KKR & Co. Inc 8-K/A, filed Mar 23, 2021

KKR & Co. Inc. (KKR)

8-K/A 2021-03-23 For: 2021-02-01

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Added on April 05, 2026

About this 8-K/A

KKR & Co. Inc filed this 8-K/A on March 23, 2021, reporting on events of February 1, 2021.

Items reported

Item 2.01: Completed an acquisition or sale of assets
Item 9.01: Financial statements and exhibits

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	KKR	New York Stock Exchange
6.75% Series A Preferred Stock	KKR PR A	New York Stock Exchange
6.50% Series B Preferred Stock	KKR PR B	New York Stock Exchange
6.00% Series C Mandatory Convertible Preferred Stock	KKR PR C	New York Stock Exchange


Exhibit Number						Description
23.1						Consent of PricewaterhouseCoopers LLP
99.1						The historical audited consolidated balance sheets of Global Atlantic as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income (loss), and cash flows for the years ended December 31, 2020 and 2019, the related consolidated statements of redeemable non-controlling interests and equity for the period from December 31, 2018 to December 31, 2020, the related notes (collectively, the “consolidated financial statements”)
99.2						The unaudited pro forma condensed combined financial information of KKR, giving effect to the acquisition of Global Atlantic, which includes the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020, the unaudited pro forma condensed combined statement of financial condition as of December 31, 2020 and the related notes.
104						Cover Page Interactive Data File, formatted in Inline XBRL


	KKR & CO. INC.

Date: March 23, 2021	By:	/s/ Christopher Lee
	Name:	Christopher Lee
	Title:	Assistant Secretary


Report of independent auditors

Consolidated financial statements			Page

Consolidated balance sheets as of December 31, 2020 and December 31, 2019			2
Consolidated statements of income for the years ended December 31, 2020 and December 31, 2019			4
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2020 and December 31, 2019			5
Consolidated statements of redeemable non-controlling interests and equity for the period from December 31, 2018 to December 31, 2020			6
Consolidated statements of cash flows for the years ended December 31, 2020 and December 31, 2019			7
Notes to the consolidated financial statements
1. Nature of business			9
2. Basis of presentation and significant accounting policies and practices			10
3. Investments			30
4. Derivative instruments			40
5. Fair value disclosure of financial instruments			44
6. Deferred policy acquisition costs, value of business acquired, unearned revenue reserves and unearned front-end loads			57
7. Policyholder liabilities			58
8. Closed blocks			65
9. Reinsurance			66
10. Debt			68
11. Composition of other assets, liabilities, income, insurance expenses and general and administrative expenses			71
12. Shareholders’ equity			72
13. Accumulated other comprehensive income (loss)			73
14. Redeemable non-controlling interests			73
15. Equity-based compensation			73
16. Income taxes			77
17. Dividend restrictions and statutory information			80
18. Related party transactions			83
19. Commitments and contingencies			86
20. Subsequent events			89


As of December 31,	2020		2019
($ in millions, except share data)
Assets
Investments:
Fixed maturity securities, available-for-sale, at fair value (amortized cost: $55,576 and $46,626, respectively; variable interest entities: $2,316 and $1,236, respectively; and related party: $368 and $179, respectively)	$	61,154	$	49,765
Fixed maturity securities, trading, at fair value (amortized cost: $11,025 and $922, respectively)	11,193		984
Equity securities at fair value (cost: $51 and $54, respectively)	95		58
Mortgage and other loan receivables (portion at fair value: $842 and $259, respectively; variable interest entities: $2,894 and $1,044, respectively; and related party: $558 and $238, respectively)	15,479		13,506
Policy loans	696		711
Derivative assets	968		823
Funds withheld receivable at interest (portion at fair value: $407 and $389, respectively; related party: $35 and $27, respectively)	2,446		2,428
Other investments (portion at fair value: $558 and $537, respectively; variable interest entities: $5,732 and $5,097, respectively; and related party: $140 and $145, respectively)	6,478		5,847
Total investments	98,509		74,122
Cash and cash equivalents (variable interest entities: $417 and $191, respectively)	3,192		2,465
Accrued investment income (variable interest entities: $58 and $41, respectively)	709		544
Reinsurance recoverable (portion at fair value: $1,355 and $1,316, respectively; related party: $11 and $2, respectively)	15,140		4,189
Deferred policy acquisition costs	1,567		1,704
Value of business acquired	280		424
Other assets (variable interest entities: $201 and $62, respectively)	912		602
Separate account assets	5,459		5,504
Total assets	$	125,768	$	89,554
			(continued)


☐						Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐						Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐						Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐						If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Global Atlantic Financial Group Limited Consolidated Balance Sheets


For the years ended December 31,	2020		2019
($ in millions)
Revenues
Premiums (related party: $32 and $37, respectively)	$	2,900	$	1,292
Policy fees (related party: $15 and $16, respectively)	1,233		1,223
Net investment income (related party investment income: $56 and $32, respectively; related party investment expense: $16 and $13, respectively)	3,109		2,923
Net investment gains:
Other-than-temporary impairment on available-for-sale fixed maturity securities	(42)		—
Net investment gains (related party: $1 and $(2), respectively)	213		576
Total net investment gains	171		576
Other income	59		58
Total revenues	7,472		6,072

Benefits and expenses
Policy benefits and claims (related party: $259 and $298, respectively)	6,075		4,521
Amortization of policy acquisition costs	268		287
Interest expense	68		67
Insurance expenses (related party: $6 and $7, respectively)	200		106
General and administrative expenses (related party: $9 and $10, respectively)	507		488
Total benefits and expenses	7,118		5,469
Income before income taxes	354		603
Income tax (benefit) expense	(45)		39
Net income	399		564
Less: net loss attributable to non-controlling interests and redeemable non-controlling interests	(110)		(69)
Net income attributable to Global Atlantic Financial Group Limited shareholders	$	509	$	633


	Redeemable non-controlling interests		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive (loss) income		Total shareholders’ equity		Non-controlling interests		Total equity
($ in millions)
Balance as of December 31, 2018	$	—	$	1	$	1,571	$	1,945	$	(57)	$	3,460	$	72	$	3,532


Net income	(21)		—		—		633		—		633		(48)		585
Other comprehensive income	—		—		—		—		1,968		1,968		1		1,969
Equity-based compensation	—		—		16		—		—		16		—		16

Repurchase of common stock	—		—		(58)		—		—		(58)		—		(58)
Capital contributions and other activity from non-controlling interests and redeemable non-controlling interests	103		—		—		—		—		—		—		—
Distributions to non-controlling interests and redeemable non-controlling interests	(2)		—		—		—		—		—		(7)		(7)
Change in equity of non-controlling interests and redeemable non-controlling interests	14		—		—		—		—		—		120		120
Balance as of December 31, 2019	94		1		1,529		2,578		1,911		6,019		138		6,157


Net income	—		—		—		509		—		509		(110)		399
Other comprehensive income	—		—		—		—		1,404		1,404		1		1,405
Equity-based compensation	—		—		18		—		—		18		—		18

Repurchase of common stock	—		—		(5)		—		—		(5)		—		(5)
Capital contributions and other activity from non-controlling interests and redeemable non-controlling interests	—		—		—		—		—		—		116		116
Distributions to non-controlling interests and redeemable non-controlling interests	(3)		—		—		—		—		—		(12)		(12)

Change in equity of non-controlling interests and redeemable non-controlling interests	—		—		—		—		—		—		5		5
Balance as of December 31, 2020	$	91	$	1	$	1,542	$	3,087	$	3,315	$	7,945	$	138	$	8,083


Accounting policy			Note
Investments			3, 4, and 5
Investment impairment			3 and 5
Variable interest entities			3 and 5
Derivative instruments			4, 5, and 7
Policyholder liabilities			5 and 7
Deferred policy acquisition costs			6
Value of business acquired			6
Unearned revenue reserves and unearned front-end loads			6
Closed blocks			8
Reinsurance			9
Debt			10
Equity-based compensation			15
Income taxes			16


	Cost or amortized cost		Gross unrealized				Fair value		OTTI in AOCI(3)
As of December 31, 2020			gains		losses
($ in millions)
AFS fixed maturity securities portfolio by type:
U.S. government and agencies	$	654	$	33	$	(8)	$	679	$	—
U.S. state, municipal and political subdivisions	4,303		700		(2)		5,001		—
Corporate(1)	28,847		3,796		(38)		32,605		—
RMBS	7,989		705		(55)		8,639		2
CMBS	3,449		234		(33)		3,650		(2)
CLOs	3,026		22		(46)		3,002		5
CBOs	3,482		111		—		3,593		—
All other structured securities(2)	3,826		179		(20)		3,985		(4)
Total AFS fixed maturity securities	$	55,576	$	5,780	$	(202)	$	61,154	$	1


As of December 31, 2020	Cost or amortized cost		Fair value
($ in millions)
Due in one year or less(1)	$	416	$	416
Due after one year through five years(2)	4,832		5,059
Due after five years through ten years(3)	8,682		9,381
Due after ten years(4)	19,874		23,429
Subtotal	33,804		38,285
RMBS	7,989		8,639
CMBS	3,449		3,650
CLOs	3,026		3,002
CBOs	3,482		3,593
All other structured securities	3,826		3,985
Total AFS fixed maturity securities	$	55,576	$	61,154


☐						Emerging growth company


	As of the date
	of acquisition
($ in millions)
Contractually required payments (principal and interest)	$	2,183
Cash flows expected to be collected(1)	2,007
Recorded investment in acquired securities	1,551


	December 31,
	2020
($ in millions)
Outstanding principal balance	$	1,960
Amortized cost	1,440
Fair value	1,539


	Less than 12 months				12 months or more				Total
As of December 31, 2020	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
($ in millions)
AFS fixed maturity securities portfolio by type:
U.S. government and agencies	$	338	$	(8)	$	—	$	—	$	338	$	(8)
U.S. state, municipal and political subdivisions	221		(2)		—		—		221		(2)
Corporate	2,386		(31)		340		(7)		2,726		(38)
RMBS	1,075		(33)		398		(22)		1,473		(55)
CMBS	550		(33)		3		—		553		(33)
CLOs	632		(7)		1,421		(39)		2,053		(46)
CBOs	24		—		—		—		24		—
All other structured securities	334		(10)		156		(10)		490		(20)
Total AFS fixed maturity securities	$	5,560	$	(124)	$	2,318	$	(78)	$	7,878	$	(202)


Years	Residential		Commercial		Total mortgage loans
($ in millions)
2021	$	428	$	594	$	1,022
2022	171		692		863
2023	371		1,296		1,667
2024	192		757		949
2025	16		437		453
2026 and thereafter	3,448		3,510		6,958
Total	$	4,626	$	7,286	$	11,912


Mortgage loans - carrying value by geographic region as of December 31,	2020		2019
($ in millions)
Pacific	$	3,413	$	2,966
West South Central	2,191		2,213
South Atlantic	1,733		1,772
Middle Atlantic	1,251		1,106
East North Central	616		627
Mountain	606		544
New England	407		377
East South Central	299		267
West North Central	207		152
Other regions	1,189		727
Total by geographic region	$	11,912	$	10,751


Mortgage loans - carrying value by property type as of December 31,	2020		2019
($ in millions)
Residential	$	4,700	$	4,069
Office building	2,669		2,670
Apartment	1,755		1,374
Industrial	1,523		1,240
Retail	781		684
Other property types	293		509
Warehouse	191		205
Total by property type	$	11,912	$	10,751


	Investment in common stock				Funding agreements issued to FHLB member banks				Collateral
	2020		2019		2020		2019		2020		2019
($ in millions)
FHLB Indianapolis	$	75	$	69	$	1,593	$	1,544	$	2,603	$	2,527
FHLB Des Moines	34		30		615		500		951		811
FHLB Boston	18		14		313		238		520		521
Total	$	127	$	113	$	2,521	$	2,282	$	4,074	$	3,859


As of December 31, 2020	Overnight		<30 Days		30 - 90 Days		> 90 Days		Total
($ in millions)
Corporate Securities	$	—	$	—	$	—	$	301	$	301
Total	$	—	$	—	$	—	$	301	$	301


	For the years ended December 31,
	2020		2019
($ in millions)
Fixed maturity securities – interest and other income	$	2,285	$	2,180
Equity securities – dividends and other income	—		6
Mortgage and other loan receivables	785		565
Income from funds withheld at interest	(27)		12
Policy loans	34		37
Investments in transportation and other leased assets	191		176
Investments in renewable energy	115		78
Investments in real estate	17		12
Short-term and other investment income	75		134
Gross investment income(1)	3,475		3,200
Less investment expenses:
Investment management and administration(2)	168		130
Transportation and renewable energy asset depreciation and maintenance	190		138
Interest expense on derivative collateral and repurchase agreements	8		9
Net investment income	$	3,109	$	2,923


As of December 31, 2020	Notional value		Derivative assets		Derivative liabilities
($ in millions)
Equity market contracts	$	19,602	$	933	$	172
Interest rate contracts	8,156		161		38
Foreign currency contracts	102		3		2
Credit contracts	60		—		2
Impact of netting(1)			(129)		(129)
Fair value included within derivative assets and derivative instruments payable			968		85
Embedded derivative – indexed universal life products			—		832
Embedded derivative – annuity products			—		1,813
Fair value included within policyholder liabilities			—		2,645
Embedded derivative – funds withheld at interest			48		132
Fair value included within total assets and liabilities			$	1,016	$	2,862


As of December 31, 2019	Notional value		Derivative assets		Derivative liabilities
($ in millions)
Equity market contracts	$	15,495	$	769	$	32
Interest rate contracts	3,994		67		60
Foreign currency contracts	40		1		1
Impact of netting(1)			(14)		(14)
Fair value included within derivative assets and derivative instruments payable			823		79
Embedded derivative – indexed universal life products			—		820
Embedded derivative – annuity products			—		1,426
Fair value included within policyholder liabilities			—		2,246
Embedded derivative – funds withheld at interest			79		61
Fair value included within total assets and liabilities			$	902	$	2,386


	For the years ended December 31,
Derivative contracts not designated as hedges	2020		2019
($ in millions)
Net investment gains (losses):
Embedded derivatives	$	(102)	$	(29)
Equity index options	124		574
Equity future contracts	(118)		(324)
Interest rate contracts	199		124
Credit risk contracts	(8)		—
Other	(1)		—
Total included in net investment gains (losses)	$	94	$	345


	For the years ended December 31,
Derivative contracts designated as hedges	2020		2019
($ in millions)
Revenues:
Foreign currency forwards	$	2	$	—
Total included in net investment gains (losses)	$	2	$	—
Policy benefits and claims:
Interest rate swap	$	(1)	$	—
Total included in policy benefits and claims	$	(1)	$	—
Interest expense:
Interest rate swap	$	49	$	15
Total included in interest expense	$	49	$	15


As of December 31, 2020	Level 1		Level 2		Level 3		Total
($ in millions)
Assets:
AFS fixed maturity securities:
U.S. government and agencies	$	468	$	211	$	—	$	679
U.S. state, municipal and political subdivisions	—		5,001		—		5,001
Corporate(1)	—		29,946		2,659		32,605
Structured securities	—		21,389		1,480		22,869
Total AFS fixed maturity securities	468		56,547		4,139		61,154
Trading fixed maturity securities:
U.S. government and agencies	416		338		—		754
U.S. state, municipal and political subdivisions	—		735		3		738
Corporate	—		8,346		127		8,473
Structured securities	—		1,188		40		1,228
Total trading fixed maturity securities	416		10,607		170		11,193
Equity securities	46		—		49		95
Mortgage and other loan receivables(2)	—		284		558		842
Other investments(3)	—		—		444		444
Funds withheld receivable at interest	—		359		48		407
Reinsurance recoverable	—		—		1,355		1,355
Derivative assets:
Equity market contracts	31		902		—		933
Interest rate contracts	1		160		—		161

Foreign currency contracts	—		3		—		3
Impact of netting(4)	(14)		(115)		—		(129)
Total derivative assets	18		950		—		968
Separate account assets	5,459		—		—		5,459
Total assets at fair value	$	6,407	$	68,747	$	6,763	$	81,917
Liabilities:
Policyholder liabilities	$	—	$	—	$	541	$	541
Closed block policy liabilities	—		—		1,409		1,409
Funds withheld payable at interest	—		—		132		132
Derivative instruments payable:
Equity market contracts	47		125		—		172
Interest rate contracts	6		32		—		38
Foreign currency contracts	—		2		—		2
Credit contracts	—		2		—		2
Impact of netting(4)	(14)		(115)		—		(129)
Total derivative instruments payable	39		46		—		85
Reinsurance liabilities	—		—		—		—
Embedded derivative – indexed universal life products	—		—		832		832
Embedded derivative – annuity products	—		—		1,813		1,813
Total liabilities at fair value	$	39	$	46	$	4,727	$	4,812


Year ended December 31, 2020	Balance, as of beginning of year		Net realized and unrealized gains / losses included in income		Net unrealized gains / losses included in OCI		Net settlements / purchases		Transfers into Level 3		Transfers out of Level 3		Balance, as of end of year
($ in millions)
Assets:
AFS fixed maturity securities:
U.S. government and agencies	$	12	$	—	$	(12)	$	—	$	—	$	—	$	—
Corporate fixed maturity securities	2,256		—		(552)		1,002		—		(47)		2,659
Structured securities	1,852		(13)		11		91		24		(485)		1,480
Total AFS fixed maturity securities	4,120		(13)		(553)		1,093		24		(532)		4,139
Trading fixed maturity securities:
U.S. government and agencies	3		(3)		—		—		—		—		—
U.S. state, municipal and political subdivisions	—		1		—		—		2		—		3
Corporate fixed maturity securities	37		—		—		81		17		(8)		127
Structured securities	2		1		—		36		3		(2)		40
Total trading fixed maturity securities	42		(1)		—		117		22		(10)		170
Equity securities	58		9		—		1		—		(19)		49
Mortgage and other loan receivables	253		—		—		305		—		—		558
Other investments	424		20		—		—		—		—		444
Funds withheld receivable at interest	79		(31)		—		—		—		—		48
Reinsurance recoverable	1,316		39		—		—		—		—		1,355
Total assets	$	6,292	$	23	$	(553)	$	1,516	$	46	$	(561)	$	6,763
Liabilities:
Policyholder liabilities	$	429	$	112	$	—	$	—	$	—	$	—	$	541
Closed block policy liabilities	1,368		37		4		—		—		—		1,409
Funds withheld payable at interest	61		71		—		—		—		—		132
Reinsurance liabilities	5		(5)		—		—		—		—		—
Embedded derivative – indexed universal life products	820		89		—		(77)		—		—		832
Embedded derivative – annuity products	1,426		163		—		224		—		—		1,813
Total liabilities	$	4,109	$	467	$	4	$	147	$	—	$	—	$	4,727


Year ended December 31, 2020	Purchases		Issuances		Sales		Settlements		Net settlements / purchases
($ in millions)
Assets:
AFS fixed maturity securities:
U.S. government and agencies	$	—	$	—	$	—	$	—	$	—
Corporate fixed maturity securities	1,410		—		(172)		(236)		1,002
Structured securities	467		—		(88)		(288)		91
Total AFS fixed maturity securities	1,877		—		(260)		(524)		1,093
Trading fixed maturity securities:

Corporate fixed maturity securities	82		—		—		(1)		81
Structured securities	37		—		—		(1)		36
Total trading fixed maturity securities	119		—		—		(2)		117
Equity securities	1		—		(1)		1		1
Mortgage and other loan receivables	305		—		—		—		305
Other investments	—		—		—		—		—


Total assets	$	2,302	$	—	$	(261)	$	(525)	$	1,516
Liabilities:




Embedded derivative – indexed universal life products	$	—	$	105	$	—	$	(182)	$	(77)
Embedded derivative – annuity products	—		224		—		—		224
Total liabilities	$	—	$	329	$	—	$	(182)	$	147


Year ended December 31, 2019	Balance, as of beginning of year		Net realized and unrealized gains / losses included in income		Net unrealized gains / losses included in OCI		Net settlements / purchases		Transfers into Level 3		Transfers out of Level 3		Balance, as of end of year
($ in millions)
Assets:
AFS fixed maturity securities:
U.S. government and agencies	$	13	$	—	$	—	$	(1)	$	—	$	—	$	12
Corporate fixed maturity securities	1,448		2		(300)		1,126		24		(44)		2,256
Structured securities	2,710		1		115		287		40		(1,301)		1,852
Total AFS fixed maturity securities	4,171		3		(185)		1,412		64		(1,345)		4,120
Trading fixed maturity securities:
U.S. government and agencies	3		—		—		—		—		—		3
Corporate fixed maturity securities	62		—		(6)		(19)		—		—		37
Structured securities	7		—		4		(4)		—		(5)		2
Total trading fixed maturity securities	72		—		(2)		(23)		—		(5)		42
Equity securities	90		(1)		(32)		1		—		—		58
Mortgage and other loan receivables	107		—		2		144		—		—		253
Other investments	386		30		—		8		—		—		424
Funds withheld receivable at interest	68		11		—		—		—		—		79
Reinsurance recoverable	1,249		67		—		—		—		—		1,316
Total assets	$	6,143	$	110	$	(217)	$	1,542	$	64	$	(1,350)	$	6,292
Liabilities:
Policyholder liabilities	$	364	$	73	$	—	$	(8)	$	—	$	—	$	429
Closed block policy liabilities	1,305		58		5		—		—		—		1,368
Funds withheld payable at interest	21		40		—		—		—		—		61
Reinsurance liabilities	—		5		—		—		—		—		5
Embedded derivative – indexed universal life products	526		361		—		(67)		—		—		820
Embedded derivative – annuity products	786		267		—		373		—		—		1,426
Total liabilities	$	3,002	$	804	$	5	$	298	$	—	$	—	$	4,109


Years	Amounts
	($ in millions)
2021	$	43
2022	38
2023	33
2024	29
2025	32
2026 and thereafter	105
Total	$	280


	2020				2019
	Future policyholder benefits		Contractholder deposit funds and other policyholder liabilities		Future policyholder benefits		Contractholder deposit funds and other policyholder liabilities
($ in millions)
Fixed-rate annuity(1)(2)	$	11,843	$	32,298	$	3,752	$	31,024
Fixed-indexed annuity	5		23,763		4		14,656
Variable annuity	—		2,507		—		2,456
Indexed universal life	—		9,496		—		8,618
Fixed and variable universal life	—		6,042		—		3,889
Other life (term and whole life)	661		288		678		308
Preneed	25		2,799		25		2,965
Closed blocks	1,293		96		1,253		99
Other (including funding agreements)	31		2,528		32		2,290
Total	$	13,858	$	79,817	$	5,744	$	66,305


	As of December 31,
Balance sheets	2020		2019
($ in millions)
Assets


Total investments	$	1	$	1
Cash and cash equivalents	4		2

Reinsurance recoverable	1,355		1,316
Deferred income taxes	57		46
Other assets	—		—
Total assets	1,417		1,365
Liabilities
Future policyholder benefits	1,290		1,250
Outstanding claims	20		17
Contractholder deposit funds and other liabilities	1		1
Policyholder dividend obligation at fair value(1)	82		84
Policyholder dividends payable at fair value(1)	13		13
Total policyholder liabilities	1,406		1,365
Accrued expenses and other liabilities	14		8
Reinsurance liabilities	—		5
Total liabilities	1,420		1,378
Excess of closed block liabilities over assets designated to the closed blocks and maximum future earnings to be recognized from closed block assets and liabilities	$	3	$	13