Yield

What this tab establishes

On the framework's own basis — free cash flow less stock-based compensation less the five-year average of acquisition spend — KKR's adjusted yield computes to 2.9% on FY2025 and 2.6% on the three-year average against a 10% reference line. The deterministic feature file returns not_computable for every yield field, because KKR's GAAP cash-flow statement consolidates its funds and its insurance company. Both the filed basis and a segment substitute are shown below.

The adjustment, line by line

The framework's yield basis is reported free cash flow minus stock-based compensation minus the trailing five-year average of acquisition spend. Every input below comes off the filed consolidated statements of cash flows.

All figures $ millions. Sources: FY2025 Form 10-K, Consolidated Statements of Cash Flows [1] and Financing Activities [2]; FY2023 Form 10-K [3]; FY2022 Form 10-K [4]; FY2021 Form 10-K [5]. Adjusted FCF is derived: reported FCF less equity-based compensation less the trailing five-year average of acquisition spend.

Two mechanics in that table need stating before the number is used for anything.

The acquisition average. Cash acquisition spend over FY2021–FY2025 was the Global Atlantic majority purchase of $473.8 million in 2021 [6], KJRM at $1,690.7 million in 2022 [7], nil in 2023, the $2,622.2 million cash consideration for the remaining Global Atlantic equity in 2024 [8], and $146.3 million in 2025 [9]. That sums to $4,933.0 million, a five-year average of $986.6 million. The 2024 Global Atlantic buy-in sits in financing activities rather than investing, because it purchased a noncontrolling interest; excluding it on that technicality drops the average to $462.2 million and lifts every adjusted figure below by $524.4 million. The inclusive figure is used throughout because it is cash paid to acquire an asset.

Why the reported FCF line is not an economic measure. KKR's consolidated funds are treated as investment companies for accounting purposes, so their purchases and sales of investments run through operating activities [10]. FY2025 operating cash flow of $477.8 million is struck after $42.9 billion of investments purchased and $33.7 billion of proceeds in asset management and strategic holdings, and after $5.0 billion of interest credited to policyholder account balances at Global Atlantic [11]. Those flows belong to fund investors and policyholders. Of the $6,145.4 million of FY2025 consolidated net income, $3,774.9 million was attributable to noncontrolling interests [12].

Source: derived from the filed consolidated statements of cash flows, FY2021–FY2025 Forms 10-K [13].

The series swings from negative $7.9 billion to positive $4.8 billion and back to negative $1.4 billion in consecutive years without KKR's fee business changing direction once. A yield computed on it would be an artefact of how much capital the funds deployed that year. On the three years FY2023–FY2025 the average adjusted figure is $253.1 million, which on a market capitalisation of $92.5 billion is a yield of 0.3%. That number should not be used, and this tab does not use it.

fit_features.adjusted_fcf reports the same obstruction from a different direction: it returns not_computable — "missing SBC for FY 2016, 2017, 2018, 2019; no complete consecutive five-year acquisition window with SBC" — and with it adjusted_fcf_yield, yield_baseline, balance_sheet_class, fcf_stability, float_retirement_years and market_cap are all null. Everything below is derived from the filings and from the price feed, with the workings shown, and the gap is recorded.

The same three deductions, on a basis that measures KKR

KKR reports a segment measure, Adjusted Net Income, that strips consolidation and marks and states the earnings attributable to its own equity holders after interest, preferred dividends and taxes on adjusted earnings [14]. ANI excludes equity-based compensation by construction, so the framework's SBC deduction applies to it unchanged; the acquisition deduction is the same five-year average. Capital expenditure of $160.8 million in FY2025 is already close to the $67.9 million of depreciation and amortisation carried inside the segment expense base [15]; the $92.9 million gap is 10 basis points of market capitalisation and is left in.

Earnings in $ millions. Adjusted Net Income (After-tax Distributable Earnings before the FY2024 renaming) from FY2025 Form 10-K [16], FY2023 Form 10-K [17] and FY2022 Form 10-K [18]; equity-based compensation from the filed cash-flow statements [19]; adjusted share counts from FY2021 Form 10-K [20], FY2023 Form 10-K [21] and the Q4 2025 earnings release [22]; year-end closing prices as reported.

The share count is the flat part of this arithmetic. Adjusted shares outstanding went from 877.6 million at the end of 2020 to a weighted-average 899.5 million in FY2025 — 2.5% over five years, about half a point a year [23] [24]. The FY2025 equity-based compensation deduction of $722.1 million is therefore not paying for a rising count; it is paying for a roughly stable one.

The yield, three ways

Market capitalisation is 901,461,945 weighted-average adjusted shares at 1Q 2026 [25] times the 28 July 2026 close of $102.66, or $92.54 billion. GAAP common shares outstanding were 897,872,941 at 7 May 2026 [26], so the two counts are within 0.4% of each other. Not included: 21.0 million shares that vested after 31 March 2026 and 21.4 million from Series D conversion by March 2028 [27], which together would take the count to roughly 944 million and the capitalisation to $96.9 billion.

Derived: framework-basis adjusted earnings divided by market capitalisation of $92.54 billion; baseline is the median of the FY2020–FY2025 year-end yields in the table above.

Current. FY2025 framework-basis earnings of $2,668.8 million on $92.54 billion is 2.88%. On the twelve months to 31 March 2026 — ANI of $4,593.0 million, being FY2025's $4,377.5 million less the $1,034.0 million first quarter of 2025 plus the $1,249.5 million first quarter of 2026 [28], less trailing equity-based compensation of $710.6 million [29] [30] and the same $986.6 million acquisition average — the figure is $2,895.9 million, or 3.13%.

Three-year average. FY2023, FY2024 and FY2025 framework-basis earnings of $1,988.7 million, $2,498.5 million and $2,668.8 million average $2,385.3 million, which on today's capitalisation is 2.58%.

Own baseline, and the jump test. The six year-end yields — 4.06%, 5.01%, 5.68%, 2.70%, 1.89%, 2.33% — have a median of 3.38%. The current 3.13% sits at 0.93 times that median. The fortress signature the framework looks for is a stable low-single-digit yield that suddenly doubles; the threshold is two times a positive baseline. KKR does not show it. A 50% drawdown from the January 2025 peak of $167.07 to the March 2026 trough of $83.88 returned the yield to roughly where it stood in 2022, because the denominator had run ahead of a rising numerator through 2023 and 2024 rather than sitting still.

Source: derived from Adjusted Net Income and equity-based compensation per the filings cited above, divided by market capitalisation at each year-end close; "Now" uses trailing-twelve-month earnings to 31 March 2026 and the 28 July 2026 close.

The unadjusted comparison is worth putting on the page so the size of the adjustment is visible: before deducting anything, FY2025 ANI of $4,377.5 million is a 4.73% yield and the trailing-twelve-month figure is 4.96%. Fee Related Earnings alone, $3,714.3 million in FY2025 [31], are 4.01%. The two deductions cost 185 basis points of the headline; the headline itself was already less than half the reference line.

Which bar applies

The framework picks the reference line off the balance sheet, and fit_features.balance_sheet_class returns "unknown" — "debt or cash missing for FY 2025". The computation, from the filed debt note:

$ millions. Corporate notes of $9,235.1 million carrying value from FY2025 Form 10-K [32]; Global Atlantic notes of $3,971.1 million and other debt obligations of $40,612.7 million from the scheduled principal payment tables [33]; cash and short-term investments of $4,789.7 million from the segment balance-sheet reconciliation [34]; Adjusted EBITDA of $5,958.2 million from the FY2025 reconciliation [35].

The revolving credit facilities were undrawn at 31 December 2025, carrying $750.0 million of financing available inside one year and $3,491.6 million in one to five years [36]. Global Atlantic's debt is non-recourse to KKR beyond Global Atlantic's assets [37], and the $40.6 billion of other debt obligations is issued by consolidated collateralised financing entities and levered investment vehicles, supported solely by the assets held at those entities and non-recourse to KKR beyond the collateral and committed capital [38].

At 0.75 times on the recourse perimeter and 1.41 times including Global Atlantic, the classification is moderate — above the 0.5 times fortress threshold, well below the 3.0 times levered threshold — and the applicable reference line is 10%. Only the third perimeter, at 8.23 times, would select the 25% levered line, and that perimeter contains debt KKR does not owe.

The bar selection turns out not to be the binding question. At 2.88% on FY2025 the name sits 712 basis points below the 10% moderate line, 512 basis points below the 8% low edge of the fortress band, and 2,212 basis points below the 25% levered line. On the three-year average of 2.58% the shortfall against the 10% line is 742 basis points, and on the trailing twelve months at 3.13% it is 687. There is no classification under which the current figure reaches its bar.

Normalized mid-cycle yield

KKR is cyclical in one of its two earnings blocks and not in the other, so the normalization applies to a defined piece rather than to the whole.

Total Operating Earnings — Fee Related Earnings plus Insurance Operating Earnings plus Strategic Holdings Operating Earnings — was $4,985.8 million in FY2025, up from $4,358.6 million in FY2024, and ran at $1,325.0 million in the first quarter of 2026 against $1,112.9 million a year earlier [39] [40]. That block is at a record and growing near 20%; it is not depressed and needs no normalization.

Total Investing Earnings — net realized carried interest and net realized investment income — is the cyclical block, and it is running below its own history. The workings:

• Years used: FY2021 $2,273.7 million, FY2022 $1,818.5 million, FY2023 $986.1 million, FY2024 $1,151.0 million, FY2025 $904.5 million — realized performance income and realized investment income, each net of their compensation, per the filed segment tables [41] [42] [43]. Five-year average $1,426.8 million, against FY2025's $904.5 million — a shortfall of $522.3 million pre-tax.
• Tax assumption: income taxes on adjusted earnings of $1,108.1 million over Total Segment Earnings less interest of $5,485.5 million is a 20.2% rate [44] [45]. The after-tax uplift is $416.8 million.
• Mid-cycle result: ANI of $4,794.3 million; framework basis $3,085.6 million after the same two deductions; yield 3.33%.

The window matters and cuts against the uplift. In November 2023 KKR changed its compensation framework, lowering the targeted share of compensation from fee-related revenues and raising the share from realized carried interest [46]. Net realized performance income after FY2023 is therefore struck against a higher compensation charge than before it, so the FY2021–FY2023 figures in that average are not comparable and bias it upward. Recomputing on the post-change window only — FY2024 $1,151.0 million, FY2025 $904.5 million, trailing twelve months to March 2026 $932.1 million [47] — gives an average of $995.9 million, a shortfall of $91.4 million pre-tax and $72.9 million after tax, mid-cycle ANI of $4,450.4 million and a framework-basis yield of 2.96%.

The honest range is 2.96% to 3.33%, against the 10% line: 667 to 704 basis points short. To close it on mid-cycle earnings the price would have to be $34.23 on the wider window or $30.42 on the narrower one, against $102.66 today and $83.88 at the March 2026 trough.

The consensus check

fit_features.consensus_forward_yield carries a free-cash-flow consensus of $8,827.3 million for FY2026, $8,813.6 million for FY2027, $14,310.1 million for FY2028 and $2,792.6 million for FY2029, each with yield_on_current_mcap null because the feature file could not resolve a market capitalisation. Those figures cannot carry the check. The same vendor file gives FY2026 cash from operations of negative $2,585.8 million and capital expenditure of $141.0 million, which would imply free cash flow of negative $2,726.8 million rather than positive $8,827.3 million; the two series are drawn from different contributor sets, no contributor count is published for the free-cash-flow line, and the FY2029 figure collapses to a fifth of FY2028's. The inconsistency is the same one the filed statements produce — a consolidated cash-flow statement that is not a measure of KKR's own cash generation.

The usable proxy is normalized earnings per share, which for an alternative manager is Adjusted Net Income per adjusted share. The vendor's FY2025 actual of $4.87 matches KKR's reported ANI of $4,377.5 million over 899.5 million weighted-average adjusted shares to the cent, which confirms the mapping. Contributor counts are 22 for FY2026 and FY2027 and 10 for FY2028; the FY2028 estimate carries a $7.76 to $9.20 range.

Source: consensus normalized earnings per share of $6.12 (FY2026), $7.35 (FY2027) and $8.60 (FY2028) from the estimates feed, vintage 29 July 2026, divided by the 28 July 2026 close; framework basis deducts equity-based compensation of $0.80 per share and the five-year acquisition average of $1.10 per share, both per the FY2025 filings [48].

Consensus does not clear the bar, on either reading. On the headline it reaches 8.38% only in FY2028, and on the framework basis 6.53%. The setup is therefore not the one where the sell side already agrees and the buy side is merely frightened, so the mean-reversion path has to be written explicitly.

The path, and what it would take. Management entered 2026 guiding to $7-plus of ANI per share — about 45% growth — and told the first-quarter call that it is "more likely that we land below that level", attributing the shortfall to monetization timing rather than to lost value, with delayed exits expected to shift into 2027 and beyond [49]. Consensus at $6.12 already sits below that target. The mechanism running in KKR's favour is visible and quantified: management fees grew 30% year-over-year in the quarter [50], embedded gains stand at $18.3 billion [51], over 90% of capital is perpetual or committed for eight years or more against $125 billion of committed but uncalled capital [52], and the forward monetization figure of over $1.2 billion is the largest the firm has disclosed on a call [53].

That mechanism is real and it is not enough. Consensus already models cumulative normalized-EPS growth of 40% from FY2026 to FY2028, and the framework-basis yield still ends at 6.53%. Reaching 10% on FY2028 consensus requires a price of $67.00 — 34.7% below today and 20.1% below the March 2026 trough. Reaching it on FY2028 without the two deductions requires $86.00, which is 16% below today and just above the trough. Put probabilities on it at the current price: the chance that the framework-basis adjusted yield clears 10% within three years without a further large price decline is under 5%, because it would need FY2028 headline earnings of $12.17 per share — 41.5% above the $8.60 consensus mean and 32.2% above the $9.20 consensus high. Widening to the fortress 8–9% band does not change the answer at today's price; the FY2028 framework figure of 6.53% is 147 basis points below even the 8% edge.

The counter-fact, stated at full strength. At the March 2026 trough of $83.88, FY2028 consensus normalized EPS of $8.60 was a 10.25% yield — the bar, cleared, on the unadjusted headline. The whole distance between that and the framework's answer is the $1.90 per share of equity-based compensation and acquisition spend the framework deducts and the street's normalized measure does not, plus the 22% the stock has recovered since March. Anyone who treats KKR's equity compensation as a genuine non-cash item and its acquisitions as discretionary rather than recurring reaches a materially different conclusion, and the arithmetic above lets them recompute it.

Cash conversion

The conversion trend runs the right way. Fee Related Earnings margin — FRE over management fees plus transaction and monitoring fees plus fee-related performance revenues — moved from 60.6% in FY2020 to 69.1% in FY2025, and the recurring block's share of total segment earnings went from 54.7% to 84.6% over the same span.

Source: derived from Fee Related Earnings and fee-related revenues, FY2025 Form 10-K [54], FY2023 Form 10-K [55] and FY2022 Form 10-K [56]; recurring share is Total Operating Earnings over Total Segment Earnings per the same filings.

Part of the FY2024 step in FRE margin is the November 2023 compensation change moving cost from the fee line to the carry line rather than removing it [57]; the underlying improvement is smaller than the 850 basis points the chart shows. The recurring-share series is unaffected by that reclassification and moves 30 points over five years. Whatever else is true of this name, the deteriorating-conversion condition the framework watches for is not present.

Management's read on the same facts, from the first-quarter call: the firm repurchased or retired $317 million of stock through 1 May 2026 at an average price of approximately $91, the board authorised a further $500 million, and the co-CEOs and several directors bought stock personally [58]. The buyback record and the share-count trajectory are taken up in Self-Help; the drawdown itself in Dislocation.