Global alternative asset manager The Carlyle Group L.P. (NASDAQ:
CG), today reported its unaudited second quarter 2012 results.
David M. Rubenstein, Co-Chief Executive Officer of Carlyle,
said, “Our firm, portfolio and funds are in very good shape,
despite a quarter marked by significant volatility in global equity
markets and continued uncertainty in Europe. Distributable
earnings, the metric that we believe best represents the results of
our long term approach to value creation, was $785 million over the
last twelve months, a 39% increase over the prior LTM period of
$567 million. The nearly $4 billion in new capital we raised this
quarter reflects the expected pick-up in fundraising as our sixth
U.S. buyout fund began to close on new commitments.”
William E. Conway, Jr., Co-Chief Executive Officer of Carlyle,
said, “Carlyle deployed $1.4 billion across our portfolio in the
second quarter, and since the beginning of July we have agreed to
invest a minimum of $1.6 billion in new transactions that are
expected to close in coming quarters. We have made some of our best
investments during uncertain times, and our recent investments
reflect the choice opportunities we see today as well as our
long-term investment horizon. Additionally, we realized $3 billion
in proceeds from 32 carry funds for our fund investors, a strong
pace that reflects our diverse global platform.”
U.S. GAAP results for the second quarter of 2012 included income
before provision for income taxes of $186 million and a net loss
attributable to The Carlyle Group L.P. of ($10) million, or a loss
of ($0.26) per common unit. For the second quarter of 2011, Carlyle
was still a private partnership, and income before provision for
income taxes was $317 million and net income attributable to
Carlyle Holdings was $372 million. Total revenue was $248 million,
compared with $756 million in the second quarter 2011. Pro forma
net loss per common unit was ($0.39) for the second quarter 2012.
Total balance sheet assets were $29.6 billion as of June 30, 2012
compared with $24.7 billion as of December 31, 2011.
Second Quarter Distribution
The Board of Directors has declared a quarterly distribution of
$0.11 to common unit holders of record at the close of business on
August 20, 2012, payable on August 31, 2012. The $0.11 per common
unit distribution is a prorated amount based on the pricing of The
Carlyle Group L.P.’s initial public offering, which occurred on May
2, 2012.
Carlyle intends to distribute $0.16 per quarter to common unit
holders in each of the first three quarters of the calendar year,
with a catch-up distribution announced with its fourth quarter
earnings release. As noted in Carlyle’s Registration Statement on
Form S-1, Carlyle intends to make the year-end catch up
distribution in an amount that, taken together with the other
quarterly distributions, represents substantially all of its
Distributable Earnings in excess of the amount determined by the
General Partner to be necessary or appropriate to provide for the
conduct of its business, to make appropriate investments in its
business and its funds or to comply with applicable law or any of
its financing agreements. Carlyle anticipates that the aggregate
amount of its distributions for most years will be less than its
total Distributable Earnings for that year. The declaration and
payment of any distribution is at the sole discretion of the
General Partner, which may change the distribution policy at any
time.
The Carlyle Engine
Carlyle evaluates the performance of its business on four key
metrics, known as the Carlyle engine (capital raised, equity
invested, fund valuations and proceeds realized for fund
investors). The table below highlights the results of those metrics
for 2Q 2012, as well as on a year-to-date (YTD) and last twelve
months (LTM) basis.
Funds Raised Equity Invested
2Q $3.9 billion
2Q $1.4 billion YTD:
$6.0 bn LTM: $10.3 bn YTD: $2.9 bn LTM: $7.9 bn
Realized Proceeds Carry Fund
Returns 2Q $3.0 billion
2Q -2% YTD:
$6.8 bn LTM: $13.2 bn YTD: 8% LTM: 9%
During the second quarter of 2012, Carlyle
generated net proceeds of $3.0 billion arising from 98 different
investments across 32 carry funds in its portfolio. Carlyle
deployed $1.4 billion of equity in 2Q 2012 in 82 new or follow on
investments across 20 carry funds. In addition, thus far in the
third quarter Carlyle has committed to invest, at a minimum, an
incremental $1.6 billion in equity across six new pending
transactions that should close in the coming months.
Segment
Realized Proceeds Equity Invested
# ofInvestments
# of Funds $ mn
# ofInvestments
# of Funds $ mn
2Q Corporate Private Equity 34
14 $1,514 13 8 $256 Global Market
Strategies 33 6 $32 7 2 $116 Real Assets 35 12
$1,434 62 10 $999
Carlyle
98 32 $2,980 82
20 $1,372 YTD Corporate
Private Equity 56 19 $3,698 25 12 $928 Global Market Strategies 42
6 $462 11 4 $206 Real Assets 67 13 $2,602
87 11 $1,774
Carlyle 160
38 $6,762 122
27 $2,908 Note: columns may not sum as some
investments cross segment lines but are only counted one time for
Carlyle results.
Carlyle All Segment Results for Second
Quarter 2012
- Distributable Earnings (DE): $115
million
- On a pro-forma basis, pre-tax
Distributable Earnings of $117 million and $0.32 per unit on a
post-tax basis, compared to $189 million and $0.57 per unit,
respectively, in 1Q 2012, taking into consideration changes related
to the Initial Public Offering, which priced on May 2, 2012.
- Fee-Related Earnings of $36
million increased 16% from $31 million in 2Q 2011 as fund
management fees revenue increased while direct compensation
increased at a slower pace.
- Net Realized Performance Fees of
$76 million increased 43% from $53 million in 2Q 2011, and were
positively impacted by public equity exits in Kinder Morgan and
Triumph Group. Some of the proceeds returned to fund investors
during 2Q 2012 were in funds not currently realizing performance
fees.
- Realized Investment Income of $4
million was down from $6 million in 2Q 2011.
- Economic Net Income/(Loss) (ENI):
($57) million
- On a pro forma basis, Carlyle generated
a pre-tax ENI loss of ($59) million, or a loss per unit of ($0.19)
on a post-tax basis, compared with ENI of $401 million, or $1.10
per unit in 1Q 2012, adjusting for the impact of our IPO.
- Economic Net Income was negatively
impacted by 2% depreciation in Carlyle’s carry fund portfolio,
which excludes CLOs, hedge funds and Fund of Funds Solutions
Vehicles, during 2Q 2012, with increases in Real Estate and Global
Market Strategies funds, offset by decreases in Energy and Buyout
funds.
- Net performance fees of ($107) million
were lower compared to $191 million in 2Q 2011. Year-to-date, net
performance fee revenue of $228 million was 64% lower than the
comparable 2011 period due to a net increase in our carry funds of
8% YTD 2012.
- In general, the private portfolio was
relatively flat while the public portfolio was down 10% in 2Q
2012.
- As a result, Corporate Private Equity
Funds and Energy Funds, which have a greater public company
composition, experienced larger declines in valuation as compared
to those funds with a greater percentage of investments in private
companies.
Carlyle Group - All Segments Period
LTM % Change $ in millions, except where noted
2Q2011 3Q2011 4Q2011
1Q2012 2Q2012 3Q11 - 2Q12
QoQ YoY YTD
Revenues
595 (263) 666 894 61 1,357 (93%) (90%) (45%)
Expenses
359 (72) 411 501 119 959
(76%) (67%) (37%) Economic Net Income
237 (191) 254 392 (57) 398
(115%) (124%) (57%) Fee-Related Earnings
31 37 14 34 36 120
4% 16% (2%) Net Performance Fees 191
(223) 223 335 (107) 228 (132%)
(156%) (64%) Net Realized Performance Fees 53
194 216 143 76 629 (47%)
43% (18%) Distributable Earnings 89 244
247 179 115 785 (36%) 29%
(21%) Total Assets Under Management ($ billion)
108.0 148.6 147.0 159.2 156.2
(2%) 45% Fee-Earning
Assets Under Management ($ billion) 80.3 112.6
111.0 117.0 112.0 (4%)
39% Note: Totals may not sum due to rounding.
Assets Under Management and Remaining Fair
Value of Capital
Pro Forma Operating Results
On a pro forma basis, taking into
consideration changes related to the IPO, Carlyle’s non-GAAP
results for 2Q 2012 are provided in the table below:
Carlyle Group Pro Forma Summary$ in millions, except
per unit amounts
Economic Net income Second
Quarter 2012 Economic Net Income (pre-tax) $ (58.9 )
Less (Add): Provision (Benefit) for Income Taxes (1) (1.2 )
Pro Forma Economic Net Income, After Taxes (57.7 )
Fully diluted units (in millions) 304.5
Pro Forma
Economic Net Income, After Taxes per Adjusted Unit $
(0.19 ) Distributable Earnings
Pro Forma Distributable Earnings $ 116.7 Less:
Estimated foreign, state, and local taxes (2) 14.8
Pro Forma Distributable Earnings, After Taxes 101.9
Allocating Distributable Earnings for only public unit
holders of The Carlyle Group L.P. Pro Forma Distributable
Earnings to The Carlyle Group L.P. 14.5 Less: Estimated current
corporate income taxes (3) 0.8 Pro Forma
Distributable Earnings to The Carlyle Group L.P. net of corporate
income taxes 13.7 Units in public float (in
millions) 43.2 Pro Forma Distributable Earnings, net, per
The Carlyle Group L.P. common unit outstanding
$
0.32
(1) Represents the implied provision for income taxes that was
calculated using a similar methodology applied in calculating the
pro forma tax provision for The Carlyle Group L.P., without any
reduction for noncontrolling interests.
(2) Represents the implied provision for current income taxes
that was calculated using a similar methodology applied in
calculating the pro forma current tax provision for The Carlyle
Group L.P., without any reduction for noncontrolling interests.
(3) Represents pro forma current corporate income taxes payable
upon distributable earnings allocated to Carlyle Holdings I GP
Inc.
Corporate Private Equity (CPE)
Funds
Raised Equity Invested Realized Proceeds Carry
Fund Returns 2Q $2.4 bn
2Q $0.3 bn
2Q $1.5 bn
2Q -2% YTD: $2.7 bn
LTM: $3.6 bn YTD: $0.9 bn LTM: $4.1 bn YTD: $3.7 bn
LTM: $7.8 bn YTD: 7% LTM: 7%
- Distributable Earnings (DE): $61
million. The following components impacted Distributable
Earnings in the quarter:
- Fee Related Earnings of $10
million declined from $20 million in 2Q 2011 as fund management
fees and portfolio advisory fee revenue were modestly lower
compared to 2Q 2011.
- Net Realized Performance Fees of
$50 million increased from $19 million in 2Q 2011 as CPE funds were
able to exit a number of positions in funds generating realized
carry.
- Realized Investment Income of $2
million compared to $0 in 2Q 2011.
- Economic Net Income (ENI): ($65)
million
- CPE carry funds valuations declined 2%
in 2Q 2012, which drove negative economic net income in the CPE
segment.
- Net performance fees of ($80) million
compared to $135 million in 2Q 2011, driven by the decline in the
CPE carry funds.
- Assets Under Management:
$52.5 billion
- Total AUM declined 1% versus 1Q
2012 while Fee-Earning AUM of $37.1 billion fell 2% versus
1Q 2012.
- Funds Raised of $2.4 billion was
driven by the first close in Carlyle Partners VI. Year-to-date,
funds raised of $2.7 billion compares to $0.8 billion in the first
half of 2011.
- New funds raised in Carlyle Partners VI
will not increase Fee-Earning AUM until the predecessor fund
(Carlyle Partners V) is substantially invested.
Corporate Private Equity (Actual results)
Period LTM % Change $ in
millions, except where noted
2Q2011
3Q2011 4Q2011 1Q2012
2Q2012 3Q11 - 2Q12 QoQ YoY
YTD
Economic Net Income 163 (185) 162 244
(65) 156 (126%) (140%) (67%) Net
Performance Fees 135 (186) 152 215
(80) 101 (137%) (159%) (70%) Net
Realized Performance Fees 19 157 130
105 50 442 (53%) 165% (13%)
Distributable Earnings 39 173 134 120
61 488 (49%) 58% (30%)
Total Assets Under Management ($ in billions) 55.8
51.0 51.1 53.3 52.5 (1%)
(6%) Fee-Earning Assets Under Management ($ in
billions) 39.3 38.6 38.0 37.8
37.1 (2%) (6%) Note:
Totals may not sum due to rounding.
Global Market Strategies (GMS)
Funds
Raised
Equity Invested
Realized Proceeds
Carry Fund Returns 2Q $1.5 bn
2Q
$0.1 bn
2Q $0.0 bn
2Q 3% YTD: $2.8 bn
LTM: $5.0 bn YTD: $0.2 bn LTM: $0.6 bn YTD: $0.5 bn
LTM: $0.9 bn YTD: 15% LTM: 8% Note: Equity Invested
and Realized Proceeds are carry funds only. Funds Raised exclude
acquisitions.
- Distributable Earnings (DE): $23
million. The following components impacted Distributable
Earnings in the quarter:
- Fee Related Earnings of $20
million increased from $11 million in 2Q 2011 as fee revenue of $60
million increased from $45 million on higher fee earning asset
values, partially offset by higher compensation.
- Net Realized Performance Fees of
$1 million declined from $27 million in 2Q 2011 as volatile global
capital markets muted realization opportunities in our funds.
- Realized Investment Income of $3
million declined from $5 million in 2Q 2011.
- Economic Net Income (ENI): $32
million
- Economic Net Income was positively
impacted by a 3% appreciation in GMS carry funds, though net
performance fees of $4 million were lower when compared to $24
million in 2Q 2011.
- Assets Under Management:
$29.0 billion
- Total AUM increased 3% versus 1Q
2012 while Fee-Earning AUM of $27.7 billion also increased
3% versus 1Q 2012.
- Hedge Fund net inflows continued to be
strong, with $1.4 billion in year-to-date net subscriptions,
resulting in total hedge fund AUM of $9.6 billion.
- Raised a second new Collateralized Loan
Obligation (CLO) in 2012 with $510 million in assets.
- GMS Carry Fund AUM ended the quarter at
$3.3 billion.
- Total Structured Credit AUM ended the
quarter at $16.2 billion.
Global Markets Strategies (Actual Results)
Period LTM % Change $ in
millions, except AUM where noted
2Q2011
3Q2011 4Q2011 1Q2012
2Q2012 3Q11 - 2Q12 QoQ YoY
YTD
Economic Net Income 43 34 22 38
32 126 (16%) (26%) (33%) Net
Performance Fees 24 11 3 18 4
36 (75%) (82%) (62%) Net Realized
Performance Fees 27 7 67 15 1
89 (96%) (98%) (64%) Distributable
Earnings 43 32 90 31 23
178 (25%) (46%) (22%) Total Assets
Under Management ($ in billions) 20.5 23.0
24.5 28.3 29.0 3% 41%
Fee-Earning Assets Under Management ($ in billions)
18.4 21.4 23.2 26.8 27.7
3% 51%
Funds Raised,
excluding hedge funds ($ in billions) 0.1 0.8
0.0 0.7 0.8 2.2 23% 507%
Hedge Fund Net Inflows ($ in billions) 0.2 0.5
0.8 0.7 0.7 2.7 (7%) 304%
Note: Totals may not sum due to rounding. Funds
Raised exclude the impact of acquisitions.
Real Assets (RA)
Funds
Raised
Equity Invested
Realized Proceeds
Carry Fund Returns 2Q $0.1 bn
2Q
$1.0 bn
2Q $1.4 bn
2Q -3% YTD: $0.1 bn
LTM: $1.0 bn YTD: $1.8 bn LTM: $3.2 bn YTD: $2.6 bn
LTM: $4.5 bn YTD: 8% LTM: 11%
- Distributable Earnings (DE): $28
million. The following components impacted Distributable
Earnings in the quarter:
- Fee Related Earnings of $3
million increased from ($1) million in 2Q 2011 as fee revenue was
down slightly to $38 million, but direct and indirect compensation
and benefits declined $6 million versus 2Q 2011.
- Net Realized Performance Fees of
$26 million increased from $7 million in 2Q 2011.
- Realized Investment Income of $0
compared to $1 million in 2Q 2011.
- Economic Net Income (ENI): ($29)
million
- Real Asset carry funds depreciated 3%
in 2Q 2012, which was the main driver of negative economic net
income in the RA segment, with Energy funds down 5% compared to 1Q
2012 and Real Estate funds up 1%.
- Net performance fees of ($33) million
compared to $31 million in 2Q 2011, driven by the decline in
portfolio valuation.
- Assets Under Management:
$30.0 billion
- Total AUM declined 7% versus 1Q
2012 while Fee-Earning AUM of $19.5 billion fell 14% versus
1Q 2012.
- Fee-Earning AUM declined as the latest
vintage Energy fund, co-managed with Riverstone, moved out of its
investment period.
- There are currently no significant Real
Assets funds raising capital.
Real Assets (Actual results) Period
LTM % Change $ in millions, except where noted
2Q2011 3Q2011 4Q2011
1Q2012 2Q2012 3Q11 - 2Q12
QoQ YoY YTD
Economic Net Income 31 (48)
64 101 (29) 89 (128%)
(193%) (43%) Net Performance Fees 31 (47)
67 99 (33) 86 (133%)
(205%) (48%) Net Realized Performance Fees 7
27 17 22 26 91 14% 245%
3% Distributable Earnings 7 27 14
22 28 91 30% 282% 14%
Total Assets Under Management ($ in billions) 31.6
30.4 30.7 32.2 30.0
(7%) (5%) Fee-Earning Assets Under
Management ($ in billions) 22.6 22.4 22.2
22.8 19.5 (14%) (14%)
Note: Totals may not sum due to rounding.
Fund of Funds Solutions (FoF)
- Distributable Earnings (DE): $3
million. The following components impacted Distributable
Earnings in the quarter:
- Fee Related Earnings of $3
million declined from $5 million in 1Q 2012 as fee revenue
increased to $17 million in 2Q 2012 from $16 million in 1Q 2012,
while General and Administrative expenses increased $2 million from
1Q 2012.
- Fee Related Earnings were negatively
impacted by a step down in the basis for Fee-Earning AUM in certain
Fund of Funds Vehicles. In general, Fee-Earning AUM moves to a
basis of invested capital from committed capital two years after
the launch of a fund.
- Economic Net Income (ENI): $4
million
- Total revenue of $30 million declined
from $33 million in 1Q 2012, as 2Q 2012 net performance fees of $1
million declined from $4 million in 1Q 2012.
- Assets Under Management:
$44.6 billion
- Total AUM declined 2% versus 1Q
2012 while Fee-Earning AUM of $27.6 billion fell 6% versus
1Q 2012.
- The 2Q 2012 F/X impact on Fee-Earning
AUM was $1.3 billion, or 4% of beginning of period assets, and
accounts for a majority of the fee earning AUM decline.
Fund of Funds Solutions (Actual Results)
Period LTM % Change $ in
millions, except where noted
2Q2011 3Q2011
4Q2011 1Q2012 2Q2012
3Q11 - 2Q12 QoQ YoY YTD
Economic Net Income
N.A. 7 6 9 4 27
(56%) N.A. N.A. Net Performance Fees N.A.
(1) 1 4 1 5 (65%)
N.A. N.A. Net Realized Performance Fees N.A. 4
3 0 0 7 (75%) N.A.
N.A. Distributable Earnings N.A. 12 9 6
3 29 (52%) N.A. N.A.
Total Assets Under Management ($ in billions) N.A.
44.2 40.7 45.4 44.6 (2%)
N.A. N.A. Fee-Earning Assets Under Management ($ in
billions) N.A. 30.2 27.7 29.5
27.6 (6%) N.A. N.A. Note:
Carlyle Group acquired a 60% ownership interest in AlpInvest on
July 1, 2011. Totals may not sum due to rounding.
Balance Sheet Highlights
As of June 30, 2012, Carlyle had the following balance sheet
highlights. The amounts presented below exclude the effect of
consolidation eliminations on investments and accrued performance
fees as well as cash and debt associated with Carlyle’s
consolidated funds:
- Cash and Cash Equivalents of $450
million.
- Investments attributable to Carlyle
unitholders of $217 million.
- Net accrued performance fees
attributable to Carlyle unitholders of $968 million. This is
comprised of Gross Accrued Performance Fees of $2,131 million less
$133 million in accrued giveback obligation and $1,030 million in
accrued performance fee compensation and non-controlling
interest.
- Loans payable of $500 million.
- Carlyle has an undrawn $750 million
revolving credit line.
During the second quarter, on May 2, 2012, Carlyle priced its
initial public offering of 30.5 million of its common units at $22
per unit. The common units trade on the NASDAQ Global Select Market
under the symbol "CG." The underwriters did not exercise their
option to purchase additional units. Carlyle raised $639 million in
proceeds, after accounting for the underwriter discount, during the
initial public offering, and used the net proceeds from the
offering to repay indebtedness.
Conference Call
Carlyle will host a conference call on August 8, 2012 at 8:00
a.m. EDT to discuss the second quarter 2012 results and industry
trends. Immediately following the prepared remarks, there will be a
Question and Answer session for analysts and investors.
Analysts and institutional investors may listen to the call by
dialing +1-800-850-2903 (international +1-253-237-1169) and
mentioning “Carlyle Group Second Quarter 2012 Results Conference
Call”. The conference call will be webcast simultaneously to the
public through a link on the investor relations section of The
Carlyle Group web site at ir.carlyle.com. An archived replay of the
webcast also will be available shortly after the live event.
About The Carlyle Group
The Carlyle Group is a global alternative asset manager with
$156 billion of assets under management in 99 active funds and 63
fund of funds vehicles as of June 30, 2012. Carlyle invests across
four segments – Corporate Private Equity, Real Assets, Global
Market Strategies and Fund of Funds Solutions – in Africa, Asia,
Australia, Europe, the Middle East, North America and South
America. Carlyle has developed expertise in various industries,
including: aerospace, defense & government services, consumer
& retail, energy, financial services, healthcare, industrial,
technology & business services, telecommunications & media
and transportation. The Carlyle Group employs more than 1,300
people in 32 offices across six continents. www.carlyle.com
Forward Looking Statements
This press release may contain forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements include, but are not limited to, statements related to
our expectations regarding the performance of our business, our
financial results, our liquidity and capital resources and other
non-historical statements. You can identify these forward-looking
statements by the use of words such as “outlook,” “believes,”
“expects,” “potential,” “continues,” “may,” “will,” “should,”
“seeks,” “approximately,” “predicts,” “intends,” “plans,”
“estimates,” “anticipates” or the negative version of these words
or other comparable words. These statements are subject to risks,
uncertainties and assumptions, including those described under the
section entitled “Risk Factors” in our prospectus dated May 2,
2012, filed with the SEC pursuant to Rule 424(b) of the Securities
Act on May 4, 2012, as such factors may be updated from time to
time in our periodic filings with the SEC, which are accessible on
the SEC’s website at www.sec.gov. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this release and
in our filings with the SEC. We undertake no obligation to publicly
update or review any forward-looking statements, whether as a
result of new information, future developments or otherwise, except
as required by applicable law.
This release does not constitute an offer for any Carlyle
fund.
The Carlyle Group L.P.GAAP
Statement of Operations (Unaudited)
Three Months Ended Six Months Ended June
30,2012 June 30,2011 June
30,2012 June 30,2011 (Dollars in
millions, except unit and per unit data) (Dollars in
millions, except unit and per unit data) Revenues
Fund management fees $ 239.9 $ 219.2 $ 474.3 $ 447.2 Performance
fees Realized 116.7 92.5 397.3 494.9 Unrealized (337.1 )
253.2 23.1 725.5 Total
performance fees (220.4 ) 345.7 420.4 1,220.4 Investment income
(loss) Realized 2.4 9.7 1.6 42.8 Unrealized 4.6
10.9 26.9 19.2 Total
investment income (loss) 7.0 20.6 28.5 62.0 Interest and other
income 2.7 7.2 5.4 13.1 Interest and other income of Consolidated
Funds 219.2 163.1 430.7
330.4 Total revenues 248.4 755.8 1,359.3 2,073.1
Expenses Compensation and benefits Base compensation
149.9 88.6 256.0 175.3 Equity-based compensation 94.2 - 94.2 -
Performance fee related Realized 32.1 31.8 66.4 84.8 Unrealized
(97.7 ) 22.3 (42.9 ) 57.8
Total compensation and benefits 178.5 142.7 373.7 317.9 General,
administrative and other expenses 84.0 77.8 175.2 144.3 Interest
6.2 15.8 16.6 32.8 Interest and other expenses of Consolidated
Funds 179.5 104.3 364.0 190.9 Other non-operating expense (income)
0.7 5.2 (3.4 ) 20.6
Total expenses 448.9 345.8 926.1 706.5
Other
income (loss) Net investment income (losses) of Consolidated
Funds 386.6 (92.7 ) 1,258.7
(277.0 ) Income before provision for income taxes
186.1 317.3 1,691.9 1,089.6 Provision for income taxes 10.6
6.7 22.3 12.8 Net
income 175.5 310.6 1,669.6 1,076.8
Net income (loss) attributable to
non-controlling interests in consolidated entities
357.9 (61.1 ) 1,222.8
(191.1 ) Net income (loss) attributable to Carlyle Holdings (182.4
) $ 371.7 446.8 $ 1,267.9
Net income (loss) attributable to
non-controlling interests in Carlyle Holdings
(172.1 ) 457.1 Net loss attributable to The
Carlyle Group L.P. $ (10.3 ) $ (10.3 ) Net loss attributable
to The Carlyle Group L.P. per common unit Basic $ (0.26 ) $ (0.26 )
Diluted $ (0.26 ) $ (0.26 ) Weighted-average common units
Basic 40,160,245 40,160,245 Diluted
40,160,245 40,160,245
Total Segment Information
(Unaudited)
The following table sets forth information in the format used by
management when making resource deployment decisions and in
assessing the performance of our segments. The information below is
the aggregate results of our four segments.
Three Months Ended
Twelve Months Ended June 30,2012 June
30,2011 March 31,2012 June
30,2012 June 30,2011 (Dollars in
millions) Segment Revenues Fund level fee revenues Fund
management fees $ 235.0 $
214.9
$
225.4
$ 915.4 $
797.6
Portfolio advisory fees, net 7.0 12.0 8.0 28.2 35.1 Transaction
fees, net 3.7 4.1 2.7
21.7 41.3 Total fee revenues 245.7
231.0 236.1 965.3 874.0 Performance fees Realized 110.3 97.6 281.8
1,194.1 685.4 Unrealized (311.1 ) 243.8
349.7 (859.5 ) 1,883.6 Total
performance fees (200.8 ) 341.4 631.5 334.6 2,569.0 Investment
income Realized 4.0 5.6 2.1 36.3 46.2 Unrealized 10.0
9.8 21.2 14.0 65.5
Total investment income 14.0 15.4 23.3 50.3 111.7 Interest
and other income 2.5 7.6 2.6
7.1 26.4 Total revenues 61.4
595.4 893.5 1,357.3 3,581.1 Segment Expenses Compensation
and benefits Direct base compensation 105.8 97.4 101.2 415.2 374.8
Indirect base compensation 36.2 35.7 33.1 137.0 124.0 Equity-based
compensation 0.6 - - 0.6 - Performance fee related Realized 34.5
44.6 139.1 565.0 330.3 Unrealized (128.6 ) 106.1
157.6 (458.0 ) 922.3
Total compensation and benefits 48.5 283.8 431.0 659.8 1,751.4
General, administrative, and other
indirect expenses
64.0 60.0 60.6 255.9 195.8 Interest expense 6.1
14.8 9.8 43.8 40.1
Total expenses 118.6 358.6
501.4 959.5 1,987.3
Economic Net Income $ (57.2 ) $ 236.8 $ 392.1
$ 397.8 $ 1,593.8 Fee Related Earnings $ 35.5
$ 30.7 $ 34.0 $ 119.9 $ 165.7 Net
Performance Fees $ (106.7 ) $ 190.7 $ 334.8 $ 227.6
$ 1,316.4 Realized Net Performance Fees $ 75.8
$ 53.0 $ 142.7 $ 629.1 $ 355.1
Investment Income $ 14.0 $ 15.4 $ 23.3 $ 50.3
$ 111.7 Distributable Earnings $ 115.3 $ 89.3
$ 178.8 $ 785.3 $ 567.0 Pro
Forma Economic Net Income(1) $ (58.9 ) Pro Forma Fee Related
Earnings(1) $ 37.0 Pro Forma Realized Net Performance
Fees(1) $ 75.7 Pro Forma Distributable Earnings(1) $ 116.7
(1) The selected pro forma non-GAAP
financial measures for the three months ended June 30, 2012
presents these measures giving pro forma effect to the
Reorganization and Offering Transactions described in our final
Prospectus dated May 2, 2012, as if such transactions had occurred
on January 1, 2012.
Total Segment Information (Unaudited),
cont
Three Months Ended
Jun 30, 2012 vs.
Jun 30, 2011
Mar 31, 2012
Jun 30,2011
Sep 30,2011
Dec 31,2011
Mar 31,2012
Jun 30,2012
$ $
Economic Net Income, Total
Segments
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $
214.9
$ 234.4 $ 220.6 $
225.4
$ 235.0 $ 20.1 $ 9.6 Portfolio advisory fees, net 12.0 7.5 5.7 8.0
7.0 (5.0 ) (1.0 ) Transaction fees, net 4.1
5.4 9.9 2.7
3.7 (0.4 ) 1.0
Total fee revenues 231.0 247.3 236.2 236.1 245.7 14.7 9.6
Performance fees Realized 97.6 387.4 414.6 281.8 110.3 12.7 (171.5
) Unrealized 243.8 (894.7 )
(3.4 ) 349.7 (311.1 )
(554.9 ) (660.8 ) Total performance
fees 341.4 (507.3 ) 411.2 631.5 (200.8 ) (542.2 ) (832.3 )
Investment income Realized 5.6 13.0 17.2 2.1 4.0 (1.6 ) 1.9
Unrealized 9.8 (17.6 )
0.4 21.2 10.0
0.2 (11.2 ) Total investment
income 15.4 (4.6 ) 17.6 23.3 14.0 (1.4 ) (9.3 ) Interest and other
income 7.6 1.4 0.6
2.6 2.5
(5.1 ) (0.1 ) Total revenues 595.4 (263.2 )
665.6 893.5 61.4 (534.0 ) (832.1 ) Expenses Compensation and
benefits Direct base compensation 97.4 107.2 101.0 101.2 105.8 8.4
4.6 Indirect base compensation 35.7 34.8 32.9 33.1 36.2 0.5 3.1
Equity-based compensation - - - - 0.6 0.6 0.6 Performance fee
related Realized 44.6 193.2 198.2 139.1 34.5 (10.1 ) (104.6 )
Unrealized 106.1 (477.2 )
(9.8 ) 157.6 (128.6 )
(234.7 ) (286.2 ) Total compensation and
benefits 283.8 (142.0 ) 322.3 431.0 48.5 (235.3 ) (382.5 )
General, administrative, and other
indirect expenses
60.0 55.0 76.3 60.6 64.0 4.0 3.4 Interest expense 14.8
15.1 12.8
9.8 6.1 (8.7 )
(3.7 ) Total expenses 358.6
(71.9 ) 411.4 501.4
118.6 (240.0 )
(382.8 ) Economic Net Income $ 236.8 $
(191.3 ) $ 254.2 $ 392.1 $ (57.2
) $ (294.0 ) $ (449.3 ) Fee Related Earnings $ 30.7
$ 36.6 $ 13.8 $ 34.0
$ 35.5 $ 4.8 $ 1.5
Net Performance Fees $ 190.7 $ (223.3 ) $
222.8 $ 334.8 $ (106.7 ) $
(297.4 ) $ (441.5 ) Realized Net Performance Fees $ 53.0
$ 194.2 $ 216.4 $ 142.7
$ 75.8 $ 22.8 $ (66.9 )
Investment Income $ 15.4 $ (4.6 ) $ 17.6
$ 23.3 $ 14.0 $ (1.4 )
$ (9.3 ) Distributable Earnings $ 89.3 $ 243.8
$ 247.4 $ 178.8 $ 115.3
$ 26.0 $ (63.5 )
Corporate Private Equity Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2012 vs.
Jun 30, 2011
Mar 31, 2012
Jun 30,2011
Sep 30,2011
Dec 31,2011
Mar 31,2012
Jun 30,2012
$ $ Corporate Private Equity
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 130.2 $
128.1 $ 123.6 $
123.9
$ 124.0 $ (6.2 ) $ 0.1 Portfolio advisory fees, net 10.4 4.8 4.3
7.0 4.9 (5.5 ) (2.1 ) Transaction fees, net 4.1
3.8 8.3 1.6
1.6 (2.5 )
- Total fee revenues 144.7 136.7 136.2 132.5 130.5 (14.2 )
(2.0 ) Performance fees Realized 30.8 333.0 262.2 223.0 80.6 49.8
(142.4 ) Unrealized 240.8 (787.2 )
79.7 241.3
(269.7 ) (510.5 ) (511.0 ) Total
performance fees 271.6 (454.2 ) 341.9 464.3 (189.1 ) (460.7 )
(653.4 ) Investment income Realized (0.1 ) 8.1 8.1 0.8 1.5 1.6 0.7
Unrealized 7.2 (14.8 )
5.9 14.5 3.7
(3.5 ) (10.8 ) Total investment income
7.1 (6.7 ) 14.0 15.3 5.2 (1.9 ) (10.1 ) Interest and other income
4.2 0.3 1.1
1.4 1.6
(2.6 ) 0.2 Total revenues 427.6 (323.9 ) 493.2
613.5 (51.8 ) (479.4 ) (665.3 ) Expenses Compensation and
benefits Direct base compensation 62.3 62.8 63.9 55.3 54.8 (7.5 )
(0.5 ) Indirect base compensation 22.7 24.1 23.7 20.8 24.1 1.4 3.3
Equity-based compensation - - - - 0.4 0.4 0.4 Performance fee
related Realized 12.1 176.2 131.9 117.6 31.0 18.9 (86.6 )
Unrealized 124.2 (444.2 )
58.0 132.0 (140.3 )
(264.5 ) (272.3 ) Total compensation
and benefits 221.3 (181.1 ) 277.5 325.7 (30.0 ) (251.3 ) (355.7 )
General, administrative, and other
indirect expenses
34.0 32.4 46.5 38.0 39.2 5.2 1.2 Interest expense 9.7
9.8 7.5 5.9
3.5 (6.2 )
(2.4 ) Total expenses 265.0 (138.9 )
331.5 369.6
12.7 (252.3 ) (356.9 )
Economic Net Income $ 162.6 $ (185.0 ) $ 161.7
$ 243.9 $ (64.5 ) $ (227.1 )
$ (308.4 ) Fee Related Earnings $ 20.2 $ 7.9
$ (4.3 ) $ 13.9 $ 10.1
$ (10.1 ) $ (3.8 ) Net Performance Fees $ 135.3
$ (186.2 ) $ 152.0 $ 214.7
$ (79.8 ) $ (215.1 ) $ (294.5 )
Realized Net Performance Fees $ 18.7 $ 156.8
$ 130.3 $ 105.4 $ 49.6
$ 30.9 $ (55.8 ) Investment Income $ 7.1
$ (6.7 ) $ 14.0 $ 15.3
$ 5.2 $ (1.9 ) $ (10.1 ) Distributable
Earnings $ 38.8 $ 172.8 $ 134.1
$ 120.1 $ 61.2 $ 22.4
$ (58.9 )
Global Market Strategies Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2012 vs. Jun 30, 2011 Mar 31, 2012
Jun 30,2011
Sep 30,2011
Dec 31,2011
Mar 31,2012
Jun 30,2012
$ $ Global Market Strategies
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 44.4 $
50.4 $ 44.9 $ 48.6 $ 59.5 $ 15.1 $ 10.9 Portfolio advisory fees,
net 0.9 0.8 0.8 0.7 0.5 (0.4 ) (0.2 ) Transaction fees, net
- - -
- - - -
Total fee revenues 45.3 51.2 45.7 49.3 60.0 14.7 10.7
Performance fees Realized 54.8 6.1 108.5 32.4 1.3 (53.5 ) (31.1 )
Unrealized (16.1 ) (6.8 ) (101.0
) 12.7 4.0 20.1
(8.7 ) Total performance fees 38.7 (0.7 ) 7.5 45.1
5.3 (33.4 ) (39.8 ) Investment income Realized 5.0 3.1 9.3 1.3 2.8
(2.2 ) 1.5 Unrealized 2.8 (2.1 )
(4.7 ) 3.7 4.8 2.0
1.1 Total investment income 7.8 1.0 4.6
5.0 7.6 (0.2 ) 2.6 Interest and other income 1.3
1.4 (0.4 ) 0.6
0.4 (0.9 ) (0.2 ) Total
revenues 93.1 52.9 57.4 100.0 73.3 (19.8 ) (26.7 ) Expenses
Compensation and benefits Direct base compensation 15.3 16.9 13.9
19.7 25.2 9.9 5.5 Indirect base compensation 4.3 4.0 3.9 4.9 4.5
0.2 (0.4 ) Equity-based compensation - - - - 0.1 0.1 0.1
Performance fee related Realized 27.9 (0.7 ) 41.8 17.8 0.7 (27.2 )
(17.1 ) Unrealized (13.5 ) (10.7 )
(37.5 ) 9.7 0.2
13.7 (9.5 ) Total compensation and benefits
34.0 9.5 22.1 52.1 30.7 (3.3 ) (21.4 )
General, administrative, and other
indirect expenses
13.5 6.8 10.1 8.1 9.7 (3.8 ) 1.6 Interest expense 2.2
2.4 3.0 1.7
0.9 (1.3 ) (0.8 ) Total
expenses 49.7 18.7
35.2 61.9 41.3
(8.4 ) (20.6 ) Economic Net Income $ 43.4
$ 34.2 $ 22.2 $ 38.1
$ 32.0 $ (11.4 ) $ (6.1 ) Fee Related Earnings
$ 11.3 $ 22.5 $ 14.4 $
15.5 $ 20.0 $ 8.7 $ 4.5 Net
Performance Fees $ 24.3 $ 10.7 $ 3.2
$ 17.6 $ 4.4 $ (19.9 ) $ (13.2 )
Realized Net Performance Fees $ 26.9 $ 6.8
$ 66.7 $ 14.6 $ 0.6 $ (26.3 )
$ (14.0 ) Investment Income $ 7.8 $ 1.0
$ 4.6 $ 5.0 $ 7.6 $ (0.2 )
$ 2.6 Distributable Earnings $ 43.2 $
32.4 $ 90.4 $ 31.4 $ 23.4
$ (19.8 ) $ (8.0 )
Real Assets Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2012 vs. Jun 30, 2011 Mar 31, 2012
Jun 30,2011
Sep 30,2011
Dec 31,2011
Mar 31,2012
Jun 30,2012
$ $ Real Assets
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 40.3 $
37.2 $ 35.8 $ 36.6 $ 34.1 $ (6.2 ) $ (2.5 ) Portfolio advisory
fees, net 0.7 1.9 0.6 0.3 1.6 0.9 1.3 Transaction fees, net
- 1.6 1.6
1.1 2.1 2.1
1.0 Total fee revenues 41.0 40.7 38.0 38.0
37.8 (3.2 ) (0.2 ) Performance fees Realized 12.0 29.1 16.9 23.2
27.0 15.0 3.8 Unrealized 19.1 (78.2 )
50.8 82.4
(56.0 ) (75.1 ) (138.4 ) Total
performance fees 31.1 (49.1 ) 67.7 105.6 (29.0 ) (60.1 ) (134.6 )
Investment income Realized 0.7 1.8 (0.2 ) - (0.3 ) (1.0 ) (0.3 )
Unrealized (0.2 ) (0.7 ) (0.8 )
3.0 1.5 1.7
(1.5 ) Total investment income 0.5 1.1 (1.0 )
3.0 1.2 0.7 (1.8 ) Interest and other income 2.1
(0.5 ) (0.2 ) 0.4
0.4 (1.7 ) -
Total revenues 74.7 (7.8 ) 104.5 147.0 10.4 (64.3 ) (136.6 )
Expenses Compensation and benefits Direct base compensation
19.8 19.4 17.0 18.2 16.9 (2.9 ) (1.3 ) Indirect base compensation
8.7 6.7 5.3 6.4 5.6 (3.1 ) (0.8 ) Equity-based compensation - - - -
0.1 0.1 0.1 Performance fee related Realized 4.6 2.4 0.3 0.9 1.5
(3.1 ) 0.6 Unrealized (4.6 ) (4.3 )
0.5 5.9 2.1
6.7 (3.8 ) Total compensation
and benefits 28.5 24.2 23.1 31.4 26.2 (2.3 ) (5.2 )
General, administrative, and other
indirect expenses
12.5 12.8 15.2 12.7 11.8 (0.7 ) (0.9 ) Interest expense 2.9
2.9 2.3
1.9 1.1 (1.8 )
(0.8 ) Total expenses 43.9
39.9 40.6 46.0
39.1 (4.8 )
(6.9 ) Economic Net Income $ 30.8 $ (47.7 )
$ 63.9 $ 101.0 $ (28.7 )
$ (59.5 ) $ (129.7 ) Fee Related Earnings $ (0.8 ) $
(1.6 ) $ (2.0 ) $ (0.8 ) $ 2.7 $
3.5 $ 3.5 Net Performance Fees $ 31.1
$ (47.2 ) $ 66.9 $ 98.8 $
(32.6 ) $ (63.7 ) $ (131.4 ) Realized Net Performance
Fees $ 7.4 $ 26.7 $ 16.6
$ 22.3 $ 25.5 $ 18.1 $
3.2 Investment Income $ 0.5 $ 1.1
$ (1.0 ) $ 3.0 $ 1.2 $
0.7 $ (1.8 ) Distributable Earnings $ 7.3
$ 26.9 $ 14.4 $ 21.5
$ 27.9 $ 20.6 $ 6.4
Fund of Funds Solutions Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2012 vs. Jun 30, 2011 Mar 31, 2012
Jun 30,2011
Sep 30,2011
Dec 31,2011
Mar 31,2012
Jun 30,2012
$ $ Fund of Funds Solutions
(Dollars in millions)
Revenues Segment fee revenues Fund management fees n/a $
18.7 $ 16.3 $
16.3
$
17.4
n/a $ 1.1 Portfolio advisory fees, net n/a - - - - n/a -
Transaction fees, net n/a - -
- - n/a
- Total fee revenues n/a 18.7 16.3 16.3 17.4
n/a 1.1 Performance fees Realized n/a 19.2 27.0 3.2 1.4 n/a (1.8 )
Unrealized n/a (22.5 ) (32.9 )
13.3 10.6 n/a
(2.7 ) Total performance fees n/a (3.3 ) (5.9 ) 16.5 12.0
n/a (4.5 ) Investment income Realized n/a - - - - n/a - Unrealized
n/a - - -
- n/a -
Total investment income n/a - - - - n/a - Interest and other income
n/a 0.2 0.1
0.2 0.1 n/a (0.1 )
Total revenues n/a 15.6 10.5 33.0 29.5 n/a (3.5 ) Expenses
Compensation and benefits Direct base compensation n/a 8.1 6.2 8.0
8.9 n/a 0.9 Indirect base compensation n/a - - 1.0 2.0 1.0
Equity-based compensation n/a - - - - - Performance fee related
Realized n/a 15.3 24.2 2.8 1.3 n/a (1.5 ) Unrealized n/a
(18.0 ) (30.8 ) 10.0
9.4 n/a (0.6 ) Total
compensation and benefits n/a 5.4 (0.4 ) 21.8 21.6 n/a (0.2 )
General, administrative, and other
indirect expenses
n/a 3.0 4.5 1.8 3.3 n/a 1.5 Interest expense n/a -
- 0.3
0.6 n/a 0.3 Total
expenses n/a 8.4 4.1
23.9 25.5 n/a
1.6 Economic Net Income n/a $
7.2 $ 6.4 $ 9.1 $ 4.0
n/a $ (5.1 ) Fee Related Earnings n/a $
7.8 $ 5.7 $ 5.4 $ 2.7
n/a $ (2.7 ) Net Performance Fees n/a $
(0.6 ) $ 0.7 $ 3.7 $ 1.3
n/a $ (2.4 ) Realized Net Performance Fees n/a
$ 3.9 $ 2.8 $ 0.4 $ 0.1
n/a $ (0.3 ) Investment Income n/a $ -
$ - $ - $ -
n/a $ - Distributable Earnings n/a $ 11.7
$ 8.5 $ 5.8 $ 2.8
n/a $ (3.0 )
Total Assets Under Management Roll Forward
(Unaudited)
Corporate Private Equity Global Market
Strategies (8) Real Assets Fund of
Funds (7) Total (USD in millions)
AvailableCapital
Fair Valueof Capital
Total AUM
AvailableCapital
Fair Valueof Capital
Total AUM
AvailableCapital
Fair Valueof Capital
Total AUM
AvailableCapital
Fair Valueof Capital
Total AUM
AvailableCapital
Fair Valueof Capital
Total AUM Balance, As of March 31, 2012 $
13,362 $ 39,902
$ 53,264 $ 1,116
$ 27,176
$ 28,292 $ 7,770 $ 24,472
$ 32,242 $ 17,636 $ 27,788
$ 45,424 $ 39,884 $
119,338 $ 159,222 Acquisitions - -
- - -
- - -
- - -
- - -
- Commitments (1) 2,274 -
2,274 302 -
302 87 -
87 (10 ) -
(10 ) 2,653 -
2,653 Capital Called, net (2) (348 ) 242
(106
) (155 ) 138
(17 ) (879 ) 817
(62
) (841 ) 789
(52 ) (2,223 )
1,986 (237 ) Distributions (3) 109 (2,042 )
(1,933 ) 18 (133 )
(115 ) 133 (1,481 )
(1,348 ) 106 (1,520 )
(1,414 )
366 (5,176 ) (4,810 )
Subscriptions, net of Redemptions (4) - -
- - 659
659
- -
- - -
- - 659 659 Changes in
CLO collateral balances - -
- - 114
114 - -
-
- -
- - 114 114 Market
Appreciation/(Depreciation) (5) - (509 )
(509 ) - 149
149 - (713 )
(713 ) - 1,630
1,630
- 557 557 Foreign exchange (6) (105 )
(361 )
(466 ) -
(338 )
(338 )
(52 ) (150 )
(202
) (523 ) (471 )
(994
) (680 ) (1,320
) (2,000 ) Balance, As of
June 30, 2012 $ 15,292 $
37,232 $ 52,524 $
1,281 $ 27,765
$ 29,046 $ 7,059
$ 22,945 $ 30,004
$ 16,368 $ 28,216
$ 44,584 $ 40,000
$ 116,158 $
156,158 Balance, As of December 31,
2011 $ 13,328 $ 37,737
$ 51,065 $ 1,079 $ 23,434
$ 24,513 $ 8,278 $ 22,394
$ 30,672 $
14,840 $ 25,879
$ 40,719 $ 37,525
$ 109,444 $ 146,969 Acquisitions - -
- - 2,903
2,903 - -
- - -
- -
2,903 2,903 Commitments (1) 2,588 -
2,588 414
-
414 141 -
141 3,283 -
3,283 6,426
- 6,426 Capital Called, net (2) (993 ) 761
(232 ) (231 ) 203
(28 ) (1,768 ) 1,805
37 (1,714 ) 1,857
143 (4,706 )
4,626 (80 ) Distributions (3) 424 (3,570 )
(3,146 ) 19 (500 )
(481 ) 425 (2,653 )
(2,228 ) 170 (2,801 )
(2,631 )
1,038 (9,524 ) (8,486 )
Subscriptions, net of Redemptions (4) - -
- - 1,369
1,369 - -
- - -
- - 1,369
1,369 Changes in CLO collateral balances - -
- - 358
358 - -
- - -
- - 358 358
Market Appreciation/(Depreciation) (5) - 2,515
2,515 - 239
239 - 1,446
1,446 - 2,927
2,927 -
7,127 7,127 Foreign exchange (6) (55 )
(211 )
(266 ) -
(241 )
(241 ) (17
) (47 )
(64 ) (211
) 354
143
(283 ) (145 )
(428 ) Balance, As of June 30, 2012
$ 15,292 $ 37,232
$ 52,524 $ 1,281
$ 27,765 $ 29,046
$ 7,059 $ 22,945
$ 30,004 $ 16,368
$ 28,216 $
44,584 $ 40,000 $
116,158 $ 156,158
(1) Represents capital raised by our carry funds and fund of funds
vehicles, net of expired available capital. (2) Represents capital
called by our carry funds and fund of funds vehicles, net of fund
fees and expenses. Equity Invested amounts may vary from Capital
Called due to timing differences between investment acquisition and
capital call dates. (3) Represents distributions from our carry
funds and fund of funds vehicles, net of amounts recycled.
Distributions are based on when proceeds are actually distributed
to investors, which may differ from when they are realized. (4)
Represents the net result of subscriptions to and redemptions from
our hedge funds and open-end structured credit funds. (5) Market
Appreciation/(Depreciation) represents realized and unrealized
gains (losses) on portfolio investments and changes in the net
asset value of our hedge funds. (6) Represents the impact of
foreign exchange rate fluctuations on the translation of our
non-U.S. dollar denominated funds. Activity during the period is
translated at the average rate for the period. Ending balances are
translated at the spot rate as of the period end. (7) The fair
market values for AlpInvest primary fund investments and secondary
investment funds are based on the latest available valuations of
the underlying limited partnership interests (in most cases as of
March 31, 2012) as provided by their general partners, plus the net
cash flows since the latest valuation, up to June 30, 2012.
(8) Ending balance is comprised of
approximately $16.2 billion from our structured credit funds
(including $0.1 billion of Available Capital), $9.6 billion in our
hedge funds, and $3.3 billion (including $1.2 billion of Available
Capital) in our carry funds.
Fee Earning Assets Under Management Roll
Forward (Unaudited)
For the Three Months Ended June 30, 2012 (USD
in millions)
CorporatePrivateEquity
GlobalMarketStrategies
Real Assets(6)
Fund
ofFundsSolutions
Total Fee-Earning AUM
Balance, Beginning of Period $ 37,833 $ 26,803 $ 22,848 $ 29,514 $
116,998 Acquisitions - - - - - Inflows, including Commitments(1)
276 309 340 679 1,604 Outflows, including Distributions(2) (584 )
(51 ) (3,514 ) (1,607 ) (5,756 ) Subscriptions, net of Redemptions
(3) - 654 - - 654 Changes in CLO collateral balances - 270 - - 270
Market Appreciation/(Depreciation) (4) - 85 - 248 333 Foreign
exchange and other (5) (396 ) (330 )
(146 ) (1,258 ) (2,130 )
Balance, End of Period $ 37,129
$ 27,740 $ 19,528
$ 27,576 $ 111,973
For the Six Months Ended June 30, 2012 (USD in
millions)
CorporatePrivateEquity
GlobalMarketStrategies
Real Assets(6)
Fund
ofFundsSolutions
Total Fee-Earning AUM Balance, Beginning of Period $
37,996 $ 23,186 $ 22,172 $ 27,671 $ 111,025 Acquisitions - 2,866 -
- 2,866 Inflows, including Commitments(1) 413 502 1,177 3,198 5,290
Outflows, including Distributions(2) (1,038 ) (382 ) (3,779 )
(3,617 ) (8,816 ) Subscriptions, net of Redemptions (3) - 1,371 - -
1,371 Changes in CLO collateral balances - 504 - - 504 Market
Appreciation/(Depreciation) (4) - (69 ) - 679 610 Foreign exchange
and other (5) (242 ) (238 ) (42
) (355 ) (877 )
Balance, End of
Period $ 37,129 $
27,740 $ 19,528
$ 27,576 $ 111,973
(1) Inflows represent limited partner
capital raised by our carry funds and fund of funds vehicles and
capital invested by our carry funds and fund of funds vehicles
outside the investment period.
(2) Outflows represent limited partner
distributions from our carry funds and fund of funds vehicles and
changes in basis for our carry funds and fund of funds vehicles
where the investment period has expired.
(3) Represents the net result of subscriptions to and redemptions
from our hedge funds and open-end structured credit funds.
(4) Market Appreciation/(Depreciation)
represents changes in the net asset value of our hedge funds and of
our fund of funds vehicles based on the lower of cost or fair
value.
(5) Represents the impact of foreign
exchange rate fluctuations on the translation of our non-U.S.
dollar denominated funds. Activity during the period is translated
at the average rate for the period. Ending balances are translated
at the spot rate as of the period end.
(6) Carlyle/Riverstone Global Energy and
Power, L.P., Carlyle/Riverstone Global Energy and Power II, L.P.
Carlyle/Riverstone Global Energy and Power III, L.P.,
Riverstone/Carlyle Global Energy and Power IV, L.P.,
Carlyle/Riverstone Renewable Energy Infrastructure, L.P. and
Riverstone/Carlyle Renewable Energy Infrastructure II, L.P.
(collectively, the “Energy Funds”), are managed with Riverstone
Holdings LLC and its affiliates. Affiliates of both Carlyle and
Riverstone act as investment advisers to each of the Energy Funds.
With the exception of Riverstone/Carlyle Global Energy and Power
IV, L.P. and Riverstone/Carlyle Renewable Energy Infrastructure II,
L.P., where Carlyle has a minority representation on the funds’
management committees, management of each of the Energy Funds is
vested in committees with equal representation by Carlyle and
Riverstone, and the consent of representatives of both Carlyle and
Riverstone are required for investment decisions. As of June 30,
2012, the Energy Funds had, in the aggregate, approximately $16
billion in AUM and $9 billion in fee-earning AUM, respectively.
Corporate Private Equity and Real Assets
Fund Performance (Unaudited)
The fund return information reflected in this discussion and
analysis is not indicative of the performance of The Carlyle Group
L.P. and is also not necessarily indicative of the future
performance of any particular fund. An investment in The Carlyle
Group L.P. is not an investment in any of our funds. There can be
no assurance that any of our funds or our other existing and future
funds will achieve similar returns.
TOTAL INVESTMENTS
REALIZED/PARTIALLY
REALIZEDINVESTMENTS (5)
as of June 30, 2012 as of June 30, 2012
FundInceptionDate
(1)
CommittedCapital
CumulativeInvestedCapital
(2)
Total FairValue (3)
MOIC(4)
GrossIRR (7)
NetIRR (8)
CumulativeInvestedCapital
(2)
Total FairValue (3)
MOIC(4)
GrossIRR (7)
Corporate Private Equity
(Reported in Local Currency, in
Millions)
(Reported in Local Currency, in Millions)
Fully Invested
Funds (6)
CP II 10/1994 $ 1,331.1 $ 1,362.4 $ 4,070.5 3.0x 34% 25% $ 1,362.4
$ 4,070.5 3.0x 34% CP III 2/2000 $ 3,912.7 $ 4,031.6 $ 10,093.6
2.5x 27% 21% $ 3,851.7 $ 9,915.5 2.6x 27% CP IV 12/2004 $ 7,850.0 $
7,612.6 $ 14,605.1 1.9x 15% 12% $ 3,569.1 $ 9,040.5 2.5x 24% CEP I
12/1997
€
1,003.6
€
972.0
€
2,119.5
2.2x 18% 11%
€
972.0
€
2,119.5
2.2x 18% CEP II 9/2003
€
1,805.4
€
2,046.5
€
3,672.2
1.8x 39% 21%
€
1,016.5
€
2,739.3
2.7x 72% CAP I 12/1998 $ 750.0 $ 627.7 $ 2,448.6 3.9x 25% 18% $
627.7 $ 2,448.6 3.9x 25% CAP II 2/2006 $ 1,810.0 $ 1,611.3 $
2,524.6 1.6x 11% 8% $ 390.1 $ 1,294.5 3.3x 33% CJP I 10/2001
¥
50,000.0
¥
47,291.4
¥
120,941.7
2.6x 61% 37%
¥
30,009.4
¥
104,486.3
3.5x 72% All Other Funds (9) Various $ 2,828.7 $ 4,144.8 1.5x 18%
6% $ 1,964.8 $ 3,281.6 1.7x 22% Coinvestments and Other (10)
Various $ 6,660.0 $ 16,219.5 2.4x 36%
33% $ 4,263.6 $ 13,183.6 3.1x 36%
Total
Fully Invested Funds $ 29,145.2 $
62,948.6 2.2x 28%
21% $ 18,920.8 $ 50,690.6
2.7x 31%
Funds in the
Investment Period (6)
CP V 5/2007 $ 13,719.7 $ 9,219.7 $ 12,984.2 1.4x 14% 9% CEP III
12/2006
€
5,294.9
€
4,072.4
€
4,806.8
1.2x 7% 3% CAP III 5/2008 $ 2,551.6 $ 1,637.2 $ 1,675.7 1.0x 1% -5%
CJP II 7/2006
¥
165,600.0
¥
119,539.7
¥
124,415.7
1.0x 1% -4% CGFSP I 9/2008 $ 1,100.2 $ 798.4 $ 1,044.7 1.3x 16% 8%
CAGP IV 6/2008 $ 1,041.4 $ 421.8 $ 524.3 1.2x 14% 1% All Other
Funds (11) Various $ 1,501.8 $ 1,957.5 1.3x
12% 4%
Total Funds in the Investment Period $
20,228.4 $ 25,826.1 1.3x
11% 5%
TOTAL CORPORATE PRIVATE
EQUITY (12) $ 49,373.7 $
88,774.7 1.8x 26%
18% $ 22,204.3 $ 56,331.3
2.5x 31% TOTAL
INVESTMENTS
REALIZED/PARTIALLY
REALIZEDINVESTMENTS (5)
as of June 30, 2012 as of June 30, 2012
FundInceptionDate
(1)
CommittedCapital
CumulativeInvestedCapital
(2)
Total FairValue (3)
MOIC(4)
GrossIRR (7)
NetIRR (8)
CumulativeInvestedCapital
(2)
Total FairValue (3)
MOIC(4)
GrossIRR (7)
Real Assets
(Reported in Local Currency, in
Millions)
(Reported in Local Currency, in Millions)
Fully Invested
Funds (6)
CRP III 11/2000 $ 564.1 $ 522.5 $ 1,326.0 2.5x 44% 30% $ 492.1 $
1,297.5 2.6x 46% CRP IV 12/2004 $ 950.0 $ 1,186.1 $ 1,085.8 0.9x
-3% -7% $ 373.3 $ 468.2 1.3x 16% CRP V 11/2006 $ 3,000.0 $ 3,122.5
$ 3,906.5 1.3x 8% 5% $ 1,486.4 $ 1,773.7 1.2x 8% CEREP I 3/2002
€
426.6
€
517.0
€
741.6
1.4x 13% 7%
€
441.2
€
695.0
1.6x 19% CEREP II 4/2005
€
762.7
€
826.9
€
330.3
0.4x -22% -22%
€
329.3
€
146.6
0.4x -21% CEREP III 5/2007
€
2,229.5
€
1,475.0
€
1,705.0
1.2x 6% 0%
€
-
€
3.5
n/a n/a Energy II 7/2002 $ 1,100.0 $ 1,313.8 $ 3,628.9 2.8x 82% 55%
$ 827.4 $ 3,308.4 4.0x 107% Energy III 10/2005 $ 3,800.0 $ 3,467.2
$ 6,715.5 1.9x 17% 13% $ 1,493.9 $ 4,177.4 2.8x 29% Energy IV
12/2007 $ 5,979.1 $ 4,698.3 $ 7,559.7 1.6x 26% 17% $ 1,345.8 $
2,688.5 2.0x 28% All Other Funds (13) Various $ 1,726.4 $ 1,768.5
1.0x 2% -6% $ 1,286.8 $ 1,544.8 1.2x 10% Coinvestments and Other
(10) Various $ 3,940.0 $ 6,655.8 1.7x 21%
17% $ 1,520.7 $ 3,731.7 2.5x 31%
Total Fully Invested Funds $ 23,542.9
$ 36,159.5 1.5x 18%
11% $ 9,801.1 $
20,059.2 2.0x 29%
Funds in the
Investment Period (6)
CRP VI (14) 9/2010 $ 2,340.0 $ 499.5 $ 536.7 1.1x n/m n/m CIP
9/2006 $ 1,143.7 $ 733.1 $ 740.3 1.0x 0% -5% Renew II 3/2008 $
3,417.5 $ 2,417.8 $ 3,328.9 1.4x 17% 10% All Other Funds (15)
Various $ 605.0 $ 567.1 0.9x -3% -10%
Total Funds in the Investment Period $ 4,255.5
$ 5,107.6 1.2x 11%
4%
TOTAL REAL ASSETS (12) $
27,798.4 $ 41,267.1 1.5x
17% 10% $ 10,533.2
$ 21,008.6 2.0x 28%
Global Markets Strategies Carry Funds and
Fund of Funds Solutions (Unaudited)
TOTAL
INVESTMENTS as of June 30, 2012
Inception toJune 30,
2012
FundInceptionDate
(1)
Fund Size
CumulativeInvested
Capital(16)
Total FairValue (3)
MOIC (4) Gross IRR (7) Net
IRR (8) Global Market Strategies (Reported in Local
Currency, in Millions) CSP II 6/2007 $ 1,352.3 $ 1,352.3 $
2,167.8 1.6x 17% 12%
TOTAL INVESTMENTS
as of June 30, 2012
Inception toJune 30,
2012
VintageYear
Fund Size
CumulativeInvested
Capital(2)(18)
Total FairValue (3)(18)
MOIC (4)
Gross IRR (7) Net IRR (8) Fund of
Funds Solutions (17) (Reported in Local Currency, in
Millions)
Fully Committed
Funds (6)
Main Fund I - Fund Investments 2000
€
5,174.6
€
3,992.3
€
6,391.3
1.6x 13% 12% Main Fund II - Fund Investments 2003
€
4,545.0
€
4,439.9
€
6,223.9
1.4x 10% 9% Main Fund III - Fund Investments 2005
€
11,500.0
€
9,396.7
€
10,689.7
1.1x 5% 4% Main Fund I - Secondary Investments 2002
€
519.4
€
470.0
€
888.0
1.9x 55% 52% Main Fund II - Secondary Investments 2003
€
998.4
€
939.0
€
1,662.6
1.8x 28% 27% Main Fund III - Secondary Investments 2006
€
2,250.0
€
2,089.4
€
2,704.1
1.3x 9% 9% Main Fund IV - Secondary Investments 2010
€
1,856.4
€
1,537.2
€
1,942.7
1.3x 26% 24% Main Fund II - Co-Investments 2003
€
1,090.0
€
885.6
€
2,337.4
2.6x 45% 43% Main Fund III - Co-Investments 2006
€
2,760.0
€
2,527.2
€
2,547.0
1.0x 0% -1% Main Fund II - Mezzanine Investments 2004
€
700.0
€
712.1
€
922.9
1.3x 8% 7% Main Fund III - Mezzanine Investments 2006
€
2,000.0
€
1,348.3
€
1,686.2
1.3x 10% 9% All Other Funds (19) Various
€
1,264.3
€
1,879.6
1.5x 19% 15%
Total Fully Committed
Funds
€
29,602.0
€
39,875.3
1.3x 11% 10%
Funds in the
Commitment Period
Main Fund IV - Fund Investments 2009
€
4,880.0
€
931.6
€
915.1
1.0x -2% -5% Main Fund V - Secondary Investments 2011
€
2,377.3
€
150.2
€
156.0
1.0x 16% 8% Main Fund IV - Co-Investments 2010
€
1,575.0
€
1,057.6
€
1,047.9
1.0x -1% -3% All Other Funds (19) Various
€
31.7
€
31.4
1.0x -7% -16%
Total Funds in the Commitment
Period
€
2,171.1
€
2,150.4
1.0x -1% -3% TOTAL
FUND OF FUNDS SOLUTIONS
€
31,773.1
€
42,025.7
1.3x 11% 10% TOTAL
FUND OF FUNDS SOLUTIONS (USD) (20) $ 40,193.7
$ 53,163.4 1.3x (1) The data
presented herein that provides "inception to date" performance
results of our segments relates to the period following the
formation of the first fund within each segment. For our Corporate
Private Equity segment our first fund was formed in 1990. For our
Real Assets segment our first fund was formed in 1997. For our
Global Market Strategies segment, CSP II was formed in 2007. (2)
Represents the original cost of all capital called for investments
since inception of the fund. (3) Represents all realized proceeds
combined with remaining fair value, before management fees,
expenses and carried interest. (4) Multiple of invested capital
("MOIC") represents total fair value, before management fees,
expenses and carried interest, divided by cumulative invested
capital. (5)An investment is considered realized when the
investment fund has completely exited, and ceases to own an
interest in, the investment. An investment is considered partially
realized when the total amount of proceeds received in respect of
such investment, including dividends, interest or other
distributions and/or return of capital, represents at least 85% of
invested capital and such investment is not yet fully realized.
Because part of our value creation strategy involves pursuing best
exit alternatives, we believe information regarding
Realized/Partially Realized MOIC and Gross IRR, when considered
together with the other investment performance metrics presented,
provides investors with meaningful information regarding our
investment performance by removing the impact of investments where
significant realization activity has not yet occurred.
Realized/Partially Realized MOIC and Gross IRR have limitations as
measures of investment performance, and should not be considered in
isolation. Such limitations include the fact that these measures do
not include the performance of earlier stage and other investments
that do not satisfy the criteria provided above. The exclusion of
such investments will have a positive impact on Realized/Partially
Realized MOIC and Gross IRR in instances when the MOIC and Gross
IRR in respect of such investments are less than the aggregate MOIC
and Gross IRR. Our measurements of Realized/Partially Realized MOIC
and Gross IRR may not be comparable to those of other companies
that use similarly titled measures. We do not present
Realized/Partially Realized performance information separately for
funds that are still in the investment period because of the
relatively insignificant level of realizations for funds of this
type. However, to the extent such funds have had realizations, they
are included in the Realized/Partially Realized performance
information presented for Total Corporate Private Equity and Total
Real Assets. (6) Fully Invested and Fully Committed funds are past
the expiration date of the investment/commitment period as defined
in the respective limited partnership agreement. In instances where
a successor fund has had its first capital call, the predecessor
fund is categorized as fully invested. (7) Gross Internal Rate of
Return ("Gross IRR") represents the annualized IRR for the period
indicated on Limited Partner invested capital based on
contributions, distributions and unrealized value before management
fees, expenses and carried interest. (8) Net Internal Rate of
Return ("Net IRR") represents the annualized IRR for the period
indicated on Limited Partner invested capital based on
contributions, distributions and unrealized value after management
fees, expenses and carried interest. (9) Aggregate includes the
following funds: CP I, CMG, CVP I, CVP II, CEVP, CETP I, CAVP I,
CAVP II, CAGP III and Mexico. (10) Includes co-investments, prefund
investments and certain other stand-alone investments arranged by
us. (11) Aggregate includes the following funds: MENA, CSABF, CUSGF
III, CETP II, CBPF, and CEOF I. (12) For purposes of aggregation,
funds that report in foreign currency have been converted to U.S.
dollars at the reporting period spot rate. (13) Aggregate includes
the following funds: CRP I, CRP II, CAREP I, ENERGY I and Renew I
(14) Gross IRR and Net IRR for CRP VI are not meaningful as the
investment period commenced in September 2010 (15) Aggregate
includes the following funds: CAREP II and CRCP I. (16) Represents
the original cost of investments net of investment level recallable
proceeds which is adjusted to reflect recyclability of invested
capital for the purpose of calculating the fund MOIC. (17) Includes
private equity and mezzanine primary fund investments, secondary
fund investments and co-investments originated by the AlpInvest
team. (18) To exclude the impact of FX, all foreign currency cash
flows have been converted to Euro at the reporting period spot
rate. (19) Aggregate includes Main Fund I - Co-Investments, Main
Fund I - Mezzanine Investments, AlpInvest CleanTech Funds and funds
which are not included as part of a main fund. (20) Represents the
U.S. dollar equivalent balance translated at the spot rate as of
period end.
The Carlyle Group L.P.Pro Forma
Consolidated Statement of Operations (Unaudited)
Pro Forma(1) for
theThree Months Ended
June 30,2012
(Dollars in millions, except unit and per
unit data)
Revenues Fund management fees $ 239.9 Performance
fees Realized 116.7 Unrealized (337.1 ) Total performance
fees (220.4 ) Investment income Realized 2.4 Unrealized 4.6
Total investment income 7.0 Interest and other income 2.7
Interest and other income of Consolidated Funds 219.2
Total revenues 248.4
Expenses Compensation and
benefits Base compensation 164.5 Equity-based compensation 52.8
Performance fee related Realized 34.2 Unrealized (111.3 )
Total compensation and benefits 140.2 General, administrative and
other expenses 84.0 Interest 4.6 Interest and other expenses of
Consolidated Funds 179.5 Other non-operating expense 0.6
Total expenses 408.9
Other income Net
investment income (losses) of Consolidated Funds 386.6
Income before provision for income taxes 226.1
Provision for income taxes 9.9 Net income 216.2 Net
income attributable to non-controlling interests in consolidated
entities 352.5 Net loss attributable to non-controlling interests
in Carlyle Holdings (122.0 ) Net loss attributable to The
Carlyle Group L.P. $ (14.3 ) Net loss per common
unit, basic(2) $ (0.39 ) Net loss per common unit, diluted(2) $
(0.39 )
(1) The pro forma consolidated statement
of operations data for the three months ended June 30, 2012
presents our consolidated results of operations giving pro forma
effect to the Reorganization and Offering Transactions described in
our final Prospectus dated May 2, 2012, as if such transactions had
occurred on January 1, 2012. The pro forma adjustments applied to
the statement of operations primarily relate to the following: (a)
a change in the allocation of performance fees to our investment
professionals from approximately 55% prior to the IPO to
approximately 45% after the IPO; (b) the recognition of partner
compensation as an expense in the pro-forma results, which was
excluded from our actual results for periods prior to the IPO, when
it was shown as distributions from equity; (c) pro forma
stock-based compensation charges for awards issued in the IPO; (d)
the reclassification of performance fees allocable to retired
Carlyle partners to non-controlling interests; and (e) the
reduction of interest expense associated with the pro forma
repayment of debt with the IPO proceeds. The pro forma adjustments
are based on available information and upon assumptions our
management believes are reasonable in order to reflect, on a pro
forma basis, the impact of these transactions on the historical
consolidated financial information of The Carlyle Group L.P. The
unaudited pro forma financial information is included for
informational purposes only and does not purport to reflect the
results of operations of The Carlyle Group L.P. that would have
occurred had the transactions described above occurred on the dates
indicated or had we operated as a public company during the periods
presented or for any future period or date.
(2) Common units used in these calculations are as follows: Basic
Diluted Weighted-average common units of The Carlyle Group L.P.
outstanding 36,232,453
36,232,453
Dilutive effect of unvested deferred restricted common units - -
Contingently issuable Carlyle Holdings partnership units -
- Total common units 36,232,453
36,232,453
The weighted-average common units
outstanding was calculated assuming the Reorganization and Offering
Transactions described in our final Prospectus dated May 2, 2012
had occurred on January 1, 2012. The dilutive effect of unvested
deferred restricted common units and contingently issuable Carlyle
Holdings partnership units have been excluded during this period as
their effect would be anti-dilutive.
Reconciliation for Economic Net Income and
Distributable Earnings (Unaudited)
Pro Forma(1) for
theThree MonthsEnded
Three Months Ended June 30,2012 June
30,2012 June 30,2011 (Dollars in
Millions) Income before provision for income
taxes $ 226.1 $ 186.1 $ 317.3 Adjustments: Partner compensation
- 5.6 (168.8 ) Equity-based compensation issued in conjunction with
the IPO 52.1 93.6 - Acquisition related charges and amortization of
intangibles 21.6 21.5 19.9 Other non-operating expenses 0.6 0.7 5.2
Net income attributable to non-controlling
interests in consolidated entities
(352.5 ) (357.9 ) 61.1
Provision for income taxes attributable to
non-controlling interests in consolidated entities
(5.7 ) (5.7 ) - Severance and lease terminations 1.7 1.7 2.3 Other
adjustments (2.8 ) (2.8 ) (0.2 )
Economic
Net Income $ (58.9 ) $ (57.2 ) $ 236.8 Net performance
fees (109.9 ) (106.7 ) 190.7 Investment income 14.0
14.0 15.4
Fee Related Earnings $
37.0 $ 35.5 $ 30.7 Realized performance fees,
net of related compensation 75.7 75.8 53.0 Investment income -
realized 4.0 4.0 5.6
Distributable Earnings $ 116.7 $ 115.3 $ 89.3
(1) The selected pro forma non-GAAP
financial measures for the three months ended June 30, 2012
presents these measures giving pro forma effect to
theReorganization and Offering Transactions described in our final
Prospectus dated May 2, 2012, as if such transactions had occurred
on January 1, 2012.
Reconciliation for Economic Net income
and Distributable Earnings, cont(Unaudited)
Pro Forma(1) for the
ThreeMonths Ended
June 30,2012 (Dollars in millions, except
unit and per unit amounts) Pro Forma Economic Net
Income $ (58.9 ) Less (Add): Provision (Benefit) for Income Taxes
(1.2 ) Pro Forma Economic Net Income, After Taxes $ (57.7 )
Pro Forma Economic Net Income, After Taxes per Adjusted
Unit(2) $ (0.19 ) Pro Forma Distributable Earnings $
116.7 Less: Estimated foreign, state, and local taxes 14.8
Pro Forma Distributable Earnings, After Taxes $ 101.9
Pro Forma Distributable Earnings to The Carlyle Group L.P. $
14.5 Less: Estimated current corporate income taxes 0.8
Pro Forma Distributable Earnings to The
Carlyle Group L.P. net of corporate income taxes
$ 13.7
Pro Forma Distributable Earnings, net, per
The Carlyle Group L.P. common unit outstanding(3)
$ 0.32
(1) The selected pro forma non-GAAP
financial measures for the three months ended June 30, 2012
presents these measures giving pro forma effect to the
Reorganization and Offering Transactions described in our final
Prospectus dated May 2, 2012, as if such transactions had occurred
on January 1, 2012.
(2) Adjusted Units were determined as follows: The
Carlyle Group L.P. common units outstanding 43,221,452 Carlyle
Holdings partnership units held by the existing owners
261,278,548 Total Adjusted Units 304,500,000
The dilutive effect of unvested deferred
restricted common units and contingently issuable Carlyle Holdings
partnership units have been excluded during this period as their
effect would be anti-dilutive.
(3) As of June 30, 2012, there are 43,221,452 outstanding
common units of The Carlyle Group L.P.
The Carlyle Group L.P.GAAP for
12-Month Rolling Summary (Unaudited)
Twelve Months Ended June 30,2012
June 30,2011 (Dollars in millions)
Revenues Fund management fees $ 942.6 $ 830.8 Performance
fees Realized 1,209.8 680.3 Unrealized (888.2 )
1,908.2 Total performance fees 321.6 2,588.5 Investment
income Realized 23.9 57.8 Unrealized 21.0 54.8
Total investment income
44.9 112.6 Interest and other income 8.1 25.6 Interest and other
income of Consolidated Funds 814.3 552.0
Total revenues 2,131.5 4,109.5
Expenses
Compensation and benefits Base compensation 455.2 295.4
Equity-based compensation 94.2 - Performance fee related Realized
207.3 131.4 Unrealized (223.0 ) 166.3 Total
compensation and benefits 533.7 593.1 General, administrative and
other expenses 354.4 244.4 Interest 44.4 41.6 Interest and other
expenses of Consolidated Funds 626.2 308.8 Other non-operating
expenses 8.0 20.6
Loss from early extinguishment of debt,
net of related expenses
- 2.5 Equity issued for affiliate debt financing -
214.0 Total expenses 1,566.7 1,425.0
Other
income (loss) Net investment income (losses) of Consolidated
Funds 1,212.4 (837.0 ) Gain on business acquisition 7.9
- Income before provision for income
taxes 1,785.1 1,847.5 Provision for income taxes 38.0
25.7 Net income 1,747.1 1,821.8
Net income (loss) attributable to
non-controlling interests in consolidated entities
1,211.3 (667.4 ) Net income attributable to
Carlyle Holdings 535.8 $ 2,489.2
Net income attributable to non-controlling
interests in Carlyle Holdings
546.1 Net loss attributable to The Carlyle Group L.P.
$ (10.3 )
Reconciliation of Non-GAAP to GAAP for
12-Month Rolling Summary (Unaudited)
Twelve Months Ended June 30,2012
June 30,2011 (Dollars in Millions)
Income before provision for income taxes $ 1,785.1 $ 1,847.5
Adjustments: Partner compensation (367.5) (1,213.8) Equity-based
compensation issued in conjunction with IPO 93.6 - Acquisition
related charges and amortization of intangibles 102.6 45.5 Gain on
business acquisition (7.9) - Other non-operating expenses 8.0 20.6
Losses associated with early extinguishment of debt - 2.5 Equity
issued for affiliate debt financing - 214.0
Net income attributable to non-controlling
interests in consolidated entities
(1,211.3) 667.4
Provision for income taxes attributable to
non-controlling interests in consolidated entities
(5.7) - Severance and lease terminations 4.3 9.9 Other adjustments
(3.4) 0.2
Economic Net Income $ 397.8 $ 1,593.8 Net
performance fees 227.6 1,316.4 Investment income 50.3 111.7
Fee
Related Earnings $ 119.9 $ 165.7 Realized performance fees, net
of related compensation 629.1 355.1 Investment income - realized
36.3 46.2
Distributable Earnings $ 785.3 $ 567.0
The Carlyle Group L.P.GAAP
Balance Sheet (Unaudited)
As of June 30, 2012
ConsolidatedOperatingEntities
ConsolidatedFunds
Eliminations Consolidated (Dollars
in millions) Assets Cash and cash equivalents
$
449.5
$
-
$ -
$
449.5
Cash and cash equivalents held at Consolidated Funds - 1,553.7 -
1,553.7 Restricted cash 29.8 - - 29.8 Restricted cash and
securities of Consolidated Funds - 80.7 - 80.7 Accrued performance
fees 2,130.9 - (11.1 ) 2,119.8 Investments 449.0 - (42.4 ) 406.6
Investments of Consolidated Funds - 23,585.3 - 23,585.3 Due from
affiliates and other receivables, net 261.2 - (9.9 ) 251.3
Due from affiliates and other receivables
of Consolidated Funds, net
- 335.9 - 335.9 Fixed assets, net 61.1 - - 61.1 Deposits and other
56.7 3.6 - 60.3 Intangible assets, net 594.9 - - 594.9 Deferred tax
assets 51.6 - -
51.6 Total assets $ 4,084.7
$ 25,559.2 $ (63.4 ) $ 29,580.5
Liabilities and partners' capital Loans payable $
500.0 $ - $ - $ 500.0 Loans payable of Consolidated Funds -
12,605.5 (40.5 ) 12,565.0 Accounts payable, accrued expenses and
other liabilities 197.2 - - 197.2 Accrued compensation and benefits
1,204.7 - - 1,204.7 Due to affiliates 225.8 40.1 - 265.9 Deferred
revenue 57.5 1.8 - 59.3 Deferred tax liabilities 69.0 - - 69.0
Other liabilities of Consolidated Funds - 1,327.9 (11.2 ) 1,316.7
Accrued giveback obligations 133.4 -
- 133.4 Total
liabilities 2,387.6 13,975.3 (51.7 ) 16,311.2 Redeemable
non-controlling interests in consolidated entities 4.6 2,529.6 -
2,534.2 Total partners' capital 1,692.5
9,054.3 (11.7 ) 10,735.1
Total liabilities and partners' capital $ 4,084.7
$ 25,559.2 $ (63.4 ) $ 29,580.5
The Carlyle Group L.P.Non-GAAP Financial Information and Other Key
Terms
Non-GAAP Financial Information
Carlyle discloses in this press release
the following financial measures that are calculated and presented
on the basis of methodologies other than in accordance with
generally accepted accounting principles in the United States of
America:
- Economic net income or “ENI,”
represents segment net income which excludes the impact of income
taxes, acquisition-related items including amortization of acquired
intangibles and contingent consideration taking the form of
earn-outs, charges associated with equity-based compensation issued
in Carlyle’s initial public offering or future acquisitions,
corporate actions and infrequently occurring or unusual events.
Carlyle believes the exclusion of these items provides investors
with a meaningful indication of its core operating performance. For
segment reporting purposes, revenues and expenses, and accordingly
segment net income, are presented on a basis that deconsolidates
certain Carlyle funds, related co-investment entities and CLOs
(referred to collectively as the “Consolidated Funds”) that Carlyle
consolidates in its combined and consolidated financial statements
pursuant to U.S. GAAP. For periods prior to its Initial Public
Offering, ENI also reflects pro forma compensation expense for
compensation to senior Carlyle professionals, which Carlyle has
accounted for as distributions from equity rather than as employee
compensation for periods prior to its Initial Public Offering.
Total Segment ENI equals the aggregate of ENI for all segments. ENI
is evaluated regularly by management in making resource deployment
decisions and in assessing performance of Carlyle’s four segments
and for compensation. Carlyle believes that reporting ENI is
helpful to understanding its business and that investors should
review the same supplemental financial measure that management uses
to analyze its segment performance.
- Fee Related Earnings is a component of
ENI and is used to measure Carlyle’s operating profitability
exclusive of performance fees, investment income from investments
in Carlyle’s funds and performance fee-related compensation.
Accordingly, Fee Related Earnings reflect the ability of the
business to cover direct base compensation and operating expenses
from fee revenues other than performance fees. For periods prior to
its Initial Public Offering, Fee Related Earnings also reflects pro
forma compensation expense for compensation to senior Carlyle
professionals, which Carlyle has accounted for as distributions
from equity rather than as employee compensation for periods prior
to its Initial Public Offering. Fee Related Earnings are reported
as part of Carlyle’s segment results. Carlyle uses Fee Related
Earnings from operations to measure its profitability from fund
management fees.
- Distributable Earnings is a component
of ENI representing total ENI less net performance fees and
investment income plus realized net performance fees and realized
investment income. Distributable Earnings is intended to show the
amount of net realized earnings without the effects of
consolidation of the Consolidated Funds. Distributable Earnings is
derived from Carlyle’s segment reported results and is an
additional measure to assess performance and amounts potentially
available for distribution from Carlyle Holdings to its equity
holders.
Income before provision for income taxes is the GAAP financial
measure most comparable to ENI, Fee Related Earnings and
Distributable Earnings. Reconciliations of these non-GAAP financial
measures to income before provision for income taxes are included
within this press release. These non-GAAP financial measures should
be considered in addition to and not as a substitute for, or
superior to, financial measures presented in accordance with U.S.
GAAP.
Other Key Terms
“Assets under management” or “AUM” refers to the
assets managed by Carlyle. AUM equals the sum of the following:
(a) the fair value of the capital invested in
Carlyle carry funds, co-investment vehicles and fund of funds
vehicles plus the capital that Carlyle is entitled to call from
investors in those funds and vehicles (including Carlyle
commitments to those funds and vehicles and those of senior Carlyle
professionals and employees) pursuant to the terms of their capital
commitments to those funds and vehicles;
(b) the amount of aggregate collateral balance
at par of Carlyle’s collateralized loan obligations (“CLOs“) and
the reference portfolio notional amount of Carlyle’s synthetic
collateralized loan obligations (“synthetic CLOs“); and
(c) the net asset value (pre-redemptions and
subscriptions) of Carlyle’s long/short credit, emerging markets,
multi-product macroeconomic and other hedge funds and certain
structured credit funds.
AUM includes certain energy and renewable resources funds that
Carlyle jointly advises with Riverstone Investment Group L.L.C.
(“Riverstone”). In addition, Carlyle’s calculation of AUM (but not
fee-earning AUM) includes uncalled commitments to, and the fair
value of invested capital in, investment funds from Carlyle and its
personnel, regardless of whether such commitments or invested
capital are subject to fees.
“Available capital,” commonly known as “dry powder,” for
Carlyle’s carry funds refers to the amount of capital commitments
available to be called for investments. Amounts previously called
may be added back to available capital following certain
distributions.
“Carlyle funds,” “our funds” and “our
investment funds” refer to the investment funds and vehicles
advised by Carlyle.
“Carry funds” refers to those investment funds that
Carlyle advises, including the buyout funds, growth capital funds,
real asset funds and distressed debt and mezzanine funds (but
excluding Carlyle’s structured credit funds, hedge funds and fund
of funds vehicles), where Carlyle receives a special residual
allocation of income, which is referred to as a “carried interest,”
in the event that specified investment returns are achieved by the
fund.
“Expired available capital” occurs when a fund has passed
the investment and follow-on periods and can no longer invest
capital into new or existing deals. Any remaining available
capital, typically a result of either recycled distributions or
specific reserves established for the follow-on period that are not
drawn, can only be called for fees and expenses and is therefore
removed from the total AUM calculation.
“Fee-earning assets under management” or “Fee-earning
AUM” refers to the assets managed by Carlyle from which Carlyle
derives recurring fund management fees. Fee-earning AUM generally
equals the sum of:
(a) for carry funds and certain co-investment
vehicles where the investment period has not expired, the amount of
limited partner capital commitments and for fund of funds vehicles,
the amount of external investor capital commitments during the
commitment period;
(b) for substantially all carry funds and
certain co-investment vehicles where the investment period has
expired, the remaining amount of limited partner invested
capital;
(c) the gross amount of aggregate collateral
balance at par, adjusted for defaulted or discounted collateral, of
Carlyle’s CLOs and the reference portfolio notional amount of
Carlyle’s synthetic CLOs;
(d) the external investor portion of the net
asset value (pre-redemptions and subscriptions) of Carlyle’s
long/short credit, emerging markets, multi-product macroeconomic
and other hedge funds and certain structured credit funds; and
(e) for fund of funds vehicles and certain
carry funds where the investment period has expired, the lower of
cost or fair value of invested capital.
Fee-earning AUM includes certain energy and renewable resources
funds that Carlyle jointly advises with Riverstone.
For Carlyle’s carry funds, co-investment vehicles and fund of
funds vehicles, total AUM includes the fair value of the capital
invested, whereas fee-earning AUM includes the amount of capital
commitments or the remaining amount of invested capital at cost,
depending on whether the investment period for the fund has
expired. As such, fee-earning AUM may be greater than total AUM
when the aggregate fair value of the remaining investments is less
than the cost of those investments.
“Fund of funds vehicles” refer to those funds, accounts
and vehicles advised by AlpInvest Partners B.V., formerly known as
AlpInvest Partners N.V.
“Net performance fees” refers to the performance fees
from Carlyle funds and fund of funds vehicles net of the portion
allocated to Carlyle investment professionals which is reflected as
performance fee related compensation expense.
“Net realized performance fees” refers to the realized
performance fees from Carlyle funds and fund of funds vehicles net
of the portion allocated to Carlyle investment professionals which
is reflected as realized performance fee related compensation
expense.
“Performance fees” consist principally of carried
interest from carry funds and fund of funds vehicles and incentive
fees or allocations from certain of our Global Market Strategies
funds. Carlyle is generally entitled to a 20% allocation (or 1.8%
to 10% in the case of most of the fund of funds vehicles) of the
net realized income or gain as a carried interest after returning
the invested capital, the allocation of preferred returns of
generally 8% to 9% and the return of certain fund costs (subject to
catch-up provisions as set forth in the fund limited partnership
agreement). Carried interest revenue, which is a component of
performance fees in Carlyle’s combined and consolidated financial
statements, is recognized by Carlyle upon appreciation of the
valuation of the applicable funds’ investments above certain return
hurdles as set forth in each respective partnership agreement and
is based on the amount that would be due to Carlyle pursuant to the
fund partnership agreement at each period end as if the funds were
liquidated at such date.
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50370186&lang=en
Carlyle (NASDAQ:CG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Carlyle (NASDAQ:CG)
Historical Stock Chart
From Jul 2023 to Jul 2024
