset/liability matching strategies, including in
particular the disposition of Origis USA, LLC. Average insurance segment
investments were primarily driven by net inflows of assets from the individual
markets and institutional channels. In addition to the impact of higher asset
balances, net investment income was also impacted by income from bond call and
loan prepayment activity.

Net cost of insurance

Net cost of insurance was driven primarily by stable liability performance
across in-force and new business, including favorable adjustments to reserves
and policy acquisition costs resulting from higher reserves and insurance
intangibles established as part of the purchase accounting for the GA
Acquisition and the impact of assumption review (as described in "-Consolidated
Results of Operations (GAAP Basis) - Insurance (Unaudited)" above).

General, administrative and other expenses

General and administrative expenses were driven by (i) employee compensation and
benefits related expenses, (ii) policy servicing fees, (iii) technology-related
charges and (iv) consulting and professional fees.

Income taxes

Insurance segment income tax expense reflects the effective tax rate for the
insurance segment on an operating basis, including the benefit of investment tax
credits.

Net Income attributable to noncontrolling interests

Income attributable to noncontrolling interests represents the portion of the
insurance segment adjusted operating earnings attributable to rollover and
co-investors in Global Atlantic.

                                      185

--------------------------------------------------------------------------------

Table of Co n tents

Analysis of Non-GAAP Performance Measures

The following is a discussion of our Non-GAAP performance measures for the years
ended December 31, 2021 and 2020:

                                                                              Year Ended
                                                       December 31,          December 31,
                                                           2021                  2020                 Change
                                                                           ($ in thousands)
Asset Management Segment Operating Earnings           $  4,243,660          $  2,286,984          $ 1,956,676
Insurance Segment Operating Earnings                       652,551                     -              652,551
Distributable Operating Earnings                         4,896,211             2,286,984            2,609,227

Interest Expense                                          (250,183)             (211,037)             (39,146)
Preferred Dividends                                        (19,201)              (33,364)              14,163
Net Income Attributable to Noncontrolling
Interests                                                  (23,664)               (7,842)             (15,822)
Income Taxes Paid                                         (687,572)             (265,950)            (421,622)
After-tax Distributable Earnings                      $  3,915,591          

$ 1,768,791 $ 2,146,800

As discussed in the Analysis of Segment Operating Results, following the
acquisition of Global Atlantic, we re-evaluated our operating structure and the
manner by which we manage and assess the performance of our businesses and
allocate our resources. In the first quarter of 2021, we changed the
presentation of our non-GAAP performance measures principally to reflect how we
evaluate our business following the Global Atlantic acquisition. We also believe
that this revised presentation improves the comparability of our non-GAAP
financial information with that provided by other publicly traded companies in
the alternative asset management industry.

Distributable Operating Earnings

The increase in distributable operating earnings for the year ended December 31,
2021 compared to the prior period was primarily due to a higher level of Asset
Management segment operating earnings and the addition of our Insurance segment
operating earnings in connection with the Global Atlantic acquisition. For a
discussion of the Asset Management and Insurance segment operating earnings, see
"-Analysis of Asset Management Segment Operating Results and Analysis of
Insurance Segment Operating Results."

Interest Expense

For the year ended December 31, 2021 and 2020, interest expense relates
primarily to the interest expense from our senior notes outstanding for KKR and
KFN.

The increase in interest expense for the year ended December 31, 2021 compared
to the prior period was primarily attributable to new note issuances.

Preferred Dividends

The decrease in preferred dividends for the year ended December 31, 2021
compared to the prior period was attributable to the redemption of all of our
Series A and B preferred stock outstanding during the year ended December 31,
2021.

Income Taxes Paid

The increase in income taxes paid for the year ended December 31, 2021 compared
to the prior period was primarily due to a higher level of distributable
operating earnings.

After-tax Distributable Earnings

The increase in after-tax distributable earnings for the year ended December 31,
2021 compared to the prior period was primarily due to a higher level of
distributable operating earnings, partially offset by an increase in income
taxes paid and interest expense, as discussed above.

                                      186

--------------------------------------------------------------------------------

Table of Co n tents

For the years ended December 31, 2021 and 2020, the amount of the tax benefit
from equity-based compensation included in income taxes paid was $123.1 million
and $59.1 million, respectively. The inclusion of the tax benefit from
equity-based compensation in After-tax Distributable Earnings had the effect of
increasing this measure by 3% for each of the years ended December 31, 2021 and
2020.

Non-GAAP Balance Sheet Measures

Book Value

The following table presents our calculation of book value as of December 31,
2022 and December 31, 2021:

                                                                                      As of
                                                                  December 31, 2022           December 31, 2021
                                                                           

($ in thousands)

(+)    Cash and Short-term Investments                          $        3,256,515          $        4,869,203
(+)    Investments                                                      17,628,327                  17,763,542
(+)    Net Unrealized Carried Interest (1)                               2,509,589                   4,967,401

(+)    Other Assets, Net (2)                                             6,979,235                   4,706,108
(+)    Global Atlantic Book Value                                        3,929,710                   3,372,498

Debt Obligations - KKR (excluding KFN and Global
(-) Atlantic)

                                                         6,957,932                   5,836,267
(-)    Debt Obligations - KFN                                              948,517                     948,517
(-)    Tax Liabilities, Net                                              1,648,600                   2,697,317
(-)    Other Liabilities                                                   911,612                     774,711
(-)    Noncontrolling Interests                                             32,843                      33,058

       Book Value                                               $       23,803,872          $       25,388,882

       Book Value Per Adjusted Share                            $            26.73          $            28.77
       Adjusted Shares                                                 890,628,190                 882,589,036


(1)The following table provides net unrealized carried interest by business
line:

                                                                    As of
                                                  December 31, 2022       December 31, 2021
                                                               ($ in thousands)
 Private Equity Business Line                    $        2,199,869      $  

4,697,134

 Real Assets Business Line                                  212,974         

159,709

 Credit and Liquid Strategies Business Line                  96,746                 110,558
 Total                                           $        2,509,589      $        4,967,401

(2)Other Assets, Net include our (i) ownership interest in FS/KKR Advisor, (ii)
minority ownership interests in hedge fund partnerships, and (iii) the net
assets of KJRM.

Book value decreased 6% from December 31, 2021. The decrease was primarily
attributable to (i) a reduction in net unrealized carried interest due to the
reversal of previously recognized carried interest from our carried interest
eligible investment funds, most notably Americas Fund XII, Asian Fund II, and
Asian Fund III, (ii) a reduction in the value of our asset management segment
investments of 5%, (iii) repurchases of our common stock, and (iv) payment of
dividends during the period. Partially offsetting these decreases was the
positive impact of our after-tax distributable earnings recognized and a
decrease in the amount of deferred tax liabilities during the period. For a
further discussion, see "-Consolidated Results of Operations (GAAP Basis) -
Asset Management-Investment Income (Loss) - Asset Management-Unrealized Gains
and Losses from Investment Activities." For a discussion of the changes in our
investment portfolio, see "-Analysis of Asset Management Segment Operating
Results-Assets Under Management." For a discussion of factors that impacted
KKR's after-tax distributable earnings, see "-Analysis of Non-GAAP Performance
Measures-After-tax Distributable Earnings" and for more information about the
factors that may impact our business, financial performance, operating results
and valuations, see "-Business Environment."

                                      187

--------------------------------------------------------------------------------

Table of Co n tents

The following table presents the holdings of our investments in the asset
management segment by asset class as of December 31, 2022. To the extent
investments are realized at values below their cost in future periods, after-tax
distributable earnings would be adversely affected by the amount of such loss,
if any, during the period in which the realization event occurs.

                                                                                  As of December 31, 2022
                                                                                      ($ in thousands)
                                                                                                            Fair Value as a
                                                                                                             Percentage of
                   Investments (1)                               Cost               Fair Value             Total Investments

Traditional Private Equity                                  $  1,730,298          $  3,078,987                           17.5  %
Core Private Equity                                            2,701,596             5,707,478                           32.4  %
Growth Equity                                                    328,514               822,250                            4.7  %
Private Equity Total                                           4,760,408             9,608,715                           54.6  %

Energy                                                           862,651               929,269                            5.3  %
Real Estate                                                    1,887,520             2,032,209                           11.5  %
Infrastructure                                                 1,066,157             1,232,412                            7.0  %
Real Assets Total                                              3,816,328             4,193,890                           23.8  %

Leveraged Credit                                               1,267,501             1,016,274                            5.8  %
Alternative Credit                                               855,941               891,474                            5.1  %
Credit Total                                                   2,123,442             1,907,748                           10.9  %

Other                                                          2,279,705             1,917,974                           10.7  %

Total Investments                                           $ 12,979,883          $ 17,628,327                          100.0  %


(1)Investments is a term used solely for purposes of financial presentation of a
portion of KKR's balance sheet and includes majority ownership of subsidiaries
that operate KKR's asset management and insurance businesses, including the
general partner interests of KKR's investment funds. Investments presented are
principally the assets measured at fair value that are held by KKR's asset
management segment, which, among other things, does not include the underlying
investments held by Global Atlantic and Marshall Wace.

                                      188

--------------------------------------------------------------------------------

  Table of Co    n    tents

                                               As of December 31, 2022
                                                  ($ in thousands)
Top 20 Investments: (1)                         Cost          Fair Value
USI, Inc.                                  $    531,425      $ 1,300,370
PetVet Care Centers, LLC                        243,211        1,143,092
Heartland Dental, LLC                           320,656          801,640
Exact Group B.V.                                213,362          560,630
Arnott's Biscuits Limited                       250,841          470,916
1-800 Contacts Inc.                             300,178          405,153
Internet Brands, Inc.                           340,312          372,628
Barracuda Networks, Inc.                        343,320          343,320
ERM Worldwide Group Limited                     228,710          343,035
Teaching Strategies, LLC                        307,162          307,162
Crescent Energy Company (NYSE: CRGY)            533,543          304,117
Resolution Life Group Holdings, L.P.            262,191          263,477
Roompot B.V.                                    193,578          255,950
Shriram General Insurance Co.                   245,470          251,414
Atlantic Aviation FBO Inc.                      170,274          186,672
Viridor Limited                                 132,023          169,709
The Bay Clubs Company, LLC                      160,127          160,127
PortAventura                                    155,803          154,784
Pembina Gas Infrastructure Inc.                  92,632          148,421
FiberCop S.p.A.                                 127,742          133,698
Total Top 20 Investments                   $  5,152,560      $ 8,076,315


(1)This list of investments identifies the twenty largest companies or assets
based on their fair values as of December 31, 2022. It does not deduct fund or
vehicle level debt, if any, incurred in connection with funding the investment.
This list excludes (i) investments expected to be syndicated, (ii) investments
expected to be transferred in connection with a new fundraising, (iii)
investments in funds and other entities that are owned by one or more third
parties and established for the purpose of making investments and (iv) the
portion of any investment that may be held through collateralized loan
obligations or levered multi-asset investment vehicles, if any. For additional
information about the asset classes of the investments held on KKR's balance
sheet see "-Our Business-Principal Activities" for the "Holdings by Asset Class"
pie chart. The fair value figures include the co-investment and the limited
partner and/or general partner interests held by KKR in the underlying
investment, if applicable.


With respect to KKR's book value relating to its insurance business, KKR
includes Global Atlantic's book value, which consists of KKR's pro rata equity
interest in Global Atlantic on a GAAP basis, excluding (i) accumulated other
comprehensive income and (ii) accumulated change in fair value of reinsurance
embedded derivative balances and related assets, net of deferred acquisition
costs and income tax. KKR believes this presentation of Global Atlantic's book
value is comparable with the corresponding metric presented by other publicly
traded companies in Global Atlantic's industry. As of December 31, 2022, KKR's
pro rata interest in Global Atlantic's book value was $3.9 billion. For more
information about the composition and credit quality of Global Atlantic's
investments on a consolidated basis, please see "-Global Atlantic's Investment
Portfolio" below.

Global Atlantic's Investment Portfolio

As of December 31, 2022, 95% and 85% of Global Atlantic's available-for-sale
("AFS") fixed maturity securities were considered investment grade under ratings
from the Securities Valuation Office of the NAIC and NRSROs, respectively. As of
December 31, 2021, 97% and 87% of Global Atlantic's AFS fixed maturity
securities were considered investment grade under ratings from NAIC and NRSROs,
respectively. Securities where a rating by an NRSRO was not available are
considered investment grade if they have an NAIC designation of "1" or "2." The
three largest asset categories in Global Atlantic's AFS fixed-maturity security
portfolio as of December 31, 2022 were Corporate, RMBS and CMBS securities,
comprising 29%, 5% and 5% of Global Atlantic's investment portfolio,
respectively. Within these categories, 94%, 95% and 95% of Global Atlantic's
Corporate, RMBS and CMBS securities, respectively, were investment grade
according to NAIC ratings and 94%, 45% and 53% of its Corporate, RMBS and CMBS
securities, respectively, were investment grade according to NRSRO ratings as of
December 31, 2022. The three largest asset categories in Global Atlantic's AFS
fixed-maturity security portfolio as of December 31, 2021 were Corporate, RMBS
and CMBS securities, comprising 34%, 6% and 5% of Global Atlantic's investment
portfolio, respectively. Within these categories, 95%, 96% and 99% of Global
Atlantic's Corporate, RMBS and CMBS

                                      189

--------------------------------------------------------------------------------

Table of Co n tents

securities, respectively, were investment grade according to NAIC ratings and
95%, 38% and 62% of its Corporate, RMBS and CMBS securities, respectively, were
investment grade according to NRSRO ratings as of December 31, 2021. NRSRO and
NAIC ratings have different methodologies. Global Atlantic believes the NAIC
ratings methodology, which considers the likelihood of recovery of amortized
cost as opposed to the recovery of all contractual payments including the
principal at par, as the more appropriate way to view the ratings quality of its
AFS fixed maturity portfolio since a large portion of its holdings were
purchased at a significant discount to par value. The portion of Global
Atlantic's investment portfolio consisting of floating rate assets was 29% and
20% as of December 31, 2022 and 2021, respectively.

Within the funds withheld receivable at interest portfolio, 97% and 96% of the
fixed maturity securities were investment grade by NAIC designation as of
December 31, 2022 and 2021, respectively.

Trading fixed maturity securities back funds withheld payable at interest where
the investment performance is ceded to reinsurers under the terms of the
respective reinsurance agreements.

Credit quality of AFS fixed maturity securities

The Securities Valuation Office of the NAIC evaluates the AFS fixed maturity
security investments of insurers for regulatory reporting and capital assessment
purposes and assigns securities to one of six credit quality categories called
"NAIC designations." Using an internally developed rating is permitted by the
NAIC if no rating is available. These designations are generally similar to the
credit quality designations of NRSROs for marketable fixed maturity securities,
except for certain structured securities as described below. NAIC designations
of "1," highest quality, and "2," high quality, include fixed maturity
securities generally considered investment grade by NRSROs. NAIC designations
"3" through "6" include fixed maturity securities generally considered below
investment grade by NRSROs.

Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was
assigned based on the following criteria: (i) the equivalent S&P rating where
the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest
NRSRO when the security is rated by two NRSROs; and (iii) the equivalent S&P
rating of the second lowest NRSRO if the security is rated by three or more
NRSROs. If the lowest two NRSROs' ratings are equal, then such rating will be
the assigned rating. NRSROs' ratings available for the periods presented were
S&P, Fitch, Moody's, DBRS, Inc. and Kroll Bond Rating Agency, Inc. If no rating
is available from a rating agency, then an internally developed rating is used.

Substantially all of the AFS fixed maturity securities portfolio, 95% and 97% as
of December 31, 2022 and December 31, 2021, respectively, were invested in
investment grade assets with a NAIC rating of 1 or 2.

The portion of the AFS fixed maturity securities portfolio that was considered
below investment grade by NAIC designation was 5% and 3% as of December 31, 2022
and 2021, respectively. Pursuant to Global Atlantic's investment guidelines,
Global Atlantic actively monitors the percentage of its portfolio that is held
in investments rated NAIC 3 or lower and must obtain an additional approval from
Global Atlantic's management investment committee before making a significant
investment in an asset rated NAIC 3 or lower.

Corporate fixed maturity securities

Global Atlantic maintains a diversified portfolio of corporate fixed maturity
securities across industries and issuers. As of December 31, 2022 and 2021, 59%
and 60%, respectively, of the AFS fixed maturity securities portfolio was
invested in corporate fixed maturity securities. As of December 31, 2022 and
2021, approximately, 5% and 3%, respectively, of the portfolio is denominated in
foreign currency.

As of December 31, 2022 and 2021, 94% and 95% of the total fair value of
corporate fixed maturity securities is rated NAIC investment grade and 94% and
95% is rated NRSROs investment grade, respectively.

Residential mortgage-backed securities

As of December 31, 2022 and 2021, 10% and 11% of the AFS fixed maturity
securities portfolio was invested in RMBS, respectively. RMBS are securities
constructed from pools of residential mortgages and backed by payments from
those pools. Excluding limitations on access to lending and other extraordinary
economic conditions, Global Atlantic would expect prepayments of principal on
the underlying loans to accelerate with decreases in market interest rates and
diminish with increases in market interest rates.

                                      190

--------------------------------------------------------------------------------

Table of Co n tents

The NAIC designations for RMBS, including prime, sub-prime, alt-A, and
adjustable rate mortgages with variable payment options ("Option ARM"), are
based upon a comparison of the bond's amortized cost to the NAIC's loss
expectation for each security. Accordingly, an investment in the same security
at a lower cost may result in a higher quality NAIC designation in recognition
of the lower likelihood the investment would result in a realized loss. Prime
residential mortgage lending includes loans to the most creditworthy borrowers
with high quality credit profiles. Alt-A is a classification of mortgage loans
where the risk profile of the borrower is between prime and sub-prime. Sub-prime
mortgage lending is the origination of residential mortgage loans to borrowers
with weak credit profiles.

As of December 31, 2022 and December 31, 2021, 90% and 93%, respectively, of
RMBS securities that are below investment grade as rated by the NRSRO, carry an
NAIC 1 ("highest quality") designation.

As of December 31, 2022, Alt-A, Option ARM, Re-Performing and Sub-prime
represent 31%, 28%, 14% and 12% of the total RMBS portfolio ($6.4 billion),
respectively. As of December 31, 2021, Alt-A, Option ARM, Re-Performing and
Sub-prime represent 33%, 30%, 14% and 12% of the total RMBS portfolio ($7.7
billion), respectively.

Unrealized gains and losses for AFS fixed maturity securities

Global Atlantic's investments in AFS fixed maturity securities are reported at
fair value with changes in fair value recorded in other comprehensive income as
unrealized gains or losses, net of taxes and offsets. Unrealized gains and
losses can be created by changes in interest rates or by changes in credit
spreads.

As of December 31, 2022 and 2021, Global Atlantic had gross unrealized losses on
below investment grade AFS fixed maturity securities of $917.6 million and
$80.3 million based on NRSRO rating and $224.9 million and $13.5 million based
on NAIC ratings, respectively. Unrealized losses were not recognized in net
income on these debt securities because there were no specific securities that,
as of each such date, Global Atlantic intended to sell or believed it was more
likely than not that it would be required to sell before recovery of their cost
or amortized cost basis.

Mortgage and other loan receivables - Credit quality indicators

Mortgage and other loan receivables consist of commercial and residential
mortgage loans, and other loan receivables. As of December 31, 2022 and 2021,
28% and 23%, respectively, of Global Atlantic's total investments consisted of
mortgage and other loan receivables. Global Atlantic invests in U.S. mortgage
loans, comprised of first lien and mezzanine real estate loans, residential
mortgage loans, consumer loans, and other loan receivables.

Global Atlantic's commercial mortgage loans may also be rated based on NAIC
designations, with designations "CM1" and "CM2" considered to be investment
grade. As of December 31, 2022 and 2021, 88% and 96% of the commercial mortgage
loan portfolio was rated investment grade based on NAIC designation,
respectively. 100% of the commercial mortgage loan portfolio is in current
status.

As of December 31, 2022, 96% of the residential mortgage loan portfolio is in
current status, and approximately $192.3 million is over 90 days past due
(representing 2% of the total residential mortgage portfolio).

The loan-to-value ratio is expressed as a percentage of the current amount of
the loan relative to the value of the underlying collateral. Approximately 84%
of the commercial mortgage loans has a loan-to-value ratio of 70% or less and 3%
has loan-to-value ratio over 90%.

Changing economic conditions affect Global Atlantic's valuation of commercial
mortgage loans. Changing vacancies and rents are incorporated into the
discounted cash flow analysis that Global Atlantic performs for monitored loans
and may contribute to the establishment of (or increase or decrease in) a
commercial mortgage loan valuation allowance for losses. In addition, Global
Atlantic continuously monitors its commercial mortgage loan portfolio to
identify risk. Areas of emphasis are properties that have exposure to specific
geographic events or have deteriorating credit.

The weighted average loan-to-value ratio for residential mortgage loans was 64%
and 68% as of December 31, 2022 and 2021, respectively.

Global Atlantic's residential mortgage loan portfolio is comprised mainly of
re-performing loans that were purchased at a discount after they were modified
and returned to performing status, as well as prime jumbo loans and mortgage
loans backed by single family rental properties. Global Atlantic has also
extended financing to counterparties in the form of repurchase agreements
secured by mortgage loans, including performing and non-performing mortgage
loans.

                                      191

--------------------------------------------------------------------------------

Table of Co n tents

Global Atlantic's consumer loan portfolio is primarily comprised of home
improvement loans, solar panel loans, student loans and auto loans.

Reconciliations to GAAP Measures

The following tables reconcile the most directly comparable financial measures
calculated and presented in accordance with GAAP to KKR's non-GAAP financial
measures for the years ended December 31, 2022, 2021, and 2020:

Revenues

                                                                            Year Ended
                                                              December 31, 2022           December 31, 2021           December 31, 2020
                                                                                          ($ in thousands)
Total GAAP Revenues                                         $        

5,721,195 $ 16,236,148 $ 4,230,891
Impact of Consolidation and Other

                                      841,711                     808,174                     461,244
Asset Management Adjustments:
Capital Allocation-Based Income (Loss) (GAAP)                        2,500,509                  (6,842,414)                 (2,224,100)
Realized Carried Interest                                            1,993,860                   1,752,130                   1,042,204
Realized Investment Income                                           1,134,419                   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.



                                      192

--------------------------------------------------------------------------------

Table of Co n tents

Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders

                                                                                  Year Ended
                                                                    December 31, 2022           December 31, 2021           December 31, 2020
                                                                                                ($ in thousands)
Net Income (Loss) Attributable to KKR & Co. Inc.
Common Stockholders (GAAP)                                        $         

(910,130) $ 4,560,829 $ 1,945,954
Preferred Stock Dividends

                                                     69,000                     105,647                      56,555
Net Income (Loss) Attributable to Noncontrolling
Interests                                                                   (182,398)                  7,628,703                   3,115,089
Income Tax Expense (Benefit)                                                 (35,672)                  1,353,270                     609,097
Income (Loss) Before Tax (GAAP)                                   $       

(1,059,200) $ 13,648,449 $ 5,726,695
Impact of Consolidation and Other

                                           (107,754)                 (5,189,459)                 (1,704,739)
Equity-based Compensation - KKR Holdings(1)                                  119,834                     161,283                      80,739
Preferred Stock Dividends                                                          -                     (19,201)                    (33,364)
Income Taxes Paid                                                           (738,841)                   (687,572)                   (265,950)
Asset Management Adjustments:
Net Unrealized (Gains) Losses                                              2,002,082                  (2,590,280)                 (1,697,740)
Unrealized Carried Interest                                                4,231,359                  (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 Compensation                                                    210,756                     183,100                     236,199
Equity-based Compensation - Performance based                                238,929                      78,230                      10,196

Insurance Adjustments:(3)
Net (Gains) Losses from Investments and
Derivatives(3)                                                               192,743                     658,975                           -
Strategic Corporate Transaction-Related Charges(3)                            24,746                      25,711                           -
Equity-based and Other Compensation(3)                                       152,083                      95,344                           -
Amortization of Acquired Intangibles(3)                                       17,647                      16,176                           -
Income Taxes(3)                                                             (171,744)                   (199,095)                          -
After-tax Distributable Earnings                                  $        

3,453,873 $ 3,915,591 $ 1,768,791
Interest Expense

                                                             315,189                     250,183                     211,037
Preferred Stock Dividends                                                          -                      19,201                      33,364
Net Income Attributable to Noncontrolling Interests                           23,200                      23,664                       7,842
Income Taxes Paid                                                            738,841                     687,572                     265,950
Distributable Operating Earnings                                  $        

4,531,103 $ 4,896,211 $ 2,286,984
Insurance Segment Operating Earnings

                                        (545,204)                   (652,551)                          -
Realized Performance Income                                               (2,176,658)                 (2,141,596)                 (1,165,699)
Realized Performance Income Compensation                                   1,333,526                   1,239,177                     697,071
Realized Investment Income                                                (1,134,419)                 (1,613,244)                   (644,659)
Realized Investment Income Compensation                                      159,003                     241,994                     106,830
Fee Related Earnings                                              $        

2,167,351 $ 1,969,991 $ 1,280,527
Insurance Segment Operating Earnings

                                         545,204                     652,551                           -
Realized Performance Income                                                2,176,658                   2,141,596                   1,165,699
Realized Performance Income Compensation                                  (1,333,526)                 (1,239,177)                   (697,071)
Realized Investment Income                                                 1,134,419                   1,613,244                     644,659
Realized Investment Income Compensation                                     (159,003)                   (241,994)                   (106,830)
Depreciation and Amortization                                                 33,809                      25,940                      18,626
Adjusted EBITDA                                                   $        4,564,912          $        4,922,151          $        2,305,610

(1)Represents equity-based compensation expense in connection with the
allocation of KKR Holdings Units, 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.

(3)Amounts include the portion allocable to noncontrolling interests (~37%).

                                      193

--------------------------------------------------------------------------------

Table of Co n tents

KKR & Co. Inc. Stockholders' Equity - Common Stock

                                                                                    As of
                                                                December 31, 2022           December 31, 2021
                                                                           

($ in thousands)
KKR & Co. Inc. Stockholders' Equity - Series I and II
Preferred Stock, Common Stock

                                 $       16,613,028          $       16,466,372
Series C Mandatory Convertible Preferred Stock                         1,115,792                   1,115,792
Impact of Consolidation and Other                                        399,318                  (1,048,569)
KKR Holdings and Exchangeable Securities                                 126,519                   8,595,510
Accumulated Other Comprehensive Income (AOCI) and Other
(Insurance)                                                            5,549,215                     259,777
Book Value                                                    $       23,803,872          $       25,388,882

The following table provides a reconciliation of KKR's GAAP Shares of Common
Stock Outstanding to Adjusted Shares:

                                                                                           As of
                                                                     December 31, 2022               December 31, 2021
GAAP Shares of Common Stock Outstanding                                861,110,478                     595,663,618

Adjustments:

KKR Holdings Units                                                               -                     258,726,163
Exchangeable Securities (1)                                              2,695,142                       1,376,655
Common Stock - Series C Mandatory Convertible Preferred Stock
(2)                                                                     26,822,570                      26,822,600
Adjusted Shares (3)                                                    890,628,190                     882,589,036

Unvested Equity Awards and Exchangeable Securities (4)                  35,457,274                      39,000,561


(1)Consists of vested restricted holdings units granted under our 2019 Equity
Incentive Plan, which are exchangeable for shares of KKR & Co. Inc. common stock
on a one-for-one basis.

(2)Assumes that all shares of Series C Mandatory Convertible Preferred Stock
have been converted into shares of KKR & Co. Inc. common stock on December 31,
2022 and December 31, 2021.

(3)Amounts exclude unvested equity awards granted under our Equity Incentive
Plans.

(4)Represents equity awards granted under our Equity Incentive Plans. Excludes
market condition awards that did not meet their market-price based vesting
conditions as of December 31, 2022 and December 31, 2021.

Liquidity

We manage our liquidity and capital requirements by (i) focusing on our cash
flows before the consolidation of our funds and CFEs and the effect of changes
in short term assets and liabilities, which we anticipate will be settled for
cash within one year, and (ii) seeking to maintain access to sufficient
liquidity through various sources. The overall liquidity framework and cash
management approach of our insurance business are also based on seeking to build
an investment portfolio that is cash flow matched, providing cash inflows from
insurance assets that meet our insurance companies' expected cash outflows to
pay their liabilities. Our primary cash flow activities typically involve: (i)
generating cash flow from operations; (ii) generating income from investment
activities, by investing in investments that generate yield (namely interest and
dividends), as well as through the sale of investments and other assets; (iii)
funding capital commitments that we have made to, and advancing capital to, our
funds and CLOs; (iv) developing and funding new investment strategies,
investment products, and other growth initiatives, including acquisitions of
other investments, assets, and businesses; (v) underwriting and funding
commitments in our capital markets business; (vi) distributing cash flow to our
stockholders and holders of our preferred stock; and (vii) paying borrowings,
interest payments, and repayments under credit agreements, our senior and
subordinated notes, and other borrowing arrangements. See "-Liquidity-Liquidity
Needs-Dividends."

See "-Business Environment" for more information on factors that may impact our
business, financial performance, operating results and valuations.

                                      194

--------------------------------------------------------------------------------

Table of Co n tents

Sources of Liquidity

Our primary sources of liquidity consist of amounts received from: (i) our
operating activities, including the fees earned from our funds, portfolio
companies, and capital markets transactions; (ii) realizations on carried
interest from our investment funds; (iii) interest and dividends from
investments that generate yield, including our investments in CLOs; (iv) in our
insurance business, cash inflows in respect of new premiums, policyholder
deposits, reinsurance transactions and funding agreements, including through
memberships in Federal Home Loan Banks; (v) realizations on and sales of
investments and other assets, including the transfers of investments or other
assets for fund formations (including CLOs and other investment vehicles); and
(vi) borrowings, including advances under our revolving credit facilities, debt
offerings, repurchase agreements, and other borrowing arrangements. In addition,
we may generate cash proceeds from issuances of our or our subsidiaries' equity
securities.

Many of our investment funds like our private equity and real assets funds
provide for carried interest. With respect to our carry-paying investment funds,
carried interest is eligible to be distributed to the general partner of the
fund only after all of the following are met: (i) a realization event has
occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle
has achieved positive overall investment returns since its inception, in excess
of performance hurdles where applicable, and is accruing carried interest; and
(iii) with respect to investments with a fair value below cost, cost has been
returned to fund investors in an amount sufficient to reduce remaining cost to
the investments' fair value. Even after all of the preceding conditions are met,
the general partner of the fund may, in its sole discretion, decide to defer the
distribution of carried interest to it to a later date. In addition, these funds
generally include what is called a "clawback" provision, which provides that the
general partner must return any carried interest that is paid in excess of what
the general partner is entitled to receive at the end of the term of the fund,
as discussed further below.

As of December 31, 2022, certain of our investment funds had met the first and
second criteria, as described above, but did not meet the third criteria. In
these cases, carried interest accrues on the consolidated statement of
operations, but will not be distributed in cash to us as the general partner of
an investment fund upon a realization event. For a fund that has a fair value
above cost, overall, and is otherwise accruing carried interest, but has one or
more investments where fair value is below cost, the shortfall between cost and
fair value for such investments is referred to as a "netting hole." When netting
holes are present, realized gains on individual investments that would otherwise
allow the general partner to receive carried interest distributions are instead
used to return invested capital to our funds' limited partners in an amount
equal to the netting hole. Once netting holes have been filled with either
(a) return of capital equal to the netting hole for those investments where fair
value is below cost or (b) increases in the fair value of those investments
where fair value is below cost, then realized carried interest will be
distributed to the general partner upon a realization event. A fund that is in a
position to pay cash carry refers to a fund for which carried interest is
expected to be paid to the general partner upon the next material realization
event, which includes funds with no netting holes as well as funds with a
netting hole that is sufficiently small in size such that the next material
realization event would be expected to result in the payment of carried
interest. Strategic investor partnerships with fund investors may require
netting across the various funds in which they invest, which may reduce the
carried interest we otherwise would have earned if such fund investors were to
have invested in our funds without the existence of the strategic investor
partnership.

As of December 31, 2022, there was no netting hole in excess of $50 million at
any of our investment funds that had a fair value above cost, overall, and is
otherwise accruing carried interest. In accordance with the criteria set forth
above, other funds currently have and may in the future develop netting holes,
and netting holes for those and other funds may otherwise increase or decrease
in the future. There are also investment funds that are not accruing carried
interest and do not have a netting hole although they may be in a clawback
position. If the investment fund has distributed carried interest, but
subsequently does not have sufficient value to provide for the distribution of
carried interest at the end of the life of the investment fund, the general
partner is typically required to return previously distributed carried interest
to the fund investors. Although our current and former employees who received
distributions of carried interest subject to clawback are required to return
them to KKR, it is KKR's obligation to return carried interest subject to
clawback to the fund investors. As of December 31, 2022, approximately $520
million of carried interest was subject to this clawback obligation, assuming
that all applicable carry-paying funds and their alternative investment vehicles
were liquidated at their December 31, 2022 fair values. As of December 31, 2022,
Asia Fund II is the only investment fund with a clawback obligation in excess of
$50 million. See Note 25 "Commitments and Contingencies-Contingent Repayment
Guarantees" in our financial statements included elsewhere in this report for
further information.

We have access to funding under various credit facilities, other borrowing
arrangements and other sources of liquidity that we have entered into with major
financial institutions or which we receive from the capital markets.

                                      195

--------------------------------------------------------------------------------

Table of Co n tents

For a discussion of our debt obligations, including our debt securities,
revolving credit agreements and loans, see Note 17 "Debt Obligations" in our
financial statements.

Liquidity Needs

We expect that our (including Global Atlantic's) primary liquidity needs will
consist of cash required to meet various obligations, including, without
limitation, to:

•continue to support and grow our Asset Management business lines, including
seeding new investment strategies, supporting capital commitments made by our
vehicles to existing and future funds, co-investments and any net capital
requirements of our capital markets companies and otherwise supporting the
investment vehicles that we sponsor;

•continue to support and grow our insurance business;

•grow and expand our businesses generally, including by acquiring or launching
new, complementary or adjacent businesses;

•warehouse investments in portfolio companies or other investments for the
benefit of one or more of our funds, accounts or CLOs or other investment
vehicles pending the contribution of committed capital by the fund investors in
such vehicles, and advancing capital to them for operational or other needs;

•service debt obligations including the payment of obligations at maturity, on
interest payment dates or upon redemption, as well as any contingent
liabilities, including from litigation, that may give rise to future cash
payments, including funding requirements to levered investment vehicles or
structured transactions;

•fund cash operating expenses and contingencies, including for litigation
matters and guarantees;

•pay corporate income taxes and other taxes;

•pay policyholders and amounts in our insurance business related to investment,
reinvestment, reinsurance or funding agreement activity;

•pay amounts that may become due under our tax receivable agreement;

•pay cash dividends in accordance with our dividend policy for our common stock
or the terms of our preferred stock, if any;

•underwrite commitments, advance loan proceeds and fund syndication commitments
within our capital markets business;

•post or return collateral in respect of derivative contracts;

•acquire other assets for our Principal Activities business line, including
other businesses, investments and assets, some of which may be required to
satisfy regulatory requirements for our capital markets business or risk
retention requirements for CLOs (to the extent they may apply);

•address capital needs of regulated subsidiaries as well as non-regulated
subsidiaries; and

•repurchase shares of our common stock or retire equity awards pursuant to the
share repurchase program or repurchase or redeem other securities issued by us.

For a discussion of KKR's share repurchase program, see Note 23 "Equity" in our
financial statements.

Capital Commitments

The agreements governing our active investment funds generally require the
general partners of the funds to make minimum capital commitments to such funds,
which generally range from 2% to 8% of a fund's total capital commitments at
final closing, but may be greater for certain funds (i) where we are pursuing
newer strategies, (ii) where third party investor demand is limited, and (iii)
where a larger commitment is consistent with the asset allocation strategy for
our Principal Activities business line, including core investments and exposure
to the Asia-Pacific region.

                                      196

--------------------------------------------------------------------------------

Table of Co n tents

The following table presents our uncalled commitments to our active investment
funds and other vehicles as of December 31, 2022:

                                                               Uncalled
                                                             Commitments
         Private Equity                                    ($ in millions)
         Core Investment Vehicles                         $          3,883
         European Fund VI                                              750
         Asian Fund IV                                                 367
         North America Fund XIII                                       359
         Next Generation Technology Growth Fund III                    196
         Global Impact Fund II                                         145
         Health Care Strategic Growth Fund II                          127

         Other Private Equity Vehicles                               1,543
         Total Private Equity Commitments                            7,370

         Real Assets
         Asia Pacific Infrastructure Investors II                      357
         Global Infrastructure Investors IV                            272
         Asia Real Estate Partners                                     162
         Real Estate Partners Americas III                              91
         Diversified Core Infrastructure Fund                           87
         Real Estate Partners Europe II                                 81
         Real Estate Credit Opportunity Partners II                     17

         Other Real Assets Vehicles                                    782
         Total Real Assets Commitments                               1,849

         Credit and Liquid Strategies
         Asset-Based Finance Partners                                   97
         Asia Credit                                                    97
         Dislocation Opportunities Fund                                 84
         Lending Partners III                                           12
         Lending Partners Europe II                                     11

         Other Credit and Liquid Strategies Vehicles                   916
         Total Credit and Liquid Strategies Commitments              1,217

         Total Uncalled Commitments                       $         10,436

Other Commitments

In addition to the uncalled commitments to our investment funds as shown above,
KKR has entered into contractual commitments primarily with respect to
underwriting transactions, debt financing, revolving credit facilities, and
equity syndications in our Capital Markets business line. As of December 31,
2022, these commitments amounted to $0.7 billion.

Whether these amounts are actually funded, in whole or in part, depends on the
contractual terms of such commitments, including the satisfaction or waiver of
any conditions to closing or funding. Our capital markets business has
arrangements with third parties, which reduce our risk under certain
circumstances when underwriting certain debt transactions, and thus our unfunded
commitments as of December 31, 2022 have been reduced to reflect the amount to
be funded by such third parties. In the case of purchases of investments or
assets in our Principal Activities business line, the amount to be funded
includes amounts that are intended to be syndicated to third parties, and the
actual amounts to be funded may be less. For more information about our Capital
Markets business line's risks, see "Risks Related to Our Business-Our capital
markets activities expose us to material risks."

                                      197

--------------------------------------------------------------------------------

Table of Co n tents

From time to time, we fund various underwriting, syndication and fronting
commitments in our capital markets business in connection with the arranging or
underwriting of loans, securities or other financial instruments, for which we
may draw all or substantially all of our availability for borrowings under our
available credit facilities. We generally expect these borrowings by our Capital
Markets business line to be repaid promptly as these commitments are syndicated
to third parties or otherwise fulfilled or terminated, although we may in some
instances elect to retain a portion of the commitments for our own investment.
For more information about our Capital Markets business line's risks, see "Risks
Related to Our Business-Our capital markets activities expose us to material
risks" in this report.

Tax Receivable Agreement

On May 30, 2022, KKR terminated the tax receivable agreement with KKR Holdings
other than with respect to exchanges of KKR Holdings Units completed prior to
such date. As of December 31, 2022, an undiscounted payable of $420.6 million
has been recorded in due to affiliates in the financial statements representing
management's best estimate of the amounts currently expected to be owed for
certain exchanges of KKR Holdings Units that took place prior to the termination
of the tax receivable agreement. As of December 31, 2022, approximately $60.4
million of cumulative cash payments have been made under the tax receivable
agreement since inception.

Dividends

A dividend of $0.155 per share of our common stock has been declared and will be
paid on March 7, 2023 to holders of record of our common stock as of the close
of business on February 17, 2023.

A dividend of $0.75 per share of Series C Mandatory Convertible Preferred Stock
has been declared and set aside for payment on March 15, 2023 to holders of
record of Series C Mandatory Convertible Preferred Stock as of the close of
business on March 1, 2023.

When KKR & Co. Inc. receives distributions from KKR Group Partnership, holders
of exchangeable securities receive their pro rata share of such distributions
from KKR Group Partnership.

The declaration and payment of dividends to our common stockholders will be at
the sole discretion of our Board of Directors, and our dividend policy may be
changed at any time. We announced on February 7, 2023 that our current dividend
policy will be to pay dividends to holders of our common stock in an annual
aggregate amount of $0.66 per share (or a quarterly dividend of $0.165 per
share) beginning with the dividend to be announced with the results for the
first quarter of 2023. The declaration of dividends is subject to the discretion
of our Board of Directors based on a number of factors, including KKR's future
financial performance and other considerations that the Board of Directors deems
relevant, and compliance with the terms of KKR & Co. Inc.'s certificate of
incorporation and applicable law. For U.S. federal income tax purposes, any
dividends we pay (including dividends on our preferred stock) generally will be
treated as qualified dividend income for U.S. individual stockholders to the
extent paid out of our current or accumulated earnings and profits, as
determined for U.S. federal income tax purposes. There can be no assurance that
future dividends will be made as intended or at all or that any particular
dividend policy for our common stock will be maintained. Furthermore, the
declaration and payment of distributions by KKR Group Partnership and our other
subsidiaries may also be subject to legal, contractual and regulatory
restrictions, including restrictions contained in our debt agreements and the
terms of the preferred units of KKR Group Partnership.

Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we (including Global Atlantic) and our
consolidated funds and CFEs enter into contractual arrangements that may require
future cash payments. Contractual arrangements include (1) commitments to fund
the purchase of investments or other assets (including obligations to fund
capital commitments as the general partner of our investment funds) or to fund
collateral for derivative transactions or otherwise, (2) obligations arising
under our senior notes, subordinated notes, and other indebtedness, (3)
commitments by our capital markets business to underwrite transactions or to
lend capital, (4) obligations arising under insurance policies written, (5)
other contractual obligations, including servicing agreements with third-party
administrators for insurance policy administration, and (6) commitments to fund
the business, operations or investments of our subsidiaries. In addition, we may
incur contingent liabilities for claims that may be made against us in the
future. For more information about these contingent liabilities, please see Note
25 "Commitments and Contingencies" in our financial statements.

                                      198

--------------------------------------------------------------------------------

Table of Co n tents

The following table sets forth information relating to anticipated future cash
payments as of December 31, 2022 excluding consolidated funds and CFEs with a
reconciliation of such amounts to anticipated future cash payments by us
(including Global Atlantic) and our consolidated funds and CFEs.

                                                                                                              Payments due by Period
Types of Contractual Obligations                                             <1 Year            1-3 Years           3-5 Years            >5 Years              Total
                                                                                                                  ($ in millions)
Asset Management
Uncalled commitments to investment funds (1)                              $ 10,436.0          $        -          $        -          $         -          $  10,436.0
Debt payment obligations (2)                                                   189.5                37.9               275.9              7,368.6              7,871.9
Interest obligations on debt payment obligations (3)                           334.0               567.4               565.1              4,084.2              5,550.7
Underwriting commitments (4)                                                     6.1                   -                   -                    -                  6.1
Lending commitments (5)                                                        507.1                   -                   -                    -                507.1
Purchase commitments (6)                                                       141.1                   -                   -                    -                141.1
Lease obligations                                                               45.6                94.5                68.3                192.6                401.0

Insurance (7)
Policy liabilities (8)                                                      13,623.9            29,730.8            24,036.3            102,686.6            170,077.6
Debt payment obligations (9)                                                       -                   -               400.0              1,900.0              2,300.0
Interest obligations on debt payment obligations (10)                          103.0               206.0               205.0              1,517.0       

2,031.0

Purchase and lease commitments (11)                                             60.9                97.6                63.0                347.8      

569.3

Total Contractual Obligations of KKR                                      $ 

25,447.2 $ 30,734.2 $ 25,613.6 $ 118,096.8

    $ 199,891.8
(+) Uncalled commitments of consolidated funds (12)                         19,423.9                   -                   -                    -       

19,423.9

(+) Debt payment obligations of consolidated funds, CFEs and Other
(13)

                                                                         2,266.7               900.5               980.8             29,470.8       

33,618.8

(+) Corporate real estate borrowings (14)                                      490.0                   -                   -                    -       

490.0

(+) Interest obligations of consolidated funds, CFEs and Other (15)

  1,660.1             2,896.4             2,797.6              6,034.7       

13,388.8

Total Consolidated Contractual Obligations                                $ 

49,287.9 $ 34,531.1 $ 29,392.0 $ 153,602.3

$ 266,813.3

(1)These uncalled commitments represent amounts committed by us to fund a
portion of the purchase price paid for each investment made by our investment
funds which are actively investing. Because capital contributions are due on
demand, the above commitments have been presented as falling due within one
year. However, given the size of such commitments and the pace at which our
investment funds make investments, we expect that the capital commitments
presented above will be called over a period of several years. See "-Liquidity
Needs" and Note 17 "Debt Obligations" in our financial statements.

(2)Amounts include senior notes and subordinated notes issued by KKR and its
subsidiaries. KFN's debt obligations are non-recourse to KKR beyond the assets
of KFN.

(3)These interest obligations on debt represent estimated interest to be paid
over the term of the related debt obligation, which has been calculated assuming
the debt outstanding at December 31, 2022 is not repaid until its maturity.
Future interest rates are assumed to be those in effect as of December 31, 2022,
including both variable and fixed rates, as applicable, provided for by the
relevant debt agreements. The amounts presented above include accrued interest
on outstanding indebtedness.

(4)Represents various commitments in our capital markets business in connection
with the underwriting of loans, securities and other financial instruments.
These commitments are shown net of amounts syndicated.

(5)Represents obligations in our capital markets business to lend under various
revolving credit facilities.

(6)Represents commitments of KKR's asset management business line including KFN
to fund the purchase of various investments.

(7)Global Atlantic has other obligations related to collateral payable held for
derivative instruments ($466.4 million) and outstanding commitments to make
investments in commercial mortgage loans, other lending facilities and other
investments ($3.3 billion) which have not been included in the above table as
the exact timing of these payments cannot be estimated. Global Atlantic's debt
obligations are non-recourse to KKR beyond the assets of Global Atlantic.

(8)Policy liabilities for insurance obligations consist of amounts required to
meet future obligations for future policy benefits and policy account balances.
Amounts presented in the table represent estimated cash payments under such
contracts, including significant assumptions related to the receipt of future
premiums, mortality, lapse, renewal, withdrawal, and annuitization comparable
with actual experience. These assumptions also include market growth and policy
crediting consistent with assumptions used in amortizing DAC. All estimated cash
payments are not discounted to present value. Accordingly, the total of cash
flows presented for all years of $170.1 billion significantly exceeds total
policy liabilities of $141.2 billion recorded on the statements of financial
condition as of December 31, 2022. Estimated cash payments are also presented
gross of reinsurance. Due to the significance of the assumptions used, the
amounts presented could differ materially from actual results.

(9)The payments due by period for debt obligations reflects the contractual
maturities of principal.

(10)Reflects estimated future interest payments. Future interest on variable
rate debt (which includes borrowing under our revolving credit facility and the
subordinated debentures) was computed using prevailing rates as of December 31,
2022 and, as such, does not consider the impact of future rate movements. Future
interest on fixed rate debt was computed using the stated rate on the
obligations.

                                      199

--------------------------------------------------------------------------------

Table of Co n tents

(11)Reflects operational servicing agreements with third-party administrators
for policy administration.

(12)Represents uncalled commitments of our consolidated funds excluding KKR's
portion of uncalled commitments as the general partner of the respective funds.
Because capital contributions are due on demand, the above commitments have been
presented as falling due within one year. However, given the size of such
commitments and the pace at which our investment funds make investments, we
expect that the capital commitments presented above will be called over a period
of several years. See "-Liquidity Needs" and Note 17 "Debt Obligations" in our
financial statements.

(13)Amounts include (i) financing arrangements entered into by our consolidated
funds with the objective of providing liquidity to the funds of $9.0 billion,
(ii) debt securities issued by our consolidated CLOs of $22.3 billion and (iii)
borrowings collateralized by fund investments, fund co-investments and other
assets held by levered investment vehicles of $2.3 billion. Debt securities
issued by consolidated CLO entities are supported solely by the investments held
at the CLO vehicles and are not collateralized by assets of any other KKR
entity. Borrowings by levered investment vehicles are supported solely by the
investments held at the investment vehicles and are not collateralized by assets
of any other KKR entity. Obligations under financing arrangements entered into
by our consolidated funds are generally limited to our pro rata equity interest
in such funds. Our management companies bear no obligations to repay any
financing arrangements at our consolidated funds.

(14)Represents a debt obligation in connection with the ownership of KKR office
space.

(15)The interest obligations on debt of our CFEs and other borrowings represent
estimated interest to be paid over the term of the related debt obligation,
which has been calculated assuming the debt outstanding at December 31, 2022 is
not repaid until its maturity. Future interest rates are assumed to be those in
effect as of December 31, 2022, including both variable and fixed rates, as
applicable, provided for by the relevant debt agreements. The amounts presented
above include accrued interest on outstanding indebtedness.


The commitment table above excludes contractual amounts owed under the tax
receivable agreement because the ultimate amount and timing of the amounts due
are not presently known. See "-Liquidity Needs-Tax Receivable Agreement" in this
report and "Risk Factors-We will be required to pay our principals for most of
the benefits relating to our use of tax attributes we receive from certain prior
exchanges of our common stock for KKR Group Partnership Units" in this report.

Off Balance Sheet Arrangements

We do not have any off-balance sheet financings or liabilities other than
contractual commitments and other legal contingencies incurred in the normal
course of our business.

Critical Accounting Policies and Estimates

The preparation of our financial statements in accordance with GAAP requires our
management to make estimates and judgments that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities, and
reported amounts of fees, capital allocation-based income (loss), expenses,
investment income, and income taxes. Our management bases these estimates and
judgments on available information, historical experience and other assumptions
that we believe are reasonable under the circumstances. However, these
estimates, judgments and assumptions are often subjective and may be impacted
negatively based on changing circumstances or changes in our analyses. If actual
amounts are ultimately different from those estimated, judged or assumed,
revisions are included in the financial statements in the period in which the
actual amounts become known. We believe our critical accounting policies could
potentially produce materially different results if we were to change underlying
estimates, judgments or assumptions.

For a further discussion about our critical accounting policies, see Note 2
"Summary of Significant Accounting Policies" in our financial statements
included in this report.

Basis of Accounting

We consolidate the financial results of KKR Group Partnership and its
consolidated entities, which include the accounts of our investment advisers,
broker-dealers, Global Atlantic's insurance companies, the general partners of
certain unconsolidated investment funds, general partners of consolidated
investment funds and their respective consolidated investment funds and certain
other entities including CFEs.

When an entity is consolidated, we reflect the accounts of the consolidated
entity, including its assets, liabilities, revenues, expenses, investment
income, cash flows and other amounts, on a gross basis. While the consolidation
of an investment fund or entity does not have an effect on the amounts of Net
Income Attributable to KKR or KKR's stockholders' equity that KKR reports, the
consolidation does significantly impact the financial statement presentation
under GAAP. This is due to the fact that the accounts of the consolidated
entities are reflected on a gross basis while the allocable share of those
amounts that are attributable to third parties are reflected as single line
items. The single line items in which the accounts attributable to third parties
are recorded are presented as noncontrolling interests on the consolidated
statements of financial condition and net income (loss) attributable to
noncontrolling interests on the consolidated statements of operations.

                                      200

--------------------------------------------------------------------------------

Table of Co n tents

The presentation in the financial statements reflect the significant industry
diversification of KKR by its acquisition of Global Atlantic. Global Atlantic
operates an insurance business, and KKR operates an asset management business,
each of which possess distinct characteristics. As a result, KKR developed a
two-tiered presentation approach for the financial statements in this
Management's Discussion and Analysis. KKR believes that these separate
presentations provide a more informative view of the consolidated financial
position and results of operations than traditional aggregated presentations.
KKR believes that reporting Global Atlantic's insurance operations separately is
appropriate given, among other factors, the relative significance of Global
Atlantic's policy liabilities, which are not obligations of KKR (other than the
insurance companies that issued them). If a traditional aggregated presentation
were to be used, KKR would expect to eliminate or combine several identical or
similar captions, which would condense the presentations but would reduce
transparency. KKR also believes that using a traditional aggregated presentation
would result in no new line items compared to the two-tier presentation included
in the financial statements in this report. We acquired Global Atlantic on
February 1, 2021; accordingly, the results of Global Atlantic's insurance
operations included in our consolidated results of operations for the year ended
December 31, 2021 are from February 1, 2021 (the closing date of the GA
Acquisition) through December 31, 2021.

Consolidation

KKR consolidates all entities that it controls either through a majority voting
interest or as the primary beneficiary of variable interest entities ("VIEs").
The following discussion is intended to provide supplemental information about
how the application of consolidation principles impact our financial results,
and management's process for implementing those principles including areas of
significant judgment. For a detailed description of our accounting policy on
consolidation, see Note 2 "Summary of Significant Accounting Policies" in our
financial statements included in this report.

As part of its consolidation procedures, KKR evaluates: (1) whether it holds a
variable interest in an entity, (2) whether the entity is a VIE, and (3) whether
the KKR's involvement would make it the primary beneficiary. The determination
that KKR holds a controlling financial interest in an investment vehicle
significantly changes the presentation of our consolidated financial statements.

The assessment of whether we consolidate an investment vehicle we manage
requires the application of significant judgment. These judgments are applied
both at the time we become involved with an investment vehicle and on an ongoing
basis and include, but are not limited to:

•Determining whether our management fees, carried interests or incentive fees
represent variable interests - We make judgments as to whether the fees we earn
are commensurate with the level of effort required for those fees and at market
rates. In making this judgment, we consider, among other things, the extent of
third party investment in the entity and the terms of any other interests we
hold in the VIE.

•Determining whether a legal entity qualifies as a VIE - For those entities
where KKR holds a variable interest, management determines whether each of these
entities qualifies as a VIE and, if so, whether or not KKR is the primary
beneficiary. The assessment of whether the entity is a VIE is generally
performed qualitatively, which requires judgment. These judgments include: (a)
determining whether the equity investment at risk is sufficient to permit the
entity to finance its activities without additional subordinated financial
support, (b) evaluating whether the equity holders, as a group, can make
decisions that have a significant effect on the economic performance of the
entity, (c) determining whether two or more parties' equity interests should be
aggregated, and (d) determining whether the equity investors have proportionate
voting rights to their obligations to absorb losses or rights to receive returns
from an entity. Entities that do not qualify as VIEs are generally assessed for
consolidation as voting interest entities. Under the voting interest entity
model, the Company consolidates those entities it controls through a majority
voting interest.

•Concluding whether KKR has an obligation to absorb losses or the right to
receive benefits that could potentially be significant to the VIE - As there is
no explicit threshold in GAAP to define "potentially significant," we must apply
judgment and evaluate both quantitative and qualitative factors to conclude
whether this threshold is met.

Changes to these judgments could result in a change in the consolidation
conclusion for a legal entity.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date under current market conditions.

                                      201

--------------------------------------------------------------------------------

Table of Co n tents

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks
the level of market price observability used in measuring financial instruments
at fair value. Investments and other financial instruments measured and reported
at fair value are classified and disclosed based on the observability of inputs
used in the determination of fair values, as follows:

Level I

Pricing inputs are unadjusted, quoted prices in active markets for identical
assets or liabilities as of the measurement date.

Level II

Pricing inputs are other than quoted prices in active markets, which are either
directly or indirectly observable as of the measurement date, and fair value is
determined through the use of models or other valuation methodologies.

Level III

Pricing inputs are unobservable for the financial instruments and include
situations where there is little, if any, market activity for the financial
instrument. The inputs into the determination of fair value require significant
management judgment or estimation. The valuation of our Level III investments at
December 31, 2022 represents management's best estimate of the amounts that we
would anticipate realizing on the sale of these investments in an orderly
transaction at such date.

In certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the level in the fair value
hierarchy within which the fair value measurement in its entirety falls has been
determined based on the lowest level input that is significant to the fair value
measurement in its entirety.

Level III Valuation Methodologies

Our investments and financial instruments are impacted by various economic
conditions and events outside of our control that are difficult to quantify or
predict, which may have a significant impact on the valuation of our investments
and, therefore, on the carried interest and investment income we realize.
Additionally, a change in interest rates could have a significant impact on
valuations.

Across the total Level III private equity investment portfolio (including core
private equity investments), and including investments in both consolidated and
unconsolidated investment funds, approximately 55% of the fair value is derived
from investments that are valued based exactly 50% on market comparables and 50%
on a discounted cash flow analysis. Less than 5% of the fair value of this Level
III private equity investment portfolio is derived from investments that are
valued either based 100% on market comparables or 100% on a discounted cash flow
analysis. As of December 31, 2022, the overall weights ascribed to the market
comparables methodology, the discounted cash flow methodology, and a methodology
based on pending sales for this portfolio of Level III private equity
investments were 38%, 55%, and 7%, respectively.

There is inherent uncertainty involved in the valuation of Level III
investments, and there is no assurance that, upon liquidation, KKR will realize
the values reflected in our valuations. Our valuations may differ significantly
from the values that would have been used had an active market for the
investments existed, and it is reasonably possible that the difference could be
material. See "-Business Environment" for more information on factors that may
impact our business, financial performance, operating results and valuations.

Key unobservable inputs that have a significant impact on our Level III
valuations as described above are included in Note 10 "Fair Value Measurements"
in our financial statements.

Level III Valuation Process

The valuation process involved for Level III measurements is completed on a
quarterly basis and is designed to subject the valuation of Level III
investments to an appropriate level of consistency, oversight, and review.

For private equity and real asset investments classified as Level III,
investment professionals prepare preliminary valuations based on their
evaluation of financial and operating data, company specific developments,
market valuations of comparable companies and other factors. KKR begins its
procedures to determine the fair values of its Level III assets approximately
one month prior to the end of a reporting period, and KKR follows additional
procedures to ensure that its determinations of fair value for its Level III
assets are appropriate as of the relevant reporting date. These preliminary
valuations are reviewed by an independent valuation firm engaged by KKR to
perform certain procedures in order to assess the reasonableness of KKR's
valuations annually for all Level III private equity and real asset investments
and quarterly for

                                      202

--------------------------------------------------------------------------------

Table of Co n tents

investments other than certain investments, which have values less than preset
value thresholds and which in the aggregate comprise less than 1% of the total
value of KKR's Level III private equity and real asset investments. The
valuations of certain real asset investments are determined solely by
independent valuation firms without the preparation of preliminary valuations by
our investment professionals, and instead such independent valuation firms rely
on valuation information available to it as a broker or valuation firm. For
credit investments, an independent valuation firm is generally engaged by KKR to
assist with the valuations of most investments classified as Level III. The
valuation firm either provides a value, provides a valuation range from which
KKR's investment professionals select a point in the range to determine the
valuation, or performs certain procedures in order to assess the reasonableness
of KKR's valuations. After reflecting any input from the independent valuation
firm, the valuation proposals are submitted for review and approval by KKR's
valuation committees. As of December 31, 2022, less than 3% of the total value
of our Level III credit investments were not valued with the engagement of an
independent valuation firm.

For Level III investments in Asset Management, KKR has a global valuation
committee that is responsible for coordinating and implementing the firm's
valuation process to ensure consistency in the application of valuation
principles across portfolio investments and between periods. The global
valuation committee is assisted by the asset class-specific valuation committees
that exist for private equity (including core equity investments and certain
impact investments), growth equity (including certain impact investments), real
estate, energy, infrastructure and credit. The asset class-specific valuation
committees are responsible for the review and approval of all preliminary Level
III valuations in their respective asset classes on a quarterly basis. The
members of these valuation committees are comprised of investment professionals,
including the heads of each respective strategy, and professionals from business
operations functions such as legal, compliance and finance, who are not
primarily responsible for the management of the investments. All Level III
valuations for investments in Asset Management are also subject to approval by
the global valuation committee, which is comprised of senior employees including
investment professionals and professionals from business operations functions,
and includes KKR's Co-Chief Executive Officers and its Chief Financial Officer,
Chief Legal Officer, General Counsel, and Chief Compliance Officer. When
valuations are approved by the global valuation committee after reflecting any
input from it, the valuations of Level III investments, as well as the
valuations of Level I and Level II investments, are presented to the Audit
Committee of the Board of Directors of KKR & Co. Inc. and are then reported to
the Board of Directors.

Level III investments held by Global Atlantic are valued on the basis of pricing
services, broker-dealers or internal models. Global Atlantic performs a
quantitative and qualitative analysis and review of the information and prices
received from independent pricing services as well as broker-dealers to verify
that it represents a reasonable estimate of fair value. As of December 31, 2022,
approximately 87% of these investments were priced via external sources, while
approximately 13% were valued on the basis of internal models. For all the
internally developed models, Global Atlantic seeks to verify the reasonableness
of fair values by analyzing the inputs and other assumptions used. These
preliminary valuations are reviewed, based on certain thresholds, by an
independent valuation firm engaged by Global Atlantic to perform certain
procedures in order to assess the reasonableness of Global Atlantic's
valuations. When valuations are approved by Global Atlantic's management, the
valuations of its Level III investments, as well as the valuations of Level I
and Level II investments, are presented to the Audit Committee of the Board of
Directors of KKR & Co. Inc. and are then reported to the Board of Directors.

As of December 31, 2022, upon completion by, where applicable, independent
valuation firms of certain limited procedures requested to be performed by them
on certain Level III investments, the independent valuation firms concluded that
the fair values, as determined by KKR (including Global Atlantic), of those
investments reviewed by them were reasonable. The limited procedures did not
involve an audit, review, compilation or any other form of examination or
attestation under generally accepted auditing standards and were not conducted
on all Level III investments. We are responsible for determining the fair value
of investments in good faith, and the limited procedures performed by an
independent valuation firm are supplementary to the inquiries and procedures
that we are required to undertake to determine the fair value of the
commensurate investments.

As described above, Level II and Level III investments were valued using
internal models with significant unobservable inputs, and our determinations of
the fair values of these investments may differ materially from the values that
would have resulted if readily observable inputs had existed. Additional
external factors may cause those values, and the values of investments for which
readily observable inputs exist, to increase or decrease over time, which may
create volatility in our earnings and the amounts of assets and stockholders'
equity that we report from time to time.

Changes in the fair value of investments impacts the amount of carried interest
that is recognized as well as the amount of investment income that is recognized
for investments held directly in Asset Management and through our consolidated
funds as described below. We estimate that an immediate 10% decrease in the fair
value of investments held directly and through consolidated investment funds
generally would result in a commensurate change in the amount of net gains
(losses) from investment activities for investments held directly and through
investment funds and a more significant impact to the amount of

                                      203

--------------------------------------------------------------------------------

Table of Co n tents

carried interest recognized, regardless of whether the investment was valued
using observable market prices or management estimates with significant
unobservable pricing inputs. With respect to consolidated investment funds, the
impact that the consequential decrease in investment income would have on net
income attributable to KKR would generally be significantly less than the amount
described above, given that a majority of the change in fair value of our
consolidated funds would be attributable to noncontrolling interests and
therefore we are only impacted to the extent of our carried interest and our
balance sheet investments. With respect to Insurance, a decrease in investment
income for certain assets where investment gains and losses are recognized
through the statement of operations would impact KKR only to the extent of our
economic ownership interest in Global Atlantic.

As of December 31, 2022, there were no investments which represented greater
than 5% of total investments on a GAAP basis. On a non-GAAP basis, as of
December 31, 2022, investments which represented greater than 5% of total
non-GAAP investments consisted of USI, Inc. and PetVet Care Centers, LLC and
valued at $1,300 million and $1,143 million, respectively. Our investment income
on a GAAP basis and our book value can be impacted by volatility in the public
markets related to our holdings of publicly traded securities, including our
sizable holdings of Crescent Energy. See "-Business Environment" for a
discussion of factors that may impact the valuations of our investments,
financial results, operating results and valuations, and "-Non-GAAP Balance
Sheet Measures" for additional information regarding our largest holdings on a
non-GAAP basis.

Business Combinations

KKR accounts for business combinations using the acquisition method of
accounting, under which the purchase price of the acquisition is allocated to
the assets acquired and liabilities assumed using the fair values determined by
management as of the acquisition date.

Management's determination of fair value of assets acquired and liabilities
assumed at the acquisition date is based on the best information available in
the circumstances and may incorporate management's own assumptions and involve a
significant degree of judgment. We use our best estimates and assumptions to
accurately assign fair value to the tangible and identifiable intangible assets
acquired and liabilities assumed at the acquisition date as well as the useful
lives of those acquired intangible assets. Examples of critical estimates in
valuing certain of the intangible assets we have acquired include, but are not
limited to, future expected cash inflows and outflows, future fundraising
assumptions, expected useful life, discount rates and income tax rates. Our
estimates for future cash flows are based on historical data, various internal
estimates and certain external sources, and are based on assumptions that are
consistent with the plans and estimates we are using to manage the underlying
assets acquired. We estimate the useful lives of the intangible assets based on
the expected period over which we anticipate generating economic benefit from
the asset. We base our estimates on assumptions we believe to be reasonable but
that are unpredictable and inherently uncertain. Unanticipated events and
circumstances may occur that could affect the accuracy or validity of such
assumptions, estimates or actual result.

Income Taxes

Significant judgment is required in estimating the provision for (benefit from)
income taxes, current and deferred tax balances (including valuation allowance),
accrued interest or penalties and uncertain tax positions. In evaluating these
judgments, we consider, among other items, projections of taxable income
(including the character of such income), beginning with historic results and
incorporating assumptions of the amount of future pretax operating income. These
assumptions about future taxable income require significant judgment and are
consistent with the plans and estimates that KKR uses to manage its business. As
of December 31, 2022, a portion of the deferred tax assets are not considered to
be more likely than not to be realized. For that portion of the deferred tax
assets for Global Atlantic, a valuation allowance has been recorded. Revisions
in estimates and/or actual costs of a tax assessment may ultimately be
materially different from the recorded accruals and unrecognized tax benefits,
if any. Please see Note 19 "Income Taxes" in our financial statements in this
report for further details.

Critical Accounting Policies and Estimates - Asset Management

Revenues

Fees and Other

Fees and other consist primarily of (i) management and incentive fees from
providing investment management services to unconsolidated funds, CLOs, other
vehicles, and separately managed accounts; (ii) transaction fees earned in
connection with successful investment transactions and from capital markets
activities; (iii) monitoring fees from providing services to portfolio
companies; (iv) expense reimbursements from certain investment funds and
portfolio companies; and (v) consulting fees. These

                                      204

--------------------------------------------------------------------------------

Table of Co n tents

fees are based on the contractual terms of the governing agreements and are
recognized when earned, which coincides with the period during which the related
services are performed and in the case of transaction fees, upon closing of the
transaction. Monitoring fees may provide for a termination payment following an
initial public offering or change of control. These termination payments are
recognized in the period when the related transaction closes.

Transaction fee calculations and management fee calculations based on committed
capital or invested capital typically do not require discretion and therefore do
not require the use of significant estimates or judgments. Management fee
calculations based on net asset value depend on the fair value of the underlying
investments within the investment vehicles. Estimates and assumptions are made
when determining the fair value of the underlying investments within the funds
and could vary depending on the valuation methodology that is used as well as
economic conditions.

Capital Allocation-Based Income (Loss)

Capital allocation-based income (loss) is earned from those arrangements whereby
KKR serves as general partner and includes income or loss from KKR's capital
interest as well as "carried interest" which entitles KKR to a disproportionate
allocation of investment income or loss from an investment fund's limited
partners.

Carried interest is recognized upon appreciation of the funds' investment values
above certain return hurdles set forth in their partnership agreement. KKR
recognizes revenues attributable to capital allocation-based income based upon
the amount that would be due pursuant to the fund partnership agreement at each
period end as if the funds were terminated at that date. Accordingly, the amount
recognized reflects KKR's share of the gains and losses of the associated funds'
underlying investments measured at their then-current fair values relative to
the fair values as of the end of the prior period. Because of the inherent
uncertainty in measuring the fair value of investments in the absence of
observable market prices as previously discussed, these estimated values may
differ significantly from the values that would have been used had a ready
market for the investments existed, and it is reasonably possible that the
difference could be material.

Expenses

Compensation and Benefits

Compensation and Benefits expense includes (i) base cash compensation consisting
of salaries and wages, (ii) benefits, (iii) carry pool allocations, (iv)
equity-based compensation and (v) discretionary cash bonuses.

To supplement base cash compensation, benefits, carry pool allocations, and
equity-based compensation, we typically pay discretionary cash bonuses, which
are included in Compensation and Benefits expense in the consolidated statements
of operations, based principally on the level of (i) management fees and other
fee revenues (including incentive fees), (ii) realized carried interest and
(iii) realized investment income earned during the year. The amounts paid as
discretionary cash bonuses, if any, are at our sole discretion and vary from
individual to individual and from period to period, including having no cash
bonus. We accrue discretionary cash bonuses when payment becomes probable and
reasonably estimable which is generally in the period when we make the decision
to pay discretionary cash bonuses and is based upon a number of factors,
including the recognition of fee revenues, realized carried interest, realized
investment income and other factors determined during the year.

Beginning in 2021, we expect to pay our employees by assigning a percentage
range to each component of asset management segment revenues. Based on the
current components and blend of our asset management segment revenues on an
annual basis, we expect to use approximately: (i) 20­25% of fee related
revenues, (ii) 60­70% of realized carried interest and incentive fees not
included in fee related performance revenues or earned from our hedge fund
partnerships, and (iii) 10­20% of realized investment income and hedge fund
partnership incentive fees to pay our asset management employees. Because these
ranges are applied to applicable asset management segment revenue components
independently, and on an annual basis, the amount paid as a percentage of total
asset management segment revenue will vary and will, for example, likely be
higher in a period with relatively higher realized carried interest and lower in
a period with relatively lower realized carried interest. We decide whether to
pay a discretionary cash bonus and determine the percentage of applicable
revenue components to pay compensation only upon the occurrence of the
realization event. There is no contractual or other binding obligation that
requires us to pay a discretionary cash bonus to the asset management employees,
except in limited circumstances.

Assuming that we had accrued compensation of (i) 65% of the unrealized carried
interest earned by the funds that allocate 40% and 43% to the carry pool and
(ii) 15% of the unrealized net gains in our Principal Activities business line
(in each case at the mid-point of the ranges above), KKR & Co. Inc.
Stockholders' Equity - Common Stock as of December 31, 2022 would have been
reduced by approximately $1.46 per share, compared to our reported $19.29 per
share on such date, and our book value as of December 31, 2022 would have been
reduced by approximately $1.42 per adjusted share, compared to our reported book
value of $26.73 per adjusted share on such date.

                                      205

--------------------------------------------------------------------------------

Table of Co n tents

Carry Pool Allocation

With respect to our funds that provide for carried interest, we allocate a
portion of the realized and unrealized carried interest that we earn to a carry
pool established at KKR Associates Holdings L.P., which is not a KKR subsidiary,
from which our asset management employees and certain other carry pool
participants are eligible to receive a carried interest allocation. The
allocation is determined based upon a fixed arrangement between KKR Associates
Holdings and us, and we do not exercise discretion on whether to make an
allocation to the carry pool upon a realization event. These amounts are
accounted for as compensatory profit sharing arrangements in Accrued Expenses
and Other Liabilities within the accompanying consolidated statements of
financial condition in conjunction with the related carried interest income and
are recorded as compensation expense. Upon a reversal of carried interest
income, the related carry pool allocation, if any, is also reversed.
Accordingly, such compensation expense is subject to both positive and negative
adjustments.

In February 2021, with the approval of a majority of our independent directors,
KKR amended the percentage of carried interest that is allocable to the carry
pool to 65% for (i) current investment funds for which no or de minimis amounts
of carried interest was accrued as of December 31, 2020 and (ii) all future
funds. For all other funds, the percentage of carried interest remains 40% or
43%, as applicable. The percentage of carried interest allocable to the carry
pool may be increased above 65% only with the approval of a majority of our
independent directors. To account for the difference in the carry pool
allocation percentages, we expect to use a portion of realized carried interest
from the older funds equal to the difference between 65% and 40% or 43%, as
applicable, to supplement the carry pool and to pay amounts as discretionary
cash bonus compensation as described above to our asset management employees.
The amounts paid as discretionary cash bonuses, if any, are at our discretion
and vary from individual to individual and from period to period, including
having no cash bonus at all for certain employees. See "-Revenues-Capital
Allocation-Based Income (Loss)" and "-Compensation and Benefits" above.

On the Sunset Date (which will not be later than December 31, 2026), KKR will
acquire control of KKR Associates Holdings and will commence making decisions
regarding the allocation of carry proceeds pursuant to the limited partnership
agreement of KKR Associates Holdings. Until the Sunset Date, our Co-Founders
will continue to make decisions regarding the allocation of carry proceeds to
themselves and others, pursuant to the limited partnership agreement of KKR
Associates Holdings, provided that any allocation of carry proceeds to the
Co-Founders will be on a percentage basis consistent with past practice. For
additional information about the Sunset Date and the Reorganization Agreement,
please see "Certain Relationships and Related Transactions, and Director
Independence" in this report.

Equity-based Compensation

In addition to the cash-based compensation and carry pool allocations as
described above, employees receive equity awards under our Equity Incentive
Plans, most of which are subject to service-based vesting typically over a three
to five-year period from the date of grant, and some of which are also subject
to the achievement of market-based conditions. Certain of these awards are
subject to post-vesting transfer restrictions and minimum retained ownership
requirements.

Compensation expense relating to the issuance of equity-based awards is measured
at fair value on the grant date. In determining the aggregate fair value of any
award grants, we make judgments as to the grant-date fair value, particularly
for certain restricted units with a vesting condition based upon market
conditions, whose grant date fair values are based on a probability distributed
Monte-Carlo simulation. See Note 20 "Equity Based Compensation," in our
financial statements included in this report for further discussion and activity
of these awards.

Investment Income (Loss) -Net Gains (Losses) from Investment Activities

Net gains (losses) from investment activities consist of realized and unrealized
gains and losses arising from our investment activities as well as income earned
from certain equity method investments. Fluctuations in net gains (losses) from
investment activities between reporting periods is driven primarily by changes
in the fair value of our investment portfolio as well as the realization of
investments. The fair value of, as well as the ability to recognize gains from,
our investments is significantly impacted by the global financial markets,
which, in turn, affects the net gains (losses) from investment activities
recognized in any given period. Upon the disposition of an investment,
previously recognized unrealized gains and losses are reversed and an offsetting
realized gain or loss is recognized in the current period. Since our investments
are carried at fair value, fluctuations between periods could be significant due
to changes to the inputs to our valuation process over time. For a further
discussion of our fair value measurements and fair value of investments, see the
above "-Critical Accounting Policies and Estimates-Fair Value Measurements."

                                      206

--------------------------------------------------------------------------------

Table of Co n tents

Critical Accounting Policies and Estimates - Insurance

Policy liabilities

Policy liabilities (collectively, "reserves,") are the portion of past premiums
or assessments received that are set aside to meet future policy and contract
obligations as they become due. Interest accrues on the reserves and on future
premiums, which may also be available to pay for future obligations. Global
Atlantic establishes reserves to pay future policy benefits, claims, and certain
expenses for its life policies and annuity contracts.

Global Atlantic's reserves are estimated based on models that include many
actuarial assumptions and projections. These assumptions and projections, which
are inherently uncertain, involve significant judgment, including assumptions as
to the levels and/or timing of premiums, benefits, claims, expenses, interest
credits, investment results (including equity market returns), credit spreads,
mortality, longevity, and persistency.

The assumptions on which reserves are based are intended to represent an
estimation of experience for the period that policy benefits are payable. Global
Atlantic reviews the adequacy of its reserves and the assumptions underlying
those reserves at least annually. Global Atlantic cannot, however, determine
with precision the amount or the timing of actual benefit payments. If actual
experience is better than or equal to the assumptions, then reserves would be
adequate to provide for future benefits and expenses. If experience is worse
than the assumptions, additional reserves may be required to meet future policy
and contract obligations. This would result in a charge to our net income during
the period in which excess benefits are paid or an increase in reserves occurs.

For a majority of Global Atlantic's in-force policies, including its universal
life policies and most annuity contracts, the base policy reserve is equal to
the account value. For these products, the account value represents its
obligation to repay to the policyholder the amounts held on deposit. However,
there are several significant blocks of business where policy reserves, in
addition to the account value, are explicitly calculated, including variable
annuities, fixed-indexed annuities, universal life products with secondary
guarantees, indexed universal life and preneed policies.

Guaranteed minimum death benefits ("GMDB")

Some of Global Atlantic's variable annuity and fixed-indexed annuity contracts
contain a GMDB feature that provides a guarantee that the benefit received at
death will be no less than a prescribed minimum amount, even if the account
balance is reduced to zero. This amount is based on either the net deposits paid
into the contract, the net deposits accumulated at a specified rate, the highest
historical account value on a contract anniversary, or sometimes a combination
of these values. If the GMDB is higher than the current account value at the
time of death, Global Atlantic incurs a cost equal to the difference.

Guaranteed minimum withdrawal benefits ("GMWB")

Global Atlantic issues fixed-indexed annuity and variable annuity contracts with
a guaranteed minimum withdrawal feature. GMWB are an optional benefit where the
contract owner is entitled to withdraw a maximum amount of their benefit base
each year.

Once exercised, living benefit features provide annuity policyholders with a
minimum guaranteed stream of income for life. A policyholder's annual income
benefit is generally based on an annual withdrawal percentage multiplied by the
benefit base. The benefit base is defined in the policy and is generally the
initial premium, reduced by any partial withdrawals and increased by a defined
percentage, formula or index credits. Any living benefit payments are first
deducted from the account value. Global Atlantic is responsible for paying any
excess guaranteed living benefits still owed after the account value has reached
zero.

The ultimate cost of these benefits will depend on the level of market returns
and the level of contractual guarantees, as well as policyholder behavior,
including surrenders, withdrawals, and benefit utilization. For fixed-indexed
annuity products, costs also include certain non-guaranteed terms that impact
the ultimate cost, such as caps on crediting rates that Global Atlantic can, in
its discretion, reset annually.

                                      207

--------------------------------------------------------------------------------

Table of Co n tents

GMDB and GMWB sensitivities

As of December 31, 2022, the GMDB and GMWB liability balance totaled
$1.3 billion. As of December 31, 2022, the liability balances for GMDB were
$36.0 million for fixed-indexed annuities and $33.8 million for variable
annuities. As of December 31, 2022, the liability balances for GMWB were
$1.2 billion for fixed-indexed annuities. The increase (decrease) to the GMDB
and GMWB liability balance as a result of hypothetical changes in projected
assessments, equity market prices, and annual equity growth is summarized in the
table below. This sensitivity considers the direct effect of such changes only
and not changes in any other assumptions used in or items considered in the
measurement of such balances.

                                    December 31, 2022
($ in thousands)
Balance                            $        1,252,206
Hypothetical change:
'+10% future assessments(1)                   (27,887)
'-10% future assessments(1)                    31,696
+10% equity market prices                     (18,298)
-10% equity market prices                       9,730
1% lower annual equity growth                   4,918

________________

Note: Hypothetical changes to the liability balance do not reflect the impact of
related hedges.

(1)The assessments used to accrue liabilities are generally based on investment
yields, realized gains and losses, rider charges, surrender charges, and
asset-based fees, such as mortality and expense fees.

Embedded derivatives

Global Atlantic's fixed-indexed annuity, variable annuity and indexed universal
life products contain equity-indexed features, which are considered embedded
derivatives and are required to be measured at fair value.

The embedded derivative is calculated as the present value of future projected
benefits in excess of the projected guaranteed benefits, using an option budget
as the indexed account value growth rate. In addition, the fair value of the
embedded derivative is reduced to reflect the risk of non-performance on Global
Atlantic's obligations (i.e., own credit risk).

Changes in interest rates, future index credits, Global Atlantic's own credit
risk, projected withdrawal and surrender activity, and mortality on
fixed-indexed annuity and indexed universal life contracts can have a
significant impact on the value of the embedded derivative.

Valuation of embedded derivatives - Fixed-indexed annuities

Fixed-indexed annuity contracts allow the policyholder to elect a fixed interest
rate of return or a market indexed strategy where interest credited is based on
the performance of an index, such as the S&P 500 Index, or other indexes. The
market indexed strategy is an embedded derivative, similar to a call option. The
fair value of the embedded derivative is computed as the present value of
benefits attributable to the excess of the projected policy contract values over
the projected minimum guaranteed contract values. The projections of policy
contract values are based on assumptions for future policy growth, which include
assumptions for expected index credits, future equity option costs, volatility,
interest rates, and policyholder behavior. The projections of minimum guaranteed
contract values include the same assumptions for policyholder behavior as are
used to project policy contract values. The embedded derivative cash flows are
discounted using a risk-free interest rate adjusted by a non-performance risk
spread tied to Global Atlantic's own credit rating.

                                      208

--------------------------------------------------------------------------------

Table of Co n tents

Valuation of embedded derivatives - Indexed universal life

Indexed universal life products allow a policyholder's account value to grow
based on the performance of certain equity indexes, which result in an embedded
derivative similar to a call option. The embedded derivative related to the
index is bifurcated from the host contract and measured at fair value. The
valuation of the embedded derivative is the present value of future projected
benefits in excess of the projected guaranteed benefits, using the option budget
as the indexed account value growth rate and the guaranteed interest rate as the
guaranteed account value growth rate. Present values are based on discount rate
curves determined at the valuation or issue date as well as assumed lapse and
mortality rates. The discount rate equals the forecast treasury rate plus a
non-performance risk spread tied to Global Atlantic's own credit rating. Changes
in discount rates and other assumptions such as spreads and/or option budgets
can have a substantial impact on the embedded derivative.

Valuation of embedded derivatives - Variable annuities

Variable annuity contracts offered and assumed by Global Atlantic provide the
contractholder with GMDB and/or GMWB. The liabilities for these benefits are
included in policy liabilities in the consolidated statement of financial
condition. The change in the liabilities for these benefits is included in
policy benefits and claims in the consolidated statements of operation.

Global Atlantic has issued variable annuity contracts with GMDB features. Global
Atlantic elected the fair value option to measure the liability for certain of
these variable annuity contracts, valued at $394.6 million as of December 31,
2022. Fair value is calculated as the present value of the estimated death
benefits less the present value of the GMDB fees, using 1,000 risk neutral
scenarios. Global Atlantic discounts the cash flows using U.S. Treasury rates
plus an adjustment for its own credit risk.

Global Atlantic also issues variable annuity contracts with a GMWB. The GMWB
feature represents an embedded derivative. The embedded derivative is required
to be bifurcated and measured at fair value. This liability is calculated as the
present value of the excess GMWB claims less the present value of GMWB fees,
using 1,000 risk neutral scenarios. Global Atlantic discounts the cash flows
using U.S. Treasury rates plus an adjustment for its own company credit risk.

As of December 31, 2022, the embedded derivative liability balance totaled $1.9
billion for fixed-indexed annuities, $337.9 million for indexed universal life
and $2.3 million for variable annuities. As of December 31, 2022, variable
annuities accounted for using the fair value option was $394.6 million. The
increase (decrease) to the embedded derivatives on fixed-indexed annuity,
indexed universal life, and variable annuity products and the increase
(decrease) in the reserves for variable annuities accounted for using the fair
value option as a result of hypothetical changes in interest rates,
non-performance risk premium, and equity market prices is summarized in the
table below. This sensitivity considers the direct effect of such changes only
and not changes in any other assumptions used in or items considered in the
measurement of such balances.

                                                             As of December 31, 2022
                                                 FIA             IUL            VA         VA (FVO)
($ in thousands)
Balance                                     $ 1,853,031      $ 337,860      $  2,335      $ 394,638

Hypothetical change:
+50 bps interest rates                          (44,023)        (5,524)      (38,491)       (20,995)
-50 bps interest rates                           46,270          4,122        47,277         22,609
'+50bps non-performance risk premium            (44,023)        (5,524)      (15,142)       (13,534)
'-50bps non-performance risk premium             46,270          4,122        18,599         14,575
+10% equity market prices                       338,258         61,879       (25,892)        (9,826)
-10% equity market prices                      (166,396)       (50,597)       28,771          9,826


________________

Note: Hypothetical changes to the liability balances do not reflect the impact
of related hedges.

Valuation of embedded derivatives in modified coinsurance or funds withheld

Global Atlantic's reinsurance agreements include modified coinsurance and
coinsurance with funds withheld arrangements that include terms that require
payment by the ceding company of a principal amount plus a return that is based
on a proportion of the ceding company's return on a designated portfolio of
assets. Because the return on the funds withheld receivable or payable is not
clearly and closely related to the host insurance contract, these contracts are
deemed to contain embedded

                                      209

--------------------------------------------------------------------------------

Table of Co n tents

derivatives, which are measured at fair value. Global Atlantic is exposed to
both the interest rate and credit risk of the assets. Changes in discount rates
and other assumptions can have a significant impact on this embedded derivative.
The fair value of the embedded derivatives is included in the funds withheld
receivable at interest and funds withheld payable at interest line items on the
consolidated statement of financial condition. The change in the fair value of
the embedded derivatives is recorded in net investment-related gains (losses) in
the consolidated statement of operations.

As of December 31, 2022, the embedded derivative balance for modified
coinsurance or funds withheld arrangements was a $3,500 million net asset ($12.8
million in funds withheld receivables at interest, and $(3,487.8) million in
funds withheld payable at interest). The increase (decrease) to the balance as a
result of hypothetical changes in credit spreads and interest rates is
summarized in the table below. This sensitivity considers the direct effect of
such changes only and not changes in any other factors that impact the embedded
derivative balance for modified coinsurance or funds withheld arrangements.

                                                                              As of December 31, 2022
                                                                        Embedded
                                                                      derivative on
                                                                     funds withheld         Embedded derivative
                                                                      receivable at          on funds withheld
                                                                        interest            payable at interest
($ in thousands)
Balance                                                             $       12,785          $      (3,487,766)
Hypothetical change:
+50 bps credit spreads                                                     (41,714)                  (781,981)
-50 bps credit spreads                                                      41,714                    849,203
+50 bps interest rates                                                     (12,880)                  (739,840)
-50 bps interest rates                                                      18,078                    807,062


________________

Note: Hypothetical changes to the funds withheld receivable and payable embedded
derivative balances do not reflect the impact of related hedges or trading
assets which back the funds withheld at interest.

Recently Issued Accounting Pronouncements

For a full discussion of recently issued accounting pronouncements, see Note 2
"Summary of Significant Accounting Policies" in our financial statements.

                                      210

--------------------------------------------------------------------------------

Table of Co n tents