A Closer Look:KKR Capstonep

March 12, 2012

WelcomeHenry R. Kravis

OverviewDean B. Nelson

The Evolution of KKR’s Value Proposition

A i P i t N th A i E Asian Private Equity

North American Private Equity

European Private Equity

KKR Capstone Operational

SupportPublic AffairsKKR

Capital Markets

Infrastructure Special SituationsEnergy

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Operational Improvements are Core

• Invest based on insight and potential

• EBITDA growth drives value: driven by revenue, cost, and capital efficiency initiatives y

• Drive a sustained improvement in EBITDA trajectory

• Identifying opportunities is easy; executing them is hard

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Intensive Focus on Driving Revenue Growth

• While much of our work helps our companies with cost and capital efficiency, enormous emphasis is placed on initiatives to grow revenues

• Revenue growth is critical: you can’t cost-cut your way to sustainable high returns

Material Revenue Growth Drives Higher Returns

12.1% 2 3x

7.8%

12.1% 2.3x

1.9x

1Revenue(1) EBITDA(1)1MOIC of

Companies with Revenue

MOIC of KKR Investments

since Inception

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Note: Portfolio companies included may not be representative of the entire portfolio, and results may not be typical.(1) Portfolio companies with greater than 4% revenue growth, located in Western Europe and the US with annual revenue greater than $500 mm, and

original investment made between 4/2004 and 7/2007.

with Revenue Growth >4%(1)

since Inception

KKR Capstone’s Operating Model

Support late-stage due diligence

Help develop 100-Day Plan and operating metrics

Resources on the ground, working with management

Involve outside resources with specific, deep expertise p , p p

Build capabilities to sustain improvement

Move on!

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No th Ame ica E ope Asia No th Ame ica E ope Asia

Global Operational Model with Significant ResourcesNorth America Europe Asia

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North America Europe Asia

58

2832

KKR Capstone Senior AdvisorsKKR Capstone Senior Advisors

Aligned with KKR model on compensation and

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g porganizational structure

KKR Capstone Partnered with ~90% of KKR’s Portfolio(1)

Modern Dairy

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Note: Portfolio companies identified above may not be representative of the entire portfolio. (1) Percentage calculated by dollars of KKR equity invested rather than by number of KKR portfolio companies. Includes companies in funds subsequent to

the 1996 Fund, which was not contributed to KKR in the Combination Transaction, excluding Harman, Legg Mason, and CICC.

We Drive Significant Procurement Savings in Our Portfolio

Cumulative Annual Run Rate Savings ($ in mm)

• Cost saving opportunities are large in both indirect and direct spending

$500

$600

$467

$549

$500

$600

$300

$400

$300

$400

$99

$152

$211$200

$300

$223

$200

$300

$6

$52$99

$0

$100

2007 2008 2009 2010 2011

$6

$77

$0

$100

2007 2008 2009 2010 2011

10

2007 2008 2009 2010 2011

Indirect2007 2008 2009 2010 2011

Indirect Direct

2011 Enhancements in Procurement

Value Engineering Raw Materials

eAuction Global Capabilities

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Cross-Portfolio

• We execute multiple programs across our portfolio that improve our businesses

– Includes environmental results through Green Portfolio Program, which generated savings of $367m and 816 thousand metric tons of carbon dioxide from 2008-2010

2008 2009 2010 2011 2012

Green Portfolio

North America

Europe

Asia

Total Companies 3 8 15 16 21-23

Wellness

Total Companies 3 6

Responsible Sourcing

Total Companies 19 21 23Total Companies 19 21-23

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The Impact of 2011 Operational Improvements

60+ discrete initiatives at 20+

companies on three

Benefits from broad range of cross-companies on three

continents portfolio services

$530 millionof incremental run-rate

EBITDA impact from 2011 projects alone(1)

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Note: Past performance is no guarantee of future results. (1) Aggregate run-rate EBITDA impact of work performed at portfolio companies during 2011 with direct involvement of KKR Capstone. Company totals

based on 2011 financial results, budgeted plans for 2012, management forecasts, and team estimates. Excludes the impact of 2011 savings from Green Portfolio Program as figures have not been finalized.

p j

Case Study: Oriental BreweryVini Letteri

Company Overview

Domestic Product International Product

• Purchased from AB InBev in 2009; KKR’s 1st investment in Korea

• #2 beer producer in Korea; 41% national market share

• “One-firm” KKR team, including KKR Capstone, KKR Capital Markets, and Global Public Affairs contributed to success

KKR t hi h t bidd l l l PE fi

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• KKR not highest bidder; only non-local PE firm

Source: Oriental Brewery data.

Operating Improvement Investment Thesis

• Played key role in

KKR Capstone Role Value Creation

• Carve-out to stand up • Played key role in diligence; identified operational improvement areas

• Carve-out to stand up business

• Procurement practicesareas

• On ground day 1 with OB team executing key initiatives

• Wholesaler management program

• New product development initiatives

• Full team engaged for 24 months post-acquisition

• New product development

• Sales force effectiveness

• Green Portfolio Program• Monitoring sustainability of

initiatives• Inventory management

• Export growth

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Wholesaler Management

Which wholesalers should be prioritized?

h• Wholesale sales modelview

PriorityCustomers

Hig

h

• Every wholesaler must buy OB product

N i d t et O

verv

Customers

B V

olu

me• No price or product

discrimination

Mar

ke

• Customer prioritized based on:

Total OB volume with O

B

r Fo

cus

–Total OB volume with customer

–OB customer market share OB Market HighLow

Low

ust

omer

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share OB Market Share

HighLowC

Wholesaler Management

(Focus)(Manage)

(Others) (Maintain)

Balanced customer prioritization based on incremental

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pvolume by channel, customer profitability and OB total volume

Source: Oriental Brewery data.

WS #1

Wholesaler Management in ActionWS #1Incremental Volume: LowChannel: Pub Before After

Cases SpendKRW/Case Cases Spend

KRW/Case

Seoul/Sudo

Gangwon55k 44M 800 50k 35M 700

WS

#1

KyoungbukChungnam

Chungbuk

20k 7M 350 30k 12M 400

WS

#2

Kyoungnam

Jeonbuk

75k 51M 680 80k 47M 588

WO

TAL

JeonnamBusan TO

7% case growth; 8% spend decline; 14% reduction in spend/case

WS #2Incremental Volume: HighCh l

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14% reduction in spend/caseChannel: Convenience Store

Source: Oriental Brewery data.

Product Development

OB Blue Brand Volume ’06-’10 Cass Light Volume ’07-’09

1,500 1,419 300256

500

1,000

OB Volume

100

200

Cass LightVolume

208

0

500

2006 2010

345

0

100

2007 2009

76% volume decline since ’06; -30% annual volume CAGR

19% volume decline since ’07 launch; -10% annual volume CAGR

20Source: Oriental Brewery data.

Product Development

• Low score on overall taste

Consumer Feedback

• Brand image: consumers aged 50+g

• Product concept lacking

• Brand affinity and heritage still strong

21Source: Oriental Brewery data.

Product Development

New Brand Image New Product Concept

22Source: Oriental Brewery data.

Product Development

OB Brand Volume ’10-’11 Cass Light Volume ’09-’11

400

600

345

509450 300

400 373329

200 OBVolume

345

268

100

200

CassLight

Volume

208 198

02010 2011 Apr-Dec

2010Apr-Dec

2011

02009 2011 May '09 -

Apr '10May '10 -

Apr '11

47% volume growth from ’10-’11;68% growth 9 months post-launch

79% volume growth (40% CAGR) from ’09-’11;

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66% growth 12 months post-launch

Source: Oriental Brewery data.

Overall Results

32.5%49.1%

Market Share Growth Improved Profitability

680 bps 520 bps

27.4%42.3%

FY 2009 FY 2011FY 2009 FY 2011 FY 2009 FY 2011FY 2009 FY 2011

Valued at 2 7x(1) cost at 12/31/2011

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Source: Oriental Brewery data.Note: Past performance is no guarantee of future results. (1) On a US dollar basis.

Valued at 2.7x(1) cost at 12/31/2011

Case Study: CapsugelPete Stavros, Deal Team Lead

Company Overview

• Leading global supplier of capsules– ~60% global market share by value,

more than five times its closest competitor

Tapered rim of the body engages easily with the cap for problem-free closure

Six elongated dimples maintain precise round capsule diameter, improving filling machine performance

Capsule Schematic(1)

p– “Mission-critical” product where quality

is key, and customers require significant support

– Supplies over 190 billion capsules per Two aerodynamic air vents allow air f h i i l h

pp p pyear

• Non-core division of Pfizer– KKR acquired Capsugel in August 2011

to escape from the cap; critical when operating high speed filling machines

Closely-matched locking ringsprovide full circumference leak-free closure

Rounded, hemispherical endsare mechanically stronger and more resistant to deformation

for $2,375mm– Purchase price multiple of 11.3x LTM

Q2 2011 EBITDA (including fees, excluding pro forma cost savings)

FY2011 Revenue by Region

Asia

– 12/31/2011 net leverage of 5.6x

• Very global business– Global presence helps drive growth

t d d id t ti

Americas 36%

EMEA

21%

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prospects and downside protection 43%

(1) Source: Capsugel

Investment Thesis

• We saw an opportunity to make a great business even better, creating a stand-alone entity and partnering with management to:

– Create a world-class marketing function

– Improve sales force effectiveness

– Add new talent/capabilities to the organization

– Create a separate “emerging technologies” division

– Centralize and optimize procurement

– Enhance manufacturing productivity

– Reduce net working capital

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Case Study: CapsugelGuido Driesen, President & CEO

Making the Transition to a PE-Owned Independent Company

• The day after signing, a few items on Capsugel leadership’s mind:

1 Still so reliant on Pfizer… Could we buy, make, ship, and bill on “day one”?

2 Recruiting a new and expanded leadership team and creating an independent culture

3 Desire to expand our value creation initiatives

4 …While running the day to day just as before

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4 e u g e day o day jus as be o e

Capsugel Has Been Accelerating Its Value Creation Agenda

• Value proposition• Marketing

ti i tiGrowth

• R&D

optimization• Business development

Growth

• Manufacturing• Procurement• Global ERP

Margin Expansion

• Systems infrastructure

• SG&A• Insurance

Inventory• Inventory• AR/AP improvement• Treasury optimization

CapitalProductivity

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My Experience Working with KKR and KKR Capstone

Access to ExpertisePartnership Healthy

Balance“Day One”

Point of View

• KKR, Capsugel, Pfizer

• Deep understanding

• Dedicated, expert

• Focus on long-term value Pfizer

collaboration

• Learn and react together

understanding of company/ industry

• Perspective on

expert resources (e.g., carve-out)

• Access to the

term value creation

• Discipline on near-term

• Accountability still rests with management

where to invest to improve company

KKR network

• Access to expert partners (e g IT

results

(e.g., IT services)

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Case Study: CapsugelDerick Prelle

KKR Capstone Involvement at Capsugel

Operational DiligenceOperational Diligence

KKR Capstone

Value Creation Initiatives Transaction Execution

phas

supported Capsugel

since before since before the

transaction closed

Carve-Out

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KKR Capstone Areas of Focus

“D ” di

Deep-Dive Support

M k ti

Support & Expertise

• “Day one” readiness

• Carve-out

• Marketing

• Risk management

• Procurement• Manufacturing

• Budgeting

Day-to-day KKR Capstone involvement in designing and implementing the initiative

Support Capsugel management as needed with expertise or capacity

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The Scope and Scale of Running a Carve-Out

• Carve-out requires two KKR Capstone executives leading 50+ Capsugel colleagues for 18 months

Pfizer IT Infrastructure IT Systems

Stand-Alone Capsugel

Business A Business B Finance, Tax, and Treasury

Insurance/Risk Management

Business C CapsugelHR: People, Systems,

and ProcessesHiring: 56 Hires +

Most of C-Suite

Purchasing Real Estate

Health & Safety Corporate

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Health & Safety Governance/Legal

KKR Capstone’s Experience with Carve-Outs

Network of S lSpecialist Partners

Direct B t ti Direct experience managing carve-outs

Best practices in working with sellers

Super execution: on time, on time,

on budget, less risk

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Impacting Gelatin Inflation

9.50

Select US & European Gelatin Prices • Procurement actions underway:

9.00

EU

US37% US increase

33% EU increase

– Established cost transparency

– Pursuing new sources of supply

8.00

8.50supply

– Increasing competition among vendors

– Monetizing gelatin scrap

7.00

7.50

Monetizing gelatin scrap

Reduced Reduced

6 00

6.50

gelatin inflation by

30%

gelatin inflation by

30%

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6.0010Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1

Source: Composite of all vendor gelatin pricing. Figures shown on a relative basis; pork rind statistics reported by Snack Food Association.

Closing Thoughts: KKR Capstone and Capsugel

Hard work, many challenges… but off to a good start

Partnership to support managementPartnership to support management

Focus on deep support in a small number of initiatives

Lasting value through transfer of skill sets

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Legal Disclosures

The information and opinions set forth herein have been prepared by KKR & Co. L.P. (NYSE: KKR). This presentation is solely for informational purposesin connection with evaluating the business, operations and financial results of KKR & Co. L.P. and its consolidated subsidiaries (collectively, “KKR”). Anydiscussion of specific KKR entities is provided solely to demonstrate such entities’ role within the KKR organization and their contributions to the business,operations and financial results of KKR & Co. L.P. This presentation is not and shall not be construed as an offer to purchase or sell, or the solicitation ofan offer to purchase or sell, any securities, any investment funds, vehicles or accounts, any investment advice, or any other service by any KKR entities,including Kohlberg Kravis Roberts & Co. L.P., KKR Asset Management LLC or KKR Capital Markets LLC. Nothing in this presentation constitutes theprovision of any tax, accounting, financial, investment, regulatory, legal or other advice by KKR or its advisors.

This presentation contains certain forward-looking statements pertaining to KKR, including certain investment funds, vehicles, and accounts that aremanaged by KKR. It also contains projections or other forward-looking statements regarding future events, targets, or expectations regarding the funds.Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressionsconcerning matters that are not historical facts. These forward-looking statements are based on KKR’s beliefs, assumptions and expectations of futureperformance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of manypossible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity andresults of operations, including but not limited to assets under management, fee paying assets under management, fee related earnings, grossdistributable earnings economic net income after tax economic net income fee related EBITDA committed dollars invested uncalled commitments coredistributable earnings, economic net income, after tax economic net income, fee related EBITDA, committed dollars invested, uncalled commitments, coreinterest expense, cash and short-term investments, book value and projected returns of its funds, may vary materially from those expressed in theforward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the generalvolatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies; availability, terms, and deployment of capital;availability of qualified personnel and expenses of recruiting and retaining such personnel; changes in the asset management industry, interest rates, orthe general economy; underperformance of KKR’s investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. KKRdoes not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which suchstatements were made except as required by law. In addition, KKR’s business strategy is focused on the long term and financial results are subject tosignificant volatilitysignificant volatility.

Additional information about factors affecting KKR, including a description of risks that may be important to a decision to purchase or sell any commonunits of KKR & Co. L.P., can be found under the section entitled “Risk Factors” and other sections of KKR & Co. L.P.’s Annual Report on Form 10-K for thefiscal year ended December 31, 2011, Quarterly Reports on Form 10-Q, and its other filings with the SEC, which are available at www.sec.gov.References to “KKR Capstone” or “Capstone” are to all or any of Capstone Consulting LLC, Capstone Europe Limited, and KKR Capstone Asia Limited,each of which is owned and controlled by their senior management and not by KKR. KKR Capstone uses the “KKR” name under license from KKR. KKRCapstone is not a subsidiary or other affiliate of KKR. In this presentation, the impact of initiatives, in which KKR Capstone has been involved, is basedon KKR’s internal analysis and information provided by the applicable portfolio company Impacts of such initiatives are estimates that have not beenon KKR s internal analysis and information provided by the applicable portfolio company. Impacts of such initiatives are estimates that have not beenverified by a third party and are not based on any established standards or protocols. They may also reflect the influence of external factors, such asmacroeconomic or industry trends, that are unrelated to the initiative presented.

The statements contained in this presentation are made as of March 9, 2012, unless another time is specified in relation to them, and access to thispresentation at any given time shall not give rise to any implication that there has been no change in the facts set forth in this presentation since thatdate. All financial information in this presentation is as of December 31, 2011 unless otherwise indicated. Certain information presented in thispresentation have been developed internally or obtained from sources believed to be reliable; however, KKR does not give any representation or warrantyas to the accuracy adequacy timeliness or completeness of such information and assumes no responsibility for independent verification of such

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as to the accuracy, adequacy, timeliness or completeness of such information, and assumes no responsibility for independent verification of suchinformation.

Legal Disclosures

Past performance is no guarantee of future results. Information about KKR, including past performance of KKR funds and its investments, is providedsolely to illustrate KKR’s investment experience. There can be no assurance that KKR will achieve comparable results as those presented or that a fundwill not lose any or all of its invested capital. Unless otherwise indicated, any references to “Gross IRR” or “gross returns” and any references to“multiples of invested capital”, “MOIC”, or “gross multiples” or multiples of “cost” are to the aggregate, annual, compound, gross internal rate of returnon investments or multiples of invested capital, respectively. Such amounts are calculated at investment level and, accordingly, do not reflectmanagement fees, carried interest and transaction costs and other expenses to be borne by investors in a fund, which will reduce returns and in theaggregate are expected to be substantial. In the case of unrealized investments, the gross returns are based on internal valuations by KKR of unrealizedi t t f th li bl d t Th t l li d t f d’ li d i t t ill d d th f t f tinvestments as of the applicable date. The actual realized returns on a fund’s unrealized investments will depend on, among other factors, futureoperating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner ofsale, all of which may differ from the assumptions on which the valuations used in the prior performance data contained herein are based. Accordingly,the actual realized return of these unrealized investments may differ materially from the returns indicated herein.

Existing KKR private equity funds may temporarily provide debt or equity financing to companies to facilitate permanent investments therein by suchfund (otherwise known as “Bridge Financing”). The principal amount of a Bridge Financing returned within 18 months is considered “recyclable capital”which is restored to the unused commitments of the investors in the relevant fund, and the interest paid thereon is distributed pro rata. If a BridgeFi i i t f d d ithi 18 th it i id d t b t i t t i th f th d t f th i i l i t t IFinancing is not refunded within 18 months, it is considered to be a permanent investment in the company from the date of the original investment. Inaddition, commencing with KKR European Fund II, any portion of a permanent investment returned within 13 months is considered “recyclable capital”and is restored to the unused commitments of the investors in the relevant fund. For the purposes of calculating the internal rates of return andmultiples of invested capital herein, “recyclable capital” (both principal repaid for Bridge Financings and permanent investments returned with 13months) and any related interest income has been disregarded.

This presentation may not be referenced, quoted or linked by website, in whole or in part, except as agreed to in writing by KKR & Co. L.P.

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