XML 58 R29.htm IDEA: XBRL DOCUMENT
v3.22.4

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES KKR & Co. Inc. is a domestic corporation for U.S. federal income tax purposes and thus is subject to U.S. federal, state and local corporate income taxes at the entity level on KKR’s share of net taxable income. In addition, KKR Group Partnership and certain of its subsidiaries operate as partnerships for U.S. federal income tax purposes and as corporate entities in the U.S. and certain non-U.S. jurisdictions. These entities, in some cases, are subject to U.S. state or local income taxes or non-U.S. income taxes. Moreover, certain subsidiaries of KKR, including the Global Atlantic Financial Group, are domestic corporations for U.S. federal income tax purposes and are subject to U.S. federal, state, and local corporate income taxes. Income before income taxes includes the following components:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Income before Income Taxes: |  |  |  |  |
United States | $ | (1,480,217) |  |  | $ | 13,160,722 |  |  | $ | 5,534,251 |
Foreign | 421,017 |  |  | 487,727 |  |  | 192,444 |
Total Income before Income Taxes | $ | (1,059,200) |  |  | $ | 13,648,449 |  |  | $ | 5,726,695 |
The provision (benefit) for income taxes consists of the following:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Current |  |  |  |  |
Federal | $ | 737,737 |  |  | $ | 344,052 |  |  | $ | 181,838 |
State and Local | 97,074 |  |  | 40,336 |  |  | 29,033 |
Foreign | 94,473 |  |  | 81,370 |  |  | 49,962 |
Subtotal | 929,284 |  |  | 465,758 |  |  | 260,833 |
Deferred |  |  |  |  |
Federal | (864,234) |  |  | 793,540 |  |  | 289,700 |
State and Local | (83,113) |  |  | 97,063 |  |  | 36,460 |
Foreign | (17,609) |  |  | (3,091) |  |  | 22,104 |
Subtotal | (964,956) |  |  | 887,512 |  |  | 348,264 |
Total Income Taxes | $ | (35,672) |  |  | $ | 1,353,270 |  |  | $ | 609,097 |
The following table reconciles the U.S. Federal Statutory Tax Rate to the Effective Income Tax Rate:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Statutory U.S. Federal Income Tax Rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Income not attributable to KKR & Co. Inc. (1) | (25.9) | % |  | (14.0) | % |  | (13.9) | %
Foreign Income Taxes | 0.2 | % |  | 0.3 | % |  | 0.8 | %
State and Local Income Taxes | (1.3) | % |  | 0.8 | % |  | 0.8 | %
Compensation Charges not attributable to KKR & Co. Inc. | 8.6 | % |  | 2.8 | % |  | 2.4 | %
Change in Valuation Allowance | — | % |  | — | % |  | 0.4 | %
Other | 0.8 | % |  | (1.0) | % |  | (0.9) | %
Effective Income Tax Rate | 3.4 | % |  | 9.9 | % |  | 10.6 | %
(1)Represents primarily income attributable to (i) noncontrolling interests for all periods. This item also includes investment income of certain entities and net carried interest of certain general partners of KKR investment funds that were not subject to U.S. federal income taxes prior to the conversion of KKR & Co. L.P. to KKR & Co. Inc. A summary of the tax effects of the temporary differences is as follows:
Asset Management | December 31, 2022 |  | December 31, 2021
Deferred Tax Assets |  |  |
Fund Management Fee Credits | $ | 185,154 |  |  | $ | 98,165 |
Equity Based Compensation | 70,246 |  |  | 34,116 |
KKR Holdings Unit Exchanges (1) | 445,587 |  |  | 449,683 |
Depreciation and Amortization (2) | 185,865 |  |  | 212,063 |
Operating Lease Liability | 80,323 |  |  | 40,101 |
Net Operating Loss Carryforwards | — |  |  | 58,764 |
Other | 29,273 |  |  | 37,833 |
Total Deferred Tax Assets before Valuation Allowance | 996,448 |  |  | 930,725 |
Valuation Allowance | — |  |  | (23,082) |
Total Deferred Tax Assets | 996,448 |  |  | 907,643 |
Deferred Tax Liabilities |  |  |
Investment Basis Differences / Net Unrealized Gains & Losses (2)(3) | 1,971,093 |  |  | 1,662,353 |
Indefinite Lived Intangible Asset(4) | 532,274 |  |  | — |
Operating Lease Right-of-Use Asset | 80,323 |  |  | 40,101 |
Other | 25,729 |  |  | 19,855 |
Total Deferred Tax Liabilities | 2,609,419 |  |  | 1,722,309 |
Total Deferred Taxes, Net | $ | (1,612,971) |  |  | $ | (814,666) |
(1)In connection with exchanges of KKR Holdings Units into common stock of KKR & Co. Inc., KKR records a deferred tax asset associated with an increase in KKR & Co. Inc.'s share of the tax basis of the tangible and intangible assets of KKR Group Partnership. This amount is offset by an adjustment to record amounts due to KKR Holdings and principals under the tax receivable agreement, which is included within Due to Affiliates in the consolidated statements of financial condition. The net impact of these adjustments was recorded as an adjustment to equity at the time of the exchanges. (2)This deferred tax item includes a portion of the tax benefit KKR recognized as a result of the step-up in tax basis generated by the conversion of KKR & Co. L.P. to KKR & Co. Inc. (3)This deferred tax item includes a portion of the tax liability KKR recognized as a result of the Reorganization Mergers. See Note 1 "Organization". (4)In connection with the acquisition of KJRM, the Company recognized a deferred tax liability resulting from the difference in the book and tax basis of the indefinite lived intangibles as of the acquisition date. See Note 3 "Acquisitions".
Insurance | December 31, 2022 |  | December 31, 2021
Deferred Tax Assets |  |  |
Insurance Reserves | $ | 923,450 |  |  | $ | 1,993,496 |
Insurance Intangibles | 300,147 |  |  | 168,054 |
Net Operating Loss and Capital Loss Carryforwards | 69,566 |  |  | 15,857 |
Insurance Investment Basis Differences, Including Derivatives | 1,599,012 |  |  | — |
Other | 31,369 |  |  | 75,000 |
Total Deferred Tax Assets before Valuation Allowance | 2,923,544 |  |  | 2,252,407 |
Valuation Allowance | (89,250) |  |  | — |
Total Deferred Tax Assets | 2,834,294 |  |  | 2,252,407 |
Deferred Tax Liabilities |  |  |
Insurance Loss Reserve Adjustment | 83,894 |  |  | 111,910 |
Insurance Investment Basis Differences, Including Derivatives | — |  |  | 1,384,621 |
Other | 23,209 |  |  | — |
Total Deferred Tax Liabilities | 107,103 |  |  | 1,496,531 |
Total Deferred Taxes, Net | $ | 2,727,191 |  |  | $ | 755,876 |
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. In 2022, changes in market conditions, including rapidly rising interest rates, impacted the unrealized tax gains and losses in the available for sale securities portfolios of Global Atlantic, resulting in deferred tax assets related to net unrealized tax capital losses for which the carryforward period has not yet begun. As such, when assessing recoverability, Global Atlantic considered our ability and intent to hold the underlying securities to recovery. Based on all available evidence, Global Atlantic concluded that a valuation allowance should be established on a portion of the deferred tax assets related to unrealized tax capital losses that are not more-likely-than-not to be realized, which represents the portion of the portfolio Global Atlantic estimates it would not be able to hold to recovery. For the year ended December 31, 2022, Global Atlantic established $89.3 million of valuation allowance associated with the unrealized tax capital losses in the available for sale securities portfolio. The valuation allowance establishment was allocated to other comprehensive income. Based on available evidence and various assumptions as to the timing of income, KKR believes it is likely that all other deferred tax assets will be realized. As of December 31, 2022, Global Atlantic has a federal NOL carryforward of $152.6 million that will begin to expire in 2034. In addition, Global Atlantic has capital loss carryforwards of $176.5 million which will begin to expire in 2025. As of December 31, 2022, KKR has accumulated undistributed earnings generated by certain foreign subsidiaries, which we intend to indefinitely reinvest and have not recorded any deferred taxes with respect to outside U.S. federal income tax basis difference on these subsidiaries. KKR will continue to evaluate its capital management plans. As a result of the Reorganization Mergers (see Note 1 "Organization"), KKR recorded additional deferred tax liabilities of $1,095 million with a corresponding decrease to Additional Paid-In Capital during the twelve months ended December 31, 2022. On August 16, 2022, the Inflation Reduction Act (the “IRA”) was signed into law. In general, the provisions of the IRA will be effective beginning with the fiscal year 2023, with certain exceptions. The IRA includes a new 15% corporate minimum tax as well as a 1% excise tax on corporate stock repurchases completed after December 31, 2022. As required under the authoritative guidance of ASC 740, Income Taxes, we reviewed the impact on income taxes due to the change in legislation and concluded there was no impact to the financial statements as of December 31, 2022. KKR is in the process of evaluating the potential future impacts of the IRA, and the Company will continue to review and monitor the issuance of additional guidance from the Treasury. Tax Contingencies KKR files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, KKR is subject to examination by U.S. federal and certain state, local and foreign tax regulators. As of December 31, 2022, tax returns of KKR and its predecessor entities are no longer subject to examinations for years before 2016 for U.S. federal tax returns and 2011 for state and local tax returns under general statute of limitations provisions. At December 31, 2022, 2021 and 2020, KKR's unrecognized tax benefits relating to uncertain tax positions, excluding related interest and penalties, consisted of the following:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Unrecognized Tax Benefits, beginning of period | $ | 59,633 |  |  | $ | 60,712 |  |  | $ | 53,372 |
Gross increases in tax positions in prior periods | 5,169 |  |  | — |  |  | — |
Gross decreases in tax positions in prior periods | (8,414) |  |  | (2,009) |  |  | (125) |
Gross increases in tax positions in current period | 6,261 |  |  | 2,671 |  |  | 7,700 |
Lapse of statute of limitations | (551) |  |  | (1,741) |  |  | (235) |
Settlements with taxing authorities | (21,090) |  |  | — |  |  | — |
Unrecognized Tax Benefits, end of period | $ | 41,008 |  |  | $ | 59,633 |  |  | $ | 60,712 |
If the above tax benefits were recognized, the effective income tax rate would be reduced. KKR believes that there could be a decrease to the tax positions up to $13 million within 12 months of the reporting date but the impact of such decrease to the effective tax rate would not be significant. KKR recognizes interest and penalties accrued related to unrecognized tax benefits as income tax expense. Related to the unrecognized tax benefits, KKR had a net decrease of accrued penalties of $2.0 million and interest of $2.0 million during 2022 and in total, as of December 31, 2022, recognized a liability for penalties of $3.2 million and interest of $11.8 million. During 2021, penalties of $2.6 million and interest of $0.5 million were accrued and in total, as of December 31, 2021 recognized a liability for penalties of $5.2 million and interest of $13.8 million. During 2020, penalties of $0.5 million and interest of $3.1 million were accrued and in total, as of December 31, 2020, recognized a liability for penalties of $2.6 million and interest of $13.3 million.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration