KKR(US:KKR)2020-08-07 23:58Financial Performance - Total revenues for Q2 2020 were $1,331,994, an increase of 12.9% compared to $1,179,864 in Q2 2019[28] - Net income attributable to KKR & Co. Inc. was $698,628 for Q2 2020, up 35.9% from $514,393 in Q2 2019[28] - Investment income for Q2 2020 was $1,582,503, compared to $1,156,076 in Q2 2019, representing a growth of 36.8%[28] - The company reported net gains from investment activities of $1,480,869 in Q2 2020, up from $1,037,985 in Q2 2019, an increase of 42.6%[28] - Net income for the three months ended June 30, 2020, was $1,951,165, compared to $1,361,730 for the same period in 2019, representing an increase of approximately 43.3%[31] - Comprehensive income attributable to KKR & Co. Inc. for the three months ended June 30, 2020, was $708,756, up from $522,580 in 2019, reflecting a growth of about 35.5%[31] - KKR's fee-related earnings (FRE) for the first half of 2020 were $774,045, down from $891,989 in the same period of 2019, a decrease of 13.2%[28] - The company reported a comprehensive loss of $(2,301,665) for the six months ended June 30, 2020, compared to a comprehensive income of $2,989,103 in 2019, marking a significant decline[31] - The net income attributable to KKR & Co. Inc. for the six months ended June 30, 2020, was $(584,386), a significant decrease from $1,231,633 in 2019[31] - KKR reported a net loss of $2,276,788 for the six months ended June 30, 2020, compared to a net income of $2,988,776 for the same period in 2019[37] Assets and Liabilities - Total assets increased to $62,110,382 as of June 30, 2020, compared to $60,899,319 at the end of 2019, reflecting a growth of 2%[19][21] - Total liabilities rose to $32,715,720 as of June 30, 2020, compared to $30,396,945 at the end of 2019, marking an increase of 7.6%[19][21] - Total equity decreased to $29,394,662 as of June 30, 2020, from $30,502,374 at the end of 2019, a decline of 3.6%[21] - KKR's total stockholders' equity was reported at $9,954,868 as of June 30, 2020[35] - Total liabilities reached $16,025,098 million, with debt obligations of consolidated CFEs accounting for $15,293,024 million[178] - The company reported a total of $2,112,831 million in assets as of June 30, 2020[173] - KKR's total borrowings stood at $28,676,899 as of June 30, 2020, compared to $27,379,075 as of December 31, 2019, indicating an increase of about 4.7%[216] Cash and Cash Equivalents - KKR's cash and cash equivalents increased to $2,454,541 as of June 30, 2020, compared to $2,346,713 at the end of 2019, an increase of 4.6%[19] - KKR's cash and cash equivalents at the end of the period were $3,738,629, an increase from $3,237,416 at the beginning of the period[40] Investment Activities - The firm made investments totaling $17,200,657 during the six months ended June 30, 2020, compared to $15,312,092 in the prior year[37] - KKR's investments consist primarily of private equity, credit, real assets, and other investments, with a focus on below investment grade corporate debt securities[61][62] - KKR's real assets investments include energy-related assets, infrastructure assets, and residential and commercial real estate[64] - KKR's energy investments include working and royalty interests in oil and natural gas properties, which are reflected at fair value as of the end of the reporting period[68] - The company recognized an $88.3 million impairment charge during Q2 2020, indicating a significant decline in growth expectations for one of its equity method investments[171] Fair Value Measurements - Fair value measurements for KKR's investments are classified into three levels based on the observability of inputs, with Level III requiring significant management judgment[89] - KKR employs market comparables analysis and discounted cash flow analysis for determining the fair value of private equity investments[99] - The fair value of private equity investments was $13,573,075 million, with $10,810,113 million classified as Level III[174] - The total balance of Level III investments at the end of the period was $26,072,813, an increase from $24,542,122 at the beginning of the period, reflecting a growth of approximately 6.2%[180] - Net unrealized gains for Level III investments amounted to $1,584,843, compared to a loss of $320,950 in the previous period, indicating a significant recovery in asset valuations[180] Revenue Recognition - KKR's revenues from contracts with customers include management fees, transaction fees, and monitoring fees, with management fees being variable based on capital committed or invested[116] - The company recognizes revenue when performance obligations are satisfied, with management fees recognized over time as services are rendered[116] - Incentive fees range from 5% to 20% of investment gains and are recognized at the end of each fund's measurement period[124] COVID-19 Impact - The impact of COVID-19 on KKR's business remains uncertain, with potential adverse effects driven by various unpredictable factors[51] - The ongoing COVID-19 pandemic has led to significant volatility in financial markets, impacting KKR's stock prices and overall economic conditions[50] Other Financial Metrics - KKR's commitments to unconsolidated investment funds amounted to $3.1 billion as of June 30, 2020, with no additional financial support provided beyond this amount[207] - The maximum exposure to loss for unconsolidated VIEs decreased to $4,752,434 as of June 30, 2020, down from $5,768,742 as of December 31, 2019, representing a reduction of approximately 17.6%[208] - The company reported $311.6 million in unsettled investment sales as of June 30, 2020, significantly up from $86.0 million at the end of 2019[200]