Global alternative asset manager The Carlyle Group L.P. (NASDAQ:
CG) today reported its unaudited results for the first quarter of
2013, which ended on March 31, 2013.
David M. Rubenstein, Co-Chief Executive Officer of Carlyle,
said, “Our first quarter results continue to demonstrate strength
in the Carlyle Engine. Fundraising was particularly strong, with $5
billion in new capital raised, and we generated $4 billion in
realized proceeds. We continue to invest in Carlyle’s growing
operational capabilities, notably the build-out of our
international energy team, the launch of our new business
development corporation, and an expanded retail strategy.”
William E. Conway, Jr., Co-Chief Executive Officer of Carlyle,
said, “Our carry funds had a strong showing, appreciating 7% during
the quarter, and our Global Market Strategies business continued to
grow and perform well across all metrics. Distributable Earnings
were solid and ENI more than doubled quarter over quarter. Our $142
million in realized net performance fees shows how our product
diversity and geographic scope deliver results. We are focused on
the long-term growth and profitability of the firm, which we
believe will benefit our fund and public investors alike.”
U.S. GAAP results for Q1 2013 included income before provision
for income taxes of $452 million and net income attributable to the
common unitholders through The Carlyle Group L.P. of $34 million,
or net income per common unit of $0.66 on a diluted basis. Total
balance sheet assets were $32.7 billion as of March 31, 2013.
First Quarter Distribution
The Board of Directors has declared a quarterly distribution of
$0.16 per common unit to holders of record at the close of business
on May 20, 2013, payable on May 31, 2013.
The Carlyle Group Distribution Policy
As further discussed in its Annual Report on Form 10-K for the
year ended December 31, 2012, Carlyle currently anticipates that it
will cause Carlyle Holdings to make quarterly distributions to its
partners, including The Carlyle Group L.P.’s wholly owned
subsidiaries, that will enable The Carlyle Group L.P. to pay a
quarterly distribution of $0.16 per common unit for each of the
first three quarters of each year, and, for the fourth quarter of
each year, to pay a distribution of at least $0.16 per common unit,
that, taken together with the prior quarterly distributions in
respect of that year, represents its share, net of taxes and
amounts payable under the tax receivable agreement, of Carlyle’s
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
Distributable Earnings for that year due to these funding
requirements. The declaration and payment of any distributions is
at the sole discretion of the General Partner, which may change the
distribution policy at any time.
The Carlyle Engine
Carlyle evaluates the underlying performance of its business on
four key metrics known as the Carlyle Engine: funds raised, equity
invested, carry fund returns and realized proceeds for fund
investors. The table below highlights the results of these metrics
for Q1 2013, year-to-date (YTD) and for the last twelve months
(LTM)1.
Funds
Raised Equity Invested Q1 $4.9 billion
Q1
$2.5 billion YTD: $4.9 bn LTM: $16.9 bn YTD: $2.5 bn LTM: $8.8 bn
Realized Proceeds
Carry Fund Returns Q1 $4.1 billion
Q1 7% YTD:
$4.1 bn LTM: $19.1 bn YTD: 7% LTM: 11% Note: Equity Invested
and Realized Proceeds reflect carry funds only.
During Q1 2013, Carlyle generated net realized proceeds of $4.1
billion from 128 different investments across 35 carry funds.
Carlyle deployed $2.5 billion of equity in Q1 2013 in 84 new or
follow-on investments across 19 carry funds. Carlyle realized
proceeds of $19.1 billion and invested $8.8 billion on an LTM
basis.
Segment Realized Proceeds
Equity Invested # of Investments # of Funds $ in millions #
of Investments # of Funds $ in millions
Q1 Corporate
Private Equity 45 19 $2,990 14 7 $1,911 Global Market
Strategies 36 5 $391 5 3 $71 Real Assets 52 11 $741 66 9
$515
Carlyle 128 35 $4,121 84
19 $2,497
Note: The columns may not sum as some
investments cross segment lines, but are only counted one time for
Carlyle results.
1 LTM, or last twelve months, refers to the period Q2 2012
through Q1 2013. Prior LTM, or the prior rolling twelve month
period, refers to the period Q2 2011 through Q1 2012.
Carlyle All Segment Results
- Distributable Earnings (DE): $168
million for Q1 2013 and $678 million on an LTM basis
- Pre-tax Distributable Earnings
were $168 million for Q1 2013, or $0.47 per common unit on a
post-tax basis. Distributable Earnings were $678 million on an LTM
basis, which is 11% lower than the prior rolling twelve month
period. A realized investment loss on a balance sheet investment in
our Real Assets segment had a ($15) million impact on Distributable
Earnings, equivalent to ($0.03) per common unit on a post-tax
basis.
- Fee Related Earnings were $36
million for Q1 2013 and increased by $2 million from $34 million in
Q1 2012 due to an increase in Fee-earning AUM and our acquisition
of an equity interest in NGP Energy Capital Management, offset by
higher fundraising costs and fee and basis step downs of several
funds exiting their investment periods. Fee Related Earnings were
$172 million on an LTM basis, up 49% compared with the prior
rolling twelve month period.
- Realized Net Performance Fees
were $142 million for Q1 2013 compared to $143 million in Q1 2012.
For Q1 2013, Realized Net Performance Fees were positively impacted
by exits in China Pacific Insurance Group, Hertz Global Holdings,
Nielsen Holdings, Cobalt International Energy, Qualicaps and
SS&C Technologies Holding, among others. Realized Net
Performance Fees were $501 million on an LTM basis, which was 17%
lower than the prior rolling twelve month period.
- Realized Investment
Income/(Loss) was ($9) million in Q1 2013, driven by the ($15)
million realized investment loss on a balance sheet investment in
our Real Assets segment.
- Economic Net Income (ENI): $394
million for Q1 2013 and $737 million on an LTM basis
- Economic Net Income was $394
million for Q1 2013 and $737 million on an LTM basis. On a post-tax
basis, Carlyle generated $1.02 in ENI per Adjusted Unit for Q1
2013.
- Q1 2013 ENI was impacted by
appreciation of 7% in Carlyle’s carry fund portfolio, which
excludes structured credit, hedge funds, NGP management fee funds
and fund of funds vehicles. Corporate Private Equity and Global
Market Strategies carry funds were both up 9% while Real Assets
carry funds were up 3% compared to the end of Q4 2012. Carry fund
appreciation was 11% on an LTM basis, compared to 15% in the prior
rolling twelve month period.
- Carlyle’s public carry fund portfolio
increased 13% during Q1 2013 while the private carry fund portfolio
increased 5% during the same period.
The Carlyle Group L.P. - All Segments (Actual Results)
Period LTM % Change $ in millions, except
where noted
Q1 2012 Q2 2012 Q3
2012 Q4 2012 Q1 2013 Q2
12 - Q1 13 QoQ YoY Revenues
894 61 584 505 852 2,003 69% (5%) Expenses 501 119 365 323
458 1,265 42% (9%)
Economic Net Income 392
(57) 219 182
394 737 116% 0% Fee-Related
Earnings 34 36 46 55
36 172 (34%) 6% Net
Performance Fees 335 (107) 165
132 355 545 169%
6% Realized Net Performance Fees 143 76
156 127 142 501
11% (1%) Distributable Earnings 179 115
206 188 168 678
(10%) (6%) Total Assets Under Management ($ in
billions) 159.2 156.2 157.4
170.2 176.3
4% 11% Fee-Earning Assets Under Management ($ in billions)
117.0 112.0 115.1 123.1
122.9 (0%)
5%
Note: Totals may not sum due to
rounding.
Assets Under Management and Remaining
Fair Value of Capital
- Total Assets Under Management:
$176.3 billion as of Q1 2013 (+11% LTM)
- Major drivers of change versus Q4 2012:
Market appreciation (+$6.2 billion), new capital commitments (+$6.0
billion), offset by net distributions (-$4.8 billion) and foreign
exchange impact (-$1.5 billion).
- Total Dry Powder of $46.2 billion as
of Q1 2013, comprised of $17.1 billion in Corporate Private
Equity, $1.8 billion in Global Market Strategies, $9.5 billion in
Real Assets and $17.9 billion in Solutions.
- Fee-earning Assets Under Management:
$122.9 billion as of Q1 2013 (+5% LTM)
- Major drivers of change versus Q4 2012:
Asset inflows (+$2.0 billion), market appreciation (+$745 million),
change in CLO collateral balances (+$296 million), offset by net
distributions and outflows (-$1.8 billion) and foreign exchange
impact (-$1.4 billion).
- As of March 31, 2013, Carlyle had
raised limited partner commitments of $6.1 billion in the aggregate
to several of its latest vintage funds in U.S. Buyout, Asia Buyout
and Financial Services funds, which are not yet included in
Fee-earning Assets Under Management as the predecessor funds have
not yet exited their investment periods.
- Remaining Fair Value of Capital
(carry funds only) as of Q1 2013: $62.2 billion
- Current Multiple of Invested Capital
(MOIC) of remaining fair value of capital: 1.3x.
- Remaining fair value of capital in the
ground in investments made in 2008 or earlier: 44% of total fair
value.
- AUM in-carry ratio as of the end of Q1
2013: 66%.
Non-GAAP Operating Results
Carlyle's non-GAAP results for Q1 2013 are
provided in the table below:
Carlyle Group Summary $ in millions, except unit and
per unit amounts
Economic Net income Q1 2013
Economic Net Income (pre-tax) $ 393.9 Less: Provision for
income taxes (1) 74.3 Economic Net Income, After Taxes $ 319.6
Fully diluted units (in millions) 313.9
Economic
Net Income, After Taxes per Adjusted Unit $ 1.02
Distributable Earnings Distributable Earnings
$ 168.4 Less: Estimated foreign, state, and local taxes (2) 11.0
Distributable Earnings, After Taxes $ 157.4 Allocating
Distributable Earnings for only public unitholders of The Carlyle
Group L.P. Distributable Earnings to The Carlyle Group L.P.
$ 23.5 Less: Estimated current corporate income taxes (3) 1.9
Distributable Earnings to The Carlyle Group L.P. net of corporate
income taxes $ 21.6 Units in public float (in millions)(4)
46.1 Distributable Earnings, net, per The Carlyle Group L.P.
common unit outstanding
$ 0.47 (1) Represents
the implied provision for income taxes that was calculated using a
similar methodology applied in calculating the tax provision for
The Carlyle Group L.P., without any reduction for non-controlling
interests. (2) Represents the implied provision for current income
taxes that was calculated using a similar methodology applied in
calculating the current tax provision for The Carlyle Group L.P.,
without any reduction for non-controlling interests. (3) Represents
current corporate income taxes payable upon distributable earnings
allocated to Carlyle Holdings I GP Inc. and estimated current Tax
Receivable Agreement payments owed. (4) Includes 2.9 million common
units issued in May 2013 related to vested DRUs. These units are
included in this calculation because these newly-issued units will
participate in the unitholder distribution that will be paid on May
31, 2013.
Corporate Private Equity (CPE)
Funds Raised Equity Invested Realized
Proceeds Carry Fund Returns Q1 $1.4 bn
Q1
$1.9 bn
Q1 $3.0 bn
Q1 9% YTD: $1.4 bn LTM:
$8.9 bn YTD: $1.9 bn LTM: $5.4 bn YTD: $3.0 bn LTM:
$13.0 bn YTD: 9% LTM: 16%
- Distributable Earnings (DE): $112
million for Q1 2013 and $392 million on an LTM basis. The
following components impacted Distributable Earnings in Q1 2013:
- Fee Related Earnings were $0 in
Q1 2013 ($47 million on an LTM basis), compared to $14 million in
Q1 2012, with the decline driven by higher fundraising costs and
fee and basis step downs in two CPE funds (Carlyle Europe Partners
III and Carlyle Japan Partners II) that exited their original
investment periods during 2012.
- Realized Net Performance Fees
were $111 million for Q1 2013 ($340 million on an LTM basis),
compared to $105 million for Q1 2012.
- Economic Net Income (ENI): $239
million for Q1 2013
- Economic Net Income of $239
million for Q1 2013 ($474 million on an LTM basis) compared to $244
million for Q1 2012.
- CPE carry fund valuations increased 9%
in Q1 2013 (16% on an LTM basis), compared with 8% in Q1 2012.
- Net Performance Fees of $235
million for Q1 2013 ($414 million on an LTM basis), compared to
$215 million for Q1 2012.
- Total Assets Under Management
(AUM): $55.1 billion as of Q1 2013
- Total AUM increased 3% to $55.1
billion from $53.3 billion at Q1 2012.
- Funds Raised of $1.4 billion
were driven by additional closings of our latest vintage U.S. and
Asia buyout funds, closings in our Peru and Sub-Saharan Africa
regional buyout funds, as well as various co-investments.
- Fee-earning Assets Under
Management were $33.2 billion as of Q1 2013, down 12% from
$37.8 billion as of Q1 2012, with the decline driven by $5.5
billion in distributions and basis step-downs, and partially offset
by $1.4 billion in new commitments and inflows.
Corporate Private Equity (Actual Results) Period
LTM % Change $ in millions, except where noted
Q1
2012 Q2 2012 Q3 2012 Q4
2012 Q1 2013 Q2 12 - Q1 13 QoQ
YoY Economic Net Income 244 (65)
177 122 239 474 95% (2%) Fee-Related
Earnings 14 10 19 18 (0) 47
(101%) (101%) Net Performance Fees 215 (80)
159 100 235 414 136% 9% Realized Net
Performance Fees 105 50 126 54 111
340 105% 5% Distributable Earnings 120 61
145 74 112 392 53% (6%)
Total Assets Under Management ($ in billions) 53.3 52.5
53.2 53.3 55.1 3%
3% Fee-Earning Assets Under Management ($ in billions) 37.8
37.1 36.9 33.8 33.2 (2%)
(12%)
Note: Totals may not sum due to
rounding.
Global Market Strategies
Funds Raised Equity Invested
(Carry Fund Only)
Realized Proceeds
(Carry Fund Only)
Carry Fund Returns Q1 $1.3 bn
Q1 $0.1 bn
Q1 $0.4 bn
Q1 9% YTD: $1.3 bn LTM: $5.2 bn YTD: $0.1
bn LTM: $0.5 bn YTD: $0.4 bn LTM: $1.1 bn YTD: 9% LTM: 20%
Note: Funds Raised excludes acquisitions,
but includes hedge funds and CLOs. Equity Invested and Realized
Proceeds are for carry funds only.
- Distributable Earnings (DE): $41
million for Q1 2013 and $178 million on an LTM basis. The
following components impacted Distributable Earnings in Q1 2013:
- Fee Related Earnings were $25
million in Q1 2013 ($98 million on an LTM basis), compared to $16
million in Q1 2012. The increase was driven by a 17% increase in
Fee-earning AUM, net growth in hedge fund assets and pricing of
five new CLOs over the past four quarters.
- Realized Net Performance Fees
were $14 million for Q1 2013 ($66 million on an LTM basis),
compared to $15 million for Q1 2012. Realized Net Performance Fees
in Q1 2013 were largely driven by various carry generating exits in
distressed debt carry funds.
- Economic Net Income (ENI): $104
million for Q1 2013
- Economic Net Income of $104
million for Q1 2013 ($231 million on an LTM basis) compared to $38
million for Q1 2012.
- GMS carry fund valuations increased 9%
in Q1 2013, compared with 12% in Q1 2012.
- Net Performance Fees of $73
million for Q1 2013 ($108 million on an LTM basis), compared to $18
million for Q1 2012.
- Total Assets Under Management
(AUM): $33.1 billion as of Q1 2013
- Total AUM of $33.1 billion as of
Q1 2013 increased 17% versus Q1 2012, while Fee-earning AUM of
$31.4 billion also increased 17% versus Q1 2012.
- Total hedge fund AUM was $12.7 billion
as of Q1 2013.
- Carlyle priced two new CLOs during Q1
2013 totaling $1.2 billion in assets.
- GMS carry fund AUM ended Q1 2013 at
$3.6 billion.
- Total Structured Credit AUM ended Q1
2013 at $16.8 billion.
Global
Markets Strategies (Actual Results) Period LTM
% Change $ in millions, except where noted
Q1
2012 Q2 2012 Q3 2012 Q4
2012 Q1 2013 Q2 12 - Q1 13 QoQ
YoY Economic Net Income 38 32 36
59 104 231 76% 173% Fee-Related
Earnings 16 20 22 31 25 98 (21%)
58% Net Performance Fees 18 4 8 23
73 108 213% 312% Realized Net Performance Fees
15 1 1 50 14 66 (71%)
(1%) Distributable Earnings 31 23 28 86
41 178 (53%) 30% Total Assets Under Management
($ in billions) 28.3 29.0 30.1 32.5
33.1 2% 17% Fee-Earning Assets Under
Management ($ in billions) 26.8 27.7 28.5 31.0
31.4 1% 17%
Funds Raised, excluding hedge funds ($
in billions) 0.7 0.8 0.8 1.2 1.3
4.1 7% 83% Hedge Fund Net Inflows ($ in billions) 0.7
0.7 0.4 0.0 0.0 1.1 N.A.
(100%)
Note: Totals may not sum due to rounding.
Funds Raised excludes the impact of acquisitions.
Real Assets
(RA)
Funds Raised Equity Invested
(Carry Fund Only)
Realized Proceeds
(Carry Fund Only)
Carry Fund Returns Q1 $0.5 bn
Q1 $0.5 bn
Q1 $0.7 bn
Q1 3% YTD: $0.5 bn LTM: $0.7 bn YTD: $0.5
bn LTM: $2.9 bn YTD: $0.7 bn LTM: $5.0 bn YTD: 3% LTM: 1%
Note: Equity Invested and Realized
Proceeds are for carry funds only. Funds Raised excludes
acquisitions.
- Distributable Earnings (DE): $11
million for Q1 2013 and $92 million on an LTM basis. The
following components impacted Distributable Earnings in Q1 2013:
- Fee Related Earnings were $9
million in Q1 2013 ($13 million on an LTM basis), compared to ($1)
million in Q1 2012. The increase was largely driven by the
acquisition of an equity interest in NGP Energy Capital Management,
which closed on December 20, 2012.
- Realized Net Performance Fees
were $16 million for Q1 2013 ($93 million on an LTM basis),
compared to $22 million for Q1 2012.
- Realized Investment
Income/(Loss) of ($13) million was driven by the realization of
a ($15) million investment loss in a real estate investment that
was originally reserved in Q4 2012. This negatively impacted
Distributable Earnings per common unit by ($0.03).
- Economic Net Income (ENI): $42
million for Q1 2013
- Economic Net Income of $42
million for Q1 2013 ($8 million on an LTM basis) compared to $101
million for Q1 2012.
- RA carry fund valuations increased 3%
in Q1 2013, compared with 11% in Q1 2012.
- Net Performance Fees of $42
million for Q1 2013 ($12 million on an LTM basis), compared to $99
million for Q1 2012.
- Total Assets Under Management (AUM):
$40.3 billion as of Q1 2013
- Total AUM increased 25% versus
Q1 2012, driven largely by the acquisition of an equity interest in
NGP Energy Capital Management, partially offset by
distributions.
- Fee-earning AUM of $29.4 billion
was up 29% versus Q1 2012, with the increase driven largely by NGP
Energy Capital Management, partially offset by distributions and
step-downs in basis for funds at the end of their original
investment period.
Real
Assets (Actual Results) Period LTM %
Change $ in millions, except where noted
Q1 2012
Q2 2012 Q3 2012 Q4 2012
Q1 2013 Q2 12 - Q1 13 QoQ YoY
Economic Net Income 101 (29) 2 (7)
42 8 706% (59%) Fee-Related Earnings (1)
3 1 0 9 13 2733% 1163%
Net Performance Fees 99 (33) (4) 6 42
12 574% (58%) Realized Net Performance Fees 22
26 29 22 16 93 (28%) (29%)
Distributable Earnings 22 28 31 22 11
92 (49%) (47%) Total Assets Under Management
($ in billions) 32.2 30.0 29.5 40.2
40.3 0% 25% Fee-Earning Assets Under
Management ($ in billions) 22.8 19.5 19.6 29.3
29.4 0% 29%
Note: Totals may not sum due to
rounding.
Solutions
- Distributable Earnings (DE): $4
million for Q1 2013 and $16 million on an LTM basis
- Fee Related Earnings were $3
million for Q1 2013 ($14 million on an LTM basis).
- Realized Net Performance Fees
were $1 million for Q1 2013 and $2 million on an LTM basis.
- Economic Net Income (ENI): $9
million for Q1 2013 and $24 million on an LTM basis, in line with
$9 million in Q1 2012.
- Total Assets Under Management
(AUM): $47.8 billion as of Q1 2013
- Total AUM was up 5% compared to
Q1 2012.
- Fee-earning AUM of $28.9 billion
decreased 2% versus Q1 2012, with the decline driven primarily due
to changes in foreign exchange.
- AlpInvest raised $150 million in new
commitments for a new secondaries fund in Q1 2013.
- On February 24, 2013, Carlyle announced
that Jacques Chappuis will join the firm in May 2013 and become the
Head of the Solutions business segment.
Solutions (Actual Results) Period
LTM % Change $ in millions, except
where noted
Q1 2012 Q2 2012 Q3
2012 Q4 2012 Q1 2013 Q2 12 - Q1
13 QoQ YoY
Economic Net Income 9 4 4
8 9 24 17% (2%)
Fee-Related Earnings 5 3 3
5 3 14 (30%) (39%)
Net Performance Fees 4 1 1
3 6 11 97% 54%
Realized Net Performance Fees 0 0 0
1 1 2 (50%)
25% Distributable Earnings 6 3 3
6 4 16 (33%) (34%)
Total Assets Under Management ($ in billions) 45.4
44.6 44.6 44.1 47.8
8% 5% Fee-Earning Assets
Under Management ($ in billions) 29.5 27.6
30.2 28.9 28.9
(0%) (2%) Note: Totals may not sum due
to rounding.
Balance Sheet Highlights
The amounts presented below exclude the effect of U.S. GAAP
consolidation eliminations on investments and accrued performance
fees, as well as cash and debt associated with Carlyle’s
consolidated funds. All data is as of March 31, 2013.
- Cash and Cash Equivalents of $570
million.
- On-balance sheet investments
attributable to unitholders of $291 million, excluding the equity
investment by Carlyle in NGP Energy Capital Management.
- Net Accrued Performance Fees
attributable to unitholders of $1,437 million. These performance
fees are comprised of Gross Accrued Performance Fees of $2,622
million less $56 million in accrued giveback obligation and $1,129
million in accrued performance fee compensation and non-controlling
interest.
- Loans payable and senior notes totaling
$923 million. During Q1 2013, indirect subsidiaries of The Carlyle
Group L.P. issued $900 million in aggregate principal amount of
10-year and 30-year senior notes. Carlyle used the net proceeds to
repay the outstanding borrowings of $386 million under the
revolving credit facility of its senior credit facility and $475
million of its term loan ($25 million remains outstanding under the
term loan as of March 31, 2013). The senior notes were issued at a
discount of approximately $2 million, which will be recognized and
increase the liability over the term of the notes.
Conference Call
Carlyle will host a conference call on May 9, 2013 at 8:00 a.m.
EDT to discuss Q1 2013 results and industry trends. Immediately
following the prepared remarks, there will be a question and answer
session for analysts and institutional investors.
Analysts and institutional investors may listen to the call by
dialing +1-800-850-2903 (international +1-253-237-1169) and
referencing “The Carlyle Group First Quarter 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 on the website shortly after the live
event.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset
manager with $176 billion of assets under management across 114
funds and 76 fund of funds vehicles as of March 31, 2013. Carlyle's
purpose is to invest wisely and create value on behalf of its
investors, many of whom are public pensions. Carlyle invests across
four segments – Corporate Private Equity, Real Assets, Global
Market Strategies and Solutions – in Africa, Asia, Australia,
Europe, the Middle East, North America and South America. Carlyle
has 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 1,400 people in 34 offices across
six continents.
Web: www.carlyle.com
Videos: www.youtube.com/onecarlyle
Tweets: www.twitter.com/onecarlyle
Podcasts: www.carlyle.com/about-carlyle/market-commentary
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 Annual Report on Form 10-K
for the year ended December 31, 2012 filed with the SEC on March
14, 2013, 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 Mar 31, Mar 31,
2013 2012 (Dollars in millions, except unit and
per unit data) Revenues Fund management fees $ 231.4 $
234.4 Performance fees Realized 252.8 280.6 Unrealized 389.6
360.2 Total performance fees 642.4 640.8
Investment income (loss) Realized (4.2 ) (0.8 ) Unrealized
4.6 22.3 Total investment income (loss) 0.4
21.5 Interest and other income 2.4 2.7 Interest and other income of
Consolidated Funds 268.4 211.5 Total
revenues 1,145.0 1,110.9
Expenses Compensation and
benefits Base compensation 178.5 106.1 Equity-based compensation
52.3 - Performance fee related Realized 108.7 34.3 Unrealized
195.0 54.8 Total compensation and
benefits 534.5 195.2 General, administrative and other expenses
111.4 91.2 Interest 10.5 10.4 Interest and other expenses of
Consolidated Funds 250.1 184.5 Other non-operating income
(2.4 ) (4.1 ) Total expenses 904.1 477.2
Other
income Net investment gains of Consolidated Funds 211.5
872.1 Income before provision for
income taxes 452.4 1,505.8 Provision for income taxes 24.9
11.7 Net income 427.5 1,494.1 Net income
attributable to non-controlling
interests in consolidated entities
168.0 864.9 Net income attributable to
Carlyle Holdings 259.5 $ 629.2 Net income attributable to
non-controlling interests in
Carlyle Holdings
225.7 Net income attributable to The Carlyle Group
L.P. $ 33.8 Net income attributable to The
Carlyle Group L.P. per common unit Basic $ 0.78 Diluted $
0.66 Weighted-average common units Basic
43,343,268 Diluted 51,109,008
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 Mar 31, Mar 31,
Dec 31, Mar 31, Mar 31,
2013 2012 2012 2013 2012
(Dollars in millions) Segment Revenues Fund level fee
revenues Fund management fees $ 240.1 $ 225.4 $ 248.9 $ 957.9 $
895.3 Portfolio advisory fees, net 4.6 8.0 2.4 18.6 33.2
Transaction fees, net 10.4 2.7 13.9
35.2 22.1 Total fee revenues 255.1
236.1 265.2 1,011.7 950.6 Performance fees Realized 248.9 281.8
200.6 836.2 1,181.4 Unrealized 342.7 349.7
39.3 119.9 (304.6 ) Total performance
fees 591.6 631.5 239.9 956.1 876.8 Investment income (loss)
Realized (9.3 ) 2.1 5.6 4.9 37.9 Unrealized 12.3
21.2 (9.8 ) 16.3 13.8 Total
investment income (loss) 3.0 23.3 (4.2 ) 21.2 51.7 Interest and
other income 2.4 2.6 4.2
13.5 12.2 Total revenues 852.1 893.5 505.1 2,002.5
1,891.3 Segment Expenses Compensation and benefits Direct
base compensation 108.0 101.2 112.5 424.2 406.8 Indirect base
compensation 33.6 33.1 42.3 145.0 136.5 Equity-based compensation
2.6 - 0.6 4.4 - Performance fee related Realized 107.4 139.1 73.2
335.3 575.1 Unrealized 129.5 157.6 34.8
76.3 (223.3 ) Total compensation and benefits
381.1 431.0 263.4 985.2 895.1 General, administrative, and other
indirect
expenses
62.3 55.4 49.5 234.1 230.9 Depreciation and amortization expense
6.3 5.2 6.1 22.6 21.0 Interest expense 8.5 9.8
3.9 23.2 52.5 Total expenses
458.2 501.4 322.9 1,265.1
1,199.5
Economic Net Income $
393.9 $ 392.1 $ 182.2
$ 737.4 $ 691.8 (-) Net
Performance Fees 354.7 334.8 131.9 544.5 525.0 (-) Investment
Income (Loss) 3.0 23.3 (4.2 )
21.2 51.7
(=) Fee Related Earnings $
36.2 $ 34.0 $ 54.5
$ 171.7 $ 115.1 (+) Realized Net
Performance Fees 141.5 142.7 127.4 500.9 606.3 (+) Realized
Investment Income (Loss) (9.3 ) 2.1 5.6
4.9 37.9
(=) Distributable Earnings
$ 168.4 $ 178.8 $
187.5 $ 677.5 $ 759.3
Total Segment Information (Unaudited),
cont
Three Months Ended
Mar 31, 2013 vs.
Mar 31,2012
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Mar 31,2012
Dec 31,2012
Economic Net Income,
(Dollars in millions)
Total Segments Revenues Segment fee revenues Fund management
fees $ 225.4 $ 235.0 $ 233.9 $ 248.9 $ 240.1 $ 14.7 $ (8.8 )
Portfolio advisory fees, net 8.0 7.0 4.6 2.4 4.6 (3.4 ) 2.2
Transaction fees, net 2.7 3.7 7.2
13.9 10.4 7.7 (3.5
) Total fee revenues 236.1 245.7 245.7 265.2 255.1 19.0 (10.1 )
Performance fees Realized 281.8 110.3 276.4 200.6 248.9 (32.9 )
48.3 Unrealized 349.7 (311.1 ) 49.0
39.3 342.7 (7.0 ) 303.4
Total performance fees 631.5 (200.8 ) 325.4 239.9 591.6 (39.9 )
351.7 Investment income Realized 2.1 4.0 4.6 5.6 (9.3 ) (11.4 )
(14.9 ) Unrealized 21.2 10.0 3.8
(9.8 ) 12.3 (8.9 ) 22.1 Total
investment income 23.3 14.0 8.4 (4.2 ) 3.0 (20.3 ) 7.2 Interest and
other income 2.6 2.5 4.4 4.2
2.4 (0.2 ) (1.8 ) Total revenues
893.5 61.4 583.9 505.1 852.1 (41.4 ) 347.0 Expenses
Compensation and benefits Direct base compensation 101.2 105.8 97.9
112.5 108.0 6.8 (4.5 ) Indirect base compensation 33.1 36.2 32.9
42.3 33.6 0.5 (8.7 ) Equity-based compensation - 0.6 0.6 0.6 2.6
2.6 2.0 Performance fee related Realized 139.1 34.5 120.2 73.2
107.4 (31.7 ) 34.2 Unrealized 157.6 (128.6 )
40.6 34.8 129.5 (28.1 )
94.7 Total compensation and benefits 431.0 48.5 292.2 263.4
381.1 (49.9 ) 117.7 General, administrative, and other
indirect expenses
55.4 60.0 62.3 49.5 62.3 6.9 12.8 Depreciation and amortization
expense 5.2 4.0 6.2 6.1 6.3 1.1 0.2 Interest expense 9.8
6.1 4.7 3.9 8.5
(1.3 ) 4.6 Total expenses 501.4
118.6 365.4 322.9 458.2
(43.2 ) 135.3
Economic Net Income
(Loss) $ 392.1 $ (57.2 )
$ 218.5 $ 182.2 $
393.9 $ 1.8 $
211.7 (-) Net Performance Fees 334.8 (106.7 ) 164.6
131.9 354.7 19.9 222.8 (-) Investment Income (Loss) 23.3
14.0 8.4 (4.2 ) 3.0
(20.3 ) 7.2
(=) Fee Related Earnings
$ 34.0 $ 35.5 $
45.5 $ 54.5 $ 36.2
$ 2.2 $ (18.3 ) (+)
Realized Net Performance Fees 142.7 75.8 156.2 127.4 141.5 (1.2 )
14.1 (+) Realized Investment Income (Loss) 2.1 4.0
4.6 5.6 (9.3 ) (11.4 )
(14.9 )
(=) Distributable Earnings $
178.8 $ 115.3 $ 206.3
$ 187.5 $ 168.4 $
(10.4 ) $ (19.1 )
Corporate Private Equity Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2013 vs.
Mar 31,2012
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Mar 31,2012
Dec 31,2012
Corporate Private Equity
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 123.9 $
124.0 $ 124.8 $ 123.5 $ 108.3 $ (15.6 ) $ (15.2 ) Portfolio
advisory fees, net 7.0 4.9 3.1 2.8 4.1 (2.9 ) 1.3 Transaction fees,
net 1.6 1.6 6.2 9.6
10.4 8.8 0.8 Total fee
revenues 132.5 130.5 134.1 135.9 122.8 (9.7 ) (13.1 ) Performance
fees Realized 223.0 80.6 241.4 94.5 212.3 (10.7 ) 117.8 Unrealized
241.3 (269.7 ) 72.8 86.4
207.6 (33.7 ) 121.2 Total performance
fees 464.3 (189.1 ) 314.2 180.9 419.9 (44.4 ) 239.0 Investment
income (loss) Realized 0.8 1.5 (0.2 ) 1.2 1.8 1.0 0.6 Unrealized
14.5 3.7 (1.0 ) 3.3 2.8
(11.7 ) (0.5 ) Total investment income (loss)
15.3 5.2 (1.2 ) 4.5 4.6 (10.7 ) 0.1 Interest and other income
1.4 1.6 3.4 2.6
1.0 (0.4 ) (1.6 ) Total revenues 613.5 (51.8 )
450.5 323.9 548.3 (65.2 ) 224.4 Expenses Compensation and
benefits Direct base compensation 55.3 54.8 56.2 59.9 55.0 (0.3 )
(4.9 ) Indirect base compensation 20.8 24.1 19.9 27.7 20.0 (0.8 )
(7.7 ) Equity-based compensation - 0.4 0.4 0.4 1.5 1.5 1.1
Performance fee related Realized 117.6 31.0 115.6 40.5 101.6 (16.0
) 61.1 Unrealized 132.0 (140.3 ) 39.2
40.8 83.6 (48.4 ) 42.8
Total compensation and benefits 325.7 (30.0 ) 231.3 169.3 261.7
(64.0 ) 92.4 General, administrative, and other
indirect expenses
34.8 36.9 36.0 26.3 39.0 4.2 12.7 Depreciation and amortization
expense 3.2 2.3 3.5 3.5 3.5 0.3 - Interest expense 5.9
3.5 2.5 2.4 4.9
(1.0 ) 2.5 Total expenses 369.6
12.7 273.3 201.5 309.1
(60.5 ) 107.6
Economic Net Income
(Loss) $ 243.9 $ (64.5 )
$ 177.2 $ 122.4 $
239.2 $ (4.7 ) $
116.8 (-) Net Performance Fees 214.7 (79.8 ) 159.4
99.6 234.7 20.0 135.1 (-) Investment Income (Loss) 15.3
5.2 (1.2 ) 4.5 4.6
(10.7 ) 0.1
(=) Fee Related Earnings $
13.9 $ 10.1 $ 19.0
$ 18.3 $ (0.1 ) $
(14.0 ) $ (18.4 ) (+) Realized
Net Performance Fees 105.4 49.6 125.8 54.0 110.7 5.3 56.7 (+)
Realized Investment Income (Loss) 0.8 1.5
(0.2 ) 1.2 1.8 1.0
0.6
(=) Distributable Earnings $ 120.1
$ 61.2 $ 144.6 $
73.5 $ 112.4 $ (7.7
) $ 38.9
Global Market Strategies Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2013 vs.
Mar 31,2012
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Mar 31,2012
Dec 31,2012
Global Market Strategies
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 48.6 $
59.5 $ 58.2 $ 70.9 $ 66.3 $ 17.7 $ (4.6 ) Portfolio advisory fees,
net 0.7 0.5 0.8 0.5 0.2 (0.5 ) (0.3 ) Transaction fees, net
- - 0.3 3.2 - -
(3.2 ) Total fee revenues 49.3 60.0 59.3 74.6 66.5
17.2 (8.1 ) Performance fees Realized 32.4 1.3 0.9 77.8 24.1 (8.3 )
(53.7 ) Unrealized 12.7 4.0 5.7
(43.6 ) 64.3 51.6 107.9 Total
performance fees 45.1 5.3 6.6 34.2 88.4 43.3 54.2 Investment income
Realized 1.3 2.8 4.6 4.4 1.9 0.6 (2.5 ) Unrealized 3.7
4.8 0.8 0.3 5.1
1.4 4.8 Total investment income 5.0 7.6 5.4
4.7 7.0 2.0 2.3 Interest and other income 0.6 0.4
0.5 0.8 1.1 0.5
0.3 Total revenues 100.0 73.3 71.8 114.3 163.0 63.0
48.7 Expenses Compensation and benefits Direct base
compensation 19.7 25.2 17.4 24.0 25.7 6.0 1.7 Indirect base
compensation 4.9 4.5 5.9 6.0 4.8 (0.1 ) (1.2 ) Equity-based
compensation - 0.1 - 0.1 0.4 0.4 0.3 Performance fee related
Realized 17.8 0.7 0.2 27.5 9.7 (8.1 ) (17.8 ) Unrealized 9.7
0.2 (1.8 ) (16.5 ) 6.2 (3.5 )
22.7 Total compensation and benefits 52.1 30.7 21.7
41.1 46.8 (5.3 ) 5.7 General, administrative, and other
indirect expenses
7.3 9.1 11.7 12.5 9.5 2.2 (3.0 ) Depreciation and amortization
expense 0.8 0.6 1.1 1.0 1.2 0.4 0.2 Interest expense 1.7
0.9 1.3 0.6 1.5
(0.2 ) 0.9 Total expenses 61.9 41.3
35.8 55.2 59.0 (2.9 )
3.8
Economic Net Income $
38.1 $ 32.0 $ 36.0
$ 59.1 $ 104.0 $
65.9 $ 44.9 (-) Net Performance
Fees 17.6 4.4 8.2 23.2 72.5 54.9 49.3 (-) Investment Income
5.0 7.6 5.4 4.7 7.0
2.0 2.3
(=) Fee Related Earnings
$ 15.5 $ 20.0 $ 22.4
$ 31.2 $ 24.5 $
9.0 $ (6.7 ) (+) Realized Net
Performance Fees 14.6 0.6 0.7 50.3 14.4 (0.2 ) (35.9 ) (+) Realized
Investment Income 1.3 2.8 4.6
4.4 1.9 0.6 (2.5 )
(=)
Distributable Earnings $ 31.4 $
23.4 $ 27.7 $ 85.9
$ 40.8 $ 9.4 $
(45.1 )
Real Assets Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2013 vs.
Mar 31,2012
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Mar 31,2012
Dec 31,2012
Real Assets
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 36.6 $
34.1 $ 34.4 $ 35.9 $ 47.0 $ 10.4 $ 11.1 Portfolio advisory fees,
net 0.3 1.6 0.7 (0.9 ) 0.3 - 1.2 Transaction fees, net 1.1
2.1 0.7 1.1
- (1.1 ) (1.1 ) Total fee revenues 38.0 37.8
35.8 36.1 47.3 9.3 11.2 Performance fees Realized 23.2 27.0 31.9
24.5 11.0 (12.2 ) (13.5 ) Unrealized 82.4
(56.0 ) (27.7 ) (11.9 ) 49.5
(32.9 ) 61.4 Total performance fees 105.6 (29.0 ) 4.2
12.6 60.5 (45.1 ) 47.9 Investment income (loss) Realized - (0.3 )
0.2 - (13.0 ) (13.0 ) (13.0 ) Unrealized 3.0
1.5 4.0 (13.4 ) 4.5
1.5 17.9 Total investment income (loss)
3.0 1.2 4.2 (13.4 ) (8.5 ) (11.5 ) 4.9 Interest and other income
0.4 0.4 0.4 0.5
0.3 (0.1 ) (0.2 ) Total revenues
147.0 10.4 44.6 35.8 99.6 (47.4 ) 63.8 Expenses Compensation
and benefits Direct base compensation 18.2 16.9 16.1 19.9 17.9 (0.3
) (2.0 ) Indirect base compensation 6.4 5.6 5.7 6.8 7.5 1.1 0.7
Equity-based compensation - 0.1 0.2 0.1 0.6 0.6 0.5 Performance fee
related Realized 0.9 1.5 2.5 2.4 (4.9 ) (5.8 ) (7.3 ) Unrealized
5.9 2.1 5.3 4.0
23.6 17.7 19.6
Total compensation and benefits 31.4 26.2 29.8 33.2 44.7 13.3 11.5
General, administrative, and other
indirect expenses
11.7 11.1 11.4 7.7 10.4 (1.3 ) 2.7 Depreciation and amortization
expense 1.0 0.7 1.1 1.1 1.1 0.1 - Interest expense 1.9
1.1 0.7 0.7
1.6 (0.3 ) 0.9 Total expenses
46.0 39.1 43.0 42.7
57.8 11.8 15.1
Economic Net Income (Loss) $ 101.0
$ (28.7 ) $ 1.6
$ (6.9 ) $ 41.8 $
(59.2 ) $ 48.7 (-) Net
Performance Fees 98.8 (32.6 ) (3.6 ) 6.2 41.8 (57.0 ) 35.6 (-)
Investment Income (Loss) 3.0 1.2
4.2 (13.4 ) (8.5 ) (11.5 ) 4.9
(=) Fee Related Earnings $ (0.8
) $ 2.7 $ 1.0
$ 0.3 $ 8.5 $
9.3 $ 8.2 (+) Realized Net
Performance Fees 22.3 25.5 29.4 22.1 15.9 (6.4 ) (6.2 ) (+)
Realized Investment Income (Loss) - (0.3 )
0.2 - (13.0 ) (13.0 )
(13.0 )
(=) Distributable Earnings $
21.5 $ 27.9 $ 30.6
$ 22.4 $ 11.4
$ (10.1 ) $ (11.0 )
Solutions Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2013 vs.
Mar 31,2012
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Mar 31,2012
Dec 31,2012
Solutions
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 16.3 $
17.4 $ 16.5 $ 18.6 $ 18.5 $ 2.2 $ (0.1 ) Portfolio advisory fees,
net - - - - - - - Transaction fees, net - - -
- - - -
Total fee revenues 16.3 17.4 16.5 18.6 18.5 2.2 (0.1 ) Performance
fees Realized 3.2 1.4 2.2 3.8 1.5 (1.7 ) (2.3 ) Unrealized
13.3 10.6 (1.8 ) 8.4 21.3
8.0 12.9 Total performance fees 16.5 12.0 0.4
12.2 22.8 6.3 10.6 Investment income Realized - - - - - - -
Unrealized - - - - (0.1 )
(0.1 ) (0.1 ) Total investment income - - - - (0.1 )
(0.1 ) (0.1 ) Interest and other income 0.2 0.1
0.1 0.3 - (0.2 )
(0.3 ) Total revenues 33.0 29.5 17.0 31.1 41.2 8.2 10.1
Expenses Compensation and benefits Direct base compensation 8.0 8.9
8.2 8.7 9.4 1.4 0.7 Indirect base compensation 1.0 2.0 1.4 1.8 1.3
0.3 (0.5 ) Equity-based compensation - - - - 0.1 0.1 0.1
Performance fee related Realized 2.8 1.3 1.9 2.8 1.0 (1.8 ) (1.8 )
Unrealized 10.0 9.4 (2.1 ) 6.5
16.1 6.1 9.6 Total compensation
and benefits 21.8 21.6 9.4 19.8 27.9 6.1 8.1 General,
administrative, and other
indirect expenses
1.6 2.9 3.2 3.0 3.4 1.8 0.4 Depreciation and amortization expense
0.2 0.4 0.5 0.5 0.5 0.3 - Interest expense 0.3 0.6
0.2 0.2 0.5 0.2
0.3 Total expenses 23.9 25.5
13.3 23.5 32.3 8.4
8.8
Economic Net Income $ 9.1
$ 4.0 $ 3.7 $ 7.6
$ 8.9 $ (0.2 ) $
1.3 (-) Net Performance Fees 3.7 1.3 0.6 2.9 5.7 2.0
2.8 (-) Investment Income (Loss) - - -
- (0.1 ) (0.1 ) (0.1 )
(=) Fee
Related Earnings $ 5.4 $ 2.7
$ 3.1 $ 4.7 $ 3.3
$ (2.1 ) $ (1.4 )
(+) Realized Net Performance Fees 0.4 0.1 0.3 1.0 0.5 0.1 (0.5 )
(+) Realized Investment Income - - -
- - - -
(=)
Distributable Earnings $ 5.8 $ 2.8
$ 3.4 $ 5.7 $ 3.8
$ (2.0 ) $ (1.9 )
Total Assets Under Management Roll Forward
(Unaudited)
Corporate Private Equity Global Market Strategies
(8) Real Assets (9) Solutions
(10) 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 December 31, 2012 $
17,642 $ 35,696
$ 53,338 $ 1,820
$ 30,722
$ 32,542 $ 9,944 $ 30,250
$ 40,194 $ 14,528 $ 29,554
$ 44,082 $ 43,934 $
126,222 $ 170,156 Commitments (1) 1,430
-
1,430 (12 ) -
(12 ) 419 -
419 4,205 -
4,205 6,042 - 6,042 Capital Called, net
(2) (1,940 ) 1,832
(108 ) (86 ) 75
(11
) (929 ) 874
(55 ) (677 ) 738
61
(3,632 ) 3,519 (113 )
Distributions (3) 18 (2,175 )
(2,157 ) 40 (308 )
(268 ) 103 (1,049 )
(946 ) 89 (1,566 )
(1,477 ) 250 (5,098 )
(4,848 ) Subscriptions, net of Redemptions (4) - -
- - 2
2 - -
- - -
- - 2
2 Changes in CLO collateral balances (5) - -
- - 331
331 - -
- - -
- - 331 331
Market Appreciation/(Depreciation) (6) - 3,073
3,073 - 678
678 - 841
841 - 1,607
1,607 -
6,199 6,199 Foreign exchange (7) (88 )
(369 )
(457 ) -
(174 )
(174 ) (16
) (97 )
(113 )
(292 ) (420 )
(712 )
(396 ) (1,060 )
(1,456 ) Balance, As of March 31,
2013 $ 17,062 $
38,057 $ 55,119 $
1,762 $ 31,326
$ 33,088 $ 9,521
$ 30,819 $ 40,340
$ 17,853 $ 29,913
$ 47,766 $ 46,198
$ 130,115 $
176,313 Corporate Private Equity
Global Market Strategies (8) Real Assets (9)
Solutions (10) Total (USD
in millions)
Available Capital Fair Value of
Capital Total AUM Available Capital
Fair Value of Capital Total AUM Available
Capital Fair Value of Capital Total
AUM Available Capital Fair Value of
Capital Total AUM Available Capital
Fair Value of 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 - -
- - 2,275
2,275 4,000 8,106
12,106 - -
- 4,000 10,381 14,381
Commitments (1) 8,676 -
8,676 1,078 -
1,078 323 -
323 4,473 -
4,473 14,550 -
14,550 Capital Called, net (2) (5,769 ) 5,281
(488
) (635 ) 553
(82 ) (3,550 ) 3,374
(176
) (4,279 ) 4,084
(195 ) (14,233
) 13,292 (941 ) Distributions (3) 934
(12,664 )
(11,730 ) 203 (949 )
(746 )
1,019 (5,288 )
(4,269 ) 460 (6,861 )
(6,401
) 2,616 (25,762 ) (23,146
) Subscriptions, net of Redemptions (4) - -
- - 1,055
1,055 - -
- - -
- - 1,055
1,055 Changes in CLO collateral balances (5) - -
- -
568
568 - -
- - -
- - 568
568 Market Appreciation/(Depreciation) (6) - 6,084
6,084 - 899
899 - 263
263 - 5,347
5,347
- 12,593 12,593 Foreign exchange (7)
(141 ) (546 )
(687 )
- (251 )
(251
) (41 ) (108 )
(149 ) (437 ) (445 )
(882 ) (619 )
(1,350 ) (1,969 )
Balance, As of March 31, 2013 $ 17,062
$ 38,057 $ 55,119
$ 1,762 $ 31,326
$ 33,088 $ 9,521
$ 30,819 $
40,340 $ 17,853 $
29,913 $ 47,766 $
46,198 $ 130,115
$ 176,313 (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 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) Represents the change in the aggregate
collateral balance and principal cash at par of the CLOs. (6)
Market Appreciation/(Depreciation) represents realized and
unrealized gains (losses) on portfolio investments and changes in
the net asset value of our hedge funds. (7) 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. (8) Ending
balance is comprised of approximately $16.8 billion from our
structured credit funds (including $0.1 billion of Available
Capital), $12.7 billion in our hedge funds, and $3.6 billion
(including $1.7 billion of Available Capital) in our carry funds.
(9) Amounts related to the NGP Funds are based on the latest
available information (in most cases as of December 31, 2012). (10)
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 December 31, 2012) as provided by their general
partners, plus the net cash flows since the latest valuation, up to
March 31, 2013.
Fee-earning AUM Roll Forward
(Unaudited)
For the Three Months Ended March 31, 2013 (USD in
millions)
Corporate Private Equity Global
Market Strategies Real
Assets (7)
Solutions Total
Fee-earning AUM Balance, As of December 31, 2012 $ 33,840 $
31,034 $ 29,305 $ 28,942 $ 123,121 Inflows, including Commitments
(1) 453 54 243 1,244 1,994 Outflows, including Distributions (2)
(797 ) (212 ) (51 ) (739 ) (1,799 ) Subscriptions, net of
Redemptions (3) - (56 ) - - (56 ) Changes in CLO collateral
balances (4) - 296 - - 296 Market Appreciation/(Depreciation) (5) -
489 - 256 745 Foreign exchange and other (6) (301 )
(169 ) (78 )
(849 ) (1,397 )
Balance, As of March
31, 2013 $ 33,195 $
31,436 $ 29,419
$ 28,854 $
122,904 For the Twelve Months Ended
March 31, 2013 (USD in millions)
Corporate Private
Equity Global Market Strategies
Real
Assets (7)
Solutions Total
Fee-earning AUM Balance, As of March 31, 2012 $ 37,833 $
26,803 $ 22,848 $ 29,514 $ 116,998 Acquisitions - 2,260 10,308 -
12,568 Inflows, including Commitments (1) 1,405 1,144 1,412 6,205
10,166 Outflows, including Distributions (2) (5,536 ) (392 ) (5,050
) (6,698 ) (17,676 ) Subscriptions, net of Redemptions (3) - 1,013
- - 1,013 Changes in CLO collateral balances (4) - 373 - - 373
Market Appreciation/(Depreciation) (5) - 479 - 863 1,342 Foreign
exchange and other (6) (507 ) (244 )
(99 ) (1,030 )
(1,880 )
Balance, As of March 31, 2013
$ 33,195 $ 31,436
$ 29,419
$ 28,854 $ 122,904
(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) Represents the change in the
aggregate fee-earning collateral balances at par of our CLOs, as of
the quarterly cut-off dates. (5) Market Appreciation/(Depreciation)
represents changes in the net asset value of our hedge funds and
our fund of fund vehicles based on the lower of cost or fair value.
(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) Energy I, Energy II, Energy III, Energy IV, Renew I, and
Renew II (collectively, the “Legacy 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
Legacy Energy Funds. With the exception of Energy IV and Renew II,
where Carlyle has a minority representation on the funds’
management committees, management of each of the Legacy 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 March
31, 2013, the Legacy Energy Funds had, in the aggregate,
approximately $14.4 billion in AUM and $9.2 billion in Fee-earning
AUM. NGP VII, NGP VIII, NGP IX, NGP X, or in the case of NGP
M&R, NGP ETP I, NGP ETP II, and NGPC, certain affiliated
entities (collectively, the “NGP management fee funds”), are
managed by NGP Energy Capital Management. As of March 31, 2013, the
NGP management fee funds had, in the aggregate, approximately $12.1
billion in AUM and $10.3 billion in Fee-earning AUM.
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 existing or future funds will achieve
similar returns.
TOTAL INVESTMENTS
REALIZED/PARTIALLY REALIZED INVESTMENTS (5) as of March
31, 2013 as of March 31, 2013 Fund Inception Date
(1) Committed Capital Cumulative
Invested Capital (2) Total Fair Value (3)
MOIC (4) Gross IRR (7) Net
IRR (8)
Cumulative Invested Capital (2) Total Fair Value
(3) MOIC (4) Gross IRR (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 $
4,071.5 3.0x 34 % 25 % $ 1,362.4 $ 4,071.5 3.0x 34 % CP III 2/2000
$ 3,912.7 $ 4,031.6 $ 10,145.9 2.5x 27 % 21 % $ 4,031.6 $ 10,145.9
2.5x 27 % CP IV 12/2004 $ 7,850.0 $ 7,612.6 $ 16,237.0 2.1x 16 % 13
% $ 4,394.5 $ 10,581.2 2.4x 20 % CEP I 12/1997
€
1,003.6
€
981.6
€
2,126.5
2.2x 18 % 11 %
€
981.6
€
2,126.5
2.2x 18 % CEP II 9/2003
€
1,805.4
€
2,046.5
€
3,800.9
1.9x 38 % 21 %
€
1,115.8
€
2,797.4
2.5x 67 % CAP I 12/1998 $ 750.0 $ 627.7 $ 2,490.9 4.0x 25 % 18 % $
627.7 $ 2,490.9 4.0x 25 % CAP II 2/2006 $ 1,810.0 $ 1,614.9 $
2,812.0 1.7x 12 % 8 % $ 587.7 $ 1,714.6 2.9x 27 % CJP I 10/2001
¥
50,000.0
¥
47,291.4
¥
133,029.0
2.8x 61 % 37 %
¥
39,756.6
¥
130,139.9
3.3x 65 % All Other Funds (9) Various $ 3,380.3 $ 5,017.2 1.5x 17 %
7 % $ 2,356.2 $ 4,104.6 1.7x 22 % Coinvestments and Other (10)
Various $ 7,238.9 $ 17,607.3
2.4x
36 % 33 % $ 4,648.1 $ 14,350.3 3.1x
36 %
Total Fully Invested Funds $
30,252.5 $ 67,393.2 2.2x
28 % 21 % $
21,119.2 $ 55,153.2 2.6x
30 % Funds in the Investment Period
(6) CP V 5/2007 $ 13,719.7 $ 12,146.1 $ 18,064.7 1.5x 17
% 11 % CEP III 12/2006
€
5,294.9
€
4,461.4
€
5,860.5
1.3x 10 % 7 % CAP III 5/2008 $ 2,551.6
$
1,802.0
$
2,087.8 1.2x 7 % 1 % CJP II 7/2006
¥
165,600.0
¥
135,239.7
¥
137,816.5
1.0x 1 % (4 %) CGFSP I 9/2008 $ 1,100.2 $ 931.3 $ 1,292.9 1.4x 16 %
9 % CAGP IV 6/2008 $ 1,041.4 $ 546.8 $ 666.2 1.2x 11 % 1 % CEOF I
(11) 5/2011 $ 1,017.7 $ 234.6 $ 299.8 1.3x n/m n/m All Other Funds
(12) Various $ 1,232.7 $ 1,510.6 1.2x 11 %
1 %
Total Funds in the Investment Period $
24,048.7 $ 32,898.4 1.4x
13 % 8 % $
4,779.7 $ 9,945.4 2.1x
25 % TOTAL CORPORATE PRIVATE EQUITY
(13) $ 54,301.2 $ 100,291.6
1.8x 26 % 18
% $ 25,898.8 $ 65,098.6
2.5x 30 % TOTAL
INVESTMENTS REALIZED/PARTIALLY REALIZED
INVESTMENTS (5) as of March 31, 2013
as of March 31, 2013 Fund
Inception Date (1) Committed Capital
Cumulative Invested Capital (2)
Total Fair Value (3) MOIC (4)
Gross IRR (7) Net
IRR (8)
Cumulative Invested Capital (2) Total Fair
Value (3) MOIC (4) Gross IRR
(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 $ 1,400.9 2.7x 44 % 30 % $ 522.5 $ 1,400.9 2.7x 44 %
CRP IV 12/2004 $ 950.0 $ 1,186.0 $ 1,210.2 1.0x 1 % (3 %) $ 441.8 $
455.9 1.0x 10 % CRP V 11/2006 $ 3,000.0 $ 3,209.9 $ 4,375.8 1.4x 10
% 7 % $ 1,844.1 $ 2,517.9 1.4x 12 % CEREP I 3/2002
€
426.6
€
517.0
€
741.6
1.4x 13 % 7 %
€
441.2
€
751.8
1.7x 19 % CEREP II 4/2005
€
762.7
€
826.9
€
143.8
0.2x (56 %) (44 %)
€
416.5
€
137.8
0.3x (54 %) CEREP III 5/2007
€
2,229.5
€
1,752.6
€
1,877.9
1.1x 3 % (2 %)
€
-
€
3.5
n/a n/a Energy II 7/2002 $ 1,100.0 $ 1,336.7 $ 3,670.4 2.7x 81 % 54
% $ 827.4 $ 3,410.1 4.1x 105 % Energy III 10/2005 $ 3,800.0 $
3,564.6 $ 6,808.5 1.9x 16 % 12 % $ 1,545.4
$
4,494.2 2.9x 28 % Energy IV 12/2007 $ 5,979.1 $ 5,129.9 $ 8,237.0
1.6x 23 % 15 % $ 1,710.6 $ 3,630.9 2.1x 32 % All Other Funds (14)
Various $ 2,289.4 $ 2,280.5 1.0x 0 % (7 %) $ 1,484.1 $ 1,703.3 1.1x
8 % Coinvestments and Other (10) Various $ 3,962.2 $ 6,706.7
1.7x 20 % 16 % $ 1,727.0 $ 3,850.5
2.2x 29 %
Total Fully Invested Funds $
25,171.1 $ 38,232.7 1.5x
16 % 10 % $
11,202.6 $ 22,608.5 2.0x
28 % Funds in the Investment Period
(6) CRP VI 9/2010 $ 2,340.0 $ 835.8 $ 1,077.5 1.3x 33 %
16 % CIP 9/2006 $ 1,143.7 $ 922.4 $ 948.2 1.0x 1 % (4 %) Renew II
3/2008 $ 3,417.5 $ 2,694.1 $ 3,675.2 1.4x 14 % 8 % All Other Funds
(15) Various $ 201.8 $ 241.2 1.2x 30 %
22 %
Total Funds in the Investment Period $ 4,654.1
$ 5,942.1 1.3x 12
% 6 % $ 833.7
$ 895.4 1.1x 3 %
TOTAL REAL ASSETS (13) $ 29,825.2
$ 44,174.8 1.5x 16
% 10 % $ 12,036.3
$ 23,504.0 2.0x 27
%
Global Markets Strategies Carry Funds and
Solutions (Unaudited)
TOTAL INVESTMENTS
as of March 31, 2013 Fund Inception Date (1)
Fund Size Cumulative
Invested Capital (16)
Total Fair Value (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 $ 2,353.4 1.7x 18% 13% CEMOF I
(17) 12/2010 $ 1,382.5 $ 274.2 $ 343.8 1.3x n/m n/m
TOTAL INVESTMENTS as of March 31, 2013 Vintage
Year Fund Size Cumulative
Invested Capital (2)(20)
Total Fair Value (3)(20) MOIC (4)
Gross IRR (7) Net IRR (8) Solutions
(18) (Reported in Local Currency, in Millions)
Fully Committed Funds (19) Main Fund I -
Fund Investments 2000
€
5,174.6
€
3,963.3
€
6,337.4
1.6x 12% 12% Main Fund II - Fund Investments 2003
€
4,545.0
€
4,449.5
€
6,362.3
1.4x 10% 9% Main Fund III - Fund Investments 2005
€
11,500.0
€
10,096.9
€
12,158.0
1.2x 6% 6% Main Fund IV - Fund Investments 2009
€
4,880.0
€
1,486.8
€
1,513.3
1.0x 2% (0%) Main Fund I - Secondary Investments 2002
€
519.4
€
464.6
€
875.3
1.9x 55% 52% Main Fund II - Secondary Investments 2003
€
998.4
€
935.2
€
1,659.1
1.8x 28% 26% Main Fund III - Secondary Investments 2006
€
2,250.0
€
2,107.9
€
2,776.0
1.3x 9% 9% Main Fund IV - Secondary Investments 2010
€
1,856.4
€
1,640.3
€
2,139.9
1.3x 20% 19% Main Fund II - Co-Investments 2003
€
1,090.0
€
874.8
€
2,331.6
2.7x 45% 43% Main Fund III - Co-Investments 2006
€
2,760.0
€
2,500.1
€
3,089.5
1.2x 4% 4% Main Fund II - Mezzanine Investments 2004
€
700.0
€
713.6
€
946.4
1.3x 8% 7% Main Fund III - Mezzanine Investments 2006
€
2,000.0
€
1,409.8
€
1,807.7
1.3x 10% 9% All Other Funds (21) Various
€
1,341.4
€
1,972.7
1.5x 18% 14%
Total Fully Committed Funds
€
31,984.1
€
43,969.2
1.4x 11% 10% Funds in the Commitment
Period Main Fund V - Fund Investments (22) 2012
€
4,830.9
€
26.7
€
24.3
0.9x n/m n/m Main Fund V - Secondary Investments 2011
€
2,665.6
€
607.5
€
724.0
1.2x 38% 34% Main Fund IV - Co-Investments 2010
€
1,475.0
€
1,236.3
€
1,654.3
1.3x 19% 16% Main Fund V - Co-Investments (22) 2012
€
1,228.2
€
293.0
€
305.9
1.0x n/m n/m All Other Funds (21) Various
€
119.3
€
126.0
1.1x 21% 14%
Total Funds in the Commitment Period
€
2,282.8
€
2,834.5
1.2x 21% 18% TOTAL SOLUTIONS
€
34,266.9
€
46,803.7
1.4x 11% 10% TOTAL SOLUTIONS (USD) (23)
$ 43,931.9 $ 60,004.7 1.4x
(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 and CEMOF I
were formed in June 2007 and December 2010, respectively. (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 funds are past the expiration date
of the investment 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, CUSGF III
and Mexico. (10) Includes co-investments, prefund investments and
certain other stand-alone investments arranged by us. (11) The
Gross IRR and Net IRR for CEOF I are not meaningful as the
investment period commenced May 2011. (12) Aggregate includes the
following funds: MENA, CSABF, CETP II, CBPF, CSSAF and CPF I. (13)
For purposes of aggregation, funds that report in foreign currency
have been converted to U.S. dollars at the reporting period spot
rate. (14) Aggregate includes the following funds: CRP I, CRP II,
CAREP I, CAREP II, Energy I and Renew I. (15) Aggregate includes
the following fund: 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) Gross IRR and Net IRR
for CEMOF I are not meaningful as the investment period commenced
in December 2010. (18) Includes private equity and mezzanine
primary fund investments, secondary fund investments and
co-investments originated by the AlpInvest team. Excluded from the
performance information shown are a) investments that were not
originated by AlpInvest and b) Direct Investments, which was spun
off from AlpInvest in 2005. As of March 31, 2013, these excluded
investments represent $0.6 billion of AUM. (19) Fully Committed
funds are past the expiration date of the commitment period as
defined in the respective limited partnership agreement. (20) To
exclude the impact of FX, all foreign currency cash flows have been
converted to Euro at the reporting period spot rate. (21) 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. (22) Gross IRR and Net IRR are not
meaningful as commitment periods commenced in Q3 2012. (23)
Represents the U.S. dollar equivalent balance translated at the
spot rate as of period end.
Reconciliation for Economic Net Income and
Distributable Earnings (Unaudited)
Three Months Ended
March 31, March 31, 2013
2012 (Dollars in millions) Income
before provision for income taxes $ 452.4 $ 1,505.8
Adjustments: Partner compensation - (271.0 ) Equity-based
compensation issued in conjunction with the IPO and
strategic investments
52.1 - Acquisition related charges and amortization of intangibles
62.5 24.1 Losses associated with debt refinancing activities 1.9 -
Other non-operating (income) expenses (2.4 ) (4.1 ) Net income
attributable to non-controlling interests in consolidated
entities
(168.0 ) (864.9 ) Provision for income taxes attributable to
non-controlling interests
in consolidated entities
(6.0 ) - Severance and lease terminations 0.5 2.4 Other adjustments
0.9 (0.2 )
Economic Net Income $ 393.9
$ 392.1 Net performance fees 354.7 334.8 Investment
income 3.0 23.3
Fee Related
Earnings $ 36.2 $ 34.0 Realized performance fees,
net of related compensation 141.5 142.7 Investment income (loss) -
realized (9.3 ) 2.1
Distributable
Earnings $ 168.4 $ 178.8 Depreciation and
amortization expense 6.3 5.2 Interest expense 8.5
9.8
Adjusted EBITDA $ 183.2 $ 193.8
Reconciliation for Economic Net income and
Distributable Earnings, cont. (Unaudited)
For the Three Months Ended March 31,
2013 (Dollars in millions, except unit and per unit
amounts) Economic Net Income $ 393.9 Less:
Provision for Income Taxes 74.3 Economic Net Income, After
Taxes $ 319.6 Economic Net Income, After Taxes per Adjusted
Unit(1) $ 1.02 Distributable Earnings $ 168.4 Less:
Estimated foreign, state, and local taxes 11.0 Distributable
Earnings, After Taxes $ 157.4 Distributable Earnings to The
Carlyle Group L.P. $ 23.5 Less: Estimated current corporate income
taxes and TRA payments 1.9 Distributable Earnings to The
Carlyle Group L.P. net of corporate income taxes $ 21.6
Distributable Earnings, net, per The Carlyle Group L.P. common unit
outstanding(2) $ 0.47 (1) Adjusted Units were
determined as follows: The Carlyle Group L.P. common units
outstanding 43,244,180 Carlyle Holdings partnership units not held
by The Carlyle Group L.P. 262,873,250 Dilutive effect of unvested
deferred restricted common units 5,393,646 Contingently issuable
Carlyle Holdings partnership units 2,372,094 Total Adjusted
Units 313,883,170 (2)
As of March 31, 2013, there are 43,244,180
outstanding common units of The Carlyle Group L.P. In May 2013, an
additional 2,865,706 common units were issued that relate to vested
deferred restricted common units. For purposes of this calculation,
those common units have been added to the common units outstanding
as of March 31, 2013, resulting in total common units of
46,109,886.
GAAP for 12-Month Rolling Summary
(Unaudited)
Twelve Months Ended March 31,
March 31, 2013
2012 (Dollars in millions) Revenues
Fund management fees $ 974.6 $ 921.9 Performance fees Realized
879.7 1,185.6 Unrealized 163.0 (297.9 ) Total
performance fees 1,042.7 887.7 Investment income Realized 12.9 31.2
Unrealized 2.4 27.3 Total investment income
15.3 58.5 Interest and other income 14.2 12.6 Interest and other
income of Consolidated Funds 960.4 758.2 Total
revenues 3,007.2 2,638.9
Expenses Compensation and
benefits Base compensation 696.9 393.9 Equity-based compensation
254.0 - Performance fee related Realized 359.9 207.0 Unrealized
172.4 (103.0 ) Total compensation and benefits
1,483.2 497.9 General, administrative and other expenses 377.7
348.2 Interest 24.7 54.0 Interest and other expenses of
Consolidated Funds 823.7 551.0 Other non-operating expenses
8.8 12.5 Total expenses 2,718.1 1,463.6
Other income Net investment gains of Consolidated Funds
1,097.4 733.1 Gain on business acquisition - 7.9
Income before provision for income taxes 1,386.5
1,916.3 Provision for income taxes 53.6 34.1
Net income 1,332.9 1,882.2 Net income attributable to
non-controlling
interests in consolidated entities
1,059.8 792.3 Net income attributable to
Carlyle Holdings 273.1 $ 1,089.9 Net income attributable to
non-controlling
interests in Carlyle Holdings
219.0 Net income attributable to The Carlyle Group L.P. $
54.1
Reconciliation of Non-GAAP to GAAP for
12-Month Rolling Summary (Unaudited)
Twelve Months Ended Mar. 31,
Mar. 31, 2013
2012 (Dollars in millions)
Income before provision for income taxes $ 1,386.5 $ 1,916.3
Adjustments: Partner compensation 5.6 (541.4 ) Equity-based
compensation issued in conjunction with the IPO and
strategic investments
252.2 - Acquisition related charges and amortization of intangibles
166.7 101.0 Losses associated with debt refinancing activities 1.9
Gain on business acquisition - (7.9 ) Other non-operating expenses
8.8 12.5 Net income attributable to non-controlling interests
in consolidated entities
(1,059.8 ) (792.3 ) Provision for income taxes attributable to
non-controlling
interests in consolidated entities
(25.5 ) - Severance and lease terminations 4.0 4.9 Other
adjustments (3.0 ) (1.3 )
Economic Net Income
$ 737.4 $ 691.8 Net performance fees 544.5 525.0
Investment income 21.2 51.7
Fee
Related Earnings $ 171.7 $ 115.1 Realized
performance fees, net of related compensation 500.9 606.3
Investment income - realized 4.9 37.9
Distributable Earnings $ 677.5 $ 759.3
Depreciation and amortization expense 22.6 21.0 Interest expense
23.2 52.5
Adjusted EBITDA $
723.3 $ 832.8
The Carlyle Group L.P.
GAAP Balance Sheet (Unaudited)
As of
March 31, 2013
ConsolidatedOperatingEntities
ConsolidatedFunds
Eliminations Consolidated (Dollars in
millions) Assets Cash and cash equivalents $ 570.4 $ - $
- $ 570.4 Cash and cash equivalents held at Consolidated Funds -
2,173.2 - 2,173.2 Restricted cash 43.4 - - 43.4 Restricted cash and
securities of Consolidated Funds - 17.8 - 17.8 Accrued performance
fees 2,622.2 - (24.0 ) 2,598.2 Investments 910.5 - (54.3 ) 856.2
Investments of Consolidated Funds - 25,093.6 - 25,093.6 Due from
affiliates and other receivables, net 159.2 - (12.6 ) 146.6 Due
from affiliates and other receivables of Consolidated
Funds, net
- 320.7 - 320.7 Fixed assets, net 62.2 - - 62.2 Deposits and other
49.8 4.6 - 54.4 Intangible assets, net 650.1 - - 650.1 Deferred tax
assets 64.7 - - 64.7 Total
assets $ 5,132.5 $ 27,609.9 $ (90.9 ) $ 32,651.5
Liabilities and partners' capital Loans payable $ 25.0 $ - $
- $ 25.0 3.875% Senior Notes due 2023 499.8 - - 499.8 5.625% Senior
Notes due 2043 398.4 - - 398.4 Loans payable of Consolidated Funds
- 14,366.6 (53.9 ) 14,312.7 Accounts payable, accrued expenses and
other liabilities 204.9 - - 204.9 Accrued compensation and benefits
1,449.3 - - 1,449.3 Due to affiliates 288.2 44.7 (0.1 ) 332.8
Deferred revenue 184.6 1.5 - 186.1 Deferred tax liabilities 70.0 -
- 70.0 Other liabilities of Consolidated Funds - 1,793.8 (30.1 )
1,763.7 Accrued giveback obligations 55.9 -
(9.6 ) 46.3 Total liabilities 3,176.1 16,206.6 (93.7 )
19,289.0 Redeemable non-controlling interests in
consolidated entities 6.6 3,297.3 - 3,303.9 Total partners'
capital 1,949.8 8,106.0 2.8
10,058.6 Total liabilities and partners' capital $ 5,132.5 $
27,609.9 $ (90.9 ) $ 32,651.5
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 in acquisitions or
strategic investments, 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 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.
- Adjusted EBITDA is a component of ENI
and is used to measure Carlyle’s ability to cover recurring
operating expenses from cash earnings. Adjusted EBITDA is computed
as ENI excluding unrealized performance fees, unrealized
performance fee compensation, unrealized investment income,
depreciation and amortization expense, and interest expense.
Income before provision for income taxes is the GAAP financial
measure most comparable to ENI, Fee Related Earnings, Distributable
Earnings, and Adjusted EBITDA. 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, NGP management fee funds 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 and principal
cash at par of our CLOs (inclusive of all positions) and the
reference portfolio notional amount of our 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”) and certain NGP management fee funds advised by NGP
Energy Capital Management. 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 management or performance
fees.
“Available capital,” commonly known as “dry powder,” for
Carlyle’s carry funds and NGP management fee 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 estate funds, infrastructure funds, certain energy funds and
distressed debt and mezzanine funds (but excluding Carlyle’s
structured credit funds, hedge funds and fund of funds vehicles as
well as the NGP management fee funds), 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, for fund of funds vehicles, the amount of
external investor capital commitments during the commitment period,
and for NGP management fee funds, the amount of investor capital
commitments before the first investment realization;
(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 and for NGP management
fee funds where the first investment has been realized, the amount
of partner commitments less realized and written-off
investments;
(c) the amount of aggregate Fee-earning collateral balance at
par of our collateralized loan obligations (“CLOs“), as defined in
the fund indentures (typically exclusive of equities and defaulted
positions) as of the quarterly cut-off date for each CLO, and the
reference portfolio notional amount of our synthetic collateralized
loan obligations (“synthetic CLOs“);
(d) the external investor portion of the net asset value
(pre-redemptions and subscriptions) of our long/short credit,
emerging markets, multi-product macroeconomic and other hedge funds
and certain structured credit funds; and
(e) for fund of funds vehicles where the commitment fee period
has expired 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 and certain NGP
management fee funds advised by NGP Energy Capital Management.
For Carlyle’s carry funds, co-investment vehicles, NGP
management fee funds 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.
“NGP management fee funds” refers to those funds
advised by NGP Energy Capital Management. In December 2012, Carlyle
acquired an equity interest in NGP Energy Capital Management that
entitles Carlyle to an allocation of income equal to 47.5% of the
management Fee Related revenues of the NGP Energy Capital
Management entities that serve as the advisors to certain private
equity funds.
“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.
“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 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.
“Realized net 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.
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