KKR Investor Presentation

2011 KKR Investor Day
March 15, 2011
Legal Disclosures
This presentation is prepared for KKR & Co. L.P. (NYSE: KKR) for the benefit of its public unitholders. This presentation is solely for informational purposes in connection with evaluating the business, operations and financial results of KKR & Co. L.P. and its consolidated subsidiaries (collectively, KKR). Any discussion of specific KKR entities is provided solely to demonstrate such entities role within the KKR organization and their contributions to the business, operations and financial results of KKR & Co. L.P. This presentation is not and shall not be construed as an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities, any investment funds, vehicles or accounts, any investment advice, or any other service by any KKR entities, including Kohlberg Kravis Roberts & Co. L.P., KKR Asset Management LLC or KKR Capital Markets LLC. Nothing in this presentation constitutes the provision of any tax, accounting, financial, investment, regulatory, legal or other advice by KKR or its advisors. This presentation may not be referenced, quoted or linked by website, in whole or in part, except as agreed to in writing by KKR & Co. L.P. This presentation contains certain forward-looking statements pertaining to KKR, including certain investment funds, vehicles and accounts that are managed by KKR. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These forward-looking statements are based on KKRs beliefs, assumptions and expectations of future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKRs business, financial condition, liquidity and results of operations, including but not limited to assets under management, fee paying assets under management, fee related earnings, economic net income, committed dollars invested, uncalled commitments and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR's business strategies; availability, terms and deployment of capital; availability of qualified personnel and expenses of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKRs competition. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKRs business strategy is focused on the long-term and financial results are subject to significant volatility. Additional information about factors affecting KKR, including a description of risks that may be important to a decision to purchase or sell any common units of KKR & Co. L.P., can be found in KKR & Co. L.P.s Annual Report on Form 10-K filed with the SEC and its other filings with the SEC, which are available at www.sec.gov. The statements contained in this presentation are made as of March 10, 2011, unless another time is specified in relation to them, and access to this presentation at any given time shall not give rise to any implication that there has been no change in the facts set forth in this presentation since that date. All financial information in this presentation is as of December 31, 2010 unless otherwise indicated. Certain information presented in this presentation have been developed internally or obtained from sources believed to be reliable; however, KKR does not give any representation or warranty as to the accuracy, adequacy, timeliness or completeness of such information, and assumes no responsibility for independent verification of such information. For additional important information, please see the section entitled Important Information located in Appendix III at the end of this presentation.
Table of Contents
Presentations Welcome Introduction Private Equity Overview North American Private Equity European Private Equity Asian Private Equity Driving Value Energy & Infrastructure Global Public Affairs Business Development & Strategy KKR Asset Management KKR Capital Markets Client & Partner Group Financial Overview Positioning KKR for the Future Appendices Appendix I: Supplemental Financial Information Appendix II: Speaker Biographies Appendix III: Important Information 202 214 224 Page Number 4 7 13 32 45 56 71 87 109 117 128 144 159 172 186
Welcome
Unit Price Performance Since KKR/KPE Combination

KKR Total Return(1): 88%
100%
SPX Total Return: 26%
Performance Since KPE Transaction % Price Performance
80%
60%
KKR Public on Euronext
KKR Relists on NYSE
40%
20%
0%
-20% 9/30/2009
Note: (1)
12/30/2009
3/30/2010
6/30/2010
9/30/2010
12/30/2010
Stock price performance as of 3/10/2011. Past performance is no guarantee of future results. See Important Information for additional disclosures. Incorporates dividends paid up to 3/10/2011.
Agenda for the Day

Time 8:00 AM 8:05 8:35 8:50 9:05 9:20 9:35 10:05 10:25 10:55 11:10 11:30 12:15 PM 1:20 1:50 2:20 3:05 3:25 3:55 5:00 Presentation Welcome Introduction Private Equity Overview North American Private Equity European Private Equity Asian Private Equity Driving Value Break Energy & Infrastructure Global Public Affairs Business Development & Strategy KKR Asset Management Lunch KKR Capital Markets Client & Partner Group Financial Overview Break Positioning KKR for the Future Q&A Cocktail Reception
Todd A. Fisher Chief Administrative Officer Management Team Craig J. Farr Global Head of KKR Capital Markets Suzanne O. Donohoe Global Head of the Client & Partner Group William J. Janetschek Chief Financial Officer Marc S. Lipschultz Global Head of Energy and Infrastructure Kenneth B. Mehlman Global Head of Public Affairs Scott C. Nuttall Global Head of Capital and Asset Management William C. Sonneborn Global Head of KKR Asset Management
Presenter(s)
Scott C. Nuttall Global Head of Capital and Asset Management George R. Roberts and Henry R. Kravis Co-Founders, Co-Chairmen, and Co-CEOs Alexander Navab Co-Head of North American Private Equity Michael W. Michelson Co-Head of North American Private Equity Johannes P. Huth Head of KKR Europe Joseph Y. Bae Head of KKR Asia Dean B. Nelson Global Head of KKR Capstone
Location Cotillion Room Cotillion Room Cotillion Room Cotillion Room Cotillion Room Cotillion Room Cotillion Room Regency Room Cotillion Room Cotillion Room Cotillion Room Cotillion Room Wedgwood Room Cotillion Room Cotillion Room Cotillion Room Regency Room Cotillion Room Cotillion Room Wedgwood Room
Introduction
George R. Roberts
Introduction
Henry R. Kravis
Our Reporting Segments
Private Markets $46 bn AUM

Private Equity Natural Resources Infrastructure
Public Markets $15 bn AUM

Liquid Credit Mezzanine Special Situations Equity Strategies
Capital Markets & Principal Activities $4.8 bn of investments

Capital Markets Balance Sheet
Note:
Figures as of 12/31/2010. See Important Information for our calculation of assets under management.
How Unitholders Participate in Our Success
Fee Related Earnings
Significant recurring portion
Carried Interest
Substantial upside opportunity from profit participation
Balance Sheet Substantial upside opportunity from 100% Investment Income of investment gains
10
Prospects for Growth
Evolving and Growing
Building and Scaling
Liquid Credit Private Equity Natural Resources/ Infrastructure
Mezzanine/ Special Situations
Long/Short Equity
11
Macro Trends Augmenting Our Opportunities
Investors seeking return
More dollars allocated to alternatives
Consolidation of general partner relationships
12
Private Equity Overview

Alexander Navab
13
Private Equity Overview

Leading Global Franchise Strong Historical Returns Distinctive Strategy and Resources
34 years, 185+ investments, $49+ bn of equity deployed Highly experienced investment team $28 bn raised across last fundraising cycle with $11+ bn dry powder today 2.4x gross MOIC, 26% gross IRR, and 20% net IRR on fully invested funds(1) S&P 500 outperformance of 7.6% on a net basis across 16 private equity funds raised since firms inception Vast global sourcing network Substantial resources in operations, capital markets, and stakeholder management, plus senior advisors Use of firm-wide brain to find and act on ideas
Aligned with Investors

Note: (1) (2)
Biggest investor in our own funds and deals with over $6 bn invested or committed(2)
Data as of 12/31/2010. Past performance is no guarantee of future results. See Important Information for details regarding returns and indices. Fully invested funds include the 1976 Fund through the European Fund II. Includes over $5 bn of balance sheet capital invested in or committed to our funds and transactions and $1 bn of personal investments by KKR principals.
14
Growing Private Equity AUM

Global franchise with $45 bn in AUM
Over $11 bn in dry powder
R CAG 21%
$36.5 bn $31.9 bn $31.8 bn
$44.8 bn $38.8 bn
$19.7 bn $14.4 bn
2004
2005
2006
2007
2008
2009
2010
Invested
Dry Powder
Note:
See Important Information for our calculation of assets under management.
15
Decades of Experienceand Decades Investing Together

Deep, tenured team with extensive experience
Private Equity Investment Committee: over 30 years average industry experience per member for a total of nearly 250 years of experience Members, Managing Directors, Directors: 22 years average experience KKR Capstone: founded in 2000; deep operational/managerial experience Additional resources: 30 senior advisors globally; stakeholder engagement through Global Public Affairs; capital markets expertise through KKR Capital Markets
59 31 18 63 2005 2007 Private Equity Investment Professionals
Note: KKR Capstone is owned and controlled by its senior management and not KKR.
125
138
2010 KKR Capstone
16
History of Innovation and Creativity
First Billion-Dollar Buyout First Public Company Buyout by Tender Offer Largest Buyouts Across Many Regions Worldwide(1) Pioneer in Complex Industries
(1)
Examples include, among others, the largest completed North American buyout (Energy Future Holdings), European buyout (Alliance Boots), and South Korean buyout (Oriental Brewery).
17
Strong Historical Performance

26% gross and 19% net IRRs since 1976 inception
Outperformed S&P 500 by ~8% on a net basis 3.3x multiple of invested capital for realized/partially realized investments(1) No fully realized funds have returned less than a 2.0x multiple of capital
Realized/Partially Realized(1)
95 companies
All Investments
152 companies
2.0x 3.3x
$64 bn
$49 bn $98 bn
$19 bn
Capital Invested
Note: (1)
Value Realized
Capital Invested
Total Value
Data includes all private equity funds since inception. Past performance does not guarantee future results. See Important Information for additional disclosures. Capital invested and value realized are based on fully realized investments, the realized portion of partially realized investments, and written-off investments through 12/31/2010. Value realized does not include dividends received from companies where KKR has not sold any portion of its original equity.
18
Performance in Periods of Dislocation

3-Year % Change in S&P 500 -0.8% -3.8% -7.1% 6.7% 8.5% 4.0% -3.3% -15.5% -1.2% 3.3% 8.1% 9.7% 7.4% 9.5% 0.6% KKR Net IRR 16.0% 2.3% 0.5% 2.8% 17.3% 37.9% 26.1% 15.6% 6.4% 19.0% 6.0% 29.7% 28.0% 25.1% 32.9% S&P 500 IRR(1) 7.3% -1.3% -1.3% -1.0% 2.4% 7.6% 7.5% 2.7% -0.6% 14.9% 11.9% 13.0% 18.4% 18.1% 15.9% KKR Outperformance 8.7% 3.6% 1.8% 3.8% 14.9% 30.3% 18.6% 12.9% 7.0% 4.1% -5.9% 16.7% 9.6% 7.0% 17.0%
Period
Great Recession 9/11 & corporate scandals (e.g., Enron, WorldCom) Largest one-day percentage drop in DJIA
2008-2010 2007-2009 2006-2008 2005-2007 2004-2006 2002-2004 2001-2003 2000-2002 1999-2001 1992-1994 1990-1992 1986-1988 1981-1983 1979-1981 1977-1979
Note:
(1)
The table above presents net internal rates of returns calculated as of 12/31/2010 for KKR private equity investments that were made during threeyear periods in which the S&P 500 returned less than 10%. Internal rates of return are computed on a dollar-weighted basis, which takes into account the timing of cash flows, the amounts invested at any given time and unrealized values as of the valuation date. KKR Net IRR is calculated after the general partners profit participation. Past performance is no guarantee of future results. Please see Important Information for additional disclosures. Market indices include dividends reinvested. The market index returns assume that on the day a portfolio investment is made, a hypothetical investment in a matching amount is made in the given index. For each date on which either a portion or all of the portfolio investment is sold, a hypothetical index multiple (factor) is calculated by comparing the change in index value between the two dates. The cost of the investment sold (or portion of cost sold) is multiplied by this factor, resulting in a hypothetical index value. The return is calculated using these dates of investment and hypothetical value(s) generated.
19
Portfolio Built on Patient, Selective Investing

Thoughtful investment process means a small fraction of evaluated investments are made Senior advisors Other business lines Industry expertise
~900 investments evaluated in 2010 Prioritization by industry team ~320 investments discussed at Investment Committee(1) Iteration with Investment Committee and involvement of KKR Capstone, Capital Markets, Public Affairs 16 completed(2)
Note: (1) (2) Data represents global private equity deal flow for 2010; includes a small number of opportunities related to infrastructure transactions. Most investments are presented to the Investment Committee numerous times throughout the diligence process; however, this count includes each unique investment opportunity once and does not include subsequent presentations. Includes transactions announced or closed in 2010.
KKR relationships
20
Sourcing Network Leads to Unique Opportunities

Strong reputation, decades of relationship-building, and resources valued by management teams yield investments not available to others
Limited Process(1) 35% Proprietary 48%
Auction 17%
Note: (1) Data in the chart above reflects all private equity investments announced or completed from the inception of the Millennium Fund in 2002 through 2010. Limited process is defined as three or fewer parties, including KKR.
21
Expertise Across Transaction Sizes

Over 90% of our 185+ private equity transactions have had transaction values less than $5 bn; ~80% less than $2 bn(1)
All Transactions by Enterprise Value(1)
>$20 bn 3% $10-20 bn 3% $5-10 bn 3% Large Buyout (>$5 bn) 21%
Current Portfolio by Type(2)
$2-5 bn 11%
JV/Growth/ Structured Equity 29%
$1-2 bn 16%
<$1 bn 64%
Small to Medium Buyout (<$5 bn) 50%
(1) (2)
Includes announced and completed transactions from inception to 12/31/2010. Reflects portfolio as of 12/31/2010.
22
Global Portfolio
62 Companies
~$200 bn in Aggregate Annual Revenue ~900,000 Employees 15 Industries 18 Countries
Bharti Infratel
Modern Dairy
Hilcorp Resources
TC Energy KKR Debt Investors
Note:
Portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. Excludes Weld North and RPM Energy Partners, two companies to which KKR has committed capital but which have not yet been funded.
23
Strong Operating Performance at Portfolio

Aggregate Portfolio Revenue Aggregate Portfolio EBITDA
7% 15%
$191 bn $204 bn
$38 bn
$33 bn
2009
Note:
2010
2009
2010
Includes all portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. Data for last 12 months ended 12/31/2010 except for portfolio companies with publicly traded securities which have non-calendar fiscal years, in which case last 12 months data as of the latest reported fiscal quarter is shown. Data not included for CICC, Dalmia Cement, El Paso Midstream, Hilcorp Resources/TC Energy, KKR Debt Investors, Rundong Auto Group, Tianrui, VATS, and Visma either because these are recent investments/data is not available or because metrics are not relevant. Past performance is no guarantee of future results.
24
Focus on Capital Structure

Leverage reductions driven by increased cash flow, debt paydown, and refinancings
Aggregate Portfolio Deleveraging
$46 bn refinanced across global KKR portfolio in 2009 and 2010

5.5x
-14%
~80% of portfolio maturities due in 2014 and thereafter

Note:
4.8x
2009
2010
Chart reflects net debt/LTM EBITDA for all portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. As of 12/31/2010 except for public portfolio companies with non-calendar fiscal years, in which case data as of the latest reported fiscal quarter is shown. Data not included for CICC, Dalmia Cement, El Paso Midstream, Hilcorp Resources/TC Energy, KKR Debt Investors, Rundong Auto Group, Tianrui, VATS, and Visma either because these are recent investments/data is not available or because metrics are not relevant. Past performance is no guarantee of future results.
25
Our Post-Investment Approach: Drive Value
Industry Expertise
Extensive understanding Strong networks
Portfolio Management
Oversight and monitoring Experienced senior advisors
Global Public Affairs

Active management of responsibilities to stakeholders
Global Resources Drive Value
KKR Capstone
100-Day Plans Active value creation
KKR Capital Markets

Acquisition financing and syndication assistance Exit and strategic refinancing plans
26
Recent Momentum
LP Dollars Invested(1)
$3.1 bn $3.2 bn
Cash Back to LPs

$3.6 bn
$1.4 bn
$0.5 bn $0.8 bn
2008
2009
2010
2008
2009
2010
2010 Increases in Fund Values

47% 48% 39% 26% 29% 51%
Relative 2010 Performance

33%
15%
2%
1996
(2)
2006
Millennium
European
European II
Asian
European III
KKR PE Funds Gross
S&P 500
(1) (2)
Limited partner private equity dollars invested, including follow-on investments. Excludes bridge and recyclable capital. See Important Information for additional disclosures. The general partner of the 1996 Fund was not contributed to KKR in the Combination Transaction, and KKR will not benefit from its investment returns.
27
Monetization Events Continuing in 2011

Over $2 bn in limited partner distributions from 2011 activity
IPO Tianrui(1) Avago Nielsen Maxeda(2) DSD Seven Media(1) Legrand HCA
Note: (1) (2)
Secondary
Strategic Sale
Past performance is no guarantee of future results. Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical. Distributions from certain of these transactions may not generate distributable cash carry to KKR unitholders. Partial sale. Strategic sale of Fashion division.
28
Post-Recession Story Playing Out

We are optimistic about the current deal environment Off to a strong start with investments made in the last three years New Investments, 2008 to 2010(1)
1.3x gross MOIC
$9.1 bn of value
$6.8 bn of equity invested
21% gross IRR
(1)
As of 12/31/2010. Includes all initial and follow-on investments made in transactions completed between 1/1/2008 and 12/31/2010; does not include any follow-ons in transactions whose original investment occurred prior to 1/1/2008. Past performance is no guarantee of future results. See Important Information for details regarding return calculations.
29
Significant Levers for Continued Growth

Proven record of developing our business to capture increasing volume of investment activity and better serve our investors
Meaningful Regional Successor Funds Strategy-Specific Funds
Regional Expansion
Successor funds to each regional fund North America Asia Europe
Strategy-specific funds capitalizing on market trends China Growth
Exploring opportunities in Latin America
30
Well Positioned to Capitalize on a Strong PE Environment
Long history of innovation and growth Proven team Strong returns Differentiated approach World-class portfolio $11+ bn of dry powder
Strong and accelerating momentum Recovering economy Open credit markets Strengthening equity markets Attractive fundamentals for private equity on a global basis
Great opportunity for KKR in private equity

31
North American Private Equity

Michael W. Michelson
32
Bright Prospects in North America
Resource Depth and Breadth
Experience and Results
Attractive Environment
33
North American Private Equity Team

Deep team of 89 investment and operating professionals with $25 bn of AUM More than three decades of experience investing in North America Extensive additional resources through KKR Capital Markets, Global Public Affairs, senior advisors, and the Client & Partner Group
31 23 12 36 49 58
2005
2007
2010
North American KKR Capstone Team
North American PE Investment Professionals
Note:
As of 12/31/2010. KKR Capstone is owned and controlled by its senior management and not KKR.
34
Deep Industry Expertise

Facilitates in-depth industry knowledge and a network of industry experts Enables us to create proprietary investment opportunities Consumer Products Energy & Infrastructure Financial Services Industrials Healthcare Media & Communications Allows us to see value creation opportunities others do not
Note: Portfolio companies identified above may not be representative of the entire portfolio.
Helps identify trends early so we can capitalize on emerging investment themes
Retail Technology
35
Sourcing Model
~450 North American investment opportunities evaluated in-depth in 2010 ~200 discrete opportunities discussed with the PE Investment Committee(1) 5 investments committed to or closed(2)
By Sourcing By Size >70% of opportunities reviewed at IC were proprietary or limited process(3) By Industry
Energy Retail 10% 10%
Auction 29% Proprietary or Limited Process 71%(3)
<$1 bn 45%
$1-5 bn 44%
Financials 9% Industrial 7% Other 4% Media & Comm. 23%
Healthcare 11% Infra 3% Consumer 11% Tech 12%
>$5 bn 11%
Note: (1) (2) (3)
Data represents North America private equity deal flow for 2010; includes a small number of opportunities related to infrastructure transactions. Pie charts based on all opportunities evaluated. Most investments are presented to the Investment Committee numerous times throughout the diligence process; however, this count includes each unique investment opportunity once and does not include subsequent presentations. Includes transactions announced or closed in 2010. Limited process is defined as three or fewer parties, including KKR.
36
Current North American Private Equity Portfolio

Strong portfolio of world-class franchises(1)
Hilcorp Resources
TC Energy
KKR Debt Investors
Note: (1)
Portfolio companies identified above may not be representative of the entire portfolio, and results from these companies may not be typical. North American portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. Excludes Weld North and RPM Energy Partners, two companies to which KKR has committed capital but which have not yet been funded.
37
Portfolio Performance Driven by Strong Operations Team

Aggregate Revenue
~70% of portfolio companies increased revenue
Aggregate EBITDA
~85% of portfolio companies increased EBITDA
Aggregate Leverage(1)
~72% of portfolio companies decreased net leverage
3% 10%
$125 bn $122 bn $22 bn $24 bn
-9%
6.0x 5.5x
2009
Note:
2010
2009
2010
2009
2010
(1)
Includes all North American portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. Data for last 12 months ended 12/31/2010 except for portfolio companies with publicly traded securities which have noncalendar fiscal years, in which case last 12 months data as of the latest reported fiscal quarter is shown. Data not included for El Paso Midstream, Hilcorp Resources/TC Energy, and KKR Debt Investors either because these are recent investments/data is not available or because metrics are not relevant. Past performance is no guarantee of future results. See Important Information for additional disclosures. Reflects net debt/LTM EBITDA.
38
Focus on Improving Capital Structures

North American portfolio companies refinanced ~$43 bn of debt in 2009 and 2010 ~84% of debt now matures in or after 2014
Size (mm) $760 $8,398 $5,087 $1,400 $6,311 $498 $4,670 $1,550 $7,546 $6,500
Note:
Description Revolver, Senior Notes Amend & Extend, Bonds Amend & Extend, Loan, Notes, Tender Offer Amend & Extend, Tender Offer ABL Extension, Senior Notes Complete Recapitalization Amend & Extend Amend & Extend, Dividend Recapitalization Senior Notes, Exchange Offer Amend & Extend, Bonds
Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical. Past performance is no guarantee of future results.
39
Strong Long-Term Track Record

~$22.5 bn invested through nine mature private equity funds in North America(1) 26.1% gross IRR and 2.8x gross MOIC across these funds Every mature fund has generated a gross MOIC of 2.0x or greater North American Private Equity Returns Since Inception(1)
26.1% 19.9% 12.8% 12.4%
KKR North American KKR North American PE Funds Gross PE Funds Net
Note: (1) (2)
S&P 500(2)
Russell 3000(2)
Returns reflect performance from inception through 12/31/2010. Past performance does not guarantee future results. MOIC stands for multiple of invested capital. See Important Information for additional disclosures. KKRs mature North American private equity funds are those which have been fully invested and include the 1976, 1980, 1982, 1984, 1986, 1987, 1993, 1996, and Millennium Funds. Includes reinvestment of dividends.
40
Recent Performance
Recent North American fund outperformance translates into ~$11 bn in incremental value versus the same amounts invested in the S&P 500 Outperformance vs. S&P 500(1)
1517 bps
1065 bps 662 bps
1996 Fund
Net IRR: S&P 500(3): Gross MOIC:
(1) (2) (3)
(2)
Millennium Fund
18.35% 3.18% 1.97x
2006 Fund
4.31% (2.31%) 1.22x
13.30% 2.65% 2.07x
All data as of 12/31/2010. Past performance is no guarantee of future results. See Important Information for more details. The general partner of the 1996 Fund was not contributed to KKR in the Combination Transaction, and KKR will not benefit from its investment returns. Includes reinvestment of dividends. See Important Information for additional disclosures.
41
2010 Valuation Changes

Significant outperformance in active North American private equity funds during 2010 $3.3 bn of distributions from the 1996, Millennium, and 2006 Funds in 2010
47.1%
26.5%
28.7%
15.1%
1996 Fund
(1) (2)
(1)
Millennium Fund
2006 Fund
S&P 500
(2)
The general partner of the 1996 Fund was not contributed to KKR in the Combination Transaction, and KKR will not benefit from its investment returns. Includes reinvestment of dividends. See Important Information for additional disclosures.
42
Attractive Fundamentals for Buyouts

Great macro backdrop for private equity
Attractive Credit Markets
Leveraged Loan Issuance(1)
$536 bn $481 bn
Reasonable Equity Valuations

30x 25x
$287 bn
High Yield Issuance(1)
S&P 500 Trailing Price-to-Earnings Ratio(2)
$144 bn
$155 bn $144 bn
$234 bn $166 bn
20x 15x 10x Dec-90
$69 bn $75 bn
2006
2007
2008
2009
2010
Dec-95
Dec-00
Dec-05
Dec-10
Companies Priced Off Trough Earnings

90 80 70 60 50 40 Annual S&P 500 Operating Earnings(3)
Worst of Recession Over

65 55 45 65 35 25 Conference Board University of Michigan 6/2009 12/2009 6/2010 60 55 12/2010 Consumer Confidence(4) 80 75 70
2005
Note: (1) (2) (3) (4)
2006
2007
2008
2009
2010
12/2008
Historic market trends may not be predictive of future market performance or results. S&P LCD News, 2010. Bloomberg. Standard & Poors, February 2010. Morgan Stanley research, December 2010.
43
North American Private Equity: Well Positioned for the Future
Resource Depth and Breadth
World-class team of professionals Differentiated strengths
Experience and Results
Impressive track record Strong portfolio
Attractive Environment
Improving economic and capital markets conditions
44
European Private Equity

Johannes P. Huth
45
Strong European Presence

KKR has been investing in Europe since 1996 Private Equity, Infrastructure, Mezzanine, Credit, KKR Capital Markets (KCM), Client & Partner Group, KKR Capstone $15.3 bn of capital in the region(1) Raised four funds with over $15 bn in capital commitments 33 completed European transactions since European operations began in 1996 across 11 industries in 13 countries
Note: (1)
KKR European investment footprint
KKR Capstone is owned and controlled by its senior management and not KKR. Figures as of 12/31/2010. Reflects market value of investments in European funds and companies plus uncalled commitments from European funds.
46
Significant Investment Growth in Europe Since 1996(1)

European Private Equity Investments and Commitments
Annex Fund European Fund III European Fund II European Fund I European Investments through Other KKR Funds
$15.3 bn $12.9 bn
35
R AG C
$5.4 bn
$11.0 $10.8 $10.2 bn bn bn
$11.4 bn
$4.9 $4.9 $4.8 $3.9 bn bn bn $3.3 bn bn $0.2 $0.4 bn bn $0.7 bn
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: As of 12/31/2010. Investments and commitments calculated as market value of investments in a given period plus uncalled commitments. European Investments through Other KKR Funds reflects values of European investments made prior to the European funds creation, and other European coinvestments made by global funds subsequent to the European funds establishment. Figures include general partner investments and commitments as well as investments and commitments made by KPE. See Important Information for additional disclosures. Newsquest was KKRs first investment in Europe, occurring in 1996. Four investments predate the 1999 inception of the first dedicated European Fund.
(1)
47
Resource Build-Out Across Europe

Private equity and operational professionals supported by broader resources of the firm
European KKR Capstone Team European PE Investment Professionals
17 9 9 6 3 8
1999
14
8 28 34 33 39
4 17
2003
6 16
2004
11
2000
13
2001
15
2002
21
21
2005
2006
2007
2008
2009
2010
Note:
KKR Capstone is owned and controlled by its senior management and not KKR.
48
Deep Industry and Country Expertise

Industry and country expertise allows us to see value creation opportunities others do not, and enables us to create proprietary investment opportunities
Core European Industries

Business Services Consumer Products and Retail
Core Geographic Coverage

UK France Benelux
Energy and Infrastructure Industrials, Building Materials, and Chemicals
Financial Services Germany Media and Communications Scandinavia Southern Europe
Healthcare
Technology
Note:
As of 12/31/2010. Portfolio companies identified above may not be representative of the entire portfolio.
49
European Portfolio Performance

Aggregate Revenue Aggregate EBITDA Aggregate Leverage(1)
13% 20%
$68 bn $60 bn
-24%
$11 bn
5.1x 3.9x
$9 bn
2009
Note: (1)
2010
2009
2010
2009
2010
Includes all European portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction, except Visma, a recently closed acquisition. Past performance is no guarantee of future results. See Important Information for additional disclosures. Reflects net debt/LTM EBITDA.
50
Capital Returned in 2009 and 2010

$1.6 bn returned in 2009 and 2010 across European funds and investments, with a further $1.7 bn expected in the first quarter of 2011(1)
IPO Avago DSD Legrand Maxeda(2) Rockwood(3) TDC
Note: (1) (2) (3)
Secondary
Strategic Sale
Past performance is no guarantee of future results. Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical. Certain distributions from these transactions may not generate distributable cash carry to KKR unitholders. Of capital returned in 2009 and 2010, $1.1 bn was attributable to European funds. Of expected first quarter 2011 distributions, $1.0 bn is attributable to European funds. Strategic sale of Fashion division. Dynamit Nobel, originally a European Fund investment, was merged into Rockwood in July 2004. Rockwood remains a partially realized position in the European and 1996 Funds. Please note that the general partner of the 1996 Fund was not contributed to KKR in the Combination Transaction, and KKR will not benefit from these investment returns.
51
European Fund Annual Valuation Changes

European Fund
53.2%
European Fund II
Annex Fund
European Fund III
47.8% 38.9% 30.2% 27.4% 10.8%

N/A N/A N/A
2.2%
-35.8%
-53.3% 2008
Note: Past performance is no guarantee of future results.
2009
2010
52
European Private Equity Performance Since Inception

25.8%
KKR Outperformance(1)
15.9% 13.0% 12.0%
2.9%
3.9%
KKR European KKR European Investments Investments Net Gross
S&P 500
MSCI
S&P 500
MSCI
Note: (1)
Includes the entire European portfolio beginning with the 1996 Newsquest investment through the Annex Fund as of 12/31/2010. Excludes investments in European funds which were made outside of the European region. Past performance is no guarantee of future results. Historic market trends may not be predictive of future market performance or future results. See Important Information for additional disclosures. On net return.
53
New Acquisitions in 2009 and 2010

Transaction Value in mm 161(1) 955 1,025 $135(4) 801 725 1,375(5)
Note: (1) (2) (3) (4) (5)
EV/ EBITDA 9.5x(2) 11.4x 8.8x(3) 7.1x(4) 10.8x 8.7x 12.2x
Net Debt/ EBITDA N/A(2) 5.4x 2.0x N/A 5.4x 5.0x 4.2x
Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical. KKR has committed to further investments to support the growth of BMG. 2010 transactions include Cherry Lane, Stage 3, Evergreen, and Chrysalis. Multiple based on LTM net publisher share (NPS). Net debt not relevant due to net cash position. Based on effective entry multiple. Lower effective multiple results from vendor note. Follow-on investment related to KKR portfolio company Northgates acquisition of Convergys. Transaction value of NOK 11,000 mm.
54
European Summary
2010 macroeconomic recovery more positive than expected
European Portfolio Improving(1)

European Fund: 2.8x from 2.5x at YE 2009 Europe II: 0.9x from 0.7x at YE 2009 Europe III: 1.0x from 0.7x at YE 2009
Accelerating Distributions and Investments

Returned $1.6 bn in 2009 and 2010(2) ~$1.7 bn expected to be distributed in first quarter of 2011(2) Invested $2.2 bn in Europe during 2009 and 2010
2011 Outlook Appears Positive
Macroeconomic environment Portfolio companies New transactions
Note: (1) (2)
Historic market trends may not be predictive of future market performance or results. As of 12/31/2010. Across European funds and investments. Of capital returned in 2009 and 2010, $1.1 bn was attributable to European funds. Of expected first quarter 2011 distributions, $1.0 bn is attributable to European funds. Certain distributions from these transactions may not generate distributable cash carry to KKR unitholders.
55
Asian Private Equity

Joseph Y. Bae
56
History of KKR Asia
KKR Asia begins operation; Hong Kong office opens
Sydney office opens; $4.0 bn Asian Fund raised
Mumbai office opens China Growth Fund reaches $1.0 bn hard cap
2005
2006
2007
2008
2009
2010
2011
Tokyo office opens
Beijing office opens; KKR Capstone, Capital Markets, and Client & Partner Group begin in Asia
Seoul office opens
57
KKR Asia Team

Experienced local investment teams with established track records are integrated with KKRs global industry teams 6 regional offices 41 private equity investors 11 KKR Capstone professionals
Generalists
8 KKR Capstone
Greater China-Focused Korea-Focused Japan-Focused
14 Private Equity 3 KKR Capstone

India-Focused
4 Private Equity
SE Asia-Focused
6 Private Equity
Australia-Focused
7 Private Equity
5 Private Equity
5 Private Equity
Note:
58
Large and Growing Pool of Dedicated Capital to Invest in Asia

Asian Private Equity Investments and Commitments
81 %
$5.6 bn
R CAG
$6.2 bn $5.1 bn 4.1 3.8
$8.4 bn 0.9
5.0
4.0 $1.4 bn $0.4 bn

2005 2006
1.6
2007
1.3
2008
2.1
2009
2.4
2010
Pre-Asian Fund
Note:
Asian Fund
China Growth Fund
As of 12/31/2010. Pre-Asian Fund indicates Asian investments made prior to the Asian Funds creation, and other Asian co-investments made by global funds subsequent to the Asian Funds establishment. China Growth Fund reached its hard cap of $1 bn subsequent to 12/31/2010. Figures include general partner investments and commitments as well as investments and commitments made by KPE. See Important Information for additional disclosures.
59
Asian Investment Timeline

2005
$427mm
2006
$915mm
2007
$424mm
2008
$725mm
2009
$634mm
2010
$904mm
Bharti Infratel Follow-On
Follow-On
Modern Dairy
Pre-Asian Fund
Note:
Asian Fund
China Growth Fund
Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical.
60
Diversified Portfolio
By Geography
Korea 11% Australia 12% Japan 4% Singapore 33%
By Industry
Telecom Mining 4% 3% Retail Recruitment 1% 4% Manufacturing Technology 5% 30% Financial 8% Media 9% Precision Manufacturing 14% Consumer 21%
India 17%
Greater China 23%
By Structure(1)
Non-Control 30% Control 70%
Note: (1)
Based on remaining fair value as of 12/31/2010. Portfolio includes all Asian investments across all private equity funds. Control indicates buyout or joint venture transactions where KKR, along with other financial investors if applicable, collectively holds equity ownership of 50% or more. Non-control indicates growth or minority investments.
61
Traditional Buyout InvestingCore Markets

Australia
Outsourced logistics services provider to mining sector Multimedia group of TV, magazine, and online properties
Singapore
Designer, developer, and global supplier of fabless semiconductors
Precision engineering manufacturer of HDD, non-HDD, and capital equipment
Korea
One of Koreas two major breweries Global provider of high-precision components
Japan
Comprehensive recruitment services provider
Note: Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical.
India
Communications industry software solutions provider
62
Growth InvestingGreater China and India

China
Leading investment bank Market-leading SME financing company Modern Dairy Dairy group operating large-scale cow farms Strong regional cement producer Leading regional car dealership Leading high-end liquor store chain operator
Note: Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical.
India
Bharti Infratel Leading global independent telecom tower company
Leading food and beverage retailer
Leading private cement company
Taiwan
World-class passive component provider
63
Strong Portfolio Performance

Aggregate Revenue Aggregate EBITDA 2010 Change in Value
51.0%
27% 46%
$10 bn $8 bn $2 bn $3 bn
44.8%
2009
Note:
2010
2009
2010
All Asian Investments
Asian Fund Investments
Revenue and EBITDA include all Asian investments as of 12/31/2010. Data not included for CICC, Dalmia Cement, Rundong Auto Group, Tianrui, and VATS either because these are recent investments/data is not available or because metrics are not relevant. Past performance is no guarantee of future results. See Important Information for additional disclosures.
64
Asian Investment Performance

Operating growth has driven meaningful portfolio appreciation
Every investment in the Asian Fund is at or above cost as of YE 2010 Asian Fund
1.4x
All Asian Investments

1.7x 1.3x
1.1x
YE 2009
YE 2010
YE 2009
Gross MOIC(1)
YE 2010
Note: (1)
Past performance is no guarantee of future results. See Important Information for details regarding multiples of invested capital.
65
Improving Exit Environment

IPO Market Trends(1) (bn)
Asia IPOs Americas IPOs $174
$84 $37 $53 $48 $49 $60
$100 $74 $20 $38 $71 $32 $53
2004
2005
2006
2007
2008
2009
2010
Asia M&A Volume as a Percent of Global M&A Volume(2)
19% 12% 8% 2004

Note: (1) (2)
14% 9% 2006 11% 2007 2008 2009
17%
2005
2010
Historic market trends may not be predictive of future market performance or results. ECM Analytics. All announced deals as of 12/24/2010. In US dollars per SDC Thomson Financial. Includes all announced M&A deals as of 12/24/2010. Excludes equity carve-outs, exchange offers, and open market purchases.
66
Asias Increasing Influence on the Global Economy

Contribution to Global GDP Growth
6%
4%
2%
0% 1970
Rest of World
Note: Source:
1980
China
1990
United States
2000
2010P
2015P
Other advanced economies
Reflects three-year moving averages. Historic market trends may not be predictive of future market performance or results. International Monetary Fund, World Economic Outlook, April 2010. Aggregates are computed on the basis of purchasing-power-parity (PPP) weights.
67
Investment Outlook in Asia

Flexible pan-Asian capital to capture opportunities across countries
Australia Public-toPrivates Structured Minority Growth Corporate Divestitures Cross-Border M&A Valuation LT Outlook
Note: See Important Information for additional disclosures.
China
India
Japan
Korea
SE Asia
68
Asian Private Equity Market

Asian private equity industry nascent relative to other regions Growth in small funds focused on non-buyout opportunities
Aggregate Asia-Focused PE Funds Asia-Focused PE Funds Raised
Buyout Non-Buyout
% 19
$169 bn $137 bn
CA
$291 bn $266 bn
GR
$324 bn
$212 bn
$15 bn $10 bn
2005 2006 2007 2008 2009 2010
$19 bn $13 bn
2006
$30 bn
$36 bn $28 bn $6 bn
2010
$14 bn
2007
$18 bn
2008
$17 bn $8 bn
2009
2005
Source:
Year-End Asian Private Equity Review. Historical market trends may not be predictive of future market performance or results.
69
Where Do We Go from Here?
Further build out private equity in region
Continue focus on portfolio
Launch region-specific businesses and raise larger successor funds
Support expansion of other parts of firm to Asia to capitalize on opportunities in this high-growth region
70
Driving Value
Dean B. Nelson
71
Operational Improvements are Core Drive returns through operational improvement Transform good companies in good industries into great companies Identifying opportunities is straightforward Implementing them is hard work KKR Capstone partners with management to drive sustained improvement
Note:
72
Revenue Growth Drives Long-Term Returns

Double-digit EBITDA growth typically requires revenue growth Primary focus is on growing revenue Portfolio Companies with Revenue Growth >3% per Year
22%
12%
6%
Revenue Growth
EBITDA Growth
IRR
Note:
Portfolio companies located in Western Europe and the US with annual revenue greater than $500 mm, original investment made between 4/2004 and 7/2007, and little to no change in business portfolio since investment. Portfolio companies included may not be representative of the entire portfolio, and results may not be typical.
73
Our Extensive Experience and Team Size Differentiate Us

KKR Capstone is a global team of 59 executives
59
19 3
2000
Americas
74
2005
Europe Asia
2010
Significant Operational Resources

One Capstone team and a global approach across seven KKR offices Supported by 30 senior advisors: former CEOs and industry leaders
Broad 2010 Portfolio Efforts

North America Europe Asia
75
We Work Broadly Across the Portfolio
KKR Capstone partnered with of KKRs portfolio(1)
90%+
Modern Dairy
Note: (1)
Portfolio companies identified above may not representative of the entire portfolio, and results may not be typical. Percentage calculated by dollars of KKR equity invested rather than by number of KKR portfolio companies. Includes companies in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction, with greater than $100 mm in revenue at close and where KKR holds a control position, either alone or with other partners.
76
The Impact of Operational Improvements

Drive Trajectory-Changing Results in the Portfolio
Build capability to sustain improvement On-the-ground, 18-24+ months Accountability plus aligned incentives Operational diligence: better investments, immediate ramp-up of value creation
$800
million
EBITDA impact of projects where we partnered with management in 2010(1)
Broad Range of Cross-Portfolio Services

Note: (1) Past performance is no guarantee of future results. Aggregate run-rate EBITDA impact of work performed at portfolio companies during 2010 with direct involvement of KKR Capstone. Company totals based on 2010 financial results, budgeted plans for 2011, management forecasts, and team estimates.
77
Value Creation at Dollar General
The largest small-box discount retailer in the US Attractive fundamentals KKR invested in 2007
Note:
Portfolio company identified above may not be representative of the entire portfolio, and results from this company may not be typical.
78
Dollar General: Key Initiatives
Revamped store merchandising Refined pricing strategy and execution Reduced out-of-stocks Improved working capital Improved store standards Reduced shrink Optimized store site selections
79
Dollar General: Revamp Private Label

Old Products New Products
80
Dollar General: Significant Sustained Improvement

Revenue Growth
20%
Improved Profitability
Adjusted EBITDA Margin
Dollar General
Capstone involvement begins
Competitor
11.6%
440 bps
7.2%
10%
0% Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10
-10%
2007
Q3 2010 LTM
Valued at 3.5x cost at 12/31/2010

Note: Past performance is no guarantee of future results.
81
Value Creation at Oriental Brewery
Opportunity #2 player in Korean beer market KKR Capstone key role in diligence KKR invested in Oriental Brewery in 2009
Value Creation New wholesaler management program Consistent sales practices across organization Re-launch of Cass Light brand beer Expanded procurement practices to reduce costs Reduced inventory
Note:
82
Oriental Brewery: Results

Market Share Growth
44.1%
Improved Profitability
EBITDA Margin
34.8%
350 bps
40.6%
110 bps
33.7%
FY 2008
FY 2010
FY 2008
FY 2010
Valued at 1.9x(1) cost at 12/31/2010

Note: (1) Past performance is no guarantee of future results. On a US dollar basis.
83
Functional Expertise Drives Value in the Portfolio

Work on-site to drive significant value at specific companies Procurement Information technology Sustainability Biggest value creation opportunities in company-specific efforts Create long-term value by building tools and capabilities at companies Over $330 mm of ongoing benefit from direct procurement efforts
Note:
Procurement Value Creation: US Foodservice

Second-largest food distributor in US 18-month work effort Centralized procurement New tools: quick, easy, repeatable Built a team Results: $100 mm in run-rate savings
84
Examples of Cross-Portfolio Impact

Impactful Range of CrossPortfolio Services Indirect Sourcing Benefits/Wellness IT Policies/Procurement Sustainability (Environmental Defense Fund partnership) Corporate Insurance Cross-Portfolio Metrics Management
85
Centralized purchasing across portfolio for improved terms 120+ spend categories from small parcel to medical plans Results $150+ mm in run-rate savings
Reducing environmental impact and improving efficiency Results Avoided 345K metric tons of greenhouse emissions, 1.2 tons of waste, and 8,500 tons of paper $150+ mm in total cost savings
Strong Operating Performance at Portfolio

Aggregate Portfolio Revenue
~83% of portfolio companies increased revenue
Aggregate Portfolio EBITDA

~87% of portfolio companies increased EBITDA
7% 15%
$191 bn $204 bn
$38 bn
$33 bn
2009
Note:
2010
2009
2010
Includes all portfolio companies as of 12/31/2010 in funds subsequent to the 1996 Fund, which was not contributed to KKR in the Combination Transaction. Data for last 12 months ended 12/31/2010 except for portfolio companies with publicly traded securities which have non-calendar fiscal years, in which case last 12 months data as of the latest reported fiscal quarter is shown. Data not included for CICC, Dalmia Cement, El Paso Midstream, Hilcorp Resources/TC Energy, KKR Debt Investors, Rundong Auto Group, Tianrui, VATS, and Visma either because these are recent investments/data is not available or because metrics are not relevant. Past performance is no guarantee of future results.
86
Energy & Infrastructure

Marc S. Lipschultz
87
Industry Dynamics Create Enormous Opportunity

Compelling outlook for energy investing over the next 10 years
Global demand expected to grow substantially over time Strong supply + weak current demand = accelerating and attractive opportunities in 2011 and beyond
Global supply composition changing radically
Low natural gas prices pressuring energy companies
88
Global Energy Demand Expected to Grow Significantly

Historical and Projected Global Energy Demand (mmtoe)
16.0 13.8 12.3 10.0 6.5 4.5 8.0 10.0 10.7 14.6 16.7
8.7
5.2
5.4
5.5
5.5
5.6
5.6
2000
Note: Source:
2008
2015
OECD
2020
Non-OECD
2030
2035
Historic market trends may not be predictive of future market performance or future results. IEA World Energy Outlook 2010. Totals include international marine and aviation bunkers (not included in regional amounts).
89
Oil and Gas Not Produced Where They are Consumed
North America Reserves: 5% Consumption: 26%
Europe and Eurasia Reserves: 20% Consumption: 27%
Middle East Reserves: 53% Consumption: 13%
South/Central America Reserves: 9% Consumption: 6%
Africa Reserves: 8% Consumption: 3%
Asia Pacific Reserves: 5% Consumption: 25%
Note: Source:
Red text reflects a significant deficit. BP Statistical Review of World Energy 2010.
90
Global Infrastructure Investment Requirements are Vast

Some sources estimate a need as high as approximately $3 trillion annually(1)
Expanded EU $305 bn per year(2)
Russia/FSU $56 bn per year(2)
North America $422 bn per year(2)
Middle East $56 bn per year(2)
China $200 bn per year(2)
Latin America $45 bn per year(2)
Africa $10 bn per year(2)
Asia ex-China $200 bn per year(2)
(1) (2)
Infrastructure to 2030 by the OECD. 2009 Report Card for Americas Infrastructure authored by ASCE (American Society of Civil Engineers).
91
Key Investment Themes in Energy & Infrastructure

Corporate Opportunities
Oil and gas companies with good assets Companies with unconventional growth opportunities Gathering and processing with substantial new investment requirements
Oil & Gas Assets

North American conventional oiland gas-producing assets Unconventional field development International oil and gas fields
Infrastructure
Utilities Contracted power Renewables Midstream Select transport areas
92
Where We Were: Limited Actionability
All Energy and Infrastructure Businesses
Buyouts
93
Where We Are: A Complete Platform to Address the Industry

Pipelines Special Situations Third-Party
Joint Venture
KKR Asset Management
KKR Capital Markets
Infrastructure
Dedicated Strategy
All Energy and Infrastructure Businesses
North American Producing Oil & Gas

Dedicated Strategy
International Oil & Gas

Joint Venture
Buyouts/Growth Partnerships
Private Equity
Opportunity Capital Pool
North American Unconventional Oil & Gas

RPM Energy
94
Long History of Energy Investing

UNION TEXAS PETROLEUM
7/1985
10/2007
EBR Properties
9/2010
ConocoPhillips Properties
12/2010
TC Energy
2/2003 6/2009 10/2010
AOT/Battrum Properties
2/2011
1976
2011
2/2000
7/2008
9/2010
Energy Bubble Bursts

12/2004 6/2010
(1)
12/2010
10/2010
Hilcorp Resources
Note: (1)
Portfolio companies identified above may not be representative of the entire portfolio, and results from these companies may not be typical. Unconventional oil and gas partnership to which capital has been committed but not yet funded.
95
Energy & Infrastructure Platform

KKR and the post-energy bubble opportunity
Holdings
EFH Hilcorp Resources RPM Texas Crude El Paso Midstream AOT/Battrum
Equity Investment/ Commitments(1)
Undrawn Capital
Private Equity
$2.0 bn
N/A
Infrastructure
Colonial Pipeline
$1.1 bn
$0.5 bn
Natural Resources(2)
EBR Gulf Coast Conoco Barnett
$0.1 bn
$0.4 bn
Other
Not disclosed
$0.1 bn $3.3 bn
N/A $0.9 bn
TOTAL
Note: (1) (2)
$4.2 bn
Investments identified above may not be representative of the entire portfolio, and results from these companies may not be typical. Includes committed but not yet funded capital as well as syndicated co-invest capital as of 3/10/2011. Investment component reflects unrealized value. Includes commitment of $250 mm from KKR Financial Holdings (KFN).
96
East Resources Encapsulates the Strategy

East Resources Asset Map
Orleans Niagara Genesee Monroe Seneca Ontario Yates
Livingston
Onondaga Cayuga Tompkins Tioga
Madison Otsego Schoharie
NewYork
Erie Wyoming
Cortland Chenango Delaware Broome Sullivan Susquehanna Wayne Pike
Schuyler Steuben Chemung
Cattaraugus Chautauqua
Allegany
Bradford Tioga McKean

Ca
Erie Crawford Lake Ashtabula Venango Trumbull Mahoning Mercer

Law ren ce
Potter Lycoming Clinton
Wyoming Lackawanna Sullivan Luzerne Columbia Montour Northumberland Schuylkill Snyder Berks Lebanon Dauphin Lancaster
Warren Forest
Lackawanna Carbon Northampton Lehigh Bucks Montgomery Philadelp Delaware Chester
2008: Targeted Marcellus 2009: Invested $330 mm 2010: Realized $1.5 bn
ron me
Elk
Geauga ahoga Summit Tuscarawas Lincoln yne Boone Mingo Logan

Portage
Clarion Jefferson
Clearfield
Centre
Mi fflin Ju nia ta
na
Butler
Armstrong Indiana Cambria Blair
ayne mes octon
Stark
Columbiana Beaver Carroll Hancock

Jefferson
Huntingdon
Perry Pennsylvania nd
a erl mb Cu
Allegheny
Westmoreland Bedford Fulton Franklin Fayette Somerset Morgan Berkeley Jefferson Hampshire
York Adams
Harrison Ohio Guernsey
Brooke Ohio
Marshall
Washington Greene
Belmont
Monongalia Monroe Wetzel Marion r Preston ton ylo Tyler Morgan hing Ta nts s sa Harrison Wa Grant Hardy lea P Barbour Tucker Athens Wood Ritchie Lewis Gilmer Meigs Wirt Pendleton Calhoun Noble y
Min era l
Ups hur
uskingum
Ra nd olp h
Webster Clay
Putnam Cabell Kanawha
WestVirginia Nicholas
Greenbrier
Poc aho ntas
Jackson Roane Mason
Braxton
Fayette Raleigh
Doddridge
OperatingAreas
Northern WV Western PA NW PA / SW NY North-Central PA / Southern NY Additional East Acreage
Additional Marcellus Acreage
S mmersMonroe
Note:
Former investment identified above may not be representative of the entire portfolio, and investment returns from this company may not be typical.
97
The Opportunity: Producing Oil and Gas in North America

Recent market dynamics have left conventional assets out of favor, leading to compelling opportunities for investors
Public market valuation premiums for shales
Capital intensity of unconventional development
Conventional properties becoming non-core
Declining production profile of conventional assets
Attractive assets with limited buyer universe
98
The Response: KKR Natural Resources (KNR)
Opportunity sourcing
Opportunity sourcing
Financial diligence and deal execution
Technical diligence
Strategic oversight
Post-acquisition asset optimization
99
KKR Natural Resources: Latest Developments
Over $500 mm committed to platform today(1) Two attractive acquisitions made for ~$177 mm(2):
EBR Gulf Coast assets closed October 2010 Conoco Barnett assets closed December 2010
Substantial long-term growth potential

Note: (1) (2) Investments identified above may not be representative of the entire portfolio, and results may not be typical. Includes commitment of $250 mm from KFN. Reflects total purchase price of assets.
100
The Opportunity: US Shale Development

Shales have altered the US oil and gas landscape and generated substantial capital need More than $1 trillion needed to develop the shales
Future Development Requirements by Shale Play
Total Future Capital Need Wells to Be Drilled $387 bn
Example: Marcellus Capital Requirements

$149 bn $124 bn $114 bn
$308 bn 93,750
$59 bn
21,818
$78 bn
12,500
$105 bn
31,250 37,500
$70 bn
12,500
Barnett (Core)
Eagle Ford
Fayetteville
Haynesville
Marcellus
Source:
Jefferies & Co. and KKR estimates based on public sources.
101
Woodford
Majors & Large Independents
Mid-Cap Independents
Small-Caps & Private Companies
The Response: RPM Energy

Formed partnership with RPM Energy, a privately owned oil and gas exploration and development company, to invest in unconventional properties in a wide range of basins
KKR
Scale/large capital pools Commercial and financial capabilities Differentiated industry relationships Experience investing in shales
RPM Energy
Technical, commercial, and financial capabilities Experienced executives that industry participants want to do business with
The Shale Opportunity
102
The Opportunity: Pipelines

Unconventional natural gas supply resources key source of production growth in North America Development of resource plays in new areas Shift in resource base and resulting need for new infrastructure investment
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Growth of Unconventional Gas (1) (Bcf/d)

C onventional Offshore Tight Gas Shale C BM Other
Supply-Driven Pipeline Capacity Additions (Mcf/d)

44,750 35,444 31,018 23,571 14,859 12,848 12,705 9,262 10,423 8,198 8,460 6,983 7,661 6,517
19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 P 20 10 P 20 11 P
Shale Gas Ubiquity in the US
Source: (1)
US Energy Information Administration reports. Other category includes AD gas, Alaska, and net imports.
103
The Response: El Paso Midstream Investment Joint Venture
Transaction Overview
Partnered with El Paso Corporation to form El Paso Midstream Investment Company, a joint venture focused on US natural gas midstream sector JV attractive to El Paso given quantum of capital/relationships required El Paso gave KKR a first look at opportunity and ultimately exclusivity
Note:
Investment Thesis
Significant midstream capital required in emerging shale plays to support robust long-term drilling outlook El Paso had incumbency advantage Attractive existing asset Leading midstream management team with experience building/operating a highly successful midstream MLP Platform upsides
Portfolio company identified above may not be representative of the entire portfolio, and results may not be typical.
104
The Opportunity: Global Infrastructure
Massive need for infrastructure capital around the world Traditional sources of capital very constrained (both public and private) Budget crises in US and Europe will require public-private partnership solutions Infrastructure investors badly bruised in prior generation of funds: need for version 2.0
105
Infrastructure Investing Must Evolve to Version 2.0
Investors expected
but received version 1.0

Transaction-oriented Sector-based asset selection Maximal leverage on individual assets Focus on asset accumulation Reactive stakeholder approach
Need for version 2.0

Experienced team Disciplined asset selection Asset-appropriate leverage Focus on operational engagement Stakeholder management as a core competence
Low risk Conservative leverage Inflation protection Low correlation with GDP and other investments Long duration
106
The Response: KKR Infrastructure Strategy
Our Strategy
Target assets with limited commercial, financial, and operating risk Drive value creation through:
Disciplined investment selection
Deep operational engagement
Active stakeholder management
107
KKR Infrastructure Platform: Latest Developments
Over $500 mm of committed uninvested capital
$1.1 bn of invested capital through a separately managed account
Infrastructure platform at $1.6 bn
108
KKR Energy & Infrastructure
The future of the platform
109
Global Public Affairs

Kenneth B. Mehlman
110
The World is Watching
Heightened scrutiny of global businesses and investors Uneven economic recovery stokes populism Sovereign debt issues Empowered NGOs Increased regulation, taxation, trade scrutiny around the world
...All can impact our bottom line
111
Our Strategy
Incorporate stakeholder and regulatory focus into processes
Build proactive efforts around
Investment Committees Portfolio management Best practices
Environment/sustainability Responsible sourcing Anti-corruption Labor/employee engagement Transparency Other issues relevant to specific companies
112
A Leader in Our Efforts

Managing environmental, social and governance issues including relationships with key stakeholdersis an increasingly important part of the value proposition of private equity. Signing the PRI and joining our network demonstrates KKRs leadership in this area, and is another sign that KKR recognizes the importance of responsible investing. We look forward to working with KKR on practical implementation and hope we can do so in a way that will encourage other firms to follow.
James Gifford PRI Executive Director February 19, 2009
113
Progress in 2010
Train and educate KKR executives Establish network of external partners Communicate our commitment to portfolio companies Communities of best practice for portfolio company personnel Responsible contracting policy for infrastructure business Build sustainability and sourcing efforts Environmental-social-governance roundtables with limited partners Annual report will discuss our efforts on sustainability We look forward to further progress in 2011
114
Our Strategy at Work: Green Portfolio Program
Recycling at Dollar General

Financial Savings Environmental Savings
Fleet Efficiency at US Foodservice and Sealy

Financial Savings Environmental Savings
~$40 mm
~10.8 mm cubic yards of waste
~$18 mm
58,000+ metric tons of CO2 emissions
Note:
More information available at http://green.kkr.com. Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical.
115
Responsible Sourcing Initiative

Program launched to promote socially and environmentally responsible global sourcingbetter business practices for portfolio companies and their suppliers
Context Real risks and changing expectations Need for best practices Activities to Date Partnered with Business for Social Responsibility to develop guidelines Conducted webinars for Chief Procurement Officers and General Counsels Results
116
KKR and our Portfolio: Part of the Solution

Taking Action on Sustainability Productive Engagement with Employees
Proactively Engaged in Understanding Public Policy
Promoting Transparency and Good Governance
117
Business Development & Strategy

Scott C. Nuttall
118
Observation #1
Under-utilizing investment ideas and relationships
Build new investing businesses
Infrastructure, Natural Resources, Liquid Credit, Mezzanine, Special Situations, China Growth
119
Observation #2
Valuable content we source should be delivered to our own relationships
Build global, multi-product capital markets business
KKR Capital Markets
120
Observation #3
Too few investor relationships
Build broader, global relationship/distribution team
Client & Partner Group
121
KKR Approach
Old World Relationship Investment Team Team
New World
Listen to companies needs
Source buyouts
Deliver best principal solution from our product set Call colleagues with opportunities Cover the entire institution
Raise episodic funds (blind pool, fixed terms)
Listen to clients needs Deliver all KKR products and design new solutions Be open-minded and flexible
Goal
Be relevant to all relationships Invest behind more ideas
122
Observation #4
Permanent capital would help create better alignment and help accelerate growth
KKR/KPE Combination Transaction
Now our own largest investor; $5.7 bn of permanent capital

123
Why Permanent Capital?

Infrastructure Natural Resources
Build New Businesses
Mezzanine Special Situations China Growth Up next: real estate, long/short equity Initial public offerings
Support Growth of KKR Capital Markets
Secondary equity offerings Term loans/revolvers High yield Structured debt/equity Private equity
124
Tests Applied to New Ideas
Benefit from one-firm approach?
Is there investor demand?
Does it fit culturally?
Yes to all three
Up next: long/short equity, real estate

125
Opportunity Old World

Buyouts $912 bn Buyouts High Yield Leveraged Loans Mezzanine Distressed PE Hedge Funds Real Estate Other Market Opportunity $912 bn Market Opportunity
New World
$912 bn ~1,200 ~1,000 ~70 ~150 ~1,600 ~1,000 ~100 ~$6,000 bn
Note:
Market opportunity represents approximate market size for identified strategies based on Preqin, JP Morgan, and KKR estimates. Actual size may vary.
126
Is It Working? 2005
Private equity Bank loans
Today(1)
Private equity Bank loans High yield Mezzanine Special situations Infrastructure Natural resources China growth Long/short equity Real estate
Ways to Invest
Non-PE AUM Capital Markets Fees Number of LPs Balance Sheet Offices/Countries Total AUM
(1) (2)
$4 bn $0 254 <$100 mm(2) 6/4 $23 bn
$16 bn $105 mm 350+ $5.7 bn 14/9 $61 bn
Dollar amounts as of 12/31/2010. Other figures as of 3/10/2011. Excludes general partner interests held by KKR principals.
127
Momentum Invest more behind ideas and relationships
Capture more from content we create
Bring ideas and products to more investors
Invest our own capital/Seed new efforts
Multiplier Effect
128

William C. Sonneborn
129
KKR Asset Management (KAM)(1) Overview

Demonstrated ability to leverage KKRs intellectual capital for growth $7.8 bn of fee paying AUM ($14.8 bn in total AUM) More than 100 dedicated employees, including ~45 investment professionals
AUM Growth(2)
Non-FPAUM FPAUM
CA G 64 %
$7 bn $3 bn $2 bn
2006
R
$9 bn $7 bn
$7 bn
$2 bn $1 bn
2004
(1) (2)
$2 bn
2005
$4 bn
2007
$4 bn
2008
$6 bn
$8 bn
2009
2010
Represents Public Markets segment. As of 12/31/2010. See Important Information for our calculation of assets under management (AUM) and fee paying AUM (FPAUM).
130
Expansion of the KAM Business

Successful record of developing and growing new businesses ~25% of 2010 management fees from businesses started in the last two years
04-08: Established Presence, Primarily Liquid Credit
Bank loans & high yield; first mezzanine investments Mezzanine launch Special situations launch Long/short equity launch New strategies
08-10: Built Out Diversified Credit Platform
11 & Beyond: New Asset Classes and Geographies
KFN launch
2004
San Francisco team established
2007
2008
2009
2011
Beyond
New geographies
New York team London team established established
131
KAM Business Model Today

A virtuous circle that yields strong returns and access to a large addressable market
Invest in asset classes where we can leverage the existing intellectual capital of KKR(1)
which enables us to make better investment decisions
INTEGRATED One-Firm APPROACH

and then creates new intellectual capital for the firm and may yield strong returns and solutions for our investors
(1)
Participation of private equity, KKR Capital Markets, and KKR Capstone personnel in the KAM investment process is subject to applicable inside information barrier policies and procedures, which may limit the involvement of these personnel in certain circumstances.
132
KAMs Competitive Edge

Strong Performance Expanding Investing Platform Growing Capital Base
Strong track record across all strategies One-firm sourcing and diligence(1)
Growing offering of strategies and products Disciplined and flexible investment approach $7.8 bn in FPAUM today Long-term, flexible capital ~55% of investors in last two years are new to KKR High degree of embedded operating leverage Significant profit contribution from incremental revenue Revenue yield on FPAUM improving New businesses are still young Sizable untapped new product areas
Scalable Business Model Attractive Financial Outlook

(1)
133
Strong Performance: Bank Loans & High Yield

Expertise across bank loan and high yield asset classes, with top-decile performance since inception in each strategy
Gross & Net Return vs. Benchmark Since Inception
Gross Net Benchmark 19.9% 18.2%
11.1% 10.5% 7.1% 8.2% 6.3% 5.2%
12.2% 11.4% 9.4%
11.0%
Secured Credit Model

Inception: 9/2004
High Yield Carve-Out

Inception: 9/2004
Bank Loans + High Yield

Inception: 7/2008
Opportunistic Credit
Inception: 5/2008
Note:
Data as of 12/31/2010. Peer comparison data is from eVestment Alliance and is based on the universe of Bank Loan and High Yield managers as self-defined by each manager. Secured Credit Model and High Yield Carve-Out performance presented is supplemental to the Secured Credit Levered Composite. Past performance is no guarantee of future results. See Important Information for information on benchmarks and returns.
134
Strong Performance: Mezzanine

Since 2010, we have deployed approximately $500 mm in mezzanine investments Partnered with experienced sponsors like KKR, Bain Capital, Advent International, Providence Equity, Golden Gate Capital, and Triton
Recent Mezzanine Experience(1)
Note: (1)
Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical. Reflects mezzanine deals completed in 2010. Includes one deal that closed in the first quarter of 2011.
135
Strong Performance: Special Situations

Special situations platform is outpacing key benchmarks and showing strong momentum
Historical Track Record Since Inception(1)

20.3% 15.2% 14.9%
13.4% 7.1%
Gross
Net
50% S&P 500 / 50% MSCI EAFE
Merrill Lynch High Yield Master II
HFRX Distressed Securities Index
Note: (1)
Past performance is no guarantee of future results. See Important Information for information on benchmarks and returns. Data as of 12/31/2010. Inception date of 2/19/2010. Since period is less than one year, returns are not annualized. Net returns based on assetweighted institutional fee of accounts in the composite. Strategy returns are based on an internal rate of return (IRR) calculation.
136
Expanding Investment Platform

KAM initially launched with a focus on below-investment-grade credit, but today has a diversified business across strategies and client vehicles
KAM Strategies Marketable Securities Bank Loans High Yield Bank Loans Plus High Yield Opportunistic Credit Alternative Investments Mezzanine Special Situations Long/Short Equity
Multiple Client Delivery Platforms
137
Growing Capital Base

$7.8 bn of differentiated, long-term fee-paying capital across strategies and accounts
By Account Type By Strategy(1) By Duration By Fee Structure(2)
Funds 27%
Other 5% Special Situations 14% Mezzanine 13% High Yield 17% Bank Loan 51%
Permanent 18%
Accounts 73%
Subject to Periodic Redemptions Subject to 43% Long-Term Lock-Up 39%
PE-Like Fee Structure 24% Hedge Fund Fee Structure 17%
Management Fee Only 59%
FPAUM growth of 24% in 2010

Note: (1) (2) Data represents fee-paying AUM as of 12/31/2010. See Important Information for our calculation of assets under management. Figures represent estimates based on target allocations across all accounts as of 12/31/2010. PE-Like Fee Structure category includes mezzanine and special situations funds and separately managed accounts.
138
KKR Financial Holdings (KFN)

KFN provides access to a range of KKR strategies
KFNs Evolution
2004-2007 2008-2009 2010 On
Growth in Managed Assets

FPAUM from KFN
(1)
$1,366 mm $813 mm $872 mm
REIT Structure
Corporate Credit
Extended Opportunities
2008 2009 2010
Extend Existing Capabilities for Growth and Capital Preservation

(1) See Important Information for additional disclosures.
KKR Incentives Aligned with KFN Performance
139
A Scalable Core
One-firm approach drives scalability in KAMs core business without adding significant incremental resources
74% flow-through on incremental 2010 revenue(1) $61.1 mm
$45.1 mm
INTEGRATED One-Firm APPROACH
Creating Operating Leverage
Incremental Revenue
Incremental FRE
2010 vs. 2009

Note: (1) Participation of private equity, KKR Capital Markets, and KKR Capstone personnel in the KAM investment process is subject to applicable inside information barrier policies and procedures, which may limit the involvement of these personnel in certain circumstances. Represents management fees, transaction fees, and incentive allocations. Excludes carried interest payments. Incremental revenue adjusted to exclude management fees received from structured finance vehicles in lieu of expense reimbursements in both 2009 and 2010. See Important Information about fee related earnings (FRE).
140
Driving Additional Growth Through New Businesses

Approach to addressing a large universe of potential new business opportunities
Replicable New Business Development Processes Phase 1: Assess Market Opportunity and Make Targeted Hires to Establish Capability Phase 2: Selectively Allocate to Strategy and Build Track Record Phase 3: Raise Dedicated Capital Phase 4: Drive Superior Investment Performance over Market Cycle
Phase 1 Public Equities
Phase 2
Phase 3
Phase 4
Special Situations Mezzanine Bank Loan + HY

Note: See Important Information about economic net income (ENI) and fee related earnings (FRE). Information regarding KAMs public equity platform (KKR Equity Strategies) is provided for discussion purposes only as the strategy is currently in development.
141
Case Study: Mezzanine

Growth of mezzanine platform highlights KAMs ability to commercialize a market opportunity
Mezzanine Evolution: Cumulative Invested Capital
$1,141 $1,039 mm mm $661 mm
2011 & Beyond
Dedicated capital US/Europe/Asia Attractive economics through management fees and carried interest generation
$565 mm $357 mm $25 mm $148 mm
$0
2004
# of Deals: 0
2005
1
2006
3
2007
2
2008
2
2009
2
2010
6
2011
1

Note:
2004-2009 Opportunistic allocations No sourcing capabilities US only
2010 to Today Dedicated capital Proprietary sourcing US/Europe
Two add-on investments in 2010 included with the original 2009 investments. 2011 data includes one investment committed to as of 12/31/2010 that closed in the first quarter of 2011. Past performance is no guarantee of future results.
142
Attractive Financial Profile

2010 was a strong year for growth, and we continue to invest in the business
Total Fee Income 86%
$55.1 mm $102.7 mm
Fee Related Earnings Margin

55.5%
21.4%
2009
2010
2009
2010
Effective Fee Rate(1)

1.40% 1.00%
Committed Dollars Invested(2)

$697.6 mm
$0.0 2009
(1) (2)
2010
2009
2010
Effective fee rate defined as (management fees + incentive fees) / average FPAUM. Represents the aggregate amount of capital commitments invested by carry-yielding funds and co-investment vehicles. Includes general partner capital.
143
Long-Term Value Creation

KAM is well positioned today
The Right People The Right Strategy Strong Track Record One-Firm Approach Long Runway for Growth
Note:
More than 100 dedicated employees, including ~45 investment professionals Expanding investment capabilities Multiple client delivery platforms Diversified capital base All KAM strategies demonstrating strong relative and absolute performance Leverages the intellectual capital of KKR Provides for a highly scalable core New businesses still early in life cycle Significant untapped market potential
144
KKR Capital Markets

Craig J. Farr
145
The Capital Markets Opportunity in the Private Equity Industry
In 2007, the global investment banking fee wallet was >$73 bn In 2007, private equity firms accounted for ~24% of the fee wallet Global capital markets business was dominated by five large players
The few large players bundled capital, advice, and distribution services
Source: Dealogic.
146
Evolution of the Business

We have evolved from a small team focused on syndicating excess private equity to a full-service, standalone business able to lead a variety of capital markets transactions globally 2010 and Today
2007
2008
2009
Large private equity checks
Credit crisis closes markets
Markets improve, opening door for new deals and exits
Further improved capital markets
KCM Professionals: 4
147
KCM Today: Full-Service Capital Markets Advisory/Underwriting

Acquisition Finance Acquisition Finance
PE co-invest syndication Mezzanine Credit facilities High yield
Ownership Ownership
Refinancing New issuance Exchange offers Amend-to-extend Buybacks
Exit Exit Pre-IPO equity IPOs Follow-ons Equity-linked
Expand capacity for private equity and mezzanine transactions

148
Optimize cost of capital, enhance capital structure flexibility
Maximize investor return in the long term
How KCM Creates Value: Key Pillars
149
Aligned Advice Drives Greater Access to Capital
Led execution/marketing of IPO Valuation premium to closest peer Allocated to sticky" shareholder base, setting foundation for long-term monetizations
Instrumental in developing unique backstopped discounted rights offering through 3rd-lien PIK convertible notes Direct dialogue with ABL providers and 1st-lien bond investors provided comfort on refinancing structure
Historical Stock Performance

160%
500% 400% 300%
Historical PIK Convert Performance
140%
120%
+33% IPO-to-date
100% Nov-09
Note:
200% 100%
+236% since issuance
Feb-10
May-10
Aug-10
Nov-10
Feb-11
Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
Stock price performance as of 3/9/2011. Dollar General IPO occurred on 11/12/2009. Sealy rights offering and third-lien convert issuance occurred on 5/27/2009. Historic market trends may not be predictive of future market performance or future results. Portfolio companies identified above may not be representative of the entire portfolio, and results may not be typical.
150
Holistic Risk Management

KKR Portfolio Company Refinancing Volume
$32 bn
$14 bn
2009
(1) Reflects all KKR portfolio company refinancings including those in which KKR Capital Markets did not participate.
2010
151
Benefits Across Key Stakeholders

Source larger, unique deals Flexible capital enhances upside Product flows for limited partners Better exits Allows PE to focus on industry specialization/corporate relationships Expands KAM mezzanine capabilities Improves CPG relationships Source of fee related earnings More carry derived from larger equity commitments
Limited Partners
Other Parts of KKR
Public Unitholders
Better capital structures enhance equity value Greater return on balance sheet capital More fund commitments from close limited partner relationships
152
Financial Results to Date: A High-Margin Business for KKR

Fees Fee Related Earnings Headcount
$105.3 mm 26 $79.1 mm 15 10 $18.2 mm $5.3 mm 2008

Margins: 29.1%
$34.1 mm
$18.7 mm
2009
54.7%
2010
75.1%
153
How Does KCM Get Paid?
Conventional Model
KCM Participation
Bank 4
Bank 1
KCM
Bank 1 Bank 2
Bank 3
Bank 2
Bank 4
Bank 3
154
Synergy with Other Parts of KKR: Private Equity
Situation Large maturity towers in 2014 through 2016 and a desire to proactively extend
KCM Value-Add Negotiated with key bond holders Executed large-scale exchange Resulted in $6.5 bn of debt extended to 2020+
Situation Visant had deleveraged and KKR was interested in returning some capital to LPs
Note:
KCM Value-Add Dividend recapitalization with customized terms Developed anchor orders and committed capital to ensure strong market execution
155
Synergy with Other Parts of KKR: KAM
Situation Company sought to refinance debt and desired capital structure to suit acquisition strategy
KCM Value-Add Worked with KAM (which provided mezzanine note) to arrange senior credit facilities Aided with an amendment and incremental term loan to facilitate a strategic acquisition
Situation Sponsors sought to raise 1.1 bn of committed financing to acquire an 80% stake in RBS WorldPay for 2.0 bn
Note:
KCM Value-Add KCM committed 127 mm to a 300 mm mezzanine tranche Helped to position KAM Mandated as arranger on junior financing
156
Synergy with Other Parts of KKR: CPG
Situation KKR and GA sought $900 mm of committed financing to acquire TASC from Northrop Grumman in the largest LBO of 2009
KCM Value-Add Direct dialogue geared towards mutually advantageous terms resulted in $100 mm allocation of term loan to a fund limited partner, while providing certainty of financing
Situation Flextronics was looking to sell a PIK seller note, and was considering a range of buyers
KCM Value-Add KCM and CPG placed note with a fund limited partner, ensuring placement with a long-term, aligned holder Limited partner and Asian Fund bought the note at substantial discount; investment marked at 1.5x cost at 12/31/2010
Note:
157
Synergy with Other Parts of KKR: Balance Sheet
Situation KKR sought 485 mm of committed financing to purchase Pets at Home in a 1 bn acquisition
KCM Value-Add KCM underwrote ~20% of the senior facilities and arranged 100% of the mezzanine With KCMs knowledge of the asset and investor relationships, KCM delivered more debt at a lower cost and better terms
Situation NXP was nearing IPO launch and seeking to extend maturities, but desired price protection in a volatile market
Note:
KCM Value-Add Partnered with underwriters to provide a $162.5 mm backstop on high yield execution Marketed the transaction to large existing bondholders and set stage for successful IPO
158
More Opportunities for KCM to Grow

Drivers
Recovering private equity and capital markets
Commentary
More acquisition finance mandates, refinancings, and exits Participate in more underwritings, generating more fees and good riskadjusted returns on capital Leverage the broader KKR platform to enhance our relationship with clients
Larger balance sheet
Increased penetration of non-KKR opportunities
Strategic partnerships in origination and distribution
Broaden capabilities and deal flow
159
Client & Partner Group

Suzanne O. Donohoe
160
Why Build Distribution at KKR?
KKRs World Today

Greater Client Interaction Clients More Global in Scope Wider Application of Firms Intellectual Capital
More sophisticated New sources of servicing needed in capital expand our a professionalized geographic horizons alternative asset management industry
Growing, diversifying firm demands broader calling effort
161
Building the Team

Global team of 37 executives dedicated to capital raising and relationship management Continuing to build in the Middle East and high net worth
Client & Partner Group Growth

US International 37
12
25
5 2 2003
162
1 4
2007
2010
Profile of Senior Professionals

Industry Tenure of Relationship Managers and Product Specialists
20+ years 30%
15-20 years 35%
<10 Years 9%
10-15 years 26%
Former Employers
AlpInvest JP Morgan Arden Asset Management
163
BlackRock
Goldman Sachs UBS HSBC
Citi
Morgan Stanley Morgan Creek Asset Management
Deutsche Bank LBO France
PineBridge Investments
Who is Our Team Talking To?

Today, we have over 350 investors across all products on the KKR platform AUM by Investor Type
Sovereign Wealth Funds/ Other Government Entities 25% Corporate Pension 3%
AUM by Geography
Middle East 5%
Financial Institution/ Insurance 20%
Asia Pacific 19%
Family Office/HNW 6% Fund of Funds 8% US Public Pension 37% Endowment/ Foundation 1%

Europe 15%
North America 61%
Note:
Percentages as of 12/31/2010. Based on the AUM of our Private Markets investment funds (1996 Fund onward), Private Markets co-investment vehicles, and Public Markets separately managed accounts and investment funds.
164
Evolving the Dialogue with Existing Investors and Prospects

2003
Private Equity Teams
2009
2010
2011
Mezzanine, Infrastructure Teams
Mezzanine, Infrastructure, Real Assets Teams
Mezzanine, Infrastructure, Real Assets Teams
Chief Investment Officers (CIOs)
CIOs
CIOs
Heads of Fixed Income
Heads of Fixed Income
Hedge Fund Allocators
165
Realizing Our Cross-Sell Potential

Large opportunity to bring existing investors into other products on the KKR platform
2011
2012
2013
2014
2015
2016
1.5 average mandates per investor(1)
2.0 target average mandates per investor
(1)
Defines successor funds in a particular geography as same strategy, but new geographies, new asset classes, or new strategies as cross-sell.
166
Growing Our Investor Franchise

Investors/Mandates Today Average New Mandates per Year
350 x 1.5
525
Existing Investors
~35/year over five years
175
New Investors
~50-60/year over five years
250-300
2016 Aspirational Target Mandates
~1,000
167
New vs. Existing Investors in Recent Fundraising

35% of capital raised in 2010 came from new investors
Strategy China Growth
(3)
Total Capital Raised(1) $1,000 mm $1,565 mm $484 mm $250 mm $2,085 mm $5.4 bn
% New Investors(2) 40% 14% 77% 0% 44% 35%
Infrastructure Mezzanine Oil & Gas Other

(4)
Total Capital Raised in 2010

(1) (2) (3) (4)
Limited partner dollars only; excludes general partner commitments. By dollars committed. As of final close of fund, which occurred subsequent to 12/31/2010. Includes all other strategies for which capital was raised: credit funds and separately managed account vehicles, private equity and private equity coinvestments, and multi-strategy mandates.
168
The Big Picture: Capital Raised in 2010

~70% of capital raised in 2010 was for first-time strategies KKRs first-time strategies have generally had fundraising success relative to others in the market in 2010, for example China Growth
Average China Fund
1 Fund
20 Funds $944 mm(1) $508 mm
3 Funds $166 mm
Industry
Note: Source: (1)
First-Time Funds
China Growth Fund
Past performance is no guarantee of future results. Preqin; data as of 9/2010. KKR data as of 12/2010. Subsequent to the end of 2010, KKR China Growth Fund held a final close at its hard cap of $1 bn.
169
Case Study: China Growth Fund

Raised $1 bn in third-party capital for China Growth Fund Public pensions, funds-of-funds, and sovereign wealth funds/other government entities accounted for ~2/3 of total commitments 40% of our external commitments came from new investors
Dollars Raised by Investor Type
Sovereign Wealth Funds/Other Government Entities 27% Endowment 2% US Public Pension 20%
Dollars Raised by New/Existing
New Investors 40%

Fund-ofFunds 19%
Corporate 10% High Net Worth 16%

Note:
Existing Investors 60%
Financial Institution 6%
All figures shown as of final close on the China Growth Fund, which occurred during the first quarter of 2011.
170
Riding Some Powerful Waves

Low-return environment focus on alternatives Emphasis on diversification of asset classes Concern over conflicts/transparency Aftermath of Volcker Rule Growth and diversification of sovereign wealth funds/other government entities Flight to quality managers and brands post-crisis Investors desire to scale relationships
171
The Result of Our Investment in Distribution
KKRs World Tomorrow

Professionalized Investor Acquisition and Servicing
90%+ of team >10 years experience Best-in-class sales, service, and holistic, solutions-driven approach Ability to continue to attract talent given brand/performance
More Diversified Investor Base
More Mandates Per Investor
By geography By investor type By asset class
Better leverages our calling effort Allows us to create stickier investors
172
Financial Overview
William J. Janetschek
173
Consistent AUM Growth with Increasing Diversification

Private Markets
Private Equity Natural Resources Infrastructure
Public Markets
Liquid Credit Mezzanine Special Situations Equity Strategies
Capital Markets & Principal Activities

Capital Markets Balance Sheet Assets
Third-Party AUM Business

R CAG
$44.9 bn
13.1
26%
$37.0 bn
5.1
$61.0 bn $52.2 bn
14.8 13.4
$47.2 bn
10.8
CAGR: 64% CAGR: 21%
% 38 $6.93
g -y o y- $7.37
th w ro
$7.63
$8.38
$23.4 bn $15.1 bn
0.8 14.4 2004 3.7 31.9 19.7 36.5 31.8 38.8
$6.08
46.2
2005
2006
2007
2008
2009
2010
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
(1)
Private Markets AUM

Note: (1)
Public Markets AUM
Book Value/Adjusted Unit
Assets under management (AUM) are presented pro forma for the combination with KPE and therefore exclude the net asset value (NAV) of KPE and its former commitments to KKRs investment funds. See Important Information for additional disclosures. Adjusted units represent the fully diluted unit count using the if-converted method. See Appendix I for a reconciliation to the comparable GAAP metric.
174
Evolving Mix of Assets and Earnings

AUM Fee Related Earnings (FRE)
Public Markets 9%
Economic Net Income (ENI)

Public Markets <1%
Public Markets 5%
2004
Private Markets 95%
Private Markets 91%
Private Markets >99%%
2010
Public Markets 24%
Capital Markets/ Principal Activities 25% Public Markets 18%
Private Markets 57%
Private Markets 76%
Capital Markets/ Principal Activities 60%
Private Markets 37% Public Markets 3%
175
2010 Sources of Earnings
FY 2010 Fee Related Earnings $318 mm
% of Total 15%
Net Carried Interest
$608 mm
28%
Other Investment Income(1)
$1,214 mm
57%
Economic Net Income
$2,140 mm
100%
Note: (1)
See Important Information for additional disclosures. Reduced by income attributable to noncontrolling interests.
176
2010 GAAP to Segment Bridge
Income (Loss) Before Taxes - (Income) Loss from Noncontrolling Interests in Consolidated Entities + Non-Cash Equity Based Charges + Amortization of Intangibles and Other, Net Economic Net Income + Income (Loss) Attributable to Noncontrolling Interests - Net Carried Interest - Other Investment Income Fee Related Earnings
$7,852
GAAP(1)
(6,544) 824 8 $2,140 4 (608) (1,218) $318
Segment
Segment
(1)
Presented before noncontrolling interests held by KKR Holdings and therefore represents 100% of the KKR business.
177
Sources of Earnings: Drivers

Private Markets Management fees Monitoring fees Fee Related Transaction fees Earnings Operating expenses Gross carried interest Allocation to KKR Net carry pool Carried Interest Management fee refunds Public Markets Management fees Incentive fees Transaction fees Operating expenses Gross carried interest Allocation to KKR carry pool Not applicable Capital Markets & Principal Activities Transaction fees Operating expenses
Other Investment Income
Not meaningful
Not meaningful
Gains/losses on principal assets Interest expense
178
Long-Duration, Stable Asset Base

Contractual Life of FPAUM(1) Fee Paying Asset Base
Permanent <10 Years 3% 7% NAV 12%
10-18 Years 90%
Committed/ Invested Capital 88%
Note: (1)
Based on fee paying assets under management (FPAUM) as of 12/31/2010. Time periods are measured from the time of a fund, account, or vehicles inception.
179
Long-Term Committed AUM Leads to Recurring, Predictable FRE

Highly predictable management and monitoring fees, with upside from transaction fees, incentive fees, and termination payments
Management and Base Monitoring Fees $510
(1)
Other Fees
(2)
Fee Related Earnings $540
$524
$318 $247 $151 $41 2008 PF

FRE Margin:
Note: (1) (2)
$259
$169
2009 PF
40%
2010
43%
28%
Dollars in millions. 2008 and 2009 figures presented pro forma for the elimination of KPE management fees and certain other adjustments related to the Combination Transaction. Fee related earnings are net of fee credits and expenses. FRE margin is based on total fees, net of fee credits. Base monitoring fees exclude monitoring fee termination payments and are presented before fee credits to limited partners. Other fees include transaction fees, monitoring fee termination payments, and incentive fees earned at KFN. Presented before fee credits to limited partners.
180
Significant Opportunity for Carried Interest

Substantial capital entitled to receive carry
$36 bn of invested capital $14 bn of dry powder No hurdles in current private equity funds
Carried interest is mark-to-market on P&L; cash carry paid on realized gains

Timing differences between carry on P&L and receipt of carry in cash MTM carry and realized cash carry are the same over the life of a fund
Traditional Private Equity Funds European Fund Millennium Fund Asian Fund European Fund III 2006 Fund European Fund II Accruing Carry Yes Yes Yes Yes Yes No Paying Carry Yes Yes Yes Close No No Remaining Cost (mm) $492 3,965 2,416 2,247 11,837 5,336 Fair Value (mm) $2,249 5,743 3,442 2,343 13,410 4,594
Unrealized gain of $5.5 bn

181
Historical Realized Gross Carried Interest

Over $4.0 bn of Carry Realized Since 2000
$800 $70
$723
$700 Realized Carried Interest ($ mm) $600 $500 $400 $300 $200 $100 $0 2000 2001 2002 2003 2004 2005
$709
$60
$558 $443 $394
$536
$50 AUM ($ bn)
$40
$370
$30
$190 $97 $54 $0

2006 2007 AUM 2008 2009 2010
$20
$10
$0
Realized Carried Interest

Note:
The 2001 carried interest figure includes two large realizations from Duracell/Gillette and FleetBoston Financial, which contributed approximately 90% of the carried interest for that year. Both investments had been held for approximately ten years before being fully exited in 2001. Past performance is no guarantee of future results.
182
Distribution Policy
Our policy is to distribute substantially all of our fee related earnings and realized cash carry Carry distributions have been limited in recent quarters, but have been the primary source of cash flow over a longer historical period
2010 Distribution Distribution per Unit Fee Related Earnings Net Carried Interest Normal Distribution Additional Distribution Total Distribution $0.28 $0.19 $0.47 $0.13 $0.60 % of Total 60% 40% 100%
Carried Interest 69% Fee Related Earnings 31%
Historical Distributable Earnings(1)
(1)
Based on aggregate figures for the period from 2000-2010. Fee related earnings figures based on reported fee related earnings figures for 2004-2010 and a comparable internal metric for 2000-2003. KKRs Public Markets business began generating fees in 2004 and KKRs capital markets business began generating fees in 2008; historical data may not be indicative of future results.
183
Permanent Balance Sheet Capital to Facilitate Growth

Through the combination with KPE, KKR acquired a significant balance sheet
Permanent Capital to Accelerate Our Growth General partner commitments Seed capital Capital markets funding Other organic/inorganic growth opportunities
Alignment of Interests with Our Limited Partners $5.3 bn of balance sheet capital invested in or committed to our funds and transactions
184
Balance Sheet Highlights

Sizable balance sheet
$5.7 bn of book equity value ($8.38/adjusted unit(2)) $4.8 bn of investments (~35% public securities)
Private Equity Funds Co-Investments Other Investments Total Investments Cash and Cash Equivalents Unrealized Carry Other Assets Total Assets 6.375% Notes due 2020 Other Liabilties/Noncontrolling Interests Partners' Capital Adjusted Units Outstanding Book Value/Adjusted Unit(2)
Balance Sheet as of 12/31/2010(1)

(in mm, except per unit) $2,049 2,305 478 $4,832 756 526 287 $6,401 $500 175 $5,726 683.0 $8.38
Ample liquidity
Over $750 mm of cash $1.6 bn of available revolver capacity(3)
Well capitalized and minimal leverage

A- and A ratings from S&P and Fitch, both with a stable outlook $500 mm of senior notes is only debt outstanding
(1) (2) (3)
Represents KKRs total reportable segment balance sheet. Adjusted units represent the fully diluted unit count using the if-converted method. Pro forma for 2/2011 amendment on Corporate Credit Facility. Excludes $500 mm of undrawn revolver capacity for use in capital markets business.
185
Key Takeaways
Strong AUM growth through expansion of private equity franchise and extension into new businesses Stable management and monitoring fees supported by long-term, locked-up capital Upside potential from transaction fees and monitoring fee termination payments in healthy capital markets environment Opportunity for significant realized carried interest as the environment for exits continues to improve $5.7 bn balance sheet to support growth Opportunity for strong earnings and increased cash distributions
186
Positioning KKR for the Future

Todd A. Fisher
187
Overview
Weve organized KKR to support our diversified, global, and growing business Clear management structure Centralized governance framework with a particular emphasis on risk management Significant enhancement of firm infrastructure Meaningful investment in human capital Focus on talent development to prepare future leaders Compensation structure that aligns employees with firm culture, one another, limited partners, and unitholders
188
Global Presence and People

Over 700 people and 14 offices, including a global presence for each business and function
San Francisco Public Markets Client & Partner Group New York & London Private Markets KKR Capstone Public Markets Capital Markets Client & Partner Group Paris Private Markets Seoul Private Markets Dubai Private Markets Client & Partner Group Mumbai Private Markets Capital Markets Tokyo Private Markets Client & Partner Group
Menlo Park Private Markets KKR Capstone
Houston Private Markets
Washington, DC KKR Capstone
Hong Kong Private Markets KKR Capstone Capital Markets Client & Partner Group Sydney Private Markets Client & Partner Group
Beijing Private Markets KKR Capstone Client & Partner Group
Note:
189
Significant Investment in Human Capital

Headcount increasing most rapidly in new businesses and firm infrastructure to enable profitable and efficient growth
757 595 447 317 644
Private Markets Public Markets KKR Capstone Client & Partner Group Capital Markets Firm Infrastructure Staff
2006
Note:
2007
2008
2009
2010
Reflects number of people at year-end. KKR Capstone is owned and controlled by its senior management and not KKR.
190
Management Structure
Co-CEOs Kravis & Roberts
Private Markets
Energy & Infrastructure
Public Markets
Capital Markets & Principal Activities

Capital Markets Balance Sheet
Private Equity
North America
Europe/ MENA
Asia/ Pacific
Leveraged Credit
Public Equities
KKR Capstone
(1)
Mezzanine
Special Situations
Client & Partner Group Legal & Compliance Information Technology Human Resources
Public Affairs
Finance
(1)
KKR Capstone is owned and controlled by its senior management and not KKR. KKR Capstone is presented here only to illustrate the KKR businesses that they support.
191
Global Governance Structure

Formalized processes and functions in place to manage firm
Transaction Oversight Investment Committees Global decision-making process Separate committees by strategy Balance Sheet Committee Reviews balance sheet investment decisions Oversees firm capital structure and liquidity
Management Committee Other firm-level matters Monitoring Oversight
Portfolio Management Function Monitor investment portfolios across the firms businesses
Risk Committee Identifies and monitors key risks to firm
Conflicts Committee Analyzes and addresses new/ potential conflicts of interest across businesses
Valuation Committees Coordinate quarterly valuations Ensure consistent global process
192
34-Year History of Managing Risk

Limited Partners Strategic
On of beh co ns man alf ti t ue y nt s
Unitholders Debt Holders Employees Portfolio Companies
Reputational
Risk Committee
ss ro Ac ny ma es em th
Legal Operational Financial and Liquidity Culture People
Under strong oversight

Public Company/Independent Board Registered Investment Adviser Regulated Broker-Dealer Activities
193
Firm Infrastructure
Finance
Public company and limited partner reporting Budgeting, planning, expense management
Public Affairs
Stakeholder management across firm and portfolio Public communications Regulatory expertise
Information Technology
Enables better decisions through better information Infrastructure and IT controls
Legal & Compliance

Transaction support Regulatory/compliance conflict management Risk mitigation
Human Resources
Professional development/ training and mobility Performance/meritocracy Recruit, hire, integrate
194
Support Functions Enabling Firm Success: Portfolio Central

Support functions are simplifying work across the firm, making us more efficient and driving bottom-line value Portfolio Central is a perfect example of how our IT team has streamlined private equity portfolio monitoring
Monthly review of revenue, EBITDA, cash flow, and leverage Margin monitoring Covenant headroom alerts
Note:
Data shown is for illustrative purposes only and does not represent actual performance.
195
Support Functions Enabling Firm Success: Portfolio Central

Portfolio Central has had tangible results in identifying key global issues
L3M EBITDA Consumer Industry A FIG Industry B Healthcare Industry C Media/Telecom Industry D Retail Industry E Technology Industry F Portfolio Company All
May-10 31.2% 3.2% 11.5% 8.4% 19.2% (14.6%) 10.2%
Jun-10 20.7% 0.4% 5.3% 7.8% 13.5% (0.2%) 6.8%
Jul-10 17.4% 1.4% 3.5% 2.2% 10.5% (2.0%) 4.4%
% of total 6% 16% 41% 12% 17% 9% 100%
US Census
Note:
Data shown is for illustrative purposes only and does not represent actual performance.
196
Culture and People are Paramount
Teamwork Integrity RelationshipDriven Innovative Accountability Excellence

197
Talent Development
Overarching goal is to maximize individual, team, and firm performance
Focused development of
All Individuals Clear expectations and performance criteria Accountability through robust evaluations Skills-based training Talent mobility
198
Managers Strong emphasis on leadership expectations Leadership development training Private coaching
Compensation Framework Underscores Our Alignment
Unitholders
Insider ownership: employees(1) own ~70% No cash bonus paid by public company for ~55 senior-most executives
Lim
ite
dP art ne rs
Holdback for future leaders
Cro
s-B s
s ne i us
Balance sheet makes us our own largest investor Carry drives bulk of income
One P&L encouraging cross-business teamwork Equity owned by individuals in every business and at every level
(1)
Includes KKR Capstone employees, although KKR Capstone is owned and controlled by its senior management and not KKR.
199
Weve Built the Necessary Foundations for Continued Success
Organized structure with clear governance
Engrained culture of managing risk
Support functions enabling efficiency and growth
Strong team proactively developed and incentivized to drive aligned success
200
Summary
201
Summary of What You Have Heard Today

Private Equity: deep roots and central to strategy Energy & Infrastructure: scaling Public Markets: poised for growth Capital Markets: high-margin and synergistic
Strong Businesses Positioned for Success with Organizational Strength to Drive It
Deep, talented bench
Clear strategic vision
Permanent capital to invest in firm growth
Interests aligned with yours
202
Appendix I
Supplemental Financial Information
203
GAAP vs. Segment

Segment results are reported on a deconsolidated basis to adjust for the impact of consolidating our private equity and certain other investment funds
$ in mm
Illustrative GAAP vs. Segment Reporting Comparison

GAAP Reporting
Fund Size Fee Rate Appreciation Management Fees Monitoring/Transaction Fees Fee Credits Net Monitoring/Transaction Fees Total Fees $1,000 1.50% 20.0% $5.0 $5.0 $5.0
Segment Reporting
Fund Size Fee Rate Appreciation Management Fees Monitoring/Transaction Fees Fee Credits Net Monitoring/Transaction Fees Total Fees Gross Carried Interest Allocation to KKR Carry Pool Net Carried Interest Noncontrolling Interests Income $1,000 1.50% 20.0% $15.0 $5.0 (4.0) $1.0 $16.0 $40.0 (16.0) $24.0 $40.0
Investment Income Noncontrolling Interests Income
$200.0 ($165.0) $40.0
204
Drivers of Earnings (Private Markets)

($ in mm) Management Fees Incentive Fees Management & Incentive Fees Monitoring Fees Transaction Fees Fee Credits Net Monitoring & Transaction Fees Total Fees Compensation & Benefits Occupancy & Related Charges Other Operating Expenses Total Expenses Fee Related Earnings Gross Carried Interest Allocation to KKR Carry Pool Management Fee Refunds Net Carried Interest Other Investment Income Total Investment Income Income Attributable to NCI Economic Net Income Year Ended 12/31/2010 $396.2 $396.2 $86.9 96.0 (52.6) $130.4 $526.6 $159.6 36.4 148.4 $344.3 $182.3 $1,202.1 (453.9) (143.4) $604.8 (1.6) $603.1 0.8 $784.6 20% of gains and no hurdles in current PE funds 40% of carried interest is allocated to KKR executives 20% of management fees returned when carry is recognized ~55 senior-most executives receive no cash bonus at public company General and administrative costs + fund expenses Generally 100-150 bps on committed capital(1); no MTM
Contractual agreements; potential termination payments Deal fees for completed transactions 80/20 fee sharing with LPs; no fee sharing on syndicated equity
(1)
Post-investment period fee rates typically 75 bps on invested capital with subsequent reductions over time.
205
Drivers of Earnings (Public Markets)

($ in mm) Management Fees Incentive Fees Management & Incentive Fees Monitoring Fees Transaction Fees Fee Credits Net Monitoring & Transaction Fees Total Fees Compensation & Benefits Occupancy & Related Charges Other Operating Expenses Total Expenses Fee Related Earnings Gross Carried Interest Allocation to KKR Carry Pool Management Fee Refunds Net Carried Interest Other Investment Income Total Investment Income Income Attributable to NCI Economic Net Income Year Ended 12/31/2010 $57.1 38.8 $95.9 19.1 (12.3) $6.8 $102.7 $29.9 2.4 13.4 $45.7 $57.0 $5.0 (2.0) $3.0 0.7 $3.7 0.5 $60.1 10-20% of gains with 8% hurdle in Alternative Investments vehicles 40% of carried interest is allocated to KKR executives ~55 senior-most executives receive no cash bonus at public company General and administrative costs + fund expenses
KFN: 1.75% of NAV; Liquid Credit: 0.5-1.0% of NAV Alternative Investments: 1.0-1.5% of committed/invested capital(1) Hedge fund-style performance fee at KFN; no high watermark
Deal fees for completed Mezzanine/Special Situations transactions Various fee sharing arrangements
(1)
Lower fees on uninvested capital in certain vehicles.
206
Drivers of Earnings (Capital Markets & Principal Activities)

($ in mm) Management Fees Incentive Fees Management & Incentive Fees Monitoring Fees Transaction Fees Fee Credits Net Monitoring & Transaction Fees Total Fees Compensation & Benefits Occupancy & Related Charges Other Operating Expenses Total Expenses Fee Related Earnings Gross Carried Interest Allocation to KKR Carry Pool Management Fee Refunds Net Carried Interest Other Investment Income Total Investment Income Income Attributable to NCI Economic Net Income Year Ended 12/31/2010 105.3 $105.3 $105.3 $16.9 0.9 8.4 $26.2 $79.1 1,219.1 $1,219.1 3.0 $1,295.1 ~55 senior-most executives receive no cash bonus at public company General and administrative costs Equity and debt underwriting; debt placement; PE syndication
Income on balance sheet investments
207
2010 Segment P&L

(Amounts in thousands)
Private Markets Segment Fees Management Fees Incentive Fees Management and Incentive Fees Monitoring Fees Transaction Fees Fee Credits Net Monitoring and Transaction Fees Total Fees Expenses Employee Compensation and Benefits Occupancy and Related Charges Other Operating Expenses Total Expenses Fee Related Earnings Investment Income (Loss) Gross Carried Interest Less: Allocation to KKR Carry Pool Less: Management Fee Refunds Net Carried Interest Other Investment Income (Loss) Investment Income (Loss) Income (Loss) Before Taxes Income (Loss) Attributable to Noncontolling Interests Economic Net Income Assets Under Management Fee Paying Assets Under Management Committed Dollars Invested Uncalled Commitments $ $ $ 396,227 396,227 86,932 96,000 (52,563) 130,369 526,596 159,561 36,395 148,357 344,313 182,283 1,202,070 (453,872) (143,446) 604,752 (1,643) 603,109 785,392 839 784,553 46,223,900 38,186,700 4,555,700 12,625,900 $ $ $ Year Ended December 31, 2010 Capital Markets Public Markets and Principal Segment Activities Segment 57,059 38,832 95,891 19,117 (12,336) 6,781 102,672 29,910 2,375 13,430 45,715 56,957 5,000 (2,000) 3,000 718 3,718 60,675 537 60,138 14,773,600 7,824,400 697,600 1,448,800 $ $ $ 105,266 105,266 105,266 16,863 945 8,376 26,184 79,082 1,219,053 1,219,053 1,298,135 3,033 1,295,102 $ $ $ Total Reportable Segments 453,286 38,832 492,118 86,932 220,383 (64,899) 242,416 734,534 206,334 39,715 170,163 416,212 318,322 1,207,070 (455,872) (143,446) 607,752 1,218,128 1,825,880 2,144,202 4,409 2,139,793 60,997,500 46,011,100 5,253,300 14,074,700
208
Segment Balance Sheet
(Amounts in thousands, except per unit amounts)

Private Markets Segment Cash and Cash Equivalents Investments Unrealized Carry Other Assets Total Assets Debt Obligations Other Liabilities Total Liabilities Noncontrolling Interests Partners' Capital Book Value per Adjusted Unit(1) $ $ $ $ $ $ $ 229,729 523,002 194,424 947,155 104,248 104,248 (1,750) 844,657 1.24 $ $ $ $ $ $ $ As of December 31, 2010 Capital Markets Public Markets and Principal Segment Activities Segment 10,007 3,001 53,222 66,230 10,193 10,193 766 55,271 0.08 $ $ $ $ $ $ $ 516,544 4,831,798 39,730 5,388,072 500,000 45,837 545,837 16,537 4,825,698 7.06 $ $ $ $ $ $ $ Total Reportable Segments 756,280 4,831,798 526,003 287,376 6,401,457 500,000 160,278 660,278 15,553 5,725,626 8.38
(1)
Adjusted units represent the fully diluted unit count using the if-converted method.
209
Segment Investment Detail

Capital Markets and Principal Activities Segment Schedule of Investments
Cost Dollar General HCA Alliance Boots Nielsen NXP Biomet US Foodservice ProSieben First Data KION Energy Future Holdings PagesJaunes Capmark Co-Investments in Portfolio Companies 2006 Fund Asian Fund European Fund III European Fund Millennium Fund European Fund II Annex Fund China Growth Fund Private Equity Funds Other Investments Total Investments (Amounts in thousands) As of Dember 31, 2010 Fair Value % of Total $575,862 436,473 304,192 235,258 198,253 151,443 120,000 106,731 81,155 55,199 40,000 $2,304,566 $1,148,646 237,606 193,090 189,240 181,989 83,923 13,334 1,479 $2,049,307 477,925 $4,831,798 11.9% 9.0% 6.3% 4.9% 4.1% 3.1% 2.5% 2.2% 1.7% 1.1% 0.9% 47.7% 23.8% 4.9% 4.0% 3.9% 3.8% 1.7% 0.3% 0.0% 42.4% 9.9% 100.0%
$164,291 201,444 301,352 156,839 250,000 151,443 100,000 226,913 135,258 128,058 200,000 235,201 137,321 $2,388,120 $1,080,930 177,996 183,368 144,133 195,164 95,974 9,432 1,479 $1,888,476 505,820 $4,782,416
210
Investment Vehicle Summary
(Amounts in millions, except percentages)

Investment Period Commencement Date 11/2010 08/2009 03/2008 07/2007 09/2006 11/2005 12/2002 12/1999 End Date 11/2016 11/2011 03/2014 07/2013 09/2012 10/2008 12/2008 12/2005 Various 10/2013 09/2016 Percentage Uncalled Committed Commitment Commitments by GP $943.8 539.4 5,956.2 3,983.2 17,642.2 5,750.8 6,000.0 3,085.4 43,901.0 3,194.4 257.5 515.0 $47,867.9 $837.5 424.6 3,709.6 1,567.6 4,726.5 11,265.8 659.3 185.8 515.0 $12,625.9 1.1% 4.2% 4.5% 2.5% 2.1% 2.1% 2.5% 3.2% Various 2.9% 9.7% Amount Remaining Cost $106.3 114.8 2,246.6 2,415.6 11,836.5 5,335.9 3,965.3 492.3 26,513.3 2,447.8 71.7 $29,032.8 Fair Value $106.3 165.9 2,342.8 3,442.2 13,410.2 4,594.0 5,742.5 2,249.4 32,053.3 3,057.5 71.7 $35,182.5
Private Markets China Growth Fund Annex Fund European Fund III Asian Fund 2006 Fund European Fund II Millennium Fund European Fund Private Equity Funds
Invested $106.3 114.8 2,246.6 2,415.6 12,915.7 5,750.8 6,000.0 3,085.4 32,635.2 2,535.1 71.7 $35,242.0
Realized 2,405.1 761.6 6,056.3 6,525.0 15,748.0 316.4 $16,064.4
Co-Investment Vehicles Various Natural Resources I 03/2010 Infrastructure Fund 09/2010 Private Markets Total Public Markets Capital Solutions Mezzanine Fund Public Markets Total Total Various 03/2010
Various 03/2015
$1,757.0 558.6 $2,315.6 $50,183.5
$1,018.2 430.6 $1,448.8 $14,074.7
Various 8.1%
$738.8 128.0 $866.8 $36,108.8
$16,064.4
$738.8 128.0 $866.8 $29,899.6
$787.7 125.2 $912.9 $36,095.4
Note:
As of 12/31/2010.
211
Reconciliation of Fee Related Earnings and Economic Net Income to Net Income Attributable to KKR & Co. L.P.
(Amounts in thousands) Total reportable segments fee related earnings Investment income Less: Income attributable to noncontrolling interests Economic net income (loss) Income taxes Amortization of intangibles and other, net Non-cash equity based charges Allocation to noncontrolling interests held by KKR Holdings L.P. Net (income) loss attributable to KKR & Co. L.P.
Year Ended 12/31/2010 $318,322 1,825,880 (4,409) $2,139,793 (75,360) (7,785) (824,193) (899,277) $333,178
212
Reconciliation of Total Reportable Segments Partners Capital to KKR & Co. L.P. Partners Capital
(Amounts in thousands) Total Reportable Segments Partners' Capital Equity Impact of Management Holdings Corp. and Other Noncontrolling Interests Held by KKR Holdings L.P. Total KKR & Co. L.P. Partners' Capital
As of 12/31/2010 $5,725,626 (52,745) (4,346,388) $1,326,493
213
Reconciliation of GAAP Common Units Outstanding to Adjusted Units
As of 12/31/2009 GAAP Common Units Outstanding - Basic Unvested Common Units KKR Holdings Units Adjusted Units
(2) (1)
As of 3/31/2010 204,902,226 204,902,226 478,105,194 683,007,420
As of 6/30/2010 204,902,226 204,902,226 478,105,194 683,007,420
As of 9/30/2010 204,902,226 204,902,226 478,105,194 683,007,420
As of 12/31/2010 212,770,091 30,000 212,800,091 470,237,329 683,037,420
204,902,226 204,902,226 478,105,194 683,007,420
GAAP Common Units Outstanding - Diluted
(1) (2)
Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan. The issuance of common units of KKR & Co. L.P. pursuant to awards under its equity incentive plan dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business. Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.
214
Appendix II
Speaker Biographies
215
Speaker Biographies
George R. Roberts (Menlo Park), a pioneer of the private equity industry, co-founded Kohlberg Kravis Roberts & Co. in 1976. For over thirty years, George Roberts, along with KKR co-founder Henry Kravis, has led the firm in its growth into a leading global investment firm. He participates in all of KKRs investment activities, and serves on the Investment, Portfolio Management, and Management Committees. Prior to co-founding KKR, George Roberts was in the Corporate Finance Department of Bear Stearns & Company from 1969 to 1976. During this time, he became a partner at age 29 and, along with Mr. Kravis and Jerome Kohlberg, pioneered the use of leverage in acquisitions. After graduating from Culver Military Academy in 1962, George Roberts earned a B.A. from Claremont McKenna College in 1966, and a J.D. from the University of California (Hastings) Law School in 1969. He has been a member of the board of directors of numerous public and private companies, and he currently serves as a director or trustee of several cultural and educational institutions, including the San Francisco Symphony and Claremont McKenna College. George Roberts is founder and Chairman of the board of directors of REDF, a San Francisco non-profit organization. REDF uses the practices of venture philanthropy to create job opportunities through the support of social enterprises that help people gain the skills to help themselves.
216
Speaker Biographies
Henry R. Kravis (New York), a pioneer of the private equity industry, co-founded Kohlberg Kravis Roberts & Co. in 1976. For over thirty years, Mr. Kravis, along with KKR co-founder George Roberts, has led the firm in its growth into a leading global investment firm. He is actively involved in managing the firm and serves on the Investment, Portfolio Management, and Management Committees. Prior to co-founding KKR, Henry Kravis was in the Corporate Finance Department of Bear Stearns & Company from 1969 to 1976. During this time, he, along with George Roberts and Jerome Kohlberg, pioneered the private equity industry. Henry Kravis earned a B.A. in Economics from Claremont McKenna College and an M.B.A. from the Columbia University Graduate School of Business. Over the years, he has been a member of the board of directors of numerous public and private companies. He currently serves on the board of First Data Corporation and China International Capital Corporation. He also currently serves as a director or trustee of several cultural and educational institutions, including the Partnership for New York City, Mount Sinai Hospital, Columbia Graduate School of Business (where he is co-chairman of the board), Rockefeller University (vice-chair), Claremont McKenna College, and the Council on Foreign Relations. Mr. Kravis is co-chairman of the New York City Investment Fund (NYCIF), a non-profit organization he founded in 1996 to create jobs and help small businesses in New York City. In response to other targeted needs that have arisen in the city, the Fund has created special purpose programs. For example, the NYCIF was responsible for raising $11 million to provide 88 recoverable grants to small businesses in Lower Manhattan that suffered damage following the events of September 11, 2001. At Claremont McKenna College, he founded the Kravis Leadership Institute and established the Kravis Prize in Leadership, which is awarded annually to an international non-profit organization that demonstrates leadership, creativity, and sustainability.
217
Speaker Biographies
Alexander Navab (New York) joined KKR in 1993. He co-heads KKRs North American Private Equity business and heads the Media/Communications industry team in the US. Mr. Navab played a significant role in the development of Borden, Intermedia Communications, KSL Recreation, Neway Anchorlok, Newsquest Media, The Nielsen Company (formerly VNU Group) NuVox (NewSouth Communications), PanAmSat, RELTEC, Tenovis, Visant, Yellow Pages Group, World Color Press, Zhone Technologies, and Weld North. He is currently on the board of directors of The Nielsen Company, Weld North, and Visant. Mr. Navab also serves on KKRs Investment Committee and Management Committee. Prior to joining KKR, Mr. Navab was with James D. Wolfensohn Incorporated where he was involved in mergers and acquisitions as well as corporate finance advisory work. From 1987 to 1989, he was with Goldman, Sachs & Co. where he worked in the Investment Banking Department. He received a B.A. with honors, Phi Beta Kappa, from Columbia College, and an M.B.A. with high distinction, Baker Scholar, Wolfe Award, from the Harvard Business School. Mr. Navab is a member of the Leadership Council of the Robin Hood Foundation, and serves on the Board of Visitors of Columbia College. Michael W. Michelson (Menlo Park) joined KKR in 1981. Since then, he has been directly involved with numerous portfolio companies. He played a significant role in the development of Accellent, Alliance Imaging, Amphenol, AutoZone, Beatrice Companies, Biomet, Dillingham, Golden West, HCA, Jazz Pharmaceuticals, KinderCare Learning Centers, Lily Tulip, M & T, Malone & Hyde, Fred Meyer, Owens-Illinois, and Union Texas Petroleum. He currently serves on the board of directors of Biomet, HCA, and Jazz Pharmaceuticals. He co-heads KKRs North American Private Equity business and heads the Health Care industry team. Mr. Michelson is also a member of KKRs Investment Committee and Management Committee. Mr. Michelson began his professional career with the law firm of Latham & Watkins in Los Angeles, where he was involved in a broad corporate practice while specializing in management buyouts. He has an A.B., cum laude, Phi Beta Kappa, from Harvard College and a J.D., cum laude, from Harvard Law School.
218
Speaker Biographies
Johannes P. Huth (London) joined KKR in 1999 and during that time has played a significant role in the development of ATU, Demag, Duales System Deutschland (DSD), KION, MTU Aero Engines, FL Selenia, NXP (formerly Philips Semiconductor), Wincor Nixdorf, Zumtobel, Pro7 Sat1, BMG, and Wild. Currently he is on the board of directors of ATU, KION, NXP, and ProSiebenSat.1. Mr. Huth manages KKRs operations in Europe and is a member of the Investment and Management Committees. He started his professional career with Salomon Brothers in the Mergers and Acquisitions department in New York and London where he was a Vice President. Following that, he worked with Investcorp in London, where he was a member of their Management Committee and was jointly responsible for operations in Europe. While at Investcorp, Mr. Huth led a number of transactions in Europe. He holds a B.Sc. with highest honors from the London School of Economics and an M.B.A. from the University of Chicago.
Joseph Y. Bae (Hong Kong) has been at KKR for 14 years and is the Managing Partner of KKR Asia. Mr. Bae is a member of KKRs Management Committee and Risk Management Committee as well as its Asia Portfolio Management and Asia Investment Committees. During his tenure with KKR he has played a significant role in the investments in Oriental Brewery, BIS Cleanaway, Borden, Elmers, Inc., MMI, Unisteel, PanAmSat, PRIMEDIA, Regal Cinemas, Seven, Shoppers Drug Mart, Visant, World Color Press, and Yellow Pages Group. Currently, he is on the board of directors of Seven and Oriental Brewery. Mr. Bae, who had been located in the New York office, moved to Hong Kong in late 2005 to establish KKRs Asian operations. Prior to KKR, Mr. Bae worked for Goldman, Sachs & Co. in its Principal Investment Area, where he was involved in a broad range of merchant banking transactions. He has a B.A., magna cum laude, from Harvard College.
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Speaker Biographies
Dean B. Nelson (New York) founded Capstone in 2000. He was formerly a senior partner with The Boston Consulting Group, ran the firms Chicago office, and was on the management committee. At The Boston Consulting Group, he focused primarily on the consumer goods and retail, industrial goods, and high technology industries. Mr. Nelson previously worked at Shell Oil Company. At Capstone, he has worked with Alliance Imaging, Dollar General, First Data, Laureate, Owens-Illinois, PRIMEDIA, Rockwood/Dynamit Nobel, Sealy, Toys R Us, The Nielsen Company (formerly VNU Group), and Yellow Pages Group. He has previously served on the boards of Dollar General, Toys R Us, and the Yellow Pages Group. Mr. Nelson is Chairman of Primedia and is a Sealy board member. He holds a B.S., summa cum laude, from Purdue University and an M.B.A. with High Honors from The University of Chicago.
Marc S. Lipschultz (New York) joined KKR in 1995 and is the global head of KKRs Energy and Infrastructure business. Mr. Lipschultz currently serves as a member of KKRs Management Committee and Infrastructure Investment Committee. He has played a leading role in many investments including DPL, International Transmission Company, Texas Genco, Energy Future Holdings (formerly TXU Corp.), East Resources, Hilcorp Resources, RPM Energy, El Paso Midstream, and Colonial Pipeline. Currently, Mr. Lipschultz is on the board of directors of Energy Future Holdings. Prior to joining KKR, Mr. Lipschultz was with Goldman, Sachs & Co., where he was involved in a broad array of mergers and acquisitions as well as the firms principal investment activities. He received an A.B., Honors and Distinction, Phi Beta Kappa, from Stanford University and an M.B.A. with High Distinction, Baker Scholar, from Harvard Business School. Mr. Lipschultz is actively involved in a variety of non-profit organizations, serving as chair of the Center for Curatorial Studies and as a member of the boards of the American Enterprise Institute for Public Policy Research, Bard College, Common Good, Michael J. Fox Foundation, and Mount Sinai Medical Center.
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Speaker Biographies
Kenneth B. Mehlman (New York) joined KKR in 2008 and is Global Head of Public Affairs. Prior to joining KKR, Mr. Mehlman was a partner at Akin Gump Strauss Hauer & Feld with a bi-partisan practice in legislative and regulatory counseling. He previously served in highlevel positions on Capitol Hill and in the White House, including as Chairman of the Republican National Committee and Campaign Manager of President Bushs successful reelection campaign. Mr. Mehlman is a trustee of the United States Holocaust Memorial Museum and of Franklin & Marshall College; a member of the Council on Foreign Relations and The American Enterprise Institutes National Council; and serves on the board of directors at the American Foundation for Equal Rights, The IDEAL School of Manhattan, and on the Senior Advisory Committee of the Harvard University Institute of Politics. Mr. Mehlman graduated with a B.A. from Franklin & Marshall College and holds a J.D. from Harvard Law School.
Scott C. Nuttall (New York) joined KKR in 1996 and heads KKR's Global Capital and Asset Management Group which includes the Client and Partner Group, KKR Capital Markets and KKR Asset Management. He has played a significant role in KKR's private equity investments in Alea Group Holdings, Amphenol, Bristol West Holdings, Capmark Financial, First Data Corporation, KinderCare Learning Centers, Legg Mason, Masonite International, Walter Industries and Willis Group. He is currently a member of the board of directors of First Data Corporation, KKR Financial Holdings and Legg Mason. He is also actively involved in funds affiliated with the Firm, including KKR Private Equity Investors and KKR Financial Holdings, and is a member of the Firm's Management Committee. Prior to joining KKR, he was with the Blackstone Group where he was involved in numerous merchant banking and merger and acquisition transactions. He received a B.S., summa cum laude, from the University of Pennsylvania.
221
Speaker Biographies
William C. Sonneborn (San Francisco) joined KKR in 2008 and heads KKR Asset Management, which advises KKR Financial Holdings LLC, of which he is the CEO. He is a member of the Credit, Mezzanine, and Capital Solutions Investment Committees and the KKR Asset Management Portfolio Management Committee. Prior to joining KKR, he spent over ten years at The TCW Group, Inc., most recently as President and Chief Operating Officer and CEO of The TCW Funds, Inc. and a member of the executive committee of Socit Gnrale Asset Management, S.A. His responsibilities at TCW included overseeing and developing portfolio management, operations and sales and marketing in both traditional and alternative investments. He has also served as member of the board of directors of The TCW Group, Inc. and Sompo Japan Asset Management in Tokyo, Japan. Prior to TCW, he spent six years in investment banking at Goldman, Sachs & Co. in both New York and Hong Kong, predominantly focused on executing mergers and acquisitions for financial institutions. Mr. Sonneborn graduated with honors from Georgetown University.
Craig J. Farr (New York) joined KKR in 2006 and is head of KKRs Capital Markets team. Mr. Farr is driving the build-out of the structuring, capital markets advisory, and distribution resources in KKRs global capital markets business. Mr. Farr also is a member of the firms Risk Management Committee. Prior to joining KKR, Mr. Farr spent 12 years at Citigroup Global Markets Inc., where he was promoted to Managing Director in 2001 and served as Co-Head of North American Equity Capital Markets. Mr. Farrs previous responsibilities included Head of US Convertible and Corporate Equity Derivative Origination. He began his career at Salomon Brothers in the investment banking division. Mr. Farr graduated with a Bachelor of Commerce from Queens University in Kingston, Canada.
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Speaker Biographies
Suzanne O. Donohoe (New York) joined KKR in 2009. Prior to joining KKR, she spent nearly 17 years with The Goldman Sachs Group, where she was a Partner for her last eight years. Most recently, she was based in London and served as the head of Goldman Sachs Asset Management International (GSAMI), leading GSAMI activities outside the United States with a specific focus on managing client-facing professionals and activities across all product lines internationally. Prior to heading GSAMI, Ms. Donohoe headed Goldman Sachs Asset Managements client businesses in North America. Ms. Donohoe received her M.B.A. from the Wharton School at the University of Pennsylvania and her undergraduate degree from Georgetown University.
William J. Janetschek (New York) joined KKR in 1997. He currently serves as the firms Chief Financial Officer. Prior to joining KKR, he was a Tax Partner with the New York office of Deloitte & Touche LLP. Mr. Janetschek was with Deloitte & Touche for 13 years. He holds a B.S. from St. Johns University and an M.S., Taxation, from Pace University, and is a Certified Public Accountant.
223
Speaker Biographies
Todd A. Fisher (New York) joined KKR in 1993. Since July 2008, he has been the global Chief Administrative Officer for KKR, responsible for overseeing the finance, legal, IT, HR, communications, and public affairs functions, as well as coordinating with the various businesses and geographies of the firm on strategy, risk management, and control infrastructure. He currently sits on KKRs Investment Committee and chairs its Management Committee. Since joining KKR in 1993, he has been involved in a range of companies and industries. He led the firms acquisitions of Vendex KBB, Dynamit Nobel, Rockwood Specialties Inc., and Northgate Information Solutions and was a leading member of the KKR teams responsible for the Alea Group Holdings Ltd., Bristol West Group, Merit Behavioral Care, and Willis Group Ltd. transactions. Prior to joining KKR, Mr. Fisher worked for Goldman, Sachs & Co. in New York and for Drexel Burnham Lambert in Los Angeles. Mr. Fisher graduated from Brown University with a B.A. in Biology and received an M.A. in International Affairs from Johns Hopkins University and an M.B.A. in Finance from the Wharton School at the University of Pennsylvania.
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Appendix III
Important Information
225
Please also refer to the important information contained in the section entitled Legal Disclosures located at the beginning of this presentation, which section is incorporated herein by reference in its entirety. Fee related earnings (FRE): FRE is comprised of segment operating revenues, less segment operating expenses. The components of FRE on a segment basis differ from the equivalent U.S. GAAP amounts on a combined basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of expenses of consolidated funds; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of charges relating to carry pool allocations; (v) the exclusion of non-cash equity charges and other non-cash compensation charges borne by KKR Holdings L.P.; (vi) the exclusion of certain reimbursable expenses and (vii) the exclusion of certain non-recurring items. Economic net income (ENI): ENI is a measure of profitability for KKRs reportable segments and is comprised of: (i) FRE; plus (ii) segment investment income, which is reduced for carry pool allocations and management fee refunds; less (iii) certain economic interests in KKRs segments held by third parties. ENI differs from net income on a GAAP basis as a result of: (i) the exclusion of the items referred to in FRE above; (ii) the exclusion of investment income relating to noncontrolling interests; and (iii) the exclusion of income taxes. Assets under Management (AUM): AUM represents the assets from which KKR is entitled to receive fees or a carried interest and general partner capital. AUM is calculated as of any date as the sum of (i) the fair value of the investments of our investment funds plus uncalled capital commitments from these funds, (ii) the fair value of investments in our co-investment vehicles, and (iii) the net asset value of certain of fixed income products, and (iv) the value of outstanding structured finance vehicles. KKRs calculation of AUM may differ from the calculations of other investment firms and, as a result, KKRs measurements of AUM may not be comparable to similar measures presented by other investment firms. KKRs definition of AUM is not based on any definition of AUM that is set forth in the agreements governing the investment funds, vehicles or accounts (collectively, Funds) that KKR manages. Fee paying AUM ("FPAUM"): FPAUM represents only those AUM from which KKR receives fees. FPAUM is the sum of all of the individual fee bases that are used to calculate KKRs fees and differs from AUM in the following respects: (i) assets from which KKR does not receive a fee are excluded (i.e., assets with respect to which KKR received only carried interest); and (ii) certain assets, primarily in KKRs 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. Combination Transaction: The Combination Transaction refers to the transaction to combine the businesses of KKR & Co. L.P. and KKR Private Equity Investors, L.P. (KPE), which was consummated on October 1, 2009. Capstone: References to KKR Capstone or Capstone are to all or any of Capstone Consulting LLC, Capstone Europe Limited, and KKR Capstone Asia Limited, each of which is owned and controlled by their senior management and not by KKR. KKR Capstone uses the KKR name under license from KKR. KKR Capstone is not a subsidiary or other affiliate of KKR.
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Calculation of Gross Returns: Unless otherwise indicated, any references to Gross IRR or gross returns and any references to multiples of invested capital, MOIC, or gross multiples or multiples of cost are to the aggregate, annual, compound, gross internal rate of return on investments or multiples of invested capital, respectively. Such amounts are calculated at investment level and, accordingly, do not reflect management fees, carried interest and transaction costs and other expenses to be borne by investors in a Fund, which will reduce returns and in the aggregate are expected to be substantial. In the case of unrealized investments, the gross returns are based on internal valuations by KKR of unrealized investments as of the applicable date. The actual realized returns on a Funds unrealized investments will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which the valuations used in the prior performance data contained herein are based. Accordingly, the actual realized return of these unrealized investments may differ materially from the returns indicated herein. Calculation of Net Returns: Unless otherwise indicated, any references to Net IRR or net return or net multiples are to the internal rate of return or multiple of invested capital calculated at the Fund level, after payment of applicable management fees and carried interest and other applicable expenses; however, where net returns and net multiples are shown at the investment level, net returns and net multiples are before management fees, as management fees are applied only at the Fund level. Internal rates of return are computed on a dollar-weighted basis, which takes into account the timing of cash flows, the amounts invested at any given time, and unrealized values as of the relevant valuation date. Past Performance is No Guarantee: Information about any Fund and investments made by such Funds, including past performance of such Funds and investments, is provided solely to illustrate KKRs investment experience, and processes and strategies used by KKR in the past with respect to such Funds. The performance information relating to KKRs previous investments is not intended to be indicative of any Funds future results or the future results of KKR. Past performance is not a guarantee of future results. There can be no assurance that KKR or any Fund will achieve comparable results as those presented or that investors in a Fund will not lose any of their invested capital. S&P Index and Other Indices: Any indices referred to in this presentation are used for purposes of comparison to the performance of certain capital markets. Unless otherwise noted, the return figures for these indices take into account changes in price and gross cash dividends paid in respect of securities comprising each index. The market index returns assume that on the day a portfolio investment is made, a hypothetical investment in a matching amount is made in the given index. For each date on which either a portion or all of the portfolio investment is sold, a hypothetical index multiple (factor) is calculated by comparing the change in index value between the two dates. The cost of the investment sold (or portion of cost sold) is multiplied by this factor, resulting in a hypothetical index value. The return is calculated using these dates of investment and hypothetical value(s) generated. The return figures for each index do not reflect the deduction of any taxes, expenses, transaction costs or advisory fees. Broad-based securities indices are unmanaged and are not subject to fees and expenses typically associated with Funds. It is not possible to invest directly in an unmanaged index. Certain performance shown is compared to the S&P 500, a broad-based securities index. The S&P 500 is shown for informational purposes only. The performance of the S&P 500 represents unmanaged, passive buy-and-hold strategies, and investment characteristics that differ materially from any Funds, and an investment in a Fund is not comparable to an investment in such index or in the stocks that comprise the index. The risk/return profile of the S&P 500 is also typically materially different from that of any Fund. Further, unless otherwise specified, the S&P 500 is not used or selected by KKR as an appropriate benchmark to compare relative to the performance of any Fund, but rather it is included herein solely because it is a well-known and widely recognized index.
227
The foregoing disclosure applies equally to any comparison with the Merrill Lynch High Yield Master II Index, the MSCI World Index and the Russell 3000 Index. The Merrill Lynch US High Yield Master II Index is a commonly used benchmark index for high yield corporate bonds. The MSCI World Index is a stock market index of 1,500 'world' stocks, and is often used as a common benchmark for 'world' or 'global' stock funds. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies. KKR Asset Management LLC ("KAM"): KAM is a Delaware limited liability company founded in August 2004. KAM consists of two divisions: the Marketable Securities Division and the Alternative Products Division. The Marketable Securities Division provides investment management and administrative services that follow a fixed-income and/or equity strategy generally investing in instruments with a readily determinable market value. The Marketable Securities Division holds itself out to the public as a separate division that claims compliance with the CFA Institute's Global Investment Performance Standards ("GIPS"). The Alternative Products Division provides investment vehicles that generally invest in instruments with a not readily determinable market value. The Alternative Products Division holds itself out to the public as a separate division that does not claim compliance with GIPS. Additional Disclosure for KAMs Gross and Net Returns: Returns are time-weighted and geometrically linked and unless otherwise stated, gross performance results are net of commissions and other direct expenses, but before management fees, custody charges, withholding taxes, and other indirect expenses. Net performance results are net of management fees, commissions, and other direct expenses, but before custody charges, withholding taxes, and other indirect expenses. All returns include the reinvestment of dividends. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results. Differences in the methodology used to calculate performance may also lead to different performance results than those shown. KAMs Benchmarks: (1) The Benchmarks referred to by KAM include the S&P/LSTA Leveraged Loan Index (the "S&P/LSTA Loan Index") and the Bank of America Merrill Lynch High Yield Master II Index (the "BoAML HY Master II Index" and, together with the S&P/LSTA Loan Index, the "Indices"). The S&P/LSTA Loan Index is an index that comprises all loans that meet the inclusion criteria and that have marks from the LSTA/LPC mark-to-market service. The inclusion criteria consist of the following: (i) syndicated term loan instruments consisting of term loans (both amortizing and institutional), acquisition loans (after they are drawn down) and bridge loans; (ii) secured; (iii) U.S. dollar denominated; (iv) minimum term of one year at inception; and (v) minimum initial spread of LIBOR plus 1.25%. The BoAML HY Master II Index is a market value weighted index of below investment grade U.S. dollar denominated corporate bonds publicly issued in the U.S. domestic market. "Yankee" bonds (debt of foreign issuers issued in the U.S. domestic market) are included in the BoAML HY Master II Index provided that the issuer is domiciled in a country having investment grade foreign currency long-term debt rating. Qualifying bonds must have maturities of one year or more, a fixed coupon schedule and minimum outstanding of US$100 million. In addition, issues having a credit rating lower than BBB3, but not in default, are also included. The indices do not reflect the reinvestment of income or dividends and the indices are not subject to management fees, incentive allocations or expenses. It is not possible to invest directly in unmanaged indices.
228
KAMs Benchmarks (Continued): (2) KAMs Secured Credit model performance track record is presented as supplemental information. The Secured Credit model represents performance of KAMs Secured Credit Levered composite calculated on an unlevered basis. KAMs Secured Credit Levered composite has an investment objective that allows it to invest in assets other than senior secured term loans and high yield securities, which includes asset backed securities, commercial mortgage backed securities, preferred stock, public equity, private equity and certain freestanding derivatives. In addition, KAMs Secured Credit Levered composite has employed leverage in its respective portfolios as part of its investment strategy. Gains realized with borrowed funds may cause returns to increase at a faster rate than would be the case without borrowings. The Secured Credit model performance presented reflects model performance an investor may have obtained had it invested in the manner shown and does not represent performance that any investor actually attained. The model performance presented is based upon the following assumptions: the returns of the Secured Credit Levered Composite calculated on an unlevered basis. Model returns have many inherent limitations and may not reflect the impact that material economic and market factors may have had on the decision-making process if client funds were actually managed in the manner shown. Changes in the assumptions may have a material impact on the model returns presented. The model performance is adjusted to reflect the reinvestment of dividends and other income and, except where indicated, the anticipated fees and expenses of the portfolio, including brokerage, custody, advisory and other fees. The Benchmark used for purposes of comparison for the Secured Credit strategy presented herein is the S&P/LSTA Loan Index. There are differences, in some cases, significant differences, between KAMs investments and the investments included in the Indices. For instance, KAMs composite may invest in securities that have a greater degree of risk and volatility, as well as liquidity risk, than those securities contained in the Indices. Performance is based on a blended composite of Bank Loans Plus High Yield strategy accounts. The Benchmark used for purposes of comparison for the Bank Loans Plus High Yield strategy is based on 65% S&P/LSTA Loan Index and 35% ML HY Master II Index. The Benchmark used for purposes of comparison for the High Yield Carve Out strategy presented herein is based on the Bank of America Merrill Lynch High Yield Master II Index. The High Yield carve-out is comprised of all investments included in KAM-sponsored portfolios that have been identified as "below investment grade" or were rated "BB" or lower at time of issuance by Standard & Poor's. The collection of investments included in the High Yield carve-out come from various investment funds, vehicles and accounts sponsored by KAM. Performance is a blended composite of accounts in the Opportunistic Credit strategy. The Benchmark used for purposes of comparison is the BoAML HY Master II Index.
(3) (4)
(5)
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2011 KKR Investor Day

March 15, 2011

Unit Price Performance Since KKR/KPE Combination

SPX Total Return: 26%

Performance Since KPE Transaction % Price Performance

KKR Public on Euronext

KKR Relists on NYSE

Agenda for the Day

Our Reporting Segments

Private Markets $46 bn AUM

Public Markets $15 bn AUM

Capital Markets & Principal Activities $4.8 bn of investments

How Unitholders Participate in Our Success

Fee Related Earnings

Significant recurring portion

Substantial upside opportunity from profit participation

Prospects for Growth

Evolving and Growing

Building and Scaling

Liquid Credit Private Equity Natural Resources/ Infrastructure

Mezzanine/ Special Situations

Macro Trends Augmenting Our Opportunities

Investors seeking return

More dollars allocated to alternatives

Consolidation of general partner relationships

Private Equity Overview

Private Equity Overview

Aligned with Investors

Growing Private Equity AUM

See Important Information for our calculation of assets under management.

Decades of Experienceand Decades Investing Together

2010 KKR Capstone

History of Innovation and Creativity

Strong Historical Performance

Performance in Periods of Dislocation

Portfolio Built on Patient, Selective Investing

Sourcing Network Leads to Unique Opportunities

Limited Process(1) 35% Proprietary 48%

Expertise Across Transaction Sizes

Current Portfolio by Type(2)

JV/Growth/ Structured Equity 29%

Small to Medium Buyout (<$5 bn) 50%

Strong Operating Performance at Portfolio

Focus on Capital Structure

$46 bn refinanced across global KKR portfolio in 2009 and 2010

~80% of portfolio maturities due in 2014 and thereafter

Our Post-Investment Approach: Drive Value

Global Public Affairs

Global Resources Drive Value

KKR Capital Markets

Cash Back to LPs

2010 Increases in Fund Values

Relative 2010 Performance

KKR PE Funds Gross

Monetization Events Continuing in 2011

Post-Recession Story Playing Out

$6.8 bn of equity invested

21% gross IRR

Significant Levers for Continued Growth

Successor funds to each regional fund North America Asia Europe

Strategy-specific funds capitalizing on market trends China Growth

Exploring opportunities in Latin America

Well Positioned to Capitalize on a Strong PE Environment