CREATING SUSTAINABLE VALUE PROGRESS THROUGH PARTNERSHIP

CREATING SUSTAINABLE VALUE PROGRESS THROUGH PARTNERSHIP 2012 ESG AND CITIZENSHIP REPORT

Achievig Meaigful Progress The world cotiues to chage ad we do too. As operatig coditios ad stakeholder expectatios have trasformed over recet years, KKR s approach to ivestig has evolved also. As part of this evolutio, we have worked to thoughtfully icorporate evirometal, social, ad goverace (ESG) factors i our decisiomakig processes. We kow that our decisios ca have eormous impacts o compaies ad commuities, ad believe that the iclusio of ESG cosideratios leads to smarter, more resposible ivestig. We also believe that by beig smarter ivestors, we ca better achieve our greatest social impact, which are the returs geerated for millios of retirees ad pesioers aroud the world. This 2012 ESG report, our third aual, demostrates our progress, highlights our parters who make this work possible, ad lays out our visio for the future. CREATING Thak you for beig with us o this jourey as we work SUSTAINABLE VALUE to improve upo the foudatio we have built. PROGRESS THROUGH PARTNERSHIP

ACHIEVING MEANINGFUL PROGRESS 1 KKR at a Glace 2 KKR by the Numbers 4 Letter From Our Fouders 7 2012 ESG Progress ad Highlights 9 SECTION 1: OUR COMMITMENT AND APPROACH 10 The Importace of ESG Maagemet 11 Idetifyig Shared Priorities 12 Egagig Our Stakeholders 13 Our Approach to ESG Maagemet i Private Equity 14 Parterships for ESG Expertise 16 Private Equity s Role i a Healthy Global Ecoomy 19 SECTION 2: ESG MANAGEMENT IN OUR INVESTMENT PROCESS 20 Ifluece ad Cotrol Over ESG Issues i the Ivestmet Portfolio 21 Itegratig ESG Maagemet Ito the Private Equity Ivestmet Process 23 Our Proactive ESG Programs: Gree Portfolio Program Resposible Sourcig Iitiative KKR Welless Works Itegrity ad Egagemet Vets @ Work 32 Resposible Ivestmet i No-Private Equity Asset Classes 35 SECTION 3: OUR COMMUNITY 36 KKR s Culture ad Commuity 42 Our Impact o the Commuities Where We Live ad Work 45 CONTINUING THE JOURNEY 46 Our Key Performace Idicators 49 Olie Resources KKR ivests across the eergy spectrum ad believes that a diversity of eergy sources is critical to address chagig supply ad growig global demad.

ABOUT THIS REPORT This is KKR s third evirometal, social, ad goverace (ESG) report. The report covers the 2012 caledar year, alog with select forward-lookig iitiatives for 2013. Similar to past reports, we focus o what we cosider to be our most material ESG issue: how ESG cosideratios are itegrated throughout our ivestmet processes. Based o feedback from last year s report, we have icluded more iformatio i this report about our due diligece process (see page 21), our five proactive ESG programs (see pages 23-31), ad our Firm structure (see pages 36-37). We seek to alig our reportig efforts with leadig frameworks ad methodologies. As a sigatory of the volutary framework of the Uited Natios-backed Priciples for Resposible Ivestmet (PRI) (see page 10), we orgaize our key performace idicator (KPI) tables (see pages 46-48) aroud the PRI s six priciples. We also apply the Global Reportig Iitiative s Techical Protocol to guide our report s cotet (see page 11). Please ote that as used i this report portfolio compay refers to the portfolio compaies of our private equity fuds. While we are i the process of evaluatig ESG issues with respect to other asset classes, the descriptio of ESG iitiatives ad the itegratio of ESG issues i the ivestmet processes, as described i this report, is limited to our private equity ivestmet process ad private equity portfolio compaies, uless otherwise specifically described. Uless otherwise oted, all data ad iformatio i this report are as of December 31, 2012. Additioal iformatio about our report ad reportig process ca be foud i Importat Iformatio o page 49 of this report. For liks to accompayig resources cited throughout this report, see Olie Resources o page 49.

Europe, the Middle East, ad Africa Achievig Meaigful Progress 2012 ESG ad Citizeship Report 1 Americas 5 KKR Offices PRIVATE EQUITY PORTFOLIO: 31 Compaies 661,000 Employees 4 KKR Offices PRIVATE EQUITY PORTFOLIO: 22 Compaies 159,000 Employees Asia 7 KKR Offices PRIVATE EQUITY PORTFOLIO: 29 Compaies 162,000 Employees KKR at a Glace KKR is a leadig global ivestmet firm with diversified capabilities, a strog track record, ad deep roots i private equity. Established i 1976, today KKR is oe of the world s most successful ivestmet maagemet compaies with a variety of ivestmet fuds coverig multiple asset classes. I private equity, KKR seeks to create value by workig as a parter ad brigig operatioal expertise to our portfolio compaies. PRIVATE MARKETS KKR s Private Markets busiess focuses o ivestig i quality compaies ad parterig with their maagemet to help them improve ad grow. We have cosistetly set ew stadards of achievemet ad iovatio i this area. These activities eable us to fid creative solutios to help our portfolio compaies adapt to a rage of ecoomic eviromets. Our Private Markets busiess brigs together our ivestmet capabilities i private equity, eergy ad ifrastructure, ad real estate. PUBLIC MARKETS KKR s Public Markets busiess offers products across a rage of credit ad equity ivestmet strategies, such as leveraged credit, customized hedge fud solutios, log ad short equity, ad alterative credit. This busiess draws o the Firm s deep itellectual capital ad idustry expertise, global etwork of relatioships, ad, whe appropriate, our kowledge of deal flow to idetify emergig ivestmet opportuities. CAPITAL MARKETS AND PRINCIPAL ACTIVITIES KKR s Capital Markets ad Pricipal Activities busiess supports our Firm, our portfolio compaies, ad our cliets by providig tailored capital markets advice to our portfolio compaies ad ivestmet professioals ad by developig ad implemetig both traditioal ad otraditioal capital solutios. Capital Markets ad Pricipal Activities $4.8 Billio i Ivestmets Public Markets $26.4 Billio Assets Uder Maagemet Private Markets $49.1 Billio Assets Uder Maagemet

2 kkr.com/resposibility KKR KKR by the Numbers $75.5 Billio Assets uder maagemet as of December 31, 2012 980,000 Approximate umber of people employed globally by KKR s private equity portfolio compaies 40 Millio Retirees ad pesioers with exposure to KKR s ivestmets 82 Portfolio Compaies I our private equity fuds geerated early $220 billio i aual reveues as of December 31, 2012 $4.6 Billio Roughly the amout KKR ad its employees have ivested or committed alogside its ivestmet parters Key Milestoes i Our Resposible Ivestmet Jourey 2008 2009 2010 Our resposible ivestmet approach is costatly evolvig. We are proud of the milestoes we have achieved sice 2008 ad have highlighted may of them here. MAY 2008 Lauched the Gree Portfolio Program i partership with Evirometal Defese Fud FEBRUARY 2009 Became a sigatory of the UN-backed Priciples for Resposible Ivestmet ad edorsed the Private Equity Growth Capital Coucil Resposible Ivestmet Guidelies Released first results from the Gree Portfolio Program JANUARY 2010 Became a member of Busiess for Social Resposibility MARCH 2010 Became a member of CSR Europe MAY 2010 Lauched the Resposible Sourcig Iitiative JUNE 2010 Released secod Gree Portfolio Program results DECEMBER 2010 Joied the PRI Private Equity Steerig Committee

KKR ivested i T-Solar Global Operatig Assets ( T-Solar ) i 2011. T-Solar is a leadig solar photovoltaic operator i Europe with 168 megawatts of istalled capacity across Spai ad Italy. 2011 2012 MARCH 2011 Edorsed the Istitutioal Limited Parters Associatio Private Equity Priciples MAY 2011 Published KKR s first ESG Report SEPTEMBER 2011 Lauched the Vets @ Work iitiative with select private equity portfolio compaies DECEMBER 2011 Released third Gree Portfolio Program results FEBRUARY 2012 Lauched partership with Trasparecy Iteratioal MARCH 2012 Received the Private Equity Iteratioal Award for Resposible Ivestor of the Year i North America JUNE 2012 Published KKR s secod ESG Report OCTOBER 2012 Joied forces with the America Heart Associatio DECEMBER 2012 Released fourth Gree Portfolio Program results of more tha $600 millio i cumulative fiacial impact Bega pilotig the KKR Welless Works program

4 kkr.com/resposibility KKR These efforts are ot always easy, but we are committed to thikig through the tough challeges ad workig to ivest resposibly across our busiesses. Letter From Our Fouders Our commitmet to creatig sustaiable value has ever bee stroger. The jourey we bega i 2007 with our collaboratio with Evirometal Defese Fud (EDF) has evolved ito a multi-faceted effort that spas geographies, idustries, focus areas, ad parterships. As we reach the five-year aiversary of our official partership with EDF our first ESG partership we are lookig back o the key drivers of past success ad lookig forward to the critical elemets of future growth. As we reflect o the last five years, three themes have prove cosistetly importat to our progress toward creatig shared value: the power of private equity, the value of parterships, ad the beefits of focusig o performace. KKR sees the private equity model as oe of the best ivestmet models for both boostig busiess performace ad servig as a platform for resposible ivestmet. For 37 years, we have see how private equity s log-term ivestmet horizo, active maagemet, operatioal focus, ad aligmet of iterests betwee ivestors ad compay maagemet ca be a powerful force for positive chage withi compaies. This same combiatio ca also help a compay better egage with key stakeholders, improve evirometal performace, ehace trasparecy, promote worker welless ad egagemet, ad achieve other importat goals. I additio, we believe that private equity ca play a importat role i buildig eterprises that solve problems ad create additioal jobs. It ca also augmet the retiremet security of retirees ad pesioers, such as the early 40 millio idividuals who are the ultimate beeficiaries of our ivestmets. I additio to producig strog returs, KKR is also focusig o promotig policies that ca cotribute to greater retiremet security for idividuals, icludig workers i the U.S. public sector. Lastly, i 2012, we saw how private equity ca relieve some of the fiacial burde o govermets through public-private parterships that are desiged to better maage ifrastructure assets. Movig forward, we are workig to scale existig efforts to itegrate the maagemet of ESG issues i our private equity ivestmet processes, while also determiig how to apply what we have leared to other importat asset classes for KKR. These efforts are ot always easy, but we are committed to thikig through the tough challeges ad workig to ivest resposibly across our busiesses. For early four decades we have see how parterships lead to greater value creatio across our etire busiess. Now, five years after the start of our groudbreakig work with EDF, we kow parterships ca also lead to real improvemets i evirometal ad social performace ad better goverace. I 2012, we lauched iitiatives with two ew world-class orgaizatios: America Heart Associatio to complemet our efforts i health, ad Trasparecy Iteratioal to ehace our approach to ethics ad itegrity. These orgaizatios alog with our existig parters, such as EDF ad Busiess for Social Resposibility (BSR), eable the importat progress we are makig, while always challegig us to do more. As we cotiue to evolve, we expect these parterships to remai a core part of our accomplishmets.

Achievig Meaigful Progress 2012 ESG ad Citizeship Report 5 We cotiue to egage our ivestmet parters ad portfolio parters i ehacig our collective performace i ESG maagemet by hostig a series of ESG-focused evets that allow us to collaborate o challeges ad share our lessos leared. We have icluded these activities, alog with others, i a summary of KKR s 2012 ESG progress ad highlights. Hery R. Kravis ad George R. Roberts, Co-CEOs ad Co-Chairme The mometum we have achieved i improvig ESG performace to date has bee sigificat ad is deliverig real value. We focus o settig shared performace goals with our private equity portfolio compaies ad seekig cotiued improvemet agaist those goals. By doig so, we aim to build better busiesses, while also provig the value of ivestig i ESG maagemet. I 2012, for example, the Gree Portfolio Program reported results for the fourth time ad participatig compaies have cumulatively avoided 1.2 millio metric tos of greehouse gas emissios ad achieved more tha $644 millio i fiacial impact (cost savigs ad added reveue) through a variety of eco-efficiecy efforts sice 2008. I 2012, we also cotiued KKR Welless Works, a program desiged to support our private equity portfolio compaies efforts to maage their health care costs, while improvig levels of employee welless ad egagemet. This program curretly icludes eight of our private equity portfolio compaies, which together provide health care for approximately 190,000 idividuals i the Uited States. I this, our third aual ESG report, we are sharig our success, but also aim to commuicate that our efforts to create sustaiable value are ot without challeges. Whether itegratig ESG maagemet ito the diverse compaies i our private equity portfolio or determiig how to evaluate ivestmets i ew asset classes with regard to ESG factors, we are costatly learig ad improvig. We kow that our approach eeds to be refied ad eriched i order to cotiue to produce results. I 2013, we pla to scale our existig efforts, with the goal of makig them more profoud ad impactful as we cotiue our jourey. We see our growig focus o ESG maagemet as smart busiess, ad believe it is a essetial compoet to our ad our ivestmets log-term competitive success. We are proud of the progress we have made to date ad kow it is oly the begiig. Thak you for your cotiued iterest i our jourey. We welcome your feedback o our efforts ad look forward to cotiued collaboratio i 2013 ad beyod. GEORGE R. ROBERTS Co-Fouder, Co-Chairma, ad Co-CEO HENRY R. KRAVIS Co-Fouder, Co-Chairma, ad Co-CEO

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Achievig Meaigful Progress 2012 ESG ad Citizeship Report 7 2012 ESG Progress ad Highlights 18 Idustry Guides Itegratio i the Pre-Ivestmet Phase Cotiued to maage ESG cosideratios i the private equity due diligece process by ehacig available resources ad tools, developig 18 idustry guides, ad holdig approximately 37 due diligece team meetigs, where a average of approximately 12 compaies were reviewed per meetig. P. 21 Parterig With Our Portfolio Compaies to Support Veteras Expaded our Vets @ Work iitiative to a additioal private equity portfolio compay i the Uited States, brigig our total umber of participatig compaies to ie. I 2012, our portfolio compaies hired approximately 7,000 veteras. P. 31 7,000 Vets @ Work Parterig With Our Portfolio Compaies for the Eviromet Cotiued to expad the Gree Portfolio Program, addig seve ew compaies i 2012. Sice 2008, the reportig compaies have achieved more tha $644 millio i cost savigs ad added reveue, while avoidig 1.2 millio metric tos of greehouse gas emissios, 3.4 millio tos of waste, ad 13.2 millio cubic meters of water use. P. 24-27 + $ 644 Millio i Fiacial Impact Expadig Exteral Parterships Stregtheed our etwork of exteral parters ad advisors o critical ESG issues, ad formally joied forces with the America Heart Associatio (AHA) to lead a research study o our efforts i employee health. P. 29-30 +2 Compaies Assessed Parterig With Our Portfolio Compaies for Resposible Sourcig Executed a series of webiars for our private equity portfolio compaies o resposible sourcig ad supply chai maagemet. Expaded the Resposible Sourcig Iitiative by providig customized assessmets of sourcig policies ad protocols for a additioal two private equity portfolio compaies, brigig our total umber of compaies assessed to 22. P. 28 Focusig Iterally Lauched a series of iitiatives desiged to improve our ow ESG performace. I Jue, the KKR Gree Team addressed critical waste issues i the New York office. Their efforts had early a $20,000 fiacial impact ad saved approximately 60,000 water bottles from eterig the waste stream. I November, KKR lauched a iteral welless effort with its first biometric screeig evets for all U.S. employees, of which more tha 98 percet of eligible employees participated. P. 40-41 98% Employee Participatio +5 Ivestor Evets Parterig With Our Ivestors Held five ESG-focused evets i the Uited States ad Europe desiged to iform our parters ad prospective ivestmet parters of our efforts, while also desiged to help us lear from their experieces. Commuicated our ESG priorities ad iitiatives to ivestmet parters, for example, through the participatio of ESG thought leaders at our 2012 U.S. Ivestors Meetig. P. 15

9 17 KKR ivestmet professioals discuss busiess i our Hog Kog office. 1 Our Commitmet ad Approach We believe that by ivestig over the log term, aligig our iterests with our stakeholders iterests, ad beig active owers, we ca capitalize o the power of private equity to improve performace ad icrease a compay s value. Today, ehacig value ad the bottom lie also ofte meas improvig the evirometal, social, ad goverace (ESG) aspects of a busiess. KKR is committed to ivestig resposibly, which we defie as the itegratio of ESG cosideratios throughout our ivestmet processes. Whether reviewig ESG risks ad opportuities durig the due diligece phase or icludig ESG performace goals ito the ogoig maagemet of a private equity portfolio compay, we are workig to stregthe our teams uderstadig of the impact of these issues o the compaies i which we ivest. The followig pages explai our commitmet to resposible ivestmet, our approach to itegratig ESG issues, ad our view o how the private equity idustry plays a importat role i a healthy global ecoomy.

10 kkr.com/resposibility KKR 1 The Importace of ESG Maagemet What Are ESG Issues? Evirometal, social, ad goverace (ESG) issues ca vary greatly amog compaies, depedig o their idustry, geography, ad stakeholders. The followig topics are examples of ESG issues. Evirometal Lad Use Carbo ad Greehouse Gas Emissios Biodiversity Natural Resource Scarcity Priority Chemicals Water Scarcity Social Employee Relatios ad Labor Egagemet Health ad Welless Safety Cosumer Protectio Data Privacy Huma Rights Goverace Regulatio Ati-fraud ad Ati-corruptio Ethics ad Itegrity Stakeholder Expectatios Trasparecy Board Compositio ad Idepedece We believe that the thoughtful maagemet of ESG issues is smart busiess ad see it as a essetial part of log-term success i a rapidly chagig world. Compaies that carefully maage ESG risks ad opportuities today should be better positioed i the future as dimiishig resources, chagig cosumer demads, ad icreased regulatio are expected to pose greater challeges. I additio, we believe that our capital, operatioal capabilities, ad owership model ca be part of the solutio to some of the challeges that commuities aroud the world are already facig, such as the eed for improved ifrastructure. To be most effective, ESG iitiatives should be see as best practices for operatioal excellece. Therefore, KKR focuses o the areas where we believe there to be a social or evirometal beefit, as well as a busiess beefit. It is importat that our efforts make sese for the compaies i which we ivest, their commuities, ad our stakeholders, icludig our ivestmet parters. While we are proud of our progress, our efforts are ot without challeges. We ivest i complicated, ofte-global compaies that every day must balace competig iterests ad make difficult trade-offs. While some might ot always agree with our coclusios, we believe the key to success is to make iformed decisios by thoroughly ad carefully cosiderig ESG issues. I additio, just as i other aspects of ivestig, the process for uderstadig ad better maagig ESG issues is oe that we must cotiually work hard to improve. As such, we work diligetly to esure that difficult situatios are discussed thoughtfully with our etwork of iteral ad exteral parters, while seekig to act i the best log-term iterests of our beeficiaries. UN Priciples for Resposible Ivestmet To demostrate our commitmet to ESG maagemet ad our fiduciary resposibilities, i 2009, we siged the Uited Natios-backed Priciples for Resposible Ivestmet (PRI). Where cosistet with our fiduciary resposibilities, we commit to the followig priciples for our private equity ivestmets: We will icorporate ESG issues ito ivestmet aalysis ad decisiomakig processes. We will be active owers ad icorporate ESG issues ito our owership policies ad practices. We will seek appropriate disclosure o ESG issues by the etities i which we ivest. We will promote acceptace ad implemetatio of the Priciples withi the ivestmet idustry. We will work together to ehace our effectiveess i implemetig the Priciples. We will each report o our activities ad progress towards implemetig the Priciples.

Our Commitmet ad Approach 2012 ESG ad Citizeship Report 11 Idetifyig Shared Priorities Returs for our ivestmet parters are fudametal to our success. To esure that our resposible ivestmet efforts are i the best iterest of our busiess ad our stakeholders, we examied our busiess strategy, our stakeholders expectatios, ad emergig treds regardig resposible ivestmet to defie our most material issues. I 2010, we coducted our first materiality assessmet. I 2011, we applied the Global Reportig Iitiative s Techical Protocol to our assessmet ad cofirmed our areas of focus. The Techical Protocol is ofte used as best practice for defiig cotet for sustaiability reportig. Accordig to our assessmets, our most material issue is the process by which we esure that the cosideratio ad maagemet of relevat ESG risks ad opportuities are itegrated i the pre-ivestmet ad portfolio maagemet phases of our ivestmet cycles, particularly i private equity. We also kow from our materiality assessmet that our trasparecy ad egagemet with stakeholders about our approach ad performace cotiue to be of high importace as we work to ehace our efforts. Material topics for a reportig orgaizatio should iclude those topics that have a direct or idirect impact o a orgaizatio s ability to create, preserve or erode ecoomic, evirometal ad social value for itself, its stakeholders ad society at large. Global Reportig Iitiative (GRI) 1 GRI Priciples for Defiig Report Cotet Idetify Sustaiability Cotext Prioritize Materiality Stakeholder Iclusiveess Validate Completeess Collaboratio amog our team members is a key compoet to successful ESG maagemet.

12 kkr.com/resposibility KKR 1 Egagig Our Stakeholders Egagig proactively with our key stakeholders helps esure that our approach to ivestig is iformed by a broad rage of isights ad experieces, ad that we are settig shared priorities, adjustig our approach, ad learig from our mistakes. It also allows us to commuicate our efforts, thereby demostratig results ad progress over time to our stakeholders. For these reasos, our focus o stakeholder egagemet has bee a cetral part of our philosophy from the begiig, ad is a capability that we costatly strive to improve. Our parters ad stakeholders iclude a wide rage of groups ad idividuals, such as the maagemet teams ad employees of the compaies i which we ivest, the idividuals ad istitutios that ivest alogside us, the commuities affected by our ivestmets, ogovermetal orgaizatios (NGOs) icludig uios, ad our ow employees. It is also importat to us that we build positive relatioships with groups that represet the commuities ad the eviromets we affect, as well as with the govermets ad regulators of the coutries i which we operate. We believe that protectig ad ehacig these relatioships is critical to smart ivestig ad creatig log-term, sustaiable value. How KKR Egages With Stakeholders STAKEHOLDER GROUPS SOME OF THE WAYS WE ENGAGE FUND INVESTMENT PARTNERS Those that have made or are cosiderig makig a ivestmet with KKR Ogoig efforts to icrease trasparecy ad egagemet, such as through our edorsemet of the Istitutioal Limited Parters Associatio priciples Alogside our limited parters, ivestmet of more tha $4.6 billio of our ad our employees ow moey, makig KKR its ow largest ivestor ESG roud tables with KKR private equity portfolio compaies ad ESG-focused presetatios itegrated i regular commuicatios KKR EMPLOYEES Persos directly employed by KKR Semiaual review ad developmet discussios based o 360-degree feedback Ogoig leadership developmet ad other critical skills-based traiig programs Commuicatio of our ESG efforts to employees through targeted iteral commuicatios ad regular updates from KKR leadership Specific ESG traiig programs for ivestmet professioals ad KKR Capstoe executives

Our Commitmet ad Approach 2012 ESG ad Citizeship Report 13 Our Approach to ESG Maagemet i Private Equity KKR cosiders the private equity model to be a strog platform for boostig busiess performace while also havig a positive impact o the eviromet ad society because of its active, log-term ivestmet approach. Recogizig this, ad the fact that the maagemet of ESG issues i private equity is our most material ESG issue (see page 11), we work to embed ESG maagemet throughout this ivestmet process. Good ivestmets begi with rigorous due diligece. KKR due diligece icludes a review of how potetial portfolio compaies maage evirometal, social, ad goverace issues. For more about our due diligece process, see page 21. The compaies that make up our private equity portfolio may participate i our relevat proactive ESG programs (see pages 23-31). We work with portfolio compay maagemet teams to determie the programs that are most applicable ad to idetify the activities that are most relevat to their busiess. Throughout our ivestmet i a portfolio compay, we offer the maagemet team expertise ad resources to achieve ESG-related goals. Our iteral teams work together to provide strategic advice ad operatioal support. These teams iclude ivestmet professioals, Global Public Affairs, Legal ad Compliace, KKR Capstoe, ad the Cliet ad Parter Group. After we choose to make a private equity ivestmet, we work with the portfolio compay maagemet teams to set priorities ad create a detailed 100-day pla that establishes iitial goals ad the steps to achieve them. Whe material ESG issues are idetified durig the due diligece process, they may be icluded i these plas. 1 STAKEHOLDER GROUPS SOME OF THE WAYS WE ENGAGE GOVERNMENTS AND REGULATORS Local, regioal, ad atioal govermets, regulators, ad supervisors Dialogue ad egagemet with regulatory authorities ad policymakers by KKR ad portfolio compaies regardig societal eeds, the role of private capital, ad idustry treds Ivestmet parterships with local ad state govermet pesio fuds Advocate for the importace of defied beefit plas as a optio for public sector workers PRIVATE EQUITY PORTFOLIO COMPANY EMPLOYEES AND PROSPECTIVE EMPLOYEES Employees of private equity portfolio compaies aroud the world Pre-ivestmet assessmets of relatioship betwee workers ad maagemet, icludig, where relevat, orgaized labor ad work coucils Meetigs ad webiars with fuctioal leads about emergig issues ad prove practices o issues of iterest Ogoig, deep egagemet through the boards of directors ad operatioal iitiatives throughout the portfolio compaies CIVIL SOCIETY Those represetig the cocers ad expectatios of the commuities i which KKR ad the private equity portfolio compaies operate Parterships with exteral thought leaders, such as NGOs Cosultatios with experts about specific ESG issues i the private equity pre-ivestmet ad portfolio maagemet phases ESG roud tables with KKR private equity portfolio compaies Ogoig outreach ad discussios with key media outlets ad jouralists

14 kkr.com/resposibility KKR 1 Parterships for ESG Expertise How We Parter for the Maagemet of ESG Issues Exteral Parters Thought Leadership ad Expertise Ehacemet of Issues Maagemet Iteral Experts Subject Matter Kowledge Ivolvemet i Decisio-Makig For the past 37 years, we have see how parterships ca lead to greater value creatio. We ow kow that they also ca lead to real improvemets i evirometal ad social performace ad to better goverace. From our iteral teams, to oprofit parters, to the ivestmet commuity, each parter brigs differet expertise ad helps to esure that we remai at the leadig edge of emergig issues ad expectatios. Our progress i reachig our ESG goals has bee due to our strog etwork of iteral ad exteral parters. Maagemet of ESG Risks ad Opportuities To lear more, see Olie Resources o page 49. Our Oe-Firm Approach Extesive Idustry Uderstadig Active Egagemet ad Goverace Ivestmet Teams Experieced Seior Advisors Oversight ad Moitorig Portfolio Maagemet KKR employees strogly believe i the power of our oe-firm approach ad work to apply it to all that we do. This philosophy meas we work proactively ad collaboratively across geographies ad departmets to achieve the best results i all aspects of our busiess, icludig the maagemet of ESG issues. Our Ivestmet Professioals are resposible for idetifyig potetial ESG issues ad raisig these issues durig the pre-ivestmet ad ivestmet phases. Recogizig the importace of buildig awareess ad competece across the orgaizatio, we cotiued to itegrate ESG maagemet as part of the educatio of our private equity ivestmet professioals i 2012. The level ad format of educatio ad traiig ca vary sigificatly withi the orgaizatio, but is a growig priority for the Firm. Curretly, KKR private equity ivestmet professioals are educated about our commitmet to resposible ivestig through ew-employee orietatio, firmwide meetigs, ad commuicatios from our fouders. Through each of these chaels, iformatio about the importace of ESG issues ad stakeholder expectatios is stressed to participats. Our Global Public Affairs team represets the core of the ESG expertise at KKR. The team was formed i 2008 to serve as a resource to KKR, our professioals, ad our portfolio compaies. The Global Public Affairs team is ivolved i the due diligece process for all potetial private equity ivestmets ad also regularly egages with portfolio compaies ad exteral stakeholders. Two members of the team are fully dedicated to ESG strategy ad maagemet for the Firm. Additioal members of the team are resposible for specific ESG opportuities based o their geography or subject matter expertise. Our Legal ad Compliace team, alog with outside cousel, assists i our due diligece process by assessig prospective ivestmets o key goverace issues, such as ati-corruptio. They also work with our portfolio compaies o these issues after we have made a ivestmet. Ati-corruptio policies are part of our commitmet to resposible ivestmet ad we have take steps to build them ito our processes. For more iformatio about our approach to itegrity ad egagemet, see pages 30-31. KKR Capstoe is a team of approximately 60 operatioal experts who parter with our ivestmet professioals ad portfolio compay maagemet teams

Our Commitmet ad Approach 2012 ESG ad Citizeship Report 15 to defie strategic priorities ad drive operatioal improvemet i our private equity ivestmets. The team is made up of experieced professioals with strog backgrouds i busiess maagemet, operatioal kowledge, ad techical expertise. KKR Capstoe professioals play a sigificat role i implemetig our ESG programs ad they parter with our Global Public Affairs team to lead the Gree Portfolio Program, KKR Welless Works, Vets @ Work, ad Resposible Sourcig Iitiative. KKR Capstoe executives receive frequet educatio ad cotiuous traiig o our commitmet to resposible ivestmet ad our ESG programs. Our Cliet ad Parter Group (CPG) is chiefly resposible for developig, structurig, ad maitaiig collaborative parterships with our fud ivestors aroud the world. CPG brigs together resources ad expertise from all of KKR to deliver the most comprehesive ad advaced itellectual capital to our ivestig parters. CPG professioals also play a critical role i listeig ad respodig to ESG questios or suggestios from our fud ivestors. They regularly parter with the Global Public Affairs team. Together, the two teams have cohosted KKR s ESG Roud Table series. This effort is desiged to brig together the etire private equity ivestmet chai from limited parter to geeral parter to portfolio compay to share ad discuss best practices with respect to real-life ESG case studies, challeges, ad opportuities. Parterig Exterally for ESG Expertise To succeed i the moder busiess ladscape, compaies must maage a wide rage of ESG issues (see page 10), makig exteral expertise, perspective, ad support critical. While KKR has deep operatioal ad ESG-related experiece, we gai great kowledge ad credibility by goig outside of our orgaizatio ad parterig with thought leaders, such as NGOs. Sice 2008, we have deepeed our relatioship with Evirometal Defese Fud, while also buildig ew relatioships with other expert, oprofit orgaizatios icludig Busiess for Social Resposibility (BSR), Trasparecy Iteratioal, the America Heart Associatio (AHA), ad veteras orgaizatios. PARTNERS IN ACTION EDF Presidet Fred Krupp (left) ad KKR Co-CEO ad Co-Fouder Hery Kravis (right) discuss the Gree Portfolio Program. Sice joiig forces i 2008 with Evirometal Defese Fud (EDF) to lauch the Gree Portfolio Program, we have see the value ad opportuity that strog exteral parterships ca provide to our ESG efforts. I 2012, we commemorated the fourth aiversary of the program ad released a video with Co-CEO ad Co-Fouder Hery Kravis ad EDF Presidet Fred Krupp. The video discusses the results of the Gree Portfolio Program to date ad the sigificace of our orgaizatios iovative partership. It is available i the Partership sectio of KKR s Gree Portfolio Program website. To lear more, see Olie Resources o page 49. These parters ad others have helped our Firm ad private equity portfolio compaies work through a wide rage of ESG risks ad opportuities. Parterig With the Ivestmet Commuity The itegratio of ESG factors ito the ivestmet process is gaiig more attetio every year. As we, alog with our peers, cotiue our work to cosistetly ad thoughtfully maage these issues, idustry collaboratio is critical. Therefore, part of our commitmet to resposible ivestmet ivolves egagig with our peers i fiacial services to achieve commo goals. I 2012, we promoted resposible ivestmet ad ehaced dialogue aroud challeges ad opportuities specific to the private equity idustry through several efforts: Spoke about resposible ivestmet at several cofereces, icludig SuperRetur Asia, SuperRetur Iteratioal, Ceres, Net Impact, ad Private Equity Iteratioal Resposible Ivestmet Forum

16 kkr.com/resposibility KKR 1 Advatages of the Private Equity Model for Resposible Ivestmet Loger-Term Horizo Progress o ESG issues ca take time ad ofte does ot fit well withi the pressures of quarterly reportig. Because private equity takes a loger view ad measures progress over years, ot quarters, we ca focus o loger-term improvemets. Aligmet of Iterests We work to alig our iterests across key stakeholder groups, icludig our ivestmet parters, portfolio compay maagemet teams, ad our employees. This strategy allows us to focus o mutually agreed upo objectives ad to seek greater success. Cotributed to a idustry best practices guide o due diligece i resposible ivestig as a member of the British Veture Capital Associatio Hosted ESG-focused evets specifically for our ivestmet parters i North America ad Europe Cotributed to the developmet of guidelies for ESG reportig, such as through the Sustaiability Accoutig Stadards Board (SASB) These efforts are i additio to our active egagemet with our peers as sigatories of the PRI (see page 10). We look forward to additioal collaboratio with the ivestmet commuity i 2013. Private Equity s Role i a Healthy Global Ecoomy Compaies today face icreasig pressures ad challeges, such as ueve global growth, resource costraits, deleveragig, icreased regulatio, ad demads for greater trasparecy. As a result, they may eed capital, a logterm approach, ad maagemet expertise three ways i which we believe our private equity model ca provide support, while also servig as platform for resposible ivestmet. We ivest i compaies that are poised for ew growth, are udervalued, or are uderperformig, ad work with them to icrease their value ad growth potetial. We see the role of private equity as sigificat i the global ecoomy because of the direct ad idirect beefits this model brigs to our fud ivestmet parters, our portfolio compaies, ad our shared commuities. Active Maagemet Beig active ivestors i our portfolio compaies helps esure that everyoe is workig toward shared goals, icludig KKR maagemet, executives at our portfolio compaies, ad outside advisors. Furthermore, we are able to provide resources ad advice to help achieve the desired outcomes. Beefitig Our Ivestors ad Their Beeficiaries For more tha three decades, leadig fiduciaries aroud the world icludig large public ad corporate pesio plas, sovereig wealth, fiacial istitutios, isurace compaies, uiversity ad other edowmets, ad foudatios have ivested with KKR as ivestmet parters. The beeficiaries of these parters iclude millios of teachers, firefighters, police officers, state ad muicipal employees, ad other professioals. Our returs o their ivestmets have a positive impact o the retiremet security ad well-beig of these ad future geeratios of beeficiaries. Esurig that we create sustaiable value is ot oly critical for the creatio of log-term value for our portfolio compaies ad our ivestmet parters, but it is also oe of the most importat ways we ca beefit our ivestors ad, by extesio, society as a whole. Beefitig Commuities We believe two essetial ways for our private equity portfolio compaies to cotribute positively to their commuities are through employmet ad iovatio. By extesio, a sigificat part of KKR s cotributio to social ad ecoomic growth is the Firm s ivestmet i compaies that employ hudreds of thousads of people aroud the world. Worldwide, our private equity portfolio compaies employed early oe millio people at the ed of 2012: 66 percet

Our Commitmet ad Approach 2012 ESG ad Citizeship Report 17 i North America, 16 percet i Europe, 16 percet i Asia, ad 2 percet i other regios of the world. I additio to direct employmet by our portfolio compaies, ecoomic growth ad job opportuities are created through compaies etworks of suppliers ad other parters. Moreover, our private equity portfolio compaies ivest i iovatio through their products, services, ad facilities, thereby beefitig the greater ecoomy. I 2013, select portfolio compaies are expectig to ivest approximately $7.6 billio i capital expeditures. 2 We believe that these ivestmets i capital expeditures ad research ad developmet are evidece of compaies ivestig i their future ad, by extesio, i the future of their local ecoomies. I 2012, select portfolio compaies reported ivestmets of approximately $1.4 billio i research ad developmet. 1 1 Beefitig Society May compaies i our portfolio fulfill societal eeds for materials, iformatio, or services (see case study below) ad ca have a positive impact o idividuals ad commuities. For example, whether developig capsules to effectively deliver medicie i the body or maufacturig equipmet to keep workers i high-risk jobs safe, may compaies i our portfolio have a focus o solvig societal problems. Our uderstadig of macro-treds ad societal eeds provides importat cotext i these types of ivestmets, which ca provide solutios to difficult challeges. Icreasigly, we see the potetial for creatig value through a deliberate emphasis o ESG issues, such as with our ivestmets i reewable eergy or water ifrastructure. We believe this is a true form of shared value ad will cotiue to examie these types of potetial ivestmets movig forward. 1 KKR ivestmets that reported as part of this umber iclude: Accellet, Acteo, Aricet Techologies, Biomet Ic., Capital Safety, Capsugel, Del Mote Foods, Go Daddy Group, Ipreo, Jazz Pharmaceuticals, Ic., KION Group, MMI Holdigs Ltd., Northgate Iformatio Solutios, NXP, SuGard Data Systems, Ic., Tarkett S.A., TASC, TDC A/S, Versatel, Visat Corporatio, Visma AS, Wild Flavors, WMF. For a complete list of KKR s private equity portfolio compaies, visit our website: http://www.kkr.com/parters/portfolio-parters 2 KKR ivestmets that reported as part of this umber iclude: Academy Sports, Accellet, Acteo, Alliat Isurace Services, Ic., Ambea, Aricet Techologies, Capital Safety, Capsugel, Coloial Pipelie, Coriace, Dollar Geeral Corporatio, Eergy Future Holdigs Corp., First Data Corporatio, Fotolia, Go Daddy Group, Ipreo, Jazz Pharmaceuticals, Ic., KION Group, Maxeda, Nielse Co., Orietal Brewery, ProSiebeSat.1 Media AG, Tarkett S.A., TASC, TDC A/S, U.N Ro-Ro, U.S. Foods, Va Gasewikel Groep, Versatel, Visat Corporatio, Wild Flavors, WMF, Yageo Corporatio. For a complete list of KKR s private equity portfolio compaies, visit our website: http://www.kkr.com/parters/portfolio-parters Ivestig i Solutios: Magma Ficorp 3 I 2011, KKR ivested i Magma Ficorp Limited ( Magma ), a obakig fiace compay. Magma caters to the diverse fiacial requiremets of small etrepreeurs i rural ad semi-rural Idia who have had difficulty accessig the Idia bakig etwork. Case Study Magma customizes its products to address customers eeds ad positios itself as a solutios provider i the asset fiacig market. I aligmet with this philosophy, the compay provides a rage of products ecompassig fiacig for cars, ew ad used commercial vehicles, costructio equipmet, tractors, small- ad medium-sized eterprise loas, gold loas, ad affordable housig fiacig. The compay has provided fiacig to more tha 700,000 customers. 3 The followig compaies are all of KKR s portfolio compaies with headquarters i Idia as of December 31, 2012: Bharti Ifratel Limited, Coffee Day Resorts, Dalmia Cemet, Magma Ficorp, ad TVS Logistics Services Ltd. The specific portfolio compaies idetified are ot represetative of all of the portfolio compaies purchased, sold, or recommeded for KKR fuds. The reader should ot assume that a ivestmet i the portfolio compaies idetified was or will be profitable. Magma s etwork helps to coect the compay with bakig customers who previously had difficulty accessig capital ad fiacial services.

Tarkett desigs, maufactures, ad sells PVC, wood, lamiate, sports, ad other specialty floorig products for residetial ad commercial markets.

2 ESG Maagemet i Our Ivestmet Process Throughout the ivestmet process, KKR works to thoughtfully itegrate evirometal, social, ad goverace (ESG) cosideratios i our decisio-makig. Whether by formal assessmets or frequet dialogue, we egage with portfolio compay maagemet teams to support their efforts to maage their relevat ESG issues. Additioally, we work with select private equity portfolio compaies o a series of proactive programs ad iitiatives that address ESG opportuities. I additio to our focus o our private equity portfolio, we have bee workig to apply resposible ivestmet priciples to asset classes that are ewer to KKR, such as eergy ad ifrastructure. The followig pages explai how we itegrate the maagemet of ESG issues ito our ivestmet decisio - makig processes from start to fiish, ad how we parter over the log term with portfolio compaies through our proactive ESG programs.

20 kkr.com/resposibility KKR 2 Ifluece ad Cotrol Over ESG Issues i the Ivestmet Portfolio Pre-Ivestmet Phase Degree of ifluece/cotrol over ESG factors Relative Ifluece ad Cotrol Over ESG Issues Across KKR Asset Classes High Fixed Icome Low Liquid Equities Eergy Real Estate Ifrastructure Ivestmet Phase Degree of ifluece/cotrol over ESG factors Private Equity High Durig the last five years, we have improved our ivestmet flexibility ad capabilities to ivest up ad dow a compay s capital structure. We believe this has eabled us to provide better solutios for ivestmet parters ad compaies. While more tha 60 percet of KKR s assets uder maagemet are i our private equity fuds, we have expaded our busiess to also iclude eergy ad ifrastructure, real estate, ad a rage of debt ad public equity ivestig. May of these additioal busiess models do ot led themselves to the same ESG-maagemet approach that we apply i our private equity portfolio. This is primarily because of varyig ivestmet theses ad levels of ifluece. However, we still believe that resposible ivestmet ca play a importat role i may of these busiesses. To better uderstad how to approach ESG risks ad opportuities, i 2011 we aalyzed our relative degree of ifluece ad cotrol over ESG factors i the pre-ivestmet ad ivestmet phases. Based o this aalysis, we cotiue to prioritize efforts to itegrate ESG cosideratios i the private equity ivestmet process. We are also explorig ways to apply these cosideratios to other asset classes icludig eergy ad ifrastructure, ad real estate. Differet Approaches for Differet Busiesses The Private Equity Growth Capital Coucil (PEGCC) Guidelies As part of our commitmet to resposible ivestmet, KKR worked with other members of PEGCC to develop Guidelies for Resposible Ivestmet i 2009. These guidelies serve as a platform for formalizig ad focusig our resposible ivestmet efforts ad those of our peers i the private equity idustry. I accordace with these guidelies, KKR s private equity fuds commit to take labor ad other ESG issues ito accout whe makig ad maagig ivestmets. To lear more, see Olie Resources o page 49. I 2012, we cotiued to grow our eergy ad ifrastructure platforms with 11 ew ivestmets. As these ivestmets icrease i size or frequecy, so do the opportuities to cosider ad maage ESG issues. However, because of the ature of these parterships ad the size of our ivestmet, our level of ifluece ca be far less tha i private equity. I additio, there ca be varied ad sigificat ESG challeges ad opportuities i this sector, ad as such, we believe that a flexible ad tailored approach to the itegratio of ESG cosideratios i these ivestmets is essetial. For more iformatio about our approach to ESG maagemet i our eergy ad ifrastructure busiess, see pages 32-33. I 2012, our real estate busiess cotiued to grow ad evolve as well. I these cases, our ability to ifluece or cotrol the activities of our ivestmets ca vary quite sigificatly, ad is ofte limited. As we expad our busiess i these areas, we expect to more clearly defie our ESG strategy. For more iformatio about our real estate busiess, see page 33. As our assessmet idicated, private equity is the area where we have the most ifluece ad cotrol (see sidebar o left), though these levels ca vary depedig o several factors, icludig whether we are a miority or majority ivestor. Therefore, throughout our private equity fuds we are active ivestors that parter with our portfolio compay maagemet teams to improve productivity ad drive growth. Resposible ivestmet i this asset class is a key priority for us. The majority of this report, particularly sectio 2, refers specifically to the maagemet of ESG factors i the pre-ivestmet ad ivestmet phases of our private equity model. We also highlight the specific proactive ESG programs that we have i place for relevat compaies i our private equity portfolio (see pages 23-31).

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 21 Itegratig ESG Maagemet Ito the Private Equity Ivestmet Process ESG Maagemet i Our Private Equity Ivestmet Process 2 As ivestmet parters, we seek to help compaies fid solutios to their biggest challeges ad oly ivest if we thik we ca help ulock value i a compay. Today, ulockig value ca ofte iclude the thoughtful maagemet of ESG-related issues. We look at a compay s operatios ad how we ca improve efficiecies ad drive positive chage, whether o its evirometal impact, i its supply chai, or amog its employees. We do this aalysis before ivestig, through our due diligece process, ad after ivestig, through our portfolio maagemet approach. Cosiderig ESG Issues Durig Pre-Ivestmet Good ivestmets begi with rigorous due diligece o key busiess drivers, such as macroecoomic treds, customer prefereces, ad raw materials prices. KKR ivestmet professioals cosider how these factors provide opportuities ad pose risks to growth ad success over the log term. KKR due diligece also icludes a review of how potetial portfolio compaies maage or are affected by evirometal, social, ad goverace issues. A team of cross-fuctioal iteral subject matter experts reviews prospective ivestmets to idetify material ESG factors ad works with ivestmet teams ad exteral cosultats to gather the appropriate iformatio to make iformed recommedatios about potetial risks ad opportuities. ESG cosideratios that are discovered i the diligece phase ca have a impact o our ivestmet decisios. However, a decisio to ivest or ot is rarely due exclusively to ESG issues because these cocers ca be itertwied with other busiess issues that might make the busiess more or less attractive Pre-Ivestmet Our efforts to itegrate ESG cosideratios ito the pre-ivestmet phase by developig relevat competecy, tools, ad processes are described o pages 21-22. Ivestmet Our efforts to itegrate ESG cosideratios ito the ivestmet phase by settig expectatios for, ad supportig the efforts of, our portfolio compaies are described o pages 22-23. Realizig Value ESG Risks ad Opportuities Assessed ad Addressed ESG Cosideratios Durig Pre-Ivestmet Phase 1: Idetifyig Ivestmets Phase 2: Evaluatig Ivestmets Phase 3: Targetig Ivestmets Private equity ivestmet teams review compaies ad explore their opportuities for growth ad exposure to risks. Ivestmet teams ad the ESG due diligece team idetify potetial ESG risks ad opportuities. Private equity ivestmet teams recommed strog cadidates to the regioal Ivestmet Committee (IC). ICs work with the appropriate ivestmet team o pricig ad egotiatio tactics. Whe material ESG issues are idetified, they are assessed ad discussed with the applicable IC team as part of the evaluatio. The applicable regioal IC will determie whether to follow through with a ivestmet. If material ESG issues are raised, the maagemet of these issues are icluded as a priority ad may become part of the 100-day pla for improvemet.

22 kkr.com/resposibility KKR 2 ESG Maagemet i the 100-Day Pla Settig the Pla We work with relevat iteral ad exteral parters to idetify the ESG-related issues or opportuities. Whe issues material to a ivestmet are idetified, they may be icorporated ito the compay s 100-day pla. for ivestmet. I some cases, we may decide that a ESG issue poses a risk to our ivestmet, e.g., due to cocers with the evirometal impact of a compay s key product or operatios. I other istaces, we may determie that a compay has sigificat opportuities because of the way it maages ESG issues. Uderstadig the ESG challeges ad opportuities helps us to determie our best strategy for workig with a compay i which we may make a ivestmet. We formalized our ESG due diligece efforts i 2011 by assemblig our team of iteral experts ad establishig regular meetigs. I 2012, we bega developig a process that allowed us to moitor relevat deals ad their associated ESG issues throughout the pre-ivestmet phase. Usig this process, our team of iteral experts held approximately 37 diligece meetigs i 2012, where a average of approximately 12 compaies were reviewed per meetig for the first time or as follow-up o ESG-related diligece. Supportig the Goals Maagig Progress Our ivestmet teams ad Portfolio Maagemet Committees (PMCs) work together to moitor ad support our portfolio compaies egagemet with their key stakeholders. Where eeded, we provide additioal resources, access to parterships, or strategic advice. Beyod the first 100 days, the ivestmet team ad PMC cotiue to parter with the compay o settig targets ad trackig progress i the short, medium, ad log term. I may cases, members of the KKR Capstoe team are also ivolved durig our ivestmet i a compay to help create value ad maximize returs. I 2012, we also deepeed the resources available durig the diligece process by creatig a series of relevat idustry guides. Workig with third-party experts, we have developed 18 guides that cover a wide rage of sectors ad subsectors, such as health care ad maaged care facilities. The guides offer key questios ad cosideratios for material ESG factors specific to each idustry. Our due diligece team uses the guides regularly ad we cotiue to stregthe ad improve them over time. Cosiderig ESG Issues Durig Ivestmet After we make a private equity ivestmet, we parter closely with the compay s maagemet team to achieve mutually agreed upo performace goals. To support this effort i the early stages, we develop a detailed 100-day pla (see sidebar o left) that idetifies iitial goals ad the steps eeded to achieve them. Material ESG issues idetified durig the due diligece process may be icluded i these plas. Whe compaies do ot have critical ESG issues or opportuities to address immediately, we may egage with them outside of their 100-day pla ad throughout our time as ivestors. From iitial ivestmet to the poit of realizig value, private equity portfolio compaies are part of our portfolio for a average of five to seve years, depedig o our ivestmet thesis ad market coditios. This loger-term horizo allows our portfolio compaies to ivest the time, resources, ad attetio eeded to grow the compay, while also providig a opportuity for our teams to parter with them to ehace their maagemet of ESG issues. As i the pre-ivestmet phase, our relatioships with our private equity portfolio compaies are carefully oversee by our ivestmet teams with support from KKR Seior Advisors, iteral experts, ad exteral advisors, as ecessary. Each regio has a Portfolio Maagemet Committee (PMC) cosistig of a chairperso, KKR ad KKR Capstoe professioals, ad Seior Advisors. The PMC advises our portfolio compaies o a variety of matters, such as where to deploy additioal resources ad how to improve uderperformig busiesses. Throughout the maagemet process, the applicable PMC moitors each compay s progress ad advises them o strategies for realizig value.

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 23 As with other aspects of busiess operatios, KKR offers our portfolio compaies expertise ad resources to achieve their ESG-related goals. KKR Capstoe our team of busiess operatios experts works with maagemet o operatioal issues that affect the bottom lie, icludig various ESG issues i partership with the Global Public Affairs team. I 2012, a group of cross-fuctioal experts from across KKR came together to review priority ESG issues for each portfolio compay i North America. These priorities were the shared with each ivestmet team ad top issues were itegrated ito ogoig PMC processes. Some of these issues, for example material regulatory chages, were flagged for board-level review. I 2013, our goal is to complete a review of Europea portfolio compaies that is curretly uderway ad start a similar review of Asia portfolio compaies. Proactive ESG Programs for KKR Portfolio Compaies Gree Portfolio Program Resposible Sourcig Iitiative 2 Respodig to ESG Challeges ad Opportuities The ESG challeges ad opportuities faced by our private equity portfolio compaies ca vary greatly over time ad are based o a compay s idustry, geography, ad stakeholders. Therefore, to esure the most success for our efforts after we have made a ivestmet, our approach to ESG-related issues is highly customized ad collaborative. For certai compaies, we parter with them through our proactive ESG programs (see pages 24-31). With others, we respod to idividual ESG-related eeds or requests as they arise as part of a idividually tailored pla. Whe there are shared issues across the portfolio, we are able to leverage our experiece ad the experiece withi our portfolio compaies to provide tested solutios to these shared challeges. As part of our effort to provide tailored ad practical guidace, we itegrate ESG issues ito existig coversatios ad collaboratios with fuctioal leaders from across our private equity portfolio. For example, i 2012, as i past years, we itegrated ESG-related presetatios ad discussios at our geeral cousel meetig, chief procuremet officer summit, ad our first aual global commuicatios summit. Overall, more tha 50 portfolio compay represetatives were ivolved i our discussios about how ESG issues affect their fuctios ad day-to-day resposibilities. We also egage with portfolio compay executives through webiar series, some of which are described o page 28. KKR Welless Works Itegrity ad Egagemet Vets @ Work Our Proactive ESG Programs Believig that we have a uique ability to provide objective ad meaigful guidace to help our private equity portfolio compaies to pursue ESG-related goals, we have created a umber of proactive programs to share resources to address commo challeges. Each program has iteral ad exteral parters who focus o producig results through fiacial, evirometal, ad social impact, or risk mitigatio. We have five proactive ESG programs available for relevat private equity portfolio compaies: Gree Portfolio Program, Resposible Sourcig Iitiative, KKR Welless Works, Itegrity ad Egagemet, ad Vets @ Work.

24 kkr.com/resposibility KKR 2 Gree Portfolio Program Approach The followig process is tailored to compaies existig sustaiability ad ESG programs. Select Priority KEPAs Review curret evirometal practices Assess evirometal ad busiess impact through materiality assessmet Idetify performace areas for focus i the GPP Establish Metrics ad Baselie Establish key metrics to assess progress o priority KEPAs Collect historical data ad establish baselie for selected metric Gree Portfolio Program: Parterig for the Eviromet KKR believes compaies that strategically measure ad maage evirometal impacts will fid opportuities to icrease efficiecy, reduce operatig expeses, ad boost the bottom lie. I May 2008, KKR lauched the Gree Portfolio Program (GPP) i partership with Evirometal Defese Fud (EDF) a leadig oprofit orgaizatio with more tha 700,000 members worldwide ad a log history of helpig compaies realize bottom lie beefits by better maagig their evirometal impacts. The GPP is a operatioal improvemet program that uses a evirometal les to assess critical busiess activities of KKR s participatig private equity portfolio compaies. At the core of the GPP approach (see sidebar o left) is a set of aalytic guides to help each compay s maagemet team assess ad track improvemets across several key evirometal performace areas (KEPAs). KEPAs iclude greehouse gas emissios, water use, waste maagemet, use of priority chemicals, ad use of forest resources. Portfolio compaies use these guides to idetify their key evirometal impacts ad to desig iitiatives to maage them. I may cases, participatig compaies already have evirometal 2012 Gree Portfolio Program Participats 4 Develop Goals ad Actio Pla Idetify improvemet targets agaist selected metrics Develop ad implemet actio pla Measure ad Report Results Report performace agaist baselie ad targets regularly Assess progress ad actio plas, amedig as ecessary 4 The above listed portfolio compaies represet all of KKR s portfolio compaies that publicly participate i the Gree Portfolio Program as of December 31, 2012. The specific portfolio compaies idetified are ot represetative of all of the portfolio compaies purchased, sold, or recommeded for KKR fuds. The reader should ot assume that a ivestmet i the portfolio compaies idetified was or will be profitable.

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 25 efforts uderway, so the GPP brigs additioal resources, clear performace metrics, ad tailored support for each compay s focus areas. 2 The GPP is maaged by a global team of KKR Capstoe ad Global Public Affairs professioals, which works with KKR ivestmet teams to eroll ad maage the participatio of portfolio compaies. The GPP team meets mothly to discuss program goals, regioal updates, ad eeded resources. For more iformatio about our teams, see pages 14-16. The program bega with just three participatig portfolio compaies i North America; however, by the ed of 2012, the GPP had expaded to iclude 24 of our private equity portfolio compaies across North America, Europe, ad Asia. I 2013, we aim to deepe the relatioships we have with existig participatig compaies, while also expadig the program to ew participats as appropriate give their busiess models ad material issues. Reportig Gree Portfolio Program Results At the ed of 2012, 24 compaies were publicly erolled i the program, with 25 portfolio compaies havig participated i the program sice its iceptio i 2008. Sixtee compaies reported results i 2012, the GPP s fourth results aoucemet. 5 Their reported efforts have led to the estimated cumulative results betwee 2008 ad 2011 as show below. Cumulative Gree Portfolio Program Results 2008-2011 6 $644 Achieved more tha Millio I avoided costs ad added reveue Avoided 3.4 Millio Tos of waste productio Avoided 13.2 Millio Cubic meters of water use Avoided 1.2 Millio Metric tos of GHG emissios 5 Sixtee of the KKR portfolio compaies participatig i the Gree Portfolio Program i 2012 reported results. Reportig for the first time i 2012 are: TDC A/S i Demark, Va Gasewikel Groep i Beelux, ad Visat Corporatio i the Uited States. Seve ew compaies joied the GPP i 2012 ad are expected to report results i 2013: Del Mote Foods ad Capsugel i the Uited States; TDC A/S i Demark; Versatel ad KION Group i Germay; Bharti Ifratel ad Dalmia Bharat Cemet i Idia; ad MMI i Sigapore. 6 The impact of iitiatives of the Gree Portfolio Program is based o KKR ad KKR Capstoe s iteral aalysis ad iformatio provided by the applicable portfolio compay. Impacts of such iitiatives are estimates that have ot bee verified by a third party ad are ot based o ay established stadards or protocols. They may also reflect the ifluece of exteral factors, such as macroecoomic or idustry treds, that are urelated to the iitiative preseted. For iformatio about our methodology, dowload our methodology documet from our Gree Portfolio Program website: http://gree.kkr.com/uploads/docs/gpp_methodology.pdf

26 kkr.com/resposibility KKR 12 Gree Portfolio Program Sapshots 7 Improvemet +82 % i Waste Dollar Geeral: Waste Reductio Efficiecy Facility Waste Reductio (2007 Baselie) $8 3.4 $17.4 7.4 $20.9 8.9 $24.1 2008 2009 2010 2011 Avoided Waste Avoided Costs Excludes recycled waste impact US $ (millios) 10.2 Cubic Yards (millios) Dollar Geeral is a leadig U.S. small-box discout retailer offerig a broad selectio of merchadise, icludig cosumables, seasoal products, apparel, ad home goods, with more tha 10,500 stores i 40 states. As part of the Gree Portfolio Program, Dollar Geeral has focused o reducig ad recyclig cardboard waste from its stores ad distributio ceters. To measure the fiacial ad evirometal impacts of its improvemets, it measured waste productio ad recyclig rates agaist a 2007 baselie. Despite sigificat growth i store operatios, sice 2007, Dollar Geeral has reduced its waste productio i absolute terms by approximately 72 percet ad has improved its waste efficiecy by more tha 82 percet (cubic yards of waste/dollar of reveue). These improvemets have helped Dollar Geeral to achieve a estimated $70 millio i cost avoidace, to avoid almost 30 millio cubic yards of waste, ad to recycle approximately 506,000 tos of cardboard sice 2007. Orietal Brewery: Eergy Efficiecy +16 % Improvemet i Eergy Efficiecy Productio Facility Eergy Efficiecy (2007 Baselie) $3.4 $4.2 US $ (millios) Orietal Brewery is a leadig brewery i South Korea with a strog portfolio of brads icludig Cass, OB Golde Lager, ad Cafri. The compay has more tha 1,600 employees ad operates three productio facilities i South Korea. Sice joiig the Gree Portfolio Program, Orietal Brewery has focused o reducig eergy use i these facilities agaist a 2007 baselie. $2.2 $2.1 11 12 17 20 2008 2009 2010 2011 Avoided GHG Emissios Avoided Costs Metric Tos (000s) I absolute terms, GHG emissios from productio facilities have icreased approximately 18 percet compared to 2007. This icrease is due to a sigificat growth i overall productio for the compay. Over the same period, efficiecy improved by a estimated 16 percet (metric tos of GHGs/hectoliter of beer). This improvemet helped Orietal Brewery avoid approximately $11.8 millio i costs ad almost 60,000 metric tos of GHG emissios sice 2007. Our GPP Team ad Resources I 2012, i additio to expadig the GPP to iclude a additioal eight compaies, we also stregtheed our iteral team for maagig the program ad developed sigificat resources for participatig private equity portfolio compaies. We added four KKR Capstoe executives across North America, Asia, ad Europe to the global GPP team, ad we stregtheed the guidace for global GPP team members to eroll ad egage portfolio compaies. This team meets mothly to review participatig compaies progress, share best practices across regios, ad determie our priorities related to program expasio. We also spet much of 2012 developig additioal resources for our portfolio compaies. Idustry practitioers are frequetly developig ew techologies ad practices that eable compaies to do busiess more efficietly with a improved evirometal impact. The efforts udertake by the GPP participats sice 2008 have highlighted for us where compaies are seekig solutios to shared challeges ad the best practices they are implemetig to resolve them.

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 27 Va Gasewikel Groep: Waste-to-Eergy Productio -1 % Decrease i Net Efficiecy 2 Va Gasewikel Groep (VGG) is a waste service provider, as well as a raw materials ad waste-to-eergy supplier, with approximately 7,000 employees. VGG sees waste as the foudatio for ew raw materials ad eergy. I 2010, VGG bega actively measurig ad maagig its gree eergy productio as part of the Gree Portfolio Program. Its focus has bee o icreasig the amout of eergy it is producig ad sellig to earby customers ad eighborig cities from two facilities, AVR Duive ad AVR Rozeburg. I absolute terms, i 2010 ad 2011, electricity geerated by the VGG facilities resulted i the avoidace of almost 559,000 metric tos of GHG emissios ad eared approximately $76.6 millio i reveue for eergy sold to third parties. Over the same time period, et efficiecy defied as produced heat plus sold electricity divided by the eergy cotet of waste ad biomass throughput declied by almost oe percet, partially due to the effects of a mild witer ad a ofuctioig turbie for part of 2011. Plas for 2012 ad 2013 are expected to improve et efficiecy by icreasig the amout of heat i the form of water ad steam that is ultimately delivered to customers. Waste-to-Eergy Productio (2010 Baselie) $36.4 $40.2 281 278 US $ (millios) Metric Tos (000s) 2010 2011 Avoided GHG Emissios Reveue Pets at Home: Fleet Efficiecy +42% Improvemet i Efficiecy of Distributio Fleet Pets at Home is the Uited Kigdom s leadig specialty retailer of pet food, pet-related products, ad accessories. As part of the Gree Portfolio Program, Pets at Home is measurig ad maagig the efficiecy of its distributio fleet. I absolute terms, GHG emissios from the distributio fleet decreased approximately 21 percet compared to a 2008 baselie. Over the same time period, efficiecy improved by approximately 42 percet (metric tos of GHGs/carto shipped). These improvemets i efficiecy have helped Pets at Home to avoid approximately $4.3 millio i costs ad almost 7,300 metric tos of GHG emissios sice 2008. 7 See Importat Iformatio o page 49 for iformatio regardig the Gree Portfolio Program ad its methodologies. Fleet Eergy Efficiecy (2008 Baselie) $0.5 900 $1.4 2,600 $2.5 3,800 US $ (millios) Metric Tos 2009 2010 2011 Avoided GHG Emissios Avoided Costs Calculated through fuel cosumed As we have leared from these experieces, we desiged our GPP Hadbook, a documet comprisig 11 guides focused o commo areas of iterest, such as fleet eergy efficiecy, retail store eergy efficiecy, ad data ceter eergy ad water efficiecy. We seek to share these lessos with all compaies i our private equity portfolio, ad hope that the GPP Hadbook serves as a formal step i that process by highlightig a wide rage of best practices relevat to differet idustries. The GPP Hadbook will be released i early 2013 ad will be updated periodically as we receive feedback or ew iformatio.

28 kkr.com/resposibility KKR 2 RSI Compay Assessmet Process Idetificatio of Compaies for Review Based o idustry, products, stakeholders, ad sourcig patters, we idetified 20 portfolio compaies for deeper assessmet. I 2012, we reviewed two additioal compaies as they became part of our private equity portfolio. Iformatio Gatherig ad Review of Key Issues With our parters at BSR, we developed a 36-questio survey that collected details about sourcig footprits, seior executive egagemet, codes of coduct, supplier egagemet, ad commuicatios. Aalysis of Performace ad Feedback With BSR, we assessed resposes to the surveys, evaluated each compay s overall performace, ad provided prioritized ideas about how to improve performace. Resposible Sourcig Iitiative: Parterig for Social Value With icreasigly complex global supply chais ad suppliers i distat locatios, it ca be challegig for compaies to esure that their ESG performace expectatios, as well as those of their customers ad stakeholders, are beig met by suppliers. I additio to havig potetially uacceptable huma rights or evirometal cosequeces, suppliers failure to achieve these expectatios ca result i operatioal risks, such as supply chai disruptio, that affect product reliability or cosumer behavior. For these reasos, i 2010, we lauched a iitiative to provide our private equity portfolio compaies with guidace ad resources focused o the cotiuous improvemet of their maagemet of huma rights ad evirometal issues i global supply chais. To create a series of tools, evets, ad other resources for our portfolio compaies, we partered with Busiess for Social Resposibility (BSR), a oprofit orgaizatio with a global etwork of early 300 member compaies. Together we developed a Supply Chai Sustaiability Resource Guide, which covers iteratioal stadards, idustry collaboratios, certificatio processes, ad guidace to help with supply chai evaluatio ad maagemet efforts. I additio to providig iformatio ad resources to our portfolio compaies, i 2011 we bega to review policies, procedures, ad maagemet practices at portfolio compaies with potetial exposure to supply chai risks. To date, we have worked with 22 of our portfolio compaies to review their supply chai policies ad procedures for resposible labor ad sourcig practices. Additioally, we review these policies durig our due diligece assessmet of compaies, whe appropriate. We foud a umber of our portfolio compaies are leadig o these issues. However, for a small umber of compaies the assessmet revealed areas for improvemet. I these cases, we provided guidace ad recommeded actio plas for improvemet. The most commo areas for improvemet icluded the eed for a stroger supplier code of coduct, better itegratio of the code of coduct i cotractual laguage, ad more proactive egagemet with suppliers. I each of these areas, we provided draft laguage ad examples from other leadig compaies, combied with idividual support to esure that the recommedatios are customized ad actioable. I 2012, we worked with three portfolio compaies to improve their sourcig practices ad will work with three additioal compaies ito 2013. I additio, sice 2010 we provided traiig o resposible sourcig priciples to more tha 50 percet of our portfolio compaies. I 2012, this traiig cosisted of a webiar series that focused o recogizig emergig treds ad the role of growig stakeholder expectatios. The topics icluded: Resposible Raw Material Sourcig, Supplier Egagemet ad Capacity Buildig, Busiess ad Huma Rights, ad Iteral Aligmet for Supply Chai Sustaiability. Movig Forward I 2013, KKR will cotiue our work i the area of resposible sourcig. As i previous years, we pla to develop additioal resources for portfolio compaies,

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 29 icludig for compay employees i the source coutries, thereby supportig their efforts to effectively maage supply chai challeges ad opportuities. I additio, we will cotiue to support our private equity portfolio compaies that were idetified as havig areas for improvemet ad will cotiue to assess ew private equity portfolio compaies with the same methodology as they joi the KKR portfolio. KKR Welless Works: Parterig for Health As health care costs i the Uited States cotiued to icrease, we bega to see a opportuity to get egaged i this complex but importat issue. Some of our portfolio compaies were already actively providig iovative solutios to ecourage employee welless, so we bega workig with them to lear from their experieces, share best practices, ad scale efforts to support good health for compay employees. Existig research shows that employees welless levels ca have positive direct ad idirect impacts o employee egagemet, lost time, productivity, ad health care spedig. Our program, KKR Welless Works, was lauched i 2011 ad is built o the idea that employees who kow their key health idicators are able to make better decisios for their health ad ultimately improve their well-beig. Our early aalysis showed that while may compaies offered biometric screeigs to employees, those who icetivized participatio i screeigs were most successful i icreasig participatio. This realizatio formed a core elemet of KKR s Welless Works program. Therefore, compaies erolled i this program commit to offerig a aual icetivized biometric screeig to employees. They also provide resources for employees to better uderstad ad respod to their results, while protectig idividual privacy. The program bega at five of our U.S.-based portfolio compaies. By the ed of 2012, we erolled a additioal three portfolio compaies whose welless efforts met our program criteria. Together, these compaies provide health care coverage for approximately 190,000 employees. Based o 2012 employmet data, our participatig compaies saw a aggregate biometric screeig rate of 72 percet i 2012, compared to 46 percet prior to their egagemet with KKR Welless Works. 8 We also deployed the program at all KKR offices i the Uited States, experiecig participatio rates of approximately 98 percet (see page 41). We aim to expad our efforts to additioal portfolio compaies i 2013. The KKR Welless Works Program Model Compaies desig a icetive for employees worth approximately $250 per employee, tied to takig a biometric screeig. Compaies commuicate the program ad icetive. Health maagemet providers the collect a set of biometrics icludig BMI, blood pressure, lipids ad glucose from each participatig employee. The data is processed by health maagemet providers, who i tur reach out to employees to discuss their results, providig additioal resources if the data idicates a health risk. Over time, the biometric data ad participatio rates are reported ad measured to track progress for employees ad the program overall. 2 2012 Welless Works Program Participats 9 Throughout the process, the compaies are egagig with health maagemet providers that adhere to HIPAA guidelies. To lear more, see Olie Resources o page 49. 8 I early 2013, KKR exited its ivestmet i Sealy ad therefore is ot icludig its data i these results. 9 The above listed portfolio compaies are all KKR s portfolio compaies participatig i the KKR Welless Works program as of December 31, 2012. The specific portfolio compaies idetified are ot represetative of all the portfolio compaies purchased, sold, or recommeded for KKR fuds, ad it should ot be assumed that the ivestmet i the portfolio compaies idetified was or will be profitable.

30 kkr.com/resposibility KKR I additio, as part of our program, i 2012 we formally joied forces with the America Heart Associatio to lauch a iovative research study ad provide additioal tools ad resources to our participatig portfolio compaies. The study will evaluate the health improvemet effort at those compaies to determie what works best to reduce risk factors ad improve health for idividuals, allowig us to adjust ad cotiuously improve our program. The research will be based o data collected at participatig portfolio compaies ad results are expected i 2015. Del Mote offers o-site fitess classes to promote health ad welless amog employees. Del Mote: Welless at Work Case Study Del Mote is oe of the coutry s largest producers, distributors, ad marketers of premium-quality, braded pet ad cosumer food products for the U.S. retail market. To ecourage employees, Del Mote lauched their welless effort Live Healthy Every Day i 2009. I 2010, Del Mote lauched a Take Care Rewards program icetivizig employees to complete a health risk assessmet (HRA) ad go to their doctor for a screeig relative to their age ad geder. This program led to 17 percet participatio. I 2012, the compay joied KKR Welless Works ad evolved the Take Care Rewards offerig to iclude o-site biometric screeigs to all beefit-eligible employees i all locatios. They also icorporated HRAs ito their pla desig. By completig these two compoets, employees are eligible for a health premium discout of up to $540 off their 2013 medical premiums. Usig this model, their participatio rate icreased to early 70 percet. Additioally, Del Mote offers employees telephoic health coachig, o-site fitess classes ad customized website resources. Their iteral Livig Healthy Every Day website also offers healthy recipes highlightig Del Mote igrediets, pertiet ews articles, ad sapshots of employees livig healthy. I 2013, Del Mote will ecourage employees to maitai or improve their biometric screeig results to qualify for the health premium discout. Itegrity ad Egagemet: Parterig for Good Goverace Promotig best practices i ethical busiess ad thoughtful egagemet with stakeholders at our portfolio compaies is a importat goal for us as ivestors. Over the past few years, we have stregtheed the guidace ad resources available to our ivestmet professioals ad our portfolio compaies o trasparecy, egagemet, ad reportig. Trasparecy ad Stakeholder Egagemet Demads for meaigful trasparecy are drive by growig expectatios for corporate accoutability ad cotiue to icrease rapidly aroud the world, especially as compaies expad their operatios ad global footprit. I respose, compaies are workig to commuicate their performace o may frots, icludig ESG issues ad impacts o society i geeral. We ecourage our portfolio compaies to ehace egagemet with their stakeholders by educatig them about the volutary codes ad frameworks of trasparecy. I 2011, we supported their efforts through a series of webiars that reached more tha 22 portfolio compaies aroud the world. I 2012, we cotiued this effort by icorporatig trasparecy ad egagemet i our ESG Roud Table evet for portfolio compaies i Lodo ad our first global commuicatios summit i New York City. I 2013, we will cotiue to provide guidace through our meetigs with fuctioal leads ad additioal webiars for iterested portfolio compay executives. Ethics, Itegrity, ad Compliace Regulatio from legislatio, such as the UK Bribery Act ad the exteded reach of the U.S. Foreig Corrupt Practices Act, coupled with greater demads for trasparecy from stakeholders, meas that it is icreasigly critical for compaies ad ivestors to sped time maagig ad documetig their goverace practices. Compaies operatig aroud the world must develop effective ati-corruptio programs. For KKR, thoughtful, effective ati-corruptio policies are part of our commitmet to resposible ivestmet, ad we have take steps to build them ito our processes. To this ed, we have coducted traiig for KKR executives, icluded due diligece of ati-corruptio matters i our private equity ivestmet process, ad assisted may of our private equity portfolio compaies i ehacig their ati-corruptio programs through our portfolio oversight activities.

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 31 I 2012, we lauched a partership with Trasparecy Iteratioal (TI), a global ati-corruptio NGO. Through this partership we seek to ehace our ivestmet ad compay maagemet processes, specifically i busiess itegrity. We work with TI to idetify resources that ca iform ivestmet professioals ad portfolio compaies based o their regios ad sectors. 1 Vets @ Work: Parterig for Employmet I 2012, the uemploymet rate i the Uited States hovered above 8 percet; however, the rate for veteras returig from Iraq ad Afghaista was more tha 12 percet ad for the yougest U.S. veteras returig from these coflicts, the rate was 30 percet. 10 These umbers provide a example of oe of the may challeges U.S. military persoel fid upo returig from war. Vets @ Work, lauched i 2011, is a iitiative aimed at recruitig ad hirig veteras across our U.S.-based private equity portfolio compaies. Because of their specialized skills, leadership experiece, ad strog character from years of military service, umerous compaies ad studies are showig that hirig veteras is smart busiess ad good corporate citizeship. I 2012, the Vets @ Work participats hired more tha 7,000 veteras ad our shared commitmet to this iitiative cotiued to grow. I additio, we expaded the program to a additioal compay, Academy Sports, brigig our total umber of actively participatig compaies to ie. We also deepeed our relatioships with existig participats by developig a series of tools ad makig importat resources available, such as expert third-party advisors, ad added opportuities for our portfolio compaies to share best practices with each other by facilitatig semiaual group discussios ad webiars. By opeig these coversatios up to our etire portfolio, we were able to reach additioal portfolio compaies that were ot yet formally erolled i the program. Lastly, we ecouraged the Vets @ Work portfolio compaies to atted key idustry evets. Six portfolio compaies participated i the Veteras o Wall Street (VOWS) Coferece, of which KKR is a two-time sposor, ad three compaies participated i the Robi Hood Foudatio s Veteras Hirig evet. KKR cotiues to stregthe our ow commitmet to veteras, ad we have a umber of U.S. veteras workig at the Firm today. They iclude idividuals who served i the U.S. Navy, U.S. Marie Corps, U.S. Air Force, ad the U.S. Army, ad they play key roles i KKR s Vets @ Work program. 2012 Vets @ Work Participats 11 Case Study I 2012, Toys R Us hired more tha 1,200 veteras. Toys R Us: Buildig Tools to Build Careers Toys R Us is oe of the world s leadig specialty toy ad juveile products retailers, sellig merchadise globally through more tha 1,600 stores i approximately 36 coutries, ad through the compay s websites. The compay is proud to support members of the U.S. armed forces by cotiually strivig to hire veteras ad active duty military service me ad wome. I 2012, the compay bolstered its iitiatives to get troops back to work by actively recruitig through military job boards, at career fairs, ad o military bases. Additioally, Toys R Us parters with a wide rage of military employmetfocused orgaizatios ad career websites, icludig Hirig Our Heroes. To further assist veteras i fidig the best job opportuities for their skills, the compay lauched a Military Skills Traslator i November 2012. The Traslator matches military persoel with Toys R Us job opeigs based o their core Military Occupatioal Specialty (MOS), as well as secodary ad tertiary MOS codes, subspecialties, certificatios, ad ay additioal traiig the applicat may have obtaied while servig i the U.S. military. I 2012, the compay hired more tha 1,200 veteras for full-time ad seasoal positios i its stores, corporate headquarters, ad distributio facilities. To lear more, see Olie Resources o page 49. 10 Bureau of Labor Statistics, Employmet Situatio of Veteras 2012, http://www.bls.gov/ews.release/pdf/empsit.pdf 11 The above listed portfolio compaies represet all of KKR s portfolio compaies that participate i the Vets @ Work iitiative as of December 31, 2012. The specific portfolio compaies idetified are ot represetative of all of the portfolio compaies purchased, sold, or recommeded for KKR fuds. The reader should ot assume that a ivestmet i the portfolio compaies idetified was or will be profitable.

32 kkr.com/resposibility KKR 2 Resposible Ivestmet i No-Private Equity Asset Classes Commitmet to Thoughtful Maagemet of ESG Risks ad Opportuities i Real Estate ad Eergy ad Ifrastructure While our ivestmet approach i eergy ad ifrastructure ad i real estate does ot always led itself to the same level of ESG maagemet as our private equity portfolio, we are fidig ways to thoughtfully itegrate resposible ivestmet strategies where coditios allow. We work with commuities, policymakers, ivestors, NGOs, ad other stakeholders to uderstad the key issues for these ivestmets ad the best approaches to maagig them. As we expad our ivestmets beyod private equity, we are cotiuously evaluatig how best to approach resposible ivestmet i these busiesses. As illustrated o page 20, beyod our private equity work, we are most focused o our eergy ad ifrastructure ad real estate busiesses because of our relative level of ifluece o the ivestmets we make i these asset classes. ESG Maagemet i Eergy ad Ifrastructure May experts would agree that we are curretly i the midst of a eergy revolutio. Global growth ad urbaizatio, particularly i developig markets, has created a uprecedeted demad for icreased ifrastructure ad all forms of eergy. Demad is particularly acute because the regios where eergy eeds are strogest are ofte far from where eergy sources reside. Accordigly, there are sigificat eeds for related exploratio, developmet, productio, trasportatio, ad distributio of eergy resources. Moreover, the world has access to more eergy sources tha ever before because of techologies ad iovatios that are ulockig a more varied eergy platform. KKR has ivested i both eergy ad ifrastructure assets for may years, buildig a busiess by makig ivestmets that supply capital to support this chagig supply ad growig demad. Providig Solutios Through Ifrastructure Ivestmets 11 Sorgeia Frace is oe of the largest wid farm operators i Frace by istalled capacity, helpig the coutry respod to eergy challeges. T-Solar Global Operatig Assets joied the KKR eergy portfolio i 2011 ad is a leadig solar eergy compay i Spai ad Italy. SuTap Eergy RE is a strategic partership with Recurret Eergy focused o acquirig solar photovoltaic electricity geeratig facilities. Bayoe Water & Wastewater Cocessio is a joit veture with Uited Water that uses a ew model to improve system efficiecy ad address ifrastructure eeds for the City of Bayoe, New Jersey. Coriace addresses chagig eergy eeds i Frace through its iovative operatios i biomass, geo-thermal sources, ad waste-toeergy plats. 11 The followig compaies are all of KKR s ifrastructure trasactios sice 2011: Sorgeia Frace, T-Solar Global Operatig Assets, Saba Ifraestructuras, SuTap Eergy, Coriace, Bayoe Water & Wastewater Cocessio. The specific portfolio compaies idetified are ot represetative of all of the portfolio compaies purchased, sold, or recommeded for KKR fuds. The reader should ot assume that a ivestmet i the portfolio compaies idetified was or will be profitable.

ESG Maagemet i Our Ivestmet Process 2012 ESG ad Citizeship Report 33 Reewable Eergy Ivestmets Our eergy ad ifrastructure platform is built o a value-added ivestmet strategy ad supported by a team with deep idustry experiece. We ivest across the eergy spectrum ad believe that a diversity of eergy sources is critical to the fuctioig of the world ecoomy. Therefore, i additio to covetioal eergy sources, such as fossil fuels, we also ivest i reewable eergy sources. These sources ca have a lower evirometal impact tha covetioal eergy techologies ad provide our ivestors with stable ivestmets with the potetial for curret yield ad protectio from iflatio ad GDP risk. For these reasos, reewable eergy is a critical part of that eergy supply diversity ad is a focus of our ifrastructure ivestmets. Natural Gas Ivestmets The more tha doublig of our atural gas supply over the course of the last decade has chaged what had bee a relatively stable eergy supply outlook. For decades, U.S. oil ad gas productio was o the declie ad may associated idustries ad busiesses had moved offshore. Today, this tred is reversig due to the techology-eabled shale gas resource. If used to its potetial, KKR believes that shale gas could provide lastig ecoomic beefits ad drive growth i log-dormat or decliig parts of the ecoomy such as maufacturig ad basic idustry, improve our trade balace, icrease eergy idepedece, advace U.S. atioal security, ad spur cotiued techological advacemets. As with all areas of our eergy ad ifrastructure busiess, we are committed to workig with the idustry ad our stakeholders to better uderstad ad maage the evirometal ad social risks that we face across this asset class. ESG Maagemet i Real Estate Through our real estate busiess, we target a variety of real estate opportuities, icludig property-level equity, debt ad special situatios trasactios, ad busiesses with sigificat real estate holdigs that ca beefit from KKR s operatioal expertise. We parter with real estate owers, leders, operators, ad developers to provide flexible capital, which i tur eables them to respod to trasactio-specific eeds or the fudig of future developmet or acquisitio opportuities. As we cotiue makig iitial ivestmets through this platform, we are examiig how to best itegrate ESG maagemet ito our real estate ivestmet processes. Our ivestmet teams have cosidered areas of importace, such as evirometal coditios, eergy coservatio, ad employmet practices i commercial real estate. As a example of this, i 2012, with the assistace of the Clito Foudatio, we worked with Yorktow Ceter, a shoppig mall i which we ivested outside of Chicago, to cosider a umber of recommeded evirometal coservatio measures for implemetatio. The measures iclude outdoor ad idoor lightig upgrades ad modificatios to the chilled water system. I 2013, we aim to further stregthe our approach to icorporate ESG cosideratios ito the real estate due diligece process ad ecourage thoughtful ad appropriate evirometal ad social practices durig ivestmet. Hydraulic Fracturig ad Shale Gas Developmet Shale Formatio Natural gas has log bee viewed by may as the evirometally preferred fossil fuel ad as the best bridge fuel for the log-term trasitio to a low-carbo ecoomy. I fact, the evirometal commuity has frequetly advocated icreased atural gas use as a alterative to coal. Despite this relatively beig view of atural gas geerally, developmet of shale gas has become a polarizig issue. While ivestig i this growig market, we are committed to actively workig with the idustry ad our key stakeholders to better uderstad ad thoughtfully maage the relevat evirometal ad social risks ad impacts. A priority i our work will be to further develop our support for portfolio compay teams efforts to maage the evirometal ad social impacts of activities related to hydraulic fracturig for atural gas, commoly referred to as frackig. I November 2012, we released a atural gas report that outlies may of the opportuities ad issues associated with atural gas extractio ad calls for stakeholders to develop appropriate regulatio ad best practices that reduce impacts ad protect huma health ad the eviromet, icludig the reductio of fugitive methae emissios. To lear more, see Olie Resources o page 49. Fresh Water Aquifer 2

KKR recogizes the impact that our Firm ad ivestmets ca have o commuities aroud the world. 3 Our Commuity KKR seeks to build stroger busiesses, ad we believe that stroger busiesses help build better commuities. Whether i our ow offices, the operatios of our private equity portfolio compaies, or the local commuities that we affect, our impact ca be sigificat ad our role as a good citize is critical. As demostrated throughout this report, our most material issue is the itegratio of evirometal, social, ad goverace (ESG) cosideratios i our private equity ivestmet process. However, we also recogize that the ways i which we maage our parterships, support our employees, ad egage with our commuities are critical compoets of our log-term growth ad success. The followig pages focus o the KKR culture the ways we work with our people through our values, programs, ad processes. This sectio also highlights the ways that we support local commuities ad our goals for future corporate egagemet.

36 kkr.com/resposibility KKR 13 KKR s Culture ad Commuity KKR s log-term growth will be drive i large part by the thoughtful maagemet of our culture ad commuity, for it is our people ad parters that are at the core of the Firm s success. Our values, Firm structure, leadership, ad commuity egagemet are essetial parts of maagig KKR for log-term growth. Our Values The bedrock of KKR s culture is a uique spirit of partership ad a shared sese of owership across all of our busiesses. Our fouders established the Firm i 1976 based o these beliefs, as well as their ow uique partership ad lifelog friedship. The same core values are igraied i the orgaizatio today. Not oly are they well-uderstood throughout the Firm, but they are also fudametal to how we recruit, evaluate, ad reward people. Teamwork is at the heart of how we operate. We coduct ourselves with Itegrity i everythig we do. As a Relatioship-Drive Firm, we are deeply committed to buildig ad sustaiig log-term parterships iterally ad exterally grouded i trust ad trasparecy. We readily accept Accoutability for our actios, iactios, ad decisios, both idividually ad as a Firm. We costatly strive to be Iovative by questioig accepted wisdom, creatig ew ideas ad ew approaches, ad ever restig o our laurels. I our pursuit of Excellece, we aspire to be the best at what we do ad to lead by example. These deeply rooted core values make KKR a very special place to work, while drivig a culture committed to exceptioal performace ad results for our ivestors ad other stakeholders. Board of Directors BOARD MEMBER Hery R. Kravis AUDIT CONFLICTS NOMINATING AND GOVERNANCE EXECUTIVE To lear more, see Olie Resources o page 49. Our Goverace Process George R. Roberts Joseph A. Grudfest Joh B. Hess We strive to clearly ad deliberately alig our iterests with the iterests of our ivestmet parters ad the executives at our portfolio compaies to create sustaiable value. To this ed, we ivest our ow capital alogside our ivestors ad we each beefit from the collective performace of the Firm. Dieter Rampl Patricia F. Russo Thomas M. Schoewe To establish the basis for strog corporate goverace, KKR has adopted corporate goverace policies coverig areas such as the board of directors resposibilities ad duties, ad the relatioship of the board of directors to maagemet. Robert W. Scully Chair Member KKR s board of directors cosists of the two fouders ad co-chief executive officers, Hery R. Kravis ad George R. Roberts, ad six o-executive directors: Joseph A. Grudfest, Joh B. Hess, Dieter Rampl, Patricia F. Russo, Thomas M. Schoewe, ad Robert W. Scully. To lear more, see Olie Resources o page 49. KKR s board of directors has four stadig committees (see sidebar o left) that operate pursuat to writte charters.

Our Commuity 2012 ESG ad Citizeship Report 37 Our Maagemet KKR is maaged as oe firm, with ivestmet teams located aroud the world, supported by a orgaizatio i which commuicatio ad collaboratio are priorities. Together, all KKR professioals across all busiess lies are compesated based o the overall success of the Firm. KKR S EXECUTIVE OFFICERS Hery R. Kravis Co-Chief Executive Officer George R. Roberts Co-Chief Executive Officer Our Code of Busiess Coduct ad Ethics KKR has adopted a Code of Busiess Coduct ad Ethics that sets forth the stadards for busiess ethics ad persoal itegrity i all types of trasactios ad iteractios. The code emphasizes our commitmet to ethics ad compliace with the law, sets forth basic stadards of ethical ad legal behavior, ad provides reportig mechaisms for kow or suspected ethical or legal violatios. The code applies to all directors, officers, ad employees at KKR. To lear more, see Olie Resources o page 49. 3 Todd A. Fisher Chief Admiistrative Officer William J. Jaetschek Chief Fiacial Officer David J. Sorki Geeral Cousel ad Secretary Our Ivestmet ad Portfolio Maagemet Committees I each regio, our ivestmet processes are oversee by a Ivestmet Committee (IC) ad Portfolio Maagemet Committee (PMC). Our ICs are resposible for maagig the pre-ivestmet phase. They review ad approve all ivestmets, moitor due diligece practices, ad provide advice i coectio with the structurig, egotiatio, executio, ad pricig of ivestmets. Whe a ivestmet team determies that a ivestmet proposal is worth cosideratio, the proposal is formally preseted to the applicable IC ad the due diligece process commeces, if appropriate. The IC moitors all due diligece practices ad must approve a ivestmet before it may be made. PMCs are resposible for workig with our ivestmet professioals from the poit at which a ivestmet is made util the time it is exited to esure that strategic ad operatioal objectives are accomplished ad that the performace of the ivestmet is closely moitored. I additio to the support provided by our ivestmet teams, KKR Capstoe, our Seior Advisors, ad our Global Public Affairs team, KKR s PMCs provide additioal expertise, support, ad oversight of our private equity portfolio. The PMCs also istill cetralized disciplie i the process of creatig value i KKR s private equity portfolio compaies ad act as a early-warig system to idetify ad address challeges. The PMCs cosist of seior professioals draw from KKR s private equity idustry teams, KKR Capstoe, ad KKR Seior Advisors. The PMCs meet regularly to review the portfolio i detail, which advaces their i-depth kowledge of each ivestmet ad helps keep ivestmet teams focused o factors that cotribute to value creatio. To lear more, see Olie Resources o page 49.

38 kkr.com/resposibility KKR 13 Executive Compesatio ad Aligmet of Iterests To help iform our talet maagemet decisios, icludig compesatio ad promotios, we coduct a comprehesive evaluatio process aually, if ot more ofte, that is predicated o iput from a wide rage of people regardig each employee s cotributios to the Firm. Feedback is gathered alog three core performace dimesios: The members of the PMCs are also egaged with KKR s private equity portfolio compaies o a frequet basis through coversatios with the KKR ivestmet teams, KKR Capstoe, portfolio compay maagemet teams, ad other costituets. Both the degree of iformatio exchaged ad the frequecy of these exchages help defie KKR s differetiated operatioal focus o its portfolio. Risk Maagemet KKR has a active Risk Committee cosistig of seior KKR leaders represetig all busiess lies (e.g., private equity, public markets, capital markets) ad cotrol fuctios (e.g., legal, fiace, public affairs). The Risk Committee prioritizes the Firm s risks, icludig ESG issues whe relevat, ad maitais focus o sigificat ad emergig busiess risks. Deliverig Commercial Results Leadig ad Maagig People Livig the Firm s Values Our Employees The success of our busiess is depedet o the stregth ad skills of our employees ad teams. Amog other thigs, we deped o their ability to fid, select, ad execute successful ivestmets; maage ad improve portfolio compay operatios; ad fid ad develop relatioships with fud ivestors ad other sources of capital. Therefore, we icetivize employees i ways desiged to motivate them to excel ad ecourage them to remai with the Firm. Executive Compesatio Our compesatio program has three primary objectives: to attract, motivate, ad retai our employees; to alig their iterests with those of our uit holders ad fud ivestors; ad to reiforce our culture ad values. Aligmet of Iterests Maagemet equity owership i the busiesses i which we ivest has bee a guidig priciple throughout our Firm s history, ad we apply that priciple to ourselves: every employee of the Firm has a equity iterest i KKR. This equity owership serves to alig the iterests of our employees with those of our ivestors. Because we ivest i our ivestmet fuds alogside our ivestmet parters, we believe that our pricipals iterests are also aliged with those of our ivestors i the fuds, vehicles, ad accouts that we maage, which i tur beefits our uit holders. We subscribe to, ad take great pride i, havig a culture of meritocracy ad fairess: holdig people accoutable for results ad their idividual cotributios to the Firm. I keepig with this philosophy, compesatio is based o may thigs, icludig the performace of the Firm as a whole, performace of oe s busiess uit, as well as oe s idividual performace ad accomplishmets. We believe this type of rigorous ad iclusive evaluatio process ot oly reaffirms our culture, but also helps icrease objectivity ad more thoughtful maagerial decisio-makig.

Our Commuity 2012 ESG ad Citizeship Report 39 Our Culture ad Programs Advacig Wome i Leadership 3 I 2012, we promoted two wome to Member ad our logest-stadig female Member became the first woma appoited to the Firm s Maagemet Committee: Suzae Doohoe Cliet ad Parter Group, Member Maagemet Committee, Member Claire Farley Eergy ad Ifrastructure, Member Silke Scheiber Europea Private Equity, Member The talet ad perspectives of our employees are at the heart of the Firm s success. Havig employees with varied backgrouds, perspectives, skills, ad experieces helps stregthe our teams ad our ivestmet decisios. We focus o promotig ad supportig diversity at our Firm ad i our idustry. We also provide our employees with traiig ad experieces that develop their skills to maximize performace ad realize their full potetial. We believe that a strog focus o both diversity ad developmet helps KKR to build better teams ad ultimately better busiesses. Developig a Diverse Culture KKR recogizes the beefits that come from a icreasigly diverse workforce ad, as such, makes creatig a iclusive place to work a priority. We are committed to: Idetifyig top talet ad buildig developmet plas accordigly Seekig a diverse slate of cadidates for key job opeigs Buildig a pipelie of diverse talet by workig closely with search firms, uiversities, ad key idustry groups Providig opportuities for our employees to give feedback ad voice cocers by way of etworkig groups, discussios with seior leaders, ad commuity outreach evets Offerig a comprehesive set of policies, programs, ad beefits to meet the chagig eeds of a wide spectrum of idividuals Diversity is a area o which the Firm is committed to focusig ad buildig. A workig group of KKR executives focuses o expadig our etwork of relatioships ad developig opportuities to icrease diversity at the Firm. The Firm s recet hirig cycles have reflected the prioritizatio of these activities.

40 kkr.com/resposibility KKR 13 We also work with exteral orgaizatios to promote diversity i our idustry as a whole. Through a series of parterships ad sposorships with leadig orgaizatios (see below ad SEO case study o page 43), we hope to build the talet pipelie ad etworks of diverse professioals. Orgaizatios that KKR has proudly supported over the last decade iclude: Private Equity Wome Ivestors Network (PE WIN) KKR is a egaged supporter of PE WIN ad serves o the steerig committee for the orgaizatio. PE WIN s missio is to provide a forum for female geeral parters, limited parters, ad private equity professioals to etwork, share ivestmet ideas, ad explore opportuities to work together. The Robert Toigo Foudatio KKR is a multi-year supporter of the Toigo Foudatio, which supports MBA studets with Toigo fellowships ad provides outreach to miorities ad female professioals to help them obtai leadership roles at their respective fiace istitutios. Out o the Street KKR is a proud sposor of Out o the Street, a aual summit desiged to focus o challeges ad opportuities for lesbia, gay, bisexual, ad trasgeder (LGBT) people workig o Wall Street. To lear more, see Olie Resources o page 49. Ivestig i Traiig ad Developmet At KKR, professioal developmet is a jourey i which we will always ivest to better serve our teams, our ivestors, ad our corporate parters. Our formal professioal developmet effort begiig with programs lauched i 2010 cotiues to provide relevat traiig, metorig, ad executive coachig to supplemet o-the-job experieces, feedback, ad coachig. With a focus o oboardig ew employees, targetig developmet at key career trasitios, ad providig skills-based developmet to maximize performace at every level, traiig programs are customized for KKR employees, ad ofte iclude a combiatio of exteral experts ad KKR leaders servig as faculty. Programs go beyod techical expertise to the developmet of skills that will cotiue to differetiate KKR as a leader i our idustry. To date, these workshops have focused o how to commuicate more effectively, build lastig parterships, maage ad lead teams, ad optimize productivity. NY Office Gree Team Reduces Waste ad Costs I 2011, the Firm fouded the KKR Gree Team at our New York headquarters. The Gree Team comprises crossfuctioal subject matter experts ad is charged with evaluatig curret practices, settig baselies, ad prioritizig iitiatives. I 2012, the Gree Team piloted a series of iitiatives i the New York office focusig o our food ad patry programs. The team elimiated the use of bottled water o select floors, replacig the plastic disposables with a filtratio system ad providig each employee with a reusable bottle or drikig glass. This effort is estimated to avoid approximately 60,000 bottles from the waste stream ad achieve early $20,000 i fiacial impact aually. The team also worked to purchase items, such as juice ad cereal i bulk cotaiers, thereby elimiatig excess waste ad reducig costs. We also provided additioal reusable mugs, plates, ad cutlery as well as chaged all disposable optios to iclude materials that are biodegradable or made from recycled cotet. I 2013, the Gree Team will focus o our pritig ad office supply ceters. The Gree Team was a active parter with the Office Operatios team throughout the year ad participated i a series of moves, build-outs, ad retrofits by offerig opiios ad isight. The buildig stadards used i our New York

Our Commuity 2012 ESG ad Citizeship Report 41 It is also importat that our team members cotiue to beefit from diverse experieces ad holistic skills developmet durig their employmet at the Firm. KKR has a strog focus o mobility desiged to give employees richer ad more varied experieces. I 2013, we will cotiue our focus o employee developmet, establishig a eve stroger foudatio for the future. Supportig Employee Welless KKR has always bee committed to providig the best health care ad welless opportuities possible for our employees. While we cotiue to stregthe our efforts o welless amog our private equity portfolio compaies (see pages 29-30), we also decided to deepe our commitmet iterally. I 2012, for the first time, KKR offered free, o-site biometric screeig evets to all employees i our U.S. offices. Through a strategic commuicatio effort, strog leadership from seior maagemet, ad a compellig icetive, KKR achieved 98 percet participatio i the screeigs, a result we are very proud to report. All employees received o-site health coachig ad follow-up outreach if their results idicated a health risk. I additio to the biometric evets, we cotiued to offer our flu shot program, health risk assessmet, ad cacer screeig outreach iitiative. We will offer all these programs agai i 2013 ad look to improve our biometric screeig participatio with the goal of reachig 100 percet. We are also pursuig chages to our luch program ad office patries to iclude more heart-healthy food optios. By thoughtfully greeig the way we work, we aim to improve our efficiecy, reduce our operatig costs, ad icorporate high-quality evirometal practices ito our offices. 13 Greeig Our Operatios KKR is committed to operatig efficiet, sustaiable, ad strog busiesses through its greeig iitiatives. We believe that our greatest evirometal impact comes through our work with portfolio compaies. Therefore, we have focused o evirometal issues with our portfolio compaies through iitiatives, such as the Gree Portfolio Program (see pages 24-27). However, with growig teams ad offices aroud the world, we have a ever-icreasig opportuity to measure ad maage KKR s direct evirometal footprit. office are beig shared globally to esure the utilizatio of gree optios whe ad where possible. I 2012, Office Operatios ad Gree Team members joied forces to support Earth Hour at our Firm. This global actio is desiged to drive awareess of climate chage ad improve evirometal efficiecy. Lights ad equipmet were tured off at KKR offices aroud the world, while employees were also ecouraged to make chages at home. We will support Earth Hour agai i 2013. We also hope to host our first Earth Day voluteer activity i New York ad share our success with other offices by developig guides for greeig KKR offices i the ext year.

42 kkr.com/resposibility KKR 13 Through our ow footprit ad that of our portfolio compaies, we have a sigificat opportuity to moitor ad improve the ways we have a impact o various commuities aroud the world. We will cotiue to focus o these efforts i 2013 ad beyod. Our Impact o the Commuities Where We Live ad Work KKR employees participated at a Hurricae Sady voluteer evet i Rockaway, Quees, New York. Philathropy has played a sigificat role i the lives of the fouders, parters, ad employees across the Firm. I 2012, we lauched a formal corporate egagemet effort, hirig a Director of Corporate Egagemet to oversee our strategy ad programs related to employee voluteerism ad givig. We believe that our corporate egagemet platform will allow us to haress the extesive ivolvemet ad commitmet of KKR s employees with commuity oprofit orgaizatios ad to share these experieces with employees across the Firm. I 2012, we focused our efforts i four key ways: I the first eight moths of our Corporate Egagemet program we lauched the KKR Gives speaker series to itroduce employees to the challeges facig their commuities ad coect them with oprofit orgaizatios that are addressig these challeges. These forums have provided employees with a firsthad look at the ways that they ca get ivolved ad make a differece where they live ad work. Through our extesive parterships ad ivolvemet with U.S. oprofit orgaizatios across New York, Sa Fracisco, ad Melo Park, we coected employees with oprofit board service opportuities. Through this effort, dozes of employees were coected to oprofit orgaizatios ad five board placemets were facilitated. Through our log-stadig partership with the Private Equity Foudatio i Lodo, we have forged parterships with oprofit orgaizatios i the U.K. that will allow us to facilitate oprofit board placemet opportuities for our Europea employees i 2013. We are also lookig to expad this iitiative to Asia. I 2012, we developed the framework ad guidelies for a KKR employee matchig gifts program. Lauchig i 2013, the program will match doatios that employees make to eligible oprofit orgaizatios dollar for dollar up to $4,000 per employee. We believe this program will further icetivize employee givig ad ivolvemet. Lastly, we orgaized opportuities for employees to give back through voluteerig. I 2013, we will build o our relatioships with oprofit orgaizatios across our U.S. offices to idetify employee voluteerism service opportuities, culmiatig i a formal service effort.

Our Commuity 2012 ESG ad Citizeship Report 43 Voluteerism ad Charitable Givig 3 Aroud the world, our employees are directly ivolved i their commuities, voluteerig their time, talet, ad expertise to umerous oprofit orgaizatios. I additio to the work they do i their persoal lives, employees at KKR joied together to support umerous orgaizatios durig 2012. Through the Fiace Departmet s aual charity softball game, early 150 employees i our New York office joied forces to raise more tha $60,000 for Camp Fatima of New Jersey, a camp for childre with special eeds. Employees from our Sa Fracisco office participated i the America Heart Associatio s aual Heart Walk i September, raisig critical fuds to fight heart disease ad promote research. Because Hurricae Sady affected so may of our employees ad eighbors, KKR hosted two relief voluteer evets ad made a $1 millio doatio to recovery relief efforts i New York ad New Jersey. We cotiue to work closely with the Partership for New York City o citywide busiess relief iitiatives related to the storm. Whe floodig i Thailad affected our portfolio compay MMI ad its employees, KKR employees wated to help. Through a volutary doatio program, KKR employees across all of our offices cotributed more tha $45,000 ad i 2012 provided it to MMI s workers whose lives were impacted by the floodig. Sposors for Educatioal Opportuities (SEO) Sice 2009, KKR has bee a active parter of Sposors for Educatioal Opportuities (SEO). SEO provides superior educatioal ad career programs to youg people from uderserved commuities to maximize their opportuities for college ad career success. Case Study At the begiig of our ivolvemet, KKR helped to desig ad lauch the Alterative Ivestmets Fellowship Program. This program is geared toward icreasig workplace diversity ad is desiged to provide a pathway to traiig ad metorig opportuities for taleted youg fiacial executives of color to icrease their presece i the alterative ivestmets field. More tha 20 KKR executives are directly ivolved i the Fellowship Program, servig as mothly voluteers ad regularly meetig with studets. This is i additio to five KKR executives who curretly serve as metors to SEO studets. We have see the power of the SEO model firsthad. We are proud that te KKR executives are SEO alumi. Their cotributios to the Firm remid us of the importace of ivestig i people at all poits of their professioal jourey. We are proud to have bee ivolved with SEO over the past four years ad look forward to icreasig our commitmet i 2013. To lear more, see Olie Resources o page 49. KKR is proud to support SEO i advacig educatio ad career opportuities for youg people.

44 kkr.com/resposibility KKR 13 Our growig focus o voluteerism ad givig is shared by our fouders, Hery Kravis ad George Roberts, both of whom are actively ivolved i positively cotributig to their commuities through their egagemet with several leadig oprofits. Through the Kravis Prize, Hery Kravis recogizes excellece i the oprofit sector through a aual grat that is awarded to outstadig oprofit orgaizatios each year. Past ad recet recipiets of the prize are brought together aually to share best practices ad, i the process, create a extraordiary global etwork of oprofit leaders. REDF, fouded by George Roberts, provides equity-like grats ad busiess assistace to a portfolio of oprofit orgaizatios i Califoria. The grats ad assistace are desiged to help start or expad social eterprises that employ idividuals who were formerly icarcerated, homeless, or strugglig with metal illess or drug ad alcohol addictios. To lear more, see Olie Resources o page 49. Through the Kravis Prize, Hery Kravis recogizes excellece i the oprofit sector through a aual grat. REDF, fouded by George Roberts, provides equity-like grats ad busiess assistace to social eterprises.

Cotiuig the Jourey We believe that itegratig ESG cosideratios ito the ivestmet process is about more tha avoidig risks. It is about discoverig opportuity ad beig better ivestors. It helps our Firm to take smarter risks; it ecourages us to thik outside of the box i all that we do; ad it allows our teams to fid ad ulock value that others do ot see. While we may ot always make the most popular decisios, we are workig to make the right decisios. To this ed, we are committed to cotiuig our jourey to lear ad improve ad will cotiue to thoughtfully approach the ESG opportuities ad challeges that we face. We believe that doig so is critical to our ultimate success as private equity ivestors. We look forward to fidig ew opportuities to create sustaiable value for our parters. We are glad you are o this jourey with us, for it is through collaboratio ad partership that we are achievig our most meaigful progress.

46 kkr.com/resposibility KKR 1 Our Key Performace Idicators We cotiue to make progress itegratig ESG cosideratios ito our ivestmet processes ad remai committed to buildig o our efforts i the years to come. I 2010, we started a dialogue with several stakeholders to defie Key Performace Idicators (KPIs) relevat to our busiess model ad material issues. Goals for ESG Maagemet The followig table cotais the KPIs that we idetified i 2010 ad agaist which we have evaluated our performace to date. This table seeks to show the ways i which we have made progress agaist our goals ad is orgaized accordig to relevat PRI priciples. OUR COMMITMENT WHAT WE HAVE DONE SINCE 2010 WHAT WE AIM TO DO IN 2013 Idetificatio of ESG risks ad opportuities pre-ivestmet (PRI I) Assess potetial private equity ivestmet targets for ESG opportuities ad risks Assessed all potetial ivestmets for ESG opportuities ad risks; further developed guidace for the Ivestmet Committees (ICs) ad ivestmet teams to support itegratio of ESG cosideratios pre-ivestmet Cotiue to ehace guidace ad, where relevat, idetify ad assess value creatio opportuities related to ESG factors Develop ESG idustry guides Developed 18 ESG idustry guides for sectors or compaies uder cosideratio Develop a library of ESG idustry guides ad broade to additioal sectors or geographies as eeded Ivolve ESG diligece team i the assessmet of all potetial private equity ivestmets as part of the Ivestmet Committee process Developed ad expaded ESG diligece team ad ehaced iteral moitorig system to iclude more detail o fidigs ad ext steps per ivestmet Ehace documetatio ad iteral moitorig methodology Itegrate ESG cosideratios i pre-ivestmet across relevat o-private equity asset classes Iterviewed stakeholders ad bechmarked peers to establish ESG-related draft policies for all relevat asset classes Fialize ad implemet ESGrelated policies for relevat asset classes Executive competecy (PRI I & II) Raise awareess amog private equity ivestmet ad operatioal professioals about our commitmet to resposible ivestmet ad their role Educated all of our private equity ivestmet ad operatioal professioals about our commitmet to, their role i, ad their accoutability for maagig ESG issues i partership with iteral experts through ew employee traiig ad regular firmwide meetigs; icluded ESG cosideratios i IC ad PMC guidace materials Cotiue awareess-buildig efforts; provide a additioal ESG-focused workshop for key private equity ivestmet ad operatioal professioals Build the capabilities of our ESG professioals through subjectmatter traiig ad educatio Ecouraged regular professioal developmet activities for ESG team, such as participatio i thought-leadership exercises, key idustry cofereces, ad specialized developmet Maitai the capabilities of all our ESG professioals through additioal subject-matter traiig ad educatio Cotiue to build the team of dedicated ESG professioals Expaded our team i 2011, to iclude a Director of Public Affairs i Asia ad a ESG ad Stakeholder Egagemet Maager No additioal goals at this time Maagemet of ESG issues durig portfolio maagemet (PRI II) Parter closely with our private equity portfolio compaies to esure key ESG issues are raised to their boards, KKR directly, or both Alerted executives at portfolio compaies i North America ad Europe of our expectatios regardig material ESG issues; assessed publicly available iformatio regardig portfolio compay policies ad awards; bega holdig quarterly iteral meetigs to review the private equity portfolio for material ESG issues or opportuities Cotiue egagemet with portfolio compaies ad regular assessmet of material ESG issues or opportuities across all regios; ehace partership with Asia-based portfolio compaies o ESG maagemet Itegrate ESG cosideratios i maagemet across relevat o-private equity asset classes Iterviewed stakeholders ad bechmarked peers to establish ESG-related draft policies or approaches for all relevat asset classes Fialize ad implemet ESGrelated policies for relevat asset classes

Cotiuig the Jourey 2012 ESG ad Citizeship Report 47 About Our Key Performace Idicators Durig the past three years, we have bee thoughtful i our effort to defie relevat KPIs for measurig ad reportig performace. Through this effort, we have idetified a umber of KPIs that are meaigful to us ad our stakeholders, but have also discovered challeges to both measurig ad commuicatig our performace o may issues. Because of these challeges, there are several KPIs that we cosidered but ultimately decided did ot accurately commuicate our progress. As a example, the umber of compaies i which we idetified ESG issues as part of the pre-ivestmet phase would be more a reflectio of the umber of compaies ad their sectors that we were evaluatig rather tha the success of our evaluatio process. As aother example, we determied that total greehouse gas emissio of our portfolio compaies would ot be a meaigful metric for the performace of the total portfolio, which icludes diverse compaies ad busiess models ad chages from year to year as compaies eter ad exit the portfolio. Istead, we seek to commuicate the results of our efforts to itegrate ESG cosideratios ito the ivestmet processes. We are ope to feedback from our parters ad stakeholders as we cotiue to refie our KPIs goig forward. OUR COMMITMENT WHAT WE HAVE DONE SINCE 2010 WHAT WE AIM TO DO IN 2013 Gree Portfolio Program (GPP) expasio (PRI II) Ehace evirometal maagemet i the portfolio compaies where eco-efficiecy is material to the busiess Started with three compaies i 2008 ad ow at 24 compaies globally; added seve ew compaies to the GPP i 2012 Lauch GPP Hadbook as part of 2013 egagemet with portfolio compaies; eroll four to six additioal compaies globally Employee egagemet program expasio (PRI II) Support productive ad costructive relatioships betwee maagemet, employees, uios, ad work coucils i private equity portfolio compaies Assessed ad cotiued to look for opportuities i all curret ad ew portfolio compaies to support maagemet i buildig positive relatioships betwee maagemet, employees, uios, ad work coucils; developed parterships with thought leaders, icludig the Gephardt Group Cotiue to look for opportuities i all portfolio compaies to support positive relatioships betwee maagemet, employees, uios, ad work coucils, icludig where KKR expertise ca create additioal value Ehace employee productivity ad health i private equity portfolio compaies through KKR Welless Works Collected secod year of biometric data for participatig compaies; added three compaies to the Welless Works program; joied forces with the America Heart Associatio, formig a joit research task force ad issuig a request for proposal for a academic istitutio to complete the proposed research study Add two to three additioal portfolio compaies to the program, cotiue collectig biometric data for participats, ad lauch the research effort with the selected academic istitutio Resposible Sourcig Iitiative (RSI) expasio (PRI II) Egage private equity portfolio compaies i the RSI Traied approximately 50 percet of global private equity compaies via learig programs; developed olie library of materials, such as code of coduct ad supplier questioaires; hosted a quarterly webiar series with parter Busiess for Social Resposibility (BSR) o key topics i resposible sourcig Cotiue to provide learig programs ad resources to chief procuremet officers ad geeral cousels, icludig resources for i-coutry sourcig officers Assess private equity portfolio compaies policies ad procedures for opportuities associated with supply chai resposibility Aalyzed policies ad procedures for 22 high-priority portfolio compaies ad developed actio plas where we saw a eed for improvemet; moved three portfolio compaies from "room for improvemet" to "satisfactory" or above Cotiue to assess portfolio compaies practices as we ivest i them Trasparecy ad stakeholder egagemet (PRI III) Trai private equity portfolio compaies o best practice reportig, icludig itegrated reportig Developed web-based learig evets that reached more tha 22 portfolio compaies ad cotiued to provide guidace as appropriate, icludig through the ESG roud tables Cotiue learig evets o prove practices as appropriate ad explore the opportuity to create a focused workig group Ecourage private equity portfolio compaies efforts to report o sustaiability to key stakeholders Approximately 38 percet of our global portfolio compaies report or are begiig to report publicly o sustaiabilityrelated issues Ecourage additioal private equity portfolio compaies to report publicly o sustaiability to key stakeholders where relevat Promotio of resposible ivestmet (PRI IV) Ivolvemet i sector iitiatives to promote the PRI ad other guidelies for resposible ivestmet Participated i idustrywide evets that target maistream ivestors o ESG issues, icludig the keyote at Private Equity Iteratioal Resposible Ivestmet Forum i 2010 ad 2011; cotributed case studies to idustry publicatios Cotiue participatio i idustrywide evets that target maistream ivestors o ESG issues as well as active egagemet with the PRI

48 kkr.com/resposibility KKR Goals for ESG Maagemet (cotiued) OUR COMMITMENT WHAT WE HAVE DONE SINCE 2010 WHAT WE AIM TO DO IN 2013 Collaboratio with parters (PRI V) Work with idividuals throughout the private equity value chai to share best practices Coveed ie ESG roud table ad stakeholder egagemet evets i Europe ad North America Develop additioal opportuities to covee ivestors ad portfolio compaies with two to three evets i 2013 Work with others i the fiacial services idustry to develop a commo framework for ESG reportig Participated i the developmet of guidelies ad performace idicators for the private equity sector, icludig by cotributig to the PRI self-assessmet survey; bega cotributig to the Sustaiability Accoutig Stadards Board Cotiue to advocate for ad participate i efforts to improve the thoughtful maagemet ad disclosure of ESG issues with parters Trasparecy ad reportig (PRI VI) Egage stakeholders to obtai feedback o our ESG reportig Iterviewed approximately 20 diverse stakeholders betwee 2009 ad 2011 to help defie our approach to ESG reportig; i 2012, we coducted a additioal professioal review of opportuities for improvemet Seek to stregthe reportig o areas of challege ad, where available, quatitative metrics Itegrate discussio of ESG issues ito ivestmet parter commuicatios Itegrated ESG maagemet ito discussios at aual limited parter cofereces globally ad distributed quarterly ESG updates as relevat Ehace reportig o practices ad progress i portfolio compay-level reports as appropriate Cotiue the developmet of quatifiable idicators o key areas Developed quatifiable ESG goals for the first time i 2010-2011 ad worked to ehace iteral trackig methods o ESG-related efforts Cotiue efforts to better quatify goals ad performace, particularly as related to our pre-ivestmet ad portfolio maagemet efforts Provide data ad KPIs that clearly lik ESG goals to busiess performace Measured ad reported the fiacial beefit of the Gree Portfolio Program ad explored additioal KPIs that capture the relatioship betwee busiess success ad ESG performace, such as through the KKR Welless Works program Explore additioal KPIs that capture the relatioship betwee busiess success ad ESG performace ad participate i idustry efforts to further develop framework Goals for KKR s Log-Term Growth I order to moitor our progress o maagig KKR for log-term growth, we have begu to develop KPIs that are relevat to our busiess. The followig table provides a overview of some of these KPIs ad targets as well as our assessmet of our curret performace as compared to 2010. This cotiues to be a work i progress ad we aim to further develop these KPIs ad targets over time. OUR COMMITMENT WHAT WE HAVE DONE SINCE 2010 WHAT WE AIM TO DO IN 2013 Evirometal Footprit Assess our evirometal impact ad idetify opportuities for improvemet Formed the KKR Gree Team, a committee i our New York office, focused o fidig gree solutios for KKR s iteral operatios; reduced packagig waste ad costs i our New York operatios by purchasig items i bulk ad elimiatig water bottles Explore additioal opportuities withi KKR s New York operatios ad develop a pla for expadig to other offices as relevat Workplace Diversity Idetify opportuities to icrease diversity of ivestmet professioals at KKR Adapted recruitig practices to icrease access to cadidates with diverse experieces ad less traditioal backgrouds; cotiued ivestig i fidig additioal ways to expad efforts Cotiue ivestig i ad focusig o diversity iitiatives, ad explore additioal ways to expad efforts Corporate Egagemet Create opportuities to deepe commuity ivolvemet for all Firm employees Hired a director of corporate egagemet i 2012; lauched KKR Gives speaker series; facilitated three commuity service evets Cotiue to build relatioships with oprofit orgaizatios to idetify employee voluteerism ad board service opportuities; host additioal firmwide voluteer evets; lauch the KKR matchig gifts program

2012 ESG ad Citizeship Report 49 ABOUT KKR Fouded i 1976 ad led by Hery Kravis ad George Roberts, KKR is a leadig global ivestmet firm with $75.5 billio i assets uder maagemet as of December 31, 2012. With offices aroud the world, KKR maages assets through a variety of ivestmet fuds ad accouts coverig multiple asset classes. KKR seeks to create value by brigig operatioal expertise to its portfolio compaies ad through active oversight ad moitorig of its ivestmets. KKR complemets its ivestmet expertise ad stregthes iteractios with fud ivestors through its cliet relatioships ad capital markets platform. KKR & Co. L.P. is publicly traded o the New York Stock Exchage (NYSE: KKR), ad KKR, as used i this report, icludes its subsidiaries, their maaged ivestmet fuds ad accouts, ad/or their affiliated ivestmet vehicles, as appropriate. For additioal iformatio, please visit KKR s website at www.kkr.com. CONTACT We value feedback o our ESG ad corporate citizeship program We welcome your questios ad commets o both our report ad our performace. Please email sustaiability@kkr.com with ay questios or suggestios. IMPORTANT INFORMATION This report is beig made available regardig Kohlberg Kravis Roberts & Co. L.P. ad its efforts o evirometal, social, ad goverace performace. This report does ot costitute a offer to sell or a solicitatio of a offer to purchase ay security of ay fud or ay other ivestmet vehicle or product sposored or maaged by KKR. No part of this report costitutes ivestmet, legal, tax, regulatory, accoutig or other advice of ay kid. By acceptace of these materials, each recipiet agrees ot to reproduce or redistribute this Presetatio to ay perso without the prior writte coset of KKR. Uless specified, ay views reflected herei are those solely of KKR ad are subject to chage without otice. Neither KKR or ay of its affiliates are uder ay obligatio to update or keep curret the iformatio cotaied herei. Additioally, this report cotais forward-lookig statemets. All statemets other tha statemets of historical facts, icludig those regardig our expectatios, beliefs, projectios, future plas ad strategies, aticipated evets or treds, ad similar expressios are forward-lookig statemets. Actual evets or results may differ materially from those reflected or cotemplated i such forward-lookig statemets. Refereces to KKR Capstoe or Capstoe are to all or ay of Capstoe Cosultig LLC, Capstoe Europe Parters LLP, ad KKR Capstoe Asia Limited, each of which is owed ad cotrolled by their seior maagemet ad ot by KKR. KKR Capstoe is ot a subsidiary of KKR ad uses the KKR ame uder licese. The reported impact of iitiatives of the Gree Portfolio Program is based o iteral aalysis of KKR ad/or KKR Capstoe ad iformatio provided by the applicable portfolio compay. Impacts of such iitiatives are estimates that have ot bee verified by a third party ad are ot ecessarily reported accordig to established volutary stadards or protocols. KKR does ot guaratee the accuracy, adequacy or completeess of such iformatio. They may also reflect the ifluece of exteral factors, such as macroecoomic or idustry treds. There is o guaratee that results show will be replicated i the future ad actual results may be better or worse i future years. Please ote the reported figures i Va Gasewikel Groep: Wasteto-Eergy Productio (see page 27) are absolute GHG emissios that result from its busiess of makig productive eergy out of waste materials. These figures are ot icluded i the aggregate KKR GPP results commuicated i 2011. Reveue umbers are icluded i the aggregate KKR GPP results. For more iformatio o the methodology ad terms used i the Gree Portfolio Program, please see http://gree.kkr.com. Past performace is ot idicative of future results. Ay iformatio provided i this report about past ivestmets is provided solely to illustrate the ivestmet process ad strategies previously used by KKR. No represetatio is beig made that ay ivestmet or trasactio will or is likely to achieve profits or losses similar to those achieved i the past, or that sigificat losses will be avoided. Ivestmet professioals ad portfolio maagers may use some or all of the techiques ad/or processes described herei. The specific securities ad portfolio compaies idetified ad described i this report do ot represet all of the securities or portfolio compaies purchased, sold or recommeded by KKR. The reader should ot assume that ivestmets i the securities ad portfolio compaies idetified ad discussed were or will be profitable. ONLINE RESOURCES Desig: BrightLeaf Group, Ic. Pritig: Classic Color For more iformatio o KKR s ESG ad citizeship program, see kkr.com/resposibility. For additioal details about specific topics foud throughout this report, see the followig listed resources: Page 14 KKR Exteral Parters: www.kkr.com/compay/resposibility/etwork-exteral-parters Page 15 EDF ad KKR Fourth Aiversary Partership Video: http://gree.kkr.com/partership Page 20 PEGCC Guidelies: http://www.pegcc.org/issues/guidelies-for-resposible-ivestmet/ Page 29 KKR Welless Works program: http://www.kkrwellessworks.com Page 31 KKR Vets @ Work iitiative: www.kkr.com/compay/resposibility/vets-work Page 31 Toys R Us Military Skills Traslator: www.toysrusic.com/careers/military-hirig/skills-traslator/ Page 33 KKR s Report o Natural Gas: www.kkr.com/_files/pdf/kkr_report-20121113-historic_opportuities_from_the_shale_gas_revolutio.pdf Page 36 KKR Culture ad Values: http://www.kkr.com/compay/culture-values Page 36 KKR Goverace: kkr.com/goverace Page 37 KKR s Leadership Team: http://www.kkr.com/leadership/team Page 37 KKR Code of Busiess Coduct ad Ethics: kkr.com/coduct-ad-ethics Page 40 Private Equity Wome Ivestors Network: http://pe-wi.com/ Page 40 Toigo Foudatio: http://www.toigofoudatio.org/ Page 40 Out o the Street: www.outothestreet.org/ Page 43 Sposors for Educatioal Opportuities: www.seoaltivestmets.org/fellowship Page 44 The Kravis Prize: www.cmc.edu/kravisprize/ Page 44 REDF: www.redf.org/

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