KKR & Co. 4th-quarter net income slumps

NEW YORK (AP) — KKR & Co. LP, the private equity firm led by Henry Kravis and George Roberts, said Thursday that its fourth-quarter net income slid 75 percent partly because of a drop in the appreciation of its investments compared with a year ago.

KKR invests in companies, often with borrowed money, and then tries to sell them years later for more. KKR also has an asset management business, which invests in debt and equities, and a capital markets business, which arranges debt financing for deals and underwrites stock sales for other companies.

The New York company reported net income of $46.1 million, or 20 cents per common unit, for the period ended Dec. 31. That's down from earnings of $180.6 million, or 86 cents per unit, a year earlier.

KKR & Co. said that the fair value of its private equity portfolio and principal investments rose in the quarter, but that the appreciation level is lower than the prior-year period.

Economic net income, a financial measure used by private equity firms that strips out income taxes, the cost of stock-based employee compensation and other items, fell to $285.5 million from $714.6 million.

Fourth-quarter fee revenue rose 43 percent to $209.4 million from $146.3 million.

Assets under management were $59 billion as of Dec. 31, up slightly from $58.7 billion as of Sept. 30. Total expenses declined to $330.1 million from $418.9 million.

KKR & Co. also declared a quarterly distribution of 32 cents per unit, which puts year-to-date distributions at 74 cents per share. This is higher than the 60 cents per unit in the year-ago period. The quarterly distribution will be paid on March 6 to unitholders of record on Feb. 20.

For the year, earnings plunged 99 percent to $1.9 million, or 1 cent per unit, from $333.2 million, or $1.62 per unit, in the prior year. Annual fee revenue climbed 66 percent to $723.6 million from $435.4 million.

Its stock slipped 28 cents, or 1.9 percent, to $14.59 in morning trading.