We build companies with a future. KKR's world-class enterprises thrive long after KKR exits the investment.

KKR is a responsible, patient private equity investor. With a vision of creating enduring value for our portfolio companies, their stakeholders and investors, we work with management to build for the future through prudent capital investment, increased research and development spending, and by expanding into new geographies. This approach improves the products and services that our companies are able to offer. In addition, it benefits the communities they serve, the workers that they employ, and the public generally. As a result, KKR creates value in the broadest sense.

Our long-term outlook also enables us to consider the perspectives of, and offer many benefits to, additional stakeholders. For example, our acquisition of Energy Future Holdings (previously known as TXU) included a substantial commitment to strengthen the company’s environmental policies, make significant investments in alternative energy, and institute corporate policies tied to climate stewardship.

These efforts, among others, helped earn the endorsement of that acquisition by the Environmental Defense Fund, the Natural Resources Defense Council and labor organizations, including the AFL-CIO, International Brotherhood of Electrical Workers Seventh District, and Lonestar Lodge of the International Brotherhood of Boilermakers.

Our experience with Energy Future Holdings has led to a partnership with the Environmental Defense Fund. It is a first-of-its kind "Green Portfolio Project" that is seeking cost-effective ways to measure and improve the efficiency and environmental performance of our U.S. portfolio companies, similar to the way we drive operational and financial improvement. Our hope is that the knowledge and tools developed in this process will be replicated and implemented across our portfolio and serve as an example for other businesses worldwide.

Another example where we believe our investment has benefited multiple stakeholders is Toys R Us. Toys R Us is a large US retailer that was in a downward spiral prior to our investment, having lost 16,000 jobs from 1999 to 2004. Since our investment, the Company has opened 45 new stores, increased employment by 22 percent and capital spending by 40 percent. And operational improvements helped the company successfully manage a massive recall of defective toys last year, toys that had been tainted with lead paint in the manufacturing process in China. In the end, the recall process and how Toys R Us took a leadership role in handling it was universally praised by industry leaders, regulators, and government officials alike.

Transparency

In addition to working to benefit employees and enhance environmental stewardship, KKR works with our portfolio companies to promote transparency.

In November 2007, a working group that was formed by The British Private Equity and Venture Capital Association (BVCA) and led by Sir David Walker issued the Guidelines for Disclosure and Transparency in Private Equity. That publication, which is also known as the “Walker Report,” makes specific recommendations for improving the level of public disclosure by private equity firms operating in the United Kingdom.

Lord Clive Hollick, a former Member of our firm, served as a member of the working group that issued the Walker Report and we are committed to its success. Because we believe in the importance of enhancing disclosure and transparency within the private equity industry, we have voluntarily undertaken to conform to the Walker Report guidelines and to promote further conformity by our UK portfolio companies. For more.

Investment Partners

Our business approach also benefits another important group of stakeholders: the pension plans, university endowments, foundations, and others who are our investment partners. The public pension plans that have invested in one of our recent private equity funds have nearly 9 million members. We take great pride in the fact that our investments have generated strong and stable returns for our investors across all economic cycles and, in doing so, have helped secure the retirements of teachers, firefighters, police officers, state and municipal employees and many others. These returns have helped reduce the size of annual pension contributions by both employees and employers and improved the funding ratio of pension plans.

KKR executives have invested their own money along with that of these investors. Since KKR was founded, its executives have invested nearly $1.9 billion of their own personal funds along side those of its limited partners. This is consistent with our founding principle and helps ensure that the interests of our investors are aligned with our own interests.