Global alternative asset manager The Carlyle Group L.P. (NASDAQ:
CG) today reported its unaudited results for the second quarter of
2013, which ended on June 30, 2013.
Carlyle Co-CEO David M. Rubenstein said, "We had a solid quarter
across the firm and continued to demonstrate our ability to produce
cash distributions for unitholders. Fundraising strengthened across
the board, and we continue to invest in growth initiatives to build
our capabilities."
Carlyle Co-CEO William E. Conway, Jr. said, "Our global
portfolio is in great shape and our pace of producing realized
proceeds continues to be brisk. I am particularly pleased with the
state of our U.S. buyout portfolio which is producing large amounts
of cash carry and accrued carry for future distributions."
U.S. GAAP results for Q2 2013 included income
before provision for income taxes of $286 million and net
income/(loss) attributable to the common unitholders through The
Carlyle Group L.P. of ($3.3) million, or net income/(loss) per
common unit of ($0.07) on a diluted basis. Total balance sheet
assets were $33.8 billion as of June 30, 2013.
Second 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 August 19, 2013, payable on August 30, 2013.
Year-to-date, the Board of Directors has declared $0.32 in
distributions per common unit. Carlyle has generated $1.00 in
year-to-date after-tax Distributable Earnings per common unit.
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 Q2 2013, year-to-date (YTD) and for the last twelve months
(LTM)1.
Funds Raised Equity Invested
Q2 $6.9 billion
Q2 $1.3 billion YTD:
$11.7 bn LTM: $19.7 bn YTD: $3.8 bn LTM: $8.8 bn
Realized Proceeds Carry Fund Returns
Q2 $3.9 billion
Q2 3% YTD: $8.0 bn
LTM: $19.9 bn YTD: 9% LTM: 16%
Note: Equity Invested and Realized Proceeds reflect carry funds
only.
During Q2 2013, within its carry funds, Carlyle
generated net realized proceeds of $3.9 billion from 144 different
investments across 29 carry funds. Carlyle deployed $1.3 billion of
equity in 75 new or follow-on investments across 19 carry funds. On
an LTM basis, Carlyle realized proceeds of $19.9 billion and
invested $8.8 billion.
Segment Realized Proceeds Equity
Invested
# ofInvestments
# of Funds
$ in millions
# ofInvestments
# of Funds $ in millions
Q2
Corporate Private Equity 36 12 $2,481 12 8 $817 Global Market
Strategies 33 5 $223 7 4 $266 Real Assets 77 12
$1,173 56 7 $264
Carlyle
144 29 $3,876 75
19 $1,347
YTD
Corporate Private Equity 61 20 $5,468 23 11 $2,728 Global Market
Strategies 50 5 $614 10 4 $337 Real Assets 88 12
$1,915 89 10 $779
Carlyle
193 37 $7,997 121
25 $3,843 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 Q3 2012
through Q2 2013. Prior LTM, or the prior rolling twelve month
period, refers to the period Q3 2011 through Q2 2012.
Carlyle All Segment Results
- Distributable Earnings (DE): $163
million for Q2 2013 and $729 million on an LTM basis
- Pre-tax Distributable Earnings
were $163 million for Q2 2013, or $0.53 per common unit on a
post-tax basis. On a year-to-date basis, pre-tax Distributable
Earnings were $334 million, 13% higher than the first half of 2012,
and Distributable Earnings per common unit were $1.00 on a post-tax
basis. Distributable Earnings were $729 million on an LTM basis,
which is 7% lower than the prior rolling twelve month period.
- During Q2 2013, the definition of DE
was modified to exclude all equity-based compensation expense. All
prior periods have been recast to conform to the new
definition.
- Fee-Related Earnings were $26
million for Q2 2013 and declined by $10 million from $36 million in
Q2 2012 due to higher fundraising costs and fee and basis step
downs of several funds exiting their investment periods, offset by
higher Fee-Earning Assets Under Management. Fee-Related Earnings
were $163 million on an LTM basis, up 36% compared with the prior
rolling twelve month period.
- Realized Net Performance Fees
were $118 million for Q2 2013, compared to $76 million in Q2 2012.
For Q2 2013, Realized Net Performance Fees were positively impacted
by exits in The Hertz Corporation, The Nielsen Company, CommScope
Inc, SS&C Technologies Inc, Wesco Holdings Inc., Cobalt
International Energy, Boston Private Financial Holdings Inc., among
others. Realized Net Performance Fees were $543 million on an LTM
basis, which was 14% lower than the prior rolling twelve month
period.
- Realized Investment Income was
$15 million in Q2 2013, largely driven by gains on a single debt
investment, with some additional gains on other balance sheet
investments.
- Economic Net Income (ENI): $156
million for Q2 2013 and $950 million on an LTM basis
- Economic Net Income was $156
million for Q2 2013 and $950 million on an LTM basis. On a post-tax
basis, Carlyle generated $0.39 in ENI per Adjusted Unit for Q2
2013.
- Q2 2013 ENI was impacted by
appreciation of 3% in Carlyle’s carry fund portfolio. Corporate
Private Equity carry funds were up 5%, Global Market Strategies
carry funds increased 8%, while Real Assets carry funds declined 2%
compared to the end of Q1 2013. Carry fund appreciation was 16% on
an LTM basis, compared to 9% in the prior twelve month period.
The Carlyle Group L.P. - All Segments (Actual Results)
Period
LTM
% Change $ in millions, except where noted
Q2 2012
Q3 2012 Q4 2012 Q1 2013
Q2 2013 Q3 12 - Q2 13 QoQ
YoY YTD Revenues 61 584 505 852 508
2,449 (40%) 727% 42% Expenses 119 365 323
458 352 1,499 (23%) 197%
31% Economic Net Income (57) 219 182
394 156 950 (60%) 372% 64%
Fee-Related Earnings 36 46 55 36
26 163 (27%) (26%) (10%) Net
Performance Fees (107) 165 132 355
123 774 (65%) 215% 109% Realized
Net Performance Fees 76 156 127 142
118 543 (17%) 55% 19%
Distributable Earnings 116 207 188 171
163 729 (5%) 41% 13%
Total Assets Under Management ($ billion) 156.2 157.4
170.2 176.3 180.4 2%
16% 6% Fee-Earning Assets Under Management ($
billion) 112.0 115.1 123.1 122.9
132.0 7% 18% 7% Note: Totals may
not sum due to rounding.
Assets Under Management and Remaining
Fair Value of Capital
- Total Assets Under Management:
$180.4 billion as of Q2 2013 (+16% LTM)
- Major drivers of change versus Q1
2013: New capital commitments (+$4.7 billion), market appreciation
($+3.5 billion) and net subscriptions to our hedge funds and open
end structured credit funds (+$0.9 billion), offset by net
distributions (-$6.0 billion).
- Total Dry Powder of $49.0 billion as
of Q2 2013, comprised of $20.1 billion in Corporate Private
Equity, $1.8 billion in Global Market Strategies, $9.2 billion in
Real Assets and $17.9 billion in Global Solutions.
- Fee-Earning Assets Under Management:
$132.0 billion as of Q2 2013 (+18% LTM)
- Major drivers of change versus Q1 2013:
Asset inflows including commitments (+$14.9 billion), net
subscriptions (+$0.8 billion), and change in CLO collateral
balances (+$508 million), offset by net distributions and outflows
(-$7.2 billion).
- Fee-Earning AUM was positively impacted
by the addition of inception to date fundraising in Carlyle
Partners VI (+$9.4 billion) and Carlyle Asia Partners IV (+$1.1
billion), and negatively impacted by the step down in basis in
Carlyle Partners V and Carlyle Asia Partners III.
- Remaining Fair Value of Capital
(carry funds only) as of Q2 2013: $61.1 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 2009 or earlier: 50% of total fair
value.
- AUM in-carry ratio as of the end of Q2
2013: 61%.
Non-GAAP Operating Results
Carlyle’s non-GAAP results for Q2 2013 are provided in the table
below:
Carlyle Group Summary $ in millions,
except unit and per unit amounts
Economic Net income
Q2 2013 Economic Net Income (pre-tax) $
155.8 Less: Provision for income taxes (1)
32.6 Economic Net Income, After Taxes $
123.2 Fully diluted units (in millions) 316.8
Economic Net Income, After Taxes per Adjusted Unit
$ 0.39 Distributable Earnings
Distributable Earnings $ 163.0 Less: Estimated foreign, state, and
local taxes (2) 6.7 Distributable
Earnings, After Taxes $ 156.3
Allocating Distributable Earnings for only public unitholders of
The Carlyle Group L.P. Distributable Earnings to The Carlyle
Group L.P. $ 24.6 Less: Estimated current corporate income taxes
(benefit) (3) (1.2 ) Distributable Earnings to
The Carlyle Group L.P. net of corporate income taxes $
25.8 Units in public float (in millions)(4)
49.0 Distributable Earnings, net, per The Carlyle Group L.P.
common unit outstanding
$
0.53 (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 noncontrolling
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 noncontrolling interests. (3) Represents
current corporate income taxes payable (benefit) 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 August 2013 related to the closing
of the AlpInvest transaction and 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 in
August 2013.
Corporate Private Equity (CPE)
Funds
Raised Equity Invested Realized Proceeds Carry
Fund Returns Q2 $3.8 bn
Q2 $0.8 bn
Q2 $2.5 bn
Q2 5%
YTD: $5.2 bn LTM: $10.3 bn YTD: $2.7 bn LTM:
$6.0 bn YTD: $5.5 bn LTM: $13.9 bn YTD: 14% LTM: 24%
- Distributable Earnings (DE): $84
million for Q2 2013 and $417 million on an LTM basis. The
following components impacted Distributable Earnings in Q2 2013:
- Fee-Related Earnings were ($6)
million in Q2 2013 and were $31 million on an LTM basis, compared
to $10 million in Q2 2012, with the decline driven by higher
fundraising costs and fee and basis step downs in two CPE funds
during 2012.
- Realized Net Performance Fees
were $86 million for Q2 2013 and were $377 million on an LTM basis,
compared to $50 million for Q2 2012.
- Economic Net Income (ENI): $106
million for Q2 2013
- Economic Net Income/(Loss) of
$106 million for Q2 2013 and $645 million on an LTM basis, compared
to ($65) million for Q2 2012.
- CPE carry fund valuations increased 5%
in Q2 2013 and 24% on an LTM basis, compared with (2%) in Q2
2012.
- Net Performance Fees of $109
million for Q2 2013 and $602 million on an LTM basis, compared to
($80) million for Q2 2012.
- Total Assets Under Management
(AUM): $57.9 billion as of Q2 2013
- Total AUM increased 10% to $57.9
billion from $52.5 billion as of Q2 2012.
- Funds Raised of $3.8 billion
were driven by additional closings of our latest vintage U.S. and
Asia buyout funds, closings in our Financial Services fund and
various co-investments.
- Fee-Earning Assets Under
Management were $38.5 billion as of Q2 2013, up 4% from $37.1
billion as of Q2 2012, with the increase driven by $11.3 billion in
inflows, and partially offset by $9.2 billion in outflows,
including distributions and basis step downs.
Corporate Private Equity (Actual Results)
Period
LTM % Change $ in millions, except
where noted
Q2 2012 Q3 2012
Q4 2012 Q1 2013 Q2 2013 Q3 12
- Q2 13 QoQ YoY YTD
Economic Net Income (65)
177 122 239 106 645 (56%)
265% 93% Fee-Related Earnings 10 19
18 (0) (6) 31 NM NM
NM Net Performance Fees (80) 159 100
235 109 602 (54%) 236%
155% Realized Net Performance Fees 50 126 54
111 86 377 (22%) 74% 27%
Distributable Earnings 62 145 74 114
84 417 (26%) 36% 9% Total
Assets Under Management ($ in billions) 52.5 53.2
53.3 55.1 57.9 5%
10% Fee-Earning Assets Under Management ($ in
billions) 37.1 36.9 33.8 33.2
38.5 16% 4% Note: Totals
may not sum due to rounding.
Global Market Strategies (GMS)
Funds
Raised
Equity Invested
Realized Proceeds
Carry Fund Returns Q2 $2.3 bn
Q2
$0.3 bn
Q2 $0.2 bn
Q2 8%
YTD: $3.6 bn LTM: $6.0 bn YTD: $0.3 bn
LTM: $0.7 bn YTD: $0.6 bn LTM: $1.3 bn YTD: 16% LTM:
22% Note:
Funds Raised excludes acquisitions, but includes hedge funds and
CLOs. Equity Invested and Realized Proceeds are for carry funds
only.
- Distributable Earnings (DE): $46
million for Q2 2013 and $201 million on an LTM basis. The
following components impacted Distributable Earnings in Q2 2013:
- Fee-Related Earnings were $22
million in Q2 2013 and $100 million on an LTM basis, compared to
$20 million in Q2 2012. The increase was driven by a net growth in
hedge fund assets and the pricing of six new CLOs, partially offset
by higher fundraising costs.
- Realized Net Performance Fees
were $11 million for Q2 2013 and $77 million on an LTM basis,
compared to $1 million for Q2 2012. Realized Net Performance Fees
in Q2 2013 largely were driven by carry generating exits in
distressed debt carry funds.
- Realized Investment Income of
$12 million was driven by the sale of a single debt
investment.
- Economic Net Income (ENI): $47
million for Q2 2013
- Economic Net Income of $47
million for Q2 2013 and $246 million on an LTM basis, compared to
$32 million for Q2 2012.
- GMS carry fund valuations increased 8%
in Q2 2013, compared to 3% in Q2 2012.
- Net Performance Fees of $25
million for Q2 2013 and $129 million on an LTM basis, compared to
$4 million for Q2 2012.
- Total Assets Under Management
(AUM): $34.7 billion as of Q2 2013
- Total AUM of $34.7 billion as of
Q2 2013 increased 20% versus Q2 2012, while Fee-Earning AUM of
$33.1 billion increased 19% versus Q2 2012.
- Total hedge fund AUM was $13.6 billion
as of Q2 2013.
- Carlyle priced two new CLOs during Q2
2013 totaling $1.0 billion in assets, and secured $250 million of
new funding for the Carlyle GMS Finance business development
company (BDC).
- GMS carry fund AUM ended Q2 2013 at
$3.6 billion.
- Total Structured Credit AUM ended Q2
2013 at $17.4 billion.
Global Markets Strategies (Actual Results)
Period
LTM % Change $ in millions, except
where noted
Q2 2012 Q3 2012
Q4 2012 Q1 2013 Q2 2013 Q3 12
- Q2 13 QoQ YoY YTD Economic
Net Income 32 36 59 104 47
246 (55%) 47% 116% Fee-Related Earnings
20 22 31 25 22 100
(9%) 11% 32% Net Performance Fees 4 8
23 73 25 129 (66%) 459%
341% Realized Net Performance Fees 1 1
50 14 11 77 (22%) 1767%
68% Distributable Earnings 24 28 86 41
46 201 12% 97% 59%
Total Assets Under Management ($ in
billions) 29.0 30.1 32.5 33.1
34.7 5% 20% Fee-Earning
Assets Under Management ($ in billions) 27.7 28.5
31.0 31.4 33.1 5%
19%
Funds Raised, excluding hedge funds ($ in
billions) 0.8 0.8 1.2 1.3 1.5
4.8 19% 90% Hedge Fund Net
Inflows ($ in billions) 0.7 0.4 0.0 0.0
0.8 1.2 NM 12% Note:
Totals may not sum due to rounding. Funds Raised excludes the
impact of acquisitions.
Real Assets (RA)
Funds
Raised
Equity Invested
Realized Proceeds
Carry Fund Returns Q2 $0.3 bn
Q2
$0.3 bn
Q2 $1.2 bn
Q2
-2% YTD: $0.8 bn LTM: $1.0 bn YTD: $0.8
bn LTM: $2.2 bn YTD: $1.9 bn LTM: $4.7 bn YTD: 1%
LTM: 3%
Note: Equity Invested and Realized Proceeds are for
carry funds only. Funds Raised excludes acquisitions.
- Distributable Earnings (DE): $25
million for Q2 2013 and $91 million on an LTM basis. The
following components impacted Distributable Earnings in Q2 2013:
- Fee-Related Earnings were $4
million in Q2 2013 and $14 million on an LTM basis, compared to $3
million in Q2 2012. The increase largely was driven by earnings
from our equity interest in NGP Energy Capital Management, offset
by a lower invested capital basis in the real estate funds.
- Realized Net Performance Fees
were $19 million for Q2 2013 and $86 million on an LTM basis,
compared to $26 million for Q2 2012.
- Realized Investment
Income/(Loss) of $1 million during Q2 2013 and ($12) million
LTM.
- Economic Net Income/(Loss) (ENI):
($11) million for Q2 2013
- Economic Net Income/(Loss) of
($11) million for Q2 2013 and $26 million on an LTM basis compared
to ($29) million for Q2 2012. The ENI loss in Q2 2013 was largely
driven by unrealized losses on the legacy energy carry fund
portfolio.
- RA carry fund valuations declined 2% in
Q2 2013, compared to a 3% decline in Q2 2012.
- Net Performance Fees of ($17)
million for Q2 2013 and $27 million on an LTM basis, compared to
($33) million for Q2 2012.
- Total Assets Under Management (AUM):
$39.8 billion as of Q2 2013
- Total AUM of $39.8 billion
increased 33% versus Q2 2012, driven largely by the acquisition of
an equity interest in NGP Energy Capital Management, partially
offset by fund distributions.
- Fee-Earning AUM of $28.7 billion
was up 47% versus Q2 2012, with the increase driven largely by the
AUM associated with 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
Q2 2012 Q3 2012
Q4 2012 Q1 2013 Q2 2013 Q3 12
- Q2 13 QoQ YoY YTD Economic
Net Income (29) 2 (7) 42 (11)
26 (125%) 63% (57%) Fee-Related
Earnings 3 1 0 9 4 14
(49%) 59% 574% Net Performance Fees
(33) (4) 6 42 (17) 27
(141%) 47% (63%) Realized Net Performance Fees
26 29 22 16 19 86 19%
(25%) (27%) Distributable Earnings 28
31 23 12 25 91 110% (10%)
(25%) Total Assets
Under Management ($ in billions) 30.0 29.5
40.2 40.3 39.8 (1%) 33%
Fee-Earning Assets Under Management ($ in billions)
19.5 19.6 29.3 29.4 28.7
(2%) 47% Note: Totals may not
sum due to rounding.
Global Solutions
- Distributable Earnings (DE): $8
million for Q2 2013 and $21 million on an LTM basis
- Fee-Related Earnings were $6
million for Q2 2013 and $17 million on an LTM basis.
- Realized Net Performance Fees
were $1 million for Q2 2013 and $3 million on an LTM basis.
- Economic Net Income (ENI): $13
million for Q2 2013 and $33 million on an LTM basis, compared to $4
million in Q2 2012.
- Total Assets Under Management
(AUM): $48.0 billion as of Q2 2013
- Total AUM of $48.0 billion was
up 8% compared to Q2 2012.
- Fee-Earning AUM of $31.8 billion
increased 15% versus Q2 2012, with the increase driven primarily
due to an increase in the fee basis of certain funds and inflows,
partially offset by outflows and fee basis step downs.
- AlpInvest attracted $249 million in new
commitments for its secondaries fund and $155 million in capital
commitments to manage an existing external account during Q2
2013.
- On August 1, 2013, Carlyle acquired the
remaining 40% equity interest in AlpInvest from the AlpInvest
management holders. Had the transaction closed on January 1, 2013,
Carlyle would have realized increased Fee-Related Earnings of $10
million for the first half of 2013.
Global Solutions (Actual Results)
Period
LTM % Change $ in millions, except
where noted
Q2 2012 Q3 2012 Q4
2012 Q1 2013 Q2 2013 Q3 12 - Q2
13 QoQ YoY YTD Economic Net
Income 4 4 8 9 13 33
45% 223% 66% Fee-Related Earnings 3
3 5 3 6 17 91%
133% 19% Net Performance Fees 1 1 3
6 7 16 14% 400% 144%
Realized Net Performance Fees 0 0 1 1
1 3 160% 1200% 260%
Distributable Earnings 3 3 6 4 8
21 97% 175% 35%
Total Assets Under Management ($ in billions)
44.6 44.6 44.1 47.8 48.0
1% 8% Fee-Earning Assets Under
Management ($ in billions) 27.6 30.2 28.9
28.9 31.8 10% 15%
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 June 30, 2013.
- Cash and Cash Equivalents of $573
million.
- On-balance sheet investments
attributable to unitholders of $262 million, excluding the equity
investment by Carlyle in NGP Energy Capital Management.
- Net Accrued Performance Fees
attributable to unitholders of $1,454 million. These performance
fees are comprised of Gross Accrued Performance Fees of $2,681
million less $59 million in accrued giveback obligation and $1,168
million in accrued performance fee compensation and non-controlling
interest.
- Loans payable and senior notes totaling
$923 million.
Conference Call
Carlyle will host a conference call on August 7, 2013 at 8:00
a.m. EDT to discuss Q2 2013 financial 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 “Carlyle Group Second Quarter 2013 Earnings 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 will be available soon after the live call.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset
manager with $180 billion of assets under management across 118
funds and 81 fund of funds vehicles as of June 30, 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 Global 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 Six Months Ended Jun
30,2013 Jun 30,2012 Jun
30,2013 Jun 30,2012 (Dollars in
millions, except unit and per unit data) Revenues Fund
management fees $ 242.2 $ 239.9 $ 473.6 $ 474.3 Performance fees
Realized 203.2 116.7 456.0 397.3 Unrealized 55.9
(337.1 ) 445.5 23.1 Total
performance fees 259.1 (220.4 ) 901.5 420.4 Investment income
(loss) Realized 12.7 2.4 8.5 1.6 Unrealized (1.7 )
4.6 2.9 26.9 Total investment
income (loss) 11.0 7.0 11.4 28.5 Interest and other income 4.1 2.7
6.5 5.4 Interest and other income of Consolidated Funds
252.9 219.2 521.3 430.7
Total revenues 769.3 248.4 1,914.3 1,359.3
Expenses Compensation and benefits Base compensation 173.6
149.9 352.1 256.0 Equity-based compensation 126.0 94.2 178.3 94.2
Performance fee related Realized 78.1 32.1 186.8 66.4 Unrealized
66.0 (97.7 ) 261.0 (42.9
) Total compensation and benefits 443.7 178.5 978.2 373.7 General,
administrative and other expenses 120.3 84.0 231.7 175.2 Interest
11.6 6.2 22.1 16.6 Interest and other expenses of Consolidated
Funds 201.7 179.5 451.8 364.0 Other non-operating (income) expense
(3.3 ) 0.7 (5.7 ) (3.4 ) Total
expenses 774.0 448.9 1,678.1 926.1
Other income Net
investment gains of Consolidated Funds 290.6
386.6 502.1 1,258.7
Income before provision for income taxes 285.9 186.1 738.3 1,691.9
Provision for income taxes 16.6 10.6
41.5 22.3 Net income 269.3 175.5 696.8
1,669.6
Net income attributable to non-controlling
interests in consolidated entities
300.0 357.9 468.0
1,222.8 Net income (loss) attributable to Carlyle Holdings
(30.7 ) (182.4 ) 228.8 446.8
Net income (loss) attributable to
non-controlling interests in Carlyle Holdings
(27.4 ) (172.1 ) 198.3 457.1
Net income (loss) attributable to The Carlyle Group L.P. $
(3.3 ) $ (10.3 ) $ 30.5 $ (10.3 ) Net income
(loss) attributable to The Carlyle Group L.P. per common unit Basic
$ (0.07 ) $ (0.26 ) $ 0.69 $ (0.26 ) Diluted $ (0.07 ) $
(0.26 ) $ 0.61 $ (0.26 ) Weighted-average common
units Basic 45,145,793 40,160,245
44,249,510 40,160,245 Diluted
45,145,793 40,160,245 49,881,397
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 Jun 30,2013 Jun
30,2012 Mar 31,2013 Jun
30,2013 Jun 30,2012 (Dollars in
millions) Segment Revenues Fund level fee revenues Fund
management fees $ 249.9 $ 235.0 $ 240.1 $ 972.8 $ 915.4 Portfolio
advisory fees, net 5.7 7.0 4.6 17.3 28.2 Transaction fees, net
6.8 3.7 10.4 38.3
21.7 Total fee revenues 262.4 245.7 255.1
1,028.4 965.3 Performance fees Realized 192.6 110.3 248.9 918.5
1,194.1 Unrealized 42.1 (311.1 ) 342.7
473.1 (859.5 ) Total performance fees
234.7 (200.8 ) 591.6 1,391.6 334.6 Investment income (loss)
Realized 14.6 4.0 (9.3 ) 15.5 36.3 Unrealized (7.7 )
10.0 12.3 (1.4 ) 14.0
Total investment income (loss) 6.9 14.0 3.0 14.1 50.3 Interest and
other income 4.0 2.5 2.4
15.0 7.1 Total revenues 508.0 61.4
852.1 2,449.1 1,357.3 Segment Expenses Compensation and
benefits Direct base compensation 101.0 105.8 108.0 419.4 415.2
Indirect base compensation 35.0 36.2 33.6 143.8 137.0 Equity-based
compensation 4.2 0.6 2.6 8.0 0.6 Performance fee related Realized
74.8 34.5 107.4 375.6 565.0 Unrealized 37.4
(128.6 ) 129.5 242.3 (458.0 )
Total compensation and benefits 252.4 48.5 381.1 1,189.1 659.8
General, administrative, and other
indirect expenses
82.0 60.0 62.3 256.1 236.7 Depreciation and amortization expense
6.2 4.0 6.3 24.8 19.2 Interest expense 11.6
6.1 8.5 28.7 43.8
Total expenses 352.2 118.6 458.2
1,498.7 959.5
Economic
Net Income (Loss) $ 155.8 $
(57.2 ) $ 393.9 $
950.4 $ 397.8 (-) Net
Performance Fees 122.5 (106.7 ) 354.7 773.7 227.6 (-) Investment
Income 6.9 14.0 3.0
14.1 50.3
(=) Fee Related
Earnings $ 26.4 $ 35.5
$ 36.2 $ 162.6
$ 119.9 (+) Realized Net Performance Fees
117.8 75.8 141.5 542.9 629.1 (+) Realized Investment Income (Loss)
14.6 4.0 (9.3 ) 15.5 36.3 (+) Equity based compensation 4.2
0.6 2.6 8.0
0.6
(=) Distributable Earnings $ 163.0
$ 115.9 $ 171.0
$ 729.0 $ 785.9
Total Segment Information (Unaudited),
cont
Three Months Ended
Jun 30, 2013 vs.
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Jun 30,2013
Jun 30, 2012 Mar 31, 2013 Economic Net
Income,
(Dollars in millions)
Total Segments Revenues Segment fee revenues Fund management
fees $ 235.0 $
233.9
$ 248.9 $ 240.1 $ 249.9 $ 14.9 $ 9.8 Portfolio advisory fees, net
7.0 4.6 2.4 4.6 5.7 (1.3 ) 1.1 Transaction fees, net 3.7
7.2 13.9 10.4
6.8 3.1 (3.6 ) Total fee
revenues 245.7 245.7 265.2 255.1 262.4 16.7 7.3 Performance fees
Realized 110.3 276.4 200.6 248.9 192.6 82.3 (56.3 ) Unrealized
(311.1 ) 49.0 39.3 342.7
42.1 353.2 (300.6 ) Total
performance fees (200.8 ) 325.4 239.9 591.6 234.7 435.5 (356.9 )
Investment income (loss) Realized 4.0 4.6 5.6 (9.3 ) 14.6 10.6 23.9
Unrealized 10.0 3.8 (9.8 )
12.3 (7.7 ) (17.7 ) (20.0 )
Total investment income (loss) 14.0 8.4 (4.2 ) 3.0 6.9 (7.1 ) 3.9
Interest and other income 2.5 4.4
4.2 2.4 4.0 1.5
1.6 Total revenues 61.4 583.9 505.1 852.1
508.0 446.6 (344.1 ) Expenses Compensation and benefits
Direct base compensation 105.8 97.9 112.5 108.0 101.0 (4.8 ) (7.0 )
Indirect base compensation 36.2 32.9 42.3 33.6 35.0 (1.2 ) 1.4
Equity-based compensation 0.6 0.6 0.6 2.6 4.2 3.6 1.6 Performance
fee related Realized 34.5 120.2 73.2 107.4 74.8 40.3 (32.6 )
Unrealized (128.6 ) 40.6 34.8
129.5 37.4 166.0
(92.1 ) Total compensation and benefits 48.5 292.2 263.4 381.1
252.4 203.9 (128.7 )
General, administrative, and other
indirect expenses
60.0 62.3 49.5 62.3 82.0 22.0 19.7 Depreciation and amortization
expense 4.0 6.2 6.1 6.3 6.2 2.2 (0.1 ) Interest expense 6.1
4.7 3.9 8.5
11.6 5.5 3.1 Total expenses
118.6 365.4 322.9
458.2 352.2 233.6 (106.0
)
Economic Net Income (Loss) $ (57.2
) $ 218.5 $ 182.2
$ 393.9 $ 155.8 $
213.0 $ (238.1 ) (-) Net
Performance Fees (106.7 ) 164.6 131.9 354.7 122.5 229.2 (232.2 )
(-) Investment Income (Loss) 14.0 8.4
(4.2 ) 3.0 6.9 (7.1 )
3.9
(=) Fee Related Earnings $
35.5 $ 45.5 $ 54.5
$ 36.2 $ 26.4
$ (9.1 ) $ (9.8 ) (+)
Realized Net Performance Fees 75.8 156.2 127.4 141.5 117.8 42.0
(23.7 ) (+) Realized Investment Income (Loss) 4.0 4.6 5.6 (9.3 )
14.6 10.6 23.9 (+) Equity based compensation 0.6
0.6 0.6 2.6 4.2
3.6 1.6
(=) Distributable
Earnings $ 115.9 $ 206.9
$ 188.1 $ 171.0
$ 163.0 $ 47.1 $
(8.0 )
Corporate Private Equity Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2013 vs.
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Jun 30,2013
Jun 30, 2012 Mar 31, 2013 Corporate Private
Equity
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 124.0 $
124.8 $ 123.5 $ 108.3 $ 108.8 $ (15.2 ) $ 0.5 Portfolio advisory
fees, net 4.9 3.1 2.8 4.1 4.9 - 0.8 Transaction fees, net
1.6 6.2 9.6 10.4
4.0 2.4 (6.4 ) Total fee revenues 130.5
134.1 135.9 122.8 117.7 (12.8 ) (5.1 ) Performance fees Realized
80.6 241.4 94.5 212.3 151.4 70.8 (60.9 ) Unrealized (269.7 )
72.8 86.4 207.6 31.2
300.9 (176.4 ) Total performance fees
(189.1 ) 314.2 180.9 419.9 182.6 371.7 (237.3 ) Investment income
(loss) Realized 1.5 (0.2 ) 1.2 1.8 1.7 0.2 (0.1 ) Unrealized
3.7 (1.0 ) 3.3 2.8 2.4
(1.3 ) (0.4 ) Total investment income (loss)
5.2 (1.2 ) 4.5 4.6 4.1 (1.1 ) (0.5 ) Interest and other income
1.6 3.4 2.6 1.0
1.7 0.1 0.7 Total
revenues (51.8 ) 450.5 323.9 548.3 306.1 357.9 (242.2 )
Expenses Compensation and benefits Direct base compensation 54.8
56.2 59.9 55.0 50.0 (4.8 ) (5.0 ) Indirect base compensation 24.1
19.9 27.7 20.0 21.8 (2.3 ) 1.8 Equity-based compensation 0.4 0.4
0.4 1.5 2.3 1.9 0.8 Performance fee related Realized 31.0 115.6
40.5 101.6 65.1 34.1 (36.5 ) Unrealized (140.3 ) 39.2
40.8 83.6 8.8
149.1 (74.8 ) Total compensation and benefits (30.0 )
231.3 169.3 261.7 148.0 178.0 (113.7 )
General, administrative, and other
indirect expenses
36.9 36.0 26.3 39.0 41.6 4.7 2.6 Depreciation and amortization
expense 2.3 3.5 3.5 3.5 3.4 1.1 (0.1 ) Interest expense 3.5
2.5 2.4 4.9 6.7
3.2 1.8 Total expenses
12.7 273.3 201.5 309.1
199.7 187.0 (109.4 )
Economic Net Income (Loss) $ (64.5 )
$ 177.2 $ 122.4 $
239.2 $ 106.4 $
170.9 $ (132.8 ) (-) Net
Performance Fees (79.8 ) 159.4 99.6 234.7 108.7 188.5 (126.0 ) (-)
Investment Income (Loss) 5.2 (1.2 ) 4.5
4.6 4.1 (1.1 ) (0.5 )
(=) Fee Related Earnings $ 10.1
$ 19.0 $ 18.3 $
(0.1 ) $ (6.4 ) $
(16.5 ) $ (6.3 ) (+) Realized
Net Performance Fees 49.6 125.8 54.0 110.7 86.3 36.7 (24.4 ) (+)
Realized Investment Income (Loss) 1.5 (0.2 ) 1.2 1.8 1.7 0.2 (0.1 )
(+) Equity based compensation 0.4 0.4
0.4 1.5 2.3 1.9
0.8
(=) Distributable Earnings $
61.6 $ 145.0 $
73.9 $ 113.9 $ 83.9
$ 22.3 $ (30.0 )
Global Market Strategies Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2013 vs.
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Jun 30,2013
Jun 30, 2012
Mar 31, 2013 Global Market Strategies
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $
59.5
$ 58.2 $ 70.9 $
66.3
$ 73.8 $ 14.3 $ 7.5 Portfolio advisory fees, net 0.5 0.8 0.5 0.2
0.5 - 0.3 Transaction fees, net - 0.3
3.2 - 0.1 0.1
0.1 Total fee revenues 60.0 59.3 74.6 66.5
74.4 14.4 7.9 Performance fees Realized 1.3 0.9 77.8 24.1 17.9 16.6
(6.2 ) Unrealized 4.0 5.7 (43.6
) 64.3 23.0 19.0
(41.3 ) Total performance fees 5.3 6.6 34.2 88.4 40.9 35.6 (47.5 )
Investment income (loss) Realized 2.8 4.6 4.4 1.9 12.2 9.4 10.3
Unrealized 4.8 0.8 0.3
5.1 (11.9 ) (16.7 ) (17.0 )
Total investment income (loss) 7.6 5.4 4.7 7.0 0.3 (7.3 ) (6.7 )
Interest and other income 0.4 0.5
0.8 1.1 1.5 1.1
0.4 Total revenues 73.3 71.8 114.3 163.0 117.1
43.8 (45.9 ) Expenses Compensation and benefits Direct base
compensation 25.2 17.4 24.0 25.7 24.9 (0.3 ) (0.8 ) Indirect base
compensation 4.5 5.9 6.0 4.8 5.5 1.0 0.7 Equity-based compensation
0.1 - 0.1 0.4 0.6 0.5 0.2 Performance fee related Realized 0.7 0.2
27.5 9.7 6.7 6.0 (3.0 ) Unrealized 0.2 (1.8 )
(16.5 ) 6.2 9.6 9.4
3.4 Total compensation and benefits 30.7 21.7
41.1 46.8 47.3 16.6 0.5
General, administrative, and other
indirect expenses
9.1 11.7 12.5 9.5 19.5 10.4 10.0 Depreciation and amortization
expense 0.6 1.1 1.0 1.2 1.1 0.5 (0.1 ) Interest expense 0.9
1.3 0.6 1.5
2.1 1.2 0.6 Total expenses
41.3 35.8 55.2
59.0 70.0 28.7 11.0
Economic Net Income $ 32.0
$ 36.0 $ 59.1
$ 104.0 $ 47.1 $
15.1 $ (56.9 ) (-) Net
Performance Fees 4.4 8.2 23.2 72.5 24.6 20.2 (47.9 ) (-) Investment
Income 7.6 5.4 4.7
7.0 0.3 (7.3 ) (6.7 )
(=) Fee
Related Earnings $ 20.0 $
22.4 $ 31.2 $ 24.5
$ 22.2 $ 2.2
$ (2.3 ) (+) Realized Net Performance Fees 0.6
0.7 50.3 14.4 11.2 10.6 (3.2 ) (+) Realized Investment Income 2.8
4.6 4.4 1.9 12.2 9.4 10.3 (+) Equity based compensation 0.1
- 0.1 0.4
0.6 0.5 0.2
(=) Distributable
Earnings $ 23.5 $ 27.7
$ 86.0 $ 41.2
$ 46.2 $ 22.7 $
5.0
Real Assets Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2013 vs.
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Jun 30,2013
Jun 30, 2012
Mar 31, 2013 Real Assets
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 34.1 $
34.4 $ 35.9 $ 47.0 $ 46.4 $ 12.3 $ (0.6 ) Portfolio advisory fees,
net 1.6 0.7 (0.9 ) 0.3 0.3 (1.3 ) - Transaction fees, net
2.1 0.7 1.1 -
2.7 0.6 2.7 Total fee
revenues 37.8 35.8 36.1 47.3 49.4 11.6 2.1 Performance fees
Realized 27.0 31.9 24.5 11.0 20.6 (6.4 ) 9.6 Unrealized
(56.0 ) (27.7 ) (11.9 ) 49.5
(33.4 ) 22.6 (82.9 ) Total performance fees
(29.0 ) 4.2 12.6 60.5 (12.8 ) 16.2 (73.3 ) Investment income (loss)
Realized (0.3 ) 0.2 - (13.0 ) 0.7 1.0 13.7 Unrealized 1.5
4.0 (13.4 ) 4.5
1.7 0.2 (2.8 ) Total investment income
(loss) 1.2 4.2 (13.4 ) (8.5 ) 2.4 1.2 10.9 Interest and other
income 0.4 0.4 0.5
0.3 0.6 0.2 0.3
Total revenues 10.4 44.6 35.8 99.6 39.6 29.2 (60.0 )
Expenses Compensation and benefits Direct base compensation 16.9
16.1 19.9 17.9 18.2 1.3 0.3 Indirect base compensation 5.6 5.7 6.8
7.5 6.4 0.8 (1.1 ) Equity-based compensation 0.1 0.2 0.1 0.6 1.2
1.1 0.6 Performance fee related Realized 1.5 2.5 2.4 (4.9 ) 1.6 0.1
6.5 Unrealized 2.1 5.3 4.0
23.6 2.9 0.8
(20.7 ) Total compensation and benefits 26.2 29.8 33.2 44.7
30.3 4.1 (14.4 )
General, administrative, and other
indirect expenses
11.1 11.4 7.7 10.4 16.5 5.4 6.1 Depreciation and amortization
expense 0.7 1.1 1.1 1.1 1.2 0.5 0.1 Interest expense 1.1
0.7 0.7 1.6
2.2 1.1 0.6 Total expenses
39.1 43.0 42.7
57.8 50.2 11.1 (7.6 )
Economic Net Income (Loss) $ (28.7
) $ 1.6 $ (6.9 )
$ 41.8 $ (10.6 ) $
18.1 $ (52.4 ) (-) Net
Performance Fees (32.6 ) (3.6 ) 6.2 41.8 (17.3 ) 15.3 (59.1 ) (-)
Investment Income (Loss) 1.2 4.2
(13.4 ) (8.5 ) 2.4 1.2
10.9
(=) Fee Related Earnings $ 2.7
$ 1.0 $ 0.3
$ 8.5 $ 4.3 $
1.6 $ (4.2 ) (+) Realized Net
Performance Fees 25.5 29.4 22.1 15.9 19.0 (6.5 ) 3.1 (+) Realized
Investment Income (Loss) (0.3 ) 0.2 - (13.0 ) 0.7 1.0 13.7 (+)
Equity based compensation 0.1 0.2
0.1 0.6 1.2 1.1
0.6
(=) Distributable Earnings $
28.0 $ 30.8 $ 22.5
$ 12.0 $ 25.2
$ (2.8 ) $ 13.2
Global Solutions Segment Results
(Unaudited)
Three Months Ended
Jun 30, 2013 vs.
Jun 30,2012
Sept 30,2012
Dec 31,2012
Mar 31,2013
Jun 30,2013
Jun 30, 2012
Mar 31, 2013
Global Solutions
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $
17.4
$ 16.5 $
18.6
$ 18.5 $
20.9
$ 3.5 $ 2.4 Portfolio advisory fees, net - - - - - - - Transaction
fees, net - - - -
- - - Total fee
revenues 17.4 16.5 18.6 18.5 20.9 3.5 2.4 Performance fees Realized
1.4 2.2 3.8 1.5 2.7 1.3 1.2 Unrealized 10.6
(1.8 ) 8.4 21.3 21.3
10.7 - Total performance fees 12.0 0.4
12.2 22.8 24.0 12.0 1.2 Investment income (loss) Realized - - - - -
- - Unrealized - - -
(0.1 ) 0.1 0.1 0.2
Total investment income (loss) - - - (0.1 ) 0.1 0.1 0.2 Interest
and other income 0.1 0.1 0.3
- 0.2 0.1
0.2 Total revenues 29.5 17.0 31.1 41.2 45.2 15.7 4.0
Expenses Compensation and benefits Direct base compensation 8.9 8.2
8.7 9.4 7.9 (1.0 ) (1.5 ) Indirect base compensation 2.0 1.4 1.8
1.3 1.3 (0.7 ) - Equity-based compensation - - - 0.1 0.1 0.1 -
Performance fee related Realized 1.3 1.9 2.8 1.0 1.4 0.1 0.4
Unrealized 9.4 (2.1 ) 6.5
16.1 16.1 6.7 -
Total compensation and benefits 21.6 9.4 19.8 27.9 26.8 5.2 (1.1 )
General, administrative, and other
indirect expenses
2.9 3.2 3.0 3.4 4.4 1.5 1.0 Depreciation and amortization expense
0.4 0.5 0.5 0.5 0.5 0.1 - Interest expense 0.6
0.2 0.2 0.5 0.6
- 0.1 Total expenses 25.5
13.3 23.5 32.3
32.3 6.8 -
Economic
Net Income $ 4.0 $ 3.7
$ 7.6 $ 8.9
$ 12.9 $ 8.9 $
4.0 (-) Net Performance Fees 1.3 0.6 2.9 5.7 6.5 5.2
0.8 (-) Investment Income (Loss) - -
- (0.1 ) 0.1 0.1
0.2
(=) Fee Related Earnings $
2.7 $ 3.1 $ 4.7
$ 3.3 $ 6.3
$ 3.6 $ 3.0 (+) Realized
Net Performance Fees 0.1 0.3 1.0 0.5 1.3 1.2 0.8 (+) Realized
Investment Income - - - - - - - (+) Equity based compensation
- - - 0.1
0.1 0.1 0.0
(=)
Distributable Earnings $ 2.8 $
3.4 $ 5.7 $ 3.9
$ 7.7 $ 4.9
$ 3.8
Total Assets Under Management Roll Forward
(Unaudited)
Corporate Private
Equity Global Market Strategies (8) Real Assets
(9)
Global 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 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 Commitments (1) 3,823 -
3,823 285 -
285 296 -
296 333 -
333
4,737 - 4,737 Capital Called, net (2) (997 )
1,042
45 (278 ) 320
42 (827 ) 767
(60 )
(523 ) 619
96 (2,625 ) 2,748 123
Distributions (3) 206 (2,959 )
(2,753 ) 28 (420 )
(392 ) 191 (1,160 )
(969 ) 129 (2,023 )
(1,894 ) 554 (6,562 )
(6,008 ) Subscriptions, net of Redemptions (4) - -
- - 869
869 - -
- - -
- -
869 869 Changes in CLO collateral balances (5) - -
- - 540
540 - -
- - -
- -
540 540 Market Appreciation/(Depreciation) (6) -
1,624
1,624 - 227
227 - 224
224 - 1,421
1,421 - 3,496 3,496 Foreign exchange
and other (7) 4 30
34 - 84
84 8 (70 )
(62 ) 139 183
322 151
227 378
Balance, As of June 30, 2013 $ 20,098
$ 37,794 $ 57,892
$ 1,797 $ 32,946
$ 34,743 $ 9,189
$ 30,580 $
39,769 $ 17,931 $
30,113 $ 48,044 $
49,015 $ 131,433
$ 180,448 Corporate Private
Equity Global Market Strategies (8) Real Assets
(9)
Global 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 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 Acquisitions - -
- -
2,275
2,275 4,000 8,106
12,106 - -
-
4,000 10,381 14,381 Commitments (1) 10,225 -
10,225 1,061 -
1,061 532 -
532 4,816 -
4,816 16,634 - 16,634 Capital Called,
net (2) (6,418 ) 6,081
(337 ) (758 ) 735
(23
) (3,498 ) 3,324
(174 ) (3,961 ) 3,914
(47 ) (14,635 ) 14,054
(581 ) Distributions (3) 1,031 (13,581 )
(12,550 ) 213 (1,236 )
(1,023 ) 1,077
(4,967 )
(3,890 ) 483 (7,364 )
(6,881 )
2,804 (27,148 ) (24,344 )
Subscriptions, net of Redemptions (4) - -
- - 1,265
1,265 - -
- - -
- - 1,265
1,265 Changes in CLO collateral balances (5) - -
- -
994
994 - -
- - -
- - 994
994 Market Appreciation/(Depreciation) (6) - 8,217
8,217 - 977
977 - 1,200
1,200 - 5,138
5,138 - 15,532 15,532 Foreign exchange
and other (7) (32 ) (155 )
(187 ) - 171
171 19 (28
)
(9 ) 225
209
434 212
197 409
Balance, As of June 30, 2013 $ 20,098
$ 37,794 $ 57,892
$ 1,797 $ 32,946
$ 34,743 $ 9,189
$ 30,580 $
39,769 $ 17,931 $
30,113 $ 48,044 $
49,015 $ 131,433
$ 180,448 (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) Includes onboarding of fully committed
existing funds from another manager and represents the impact of
foreign exchange rate fluctuations on the translation of our
non-U.S. dollar denominated funds and other changes in Total AUM.
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 $17.4 billion from
our structured credit funds (including $0.1 billion of Available
Capital), $13.6 billion in our hedge funds, $3.6 billion (including
$1.7 billion of Available Capital) in our carry funds and $0.1
billion from our business development company. (9) Amounts related
to the NGP Funds are based on the latest available information (in
most cases as of March 31, 2013). (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 March 31, 2013)
as provided by their general partners, plus the net cash flows
since the latest valuation, up to June 30, 2013.
Fee-Earning AUM Roll Forward
(Unaudited)
For the Three Months Ended
June 30, 2013 (USD in millions)
CorporatePrivateEquity
GlobalMarketStrategies
RealAssets(7)
GlobalSolutions
Total Fee-Earning AUM Balance, As of March 31,
2013 $ 33,195 $ 31,436 $ 29,419 $ 28,854 $ 122,904 Inflows,
including Commitments (1) 10,170 281 755 3,677 14,883 Outflows,
including Distributions (2) (4,255 ) (155 ) (1,432 ) (1,391 )
(7,233 ) Subscriptions, net of Redemptions (3) 812 812 Changes in
CLO collateral balances (4) 508 508 Market
Appreciation/(Depreciation) (5) 94 131 225 Foreign exchange and
other (6) (603 ) 81 (57 )
504 (75 )
Balance, As of June
30, 2013 $ 38,507 $
33,057 $ 28,685
$ 31,775 $ 132,024
For the Twelve Months Ended June 30, 2013 (USD
in millions)
CorporatePrivateEquity
GlobalMarketStrategies
RealAssets(7)
GlobalSolutions
Total Fee-Earning AUM Balance, As of June 30,
2012 $ 37,129 $ 27,740 $ 19,528 $ 27,576 $ 111,973 Acquisitions
2,260 10,307 12,567 Inflows, including Commitments (1) 11,299 1,115
1,827 9,203 23,444 Outflows, including Distributions (2) (9,207 )
(496 ) (2,968 ) (6,482 ) (19,153 ) Subscriptions, net of
Redemptions (3) 1,172 1,172 Changes in CLO collateral balances (4)
611 611 Market Appreciation/(Depreciation) (5) 488 747 1,235
Foreign exchange and other (6) (714 ) 167
(9 ) 731
175
Balance, As of June 30, 2013 $
38,507 $ 33,057
$ 28,685 $ 31,775
$ 132,024 (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 funds vehicles based
on the lower of cost or fair value. (6) Includes funds with fees
based on gross asset value, onboarding of fully committed existing
funds from another manager and 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 June 30, 2013, the Legacy Energy Funds
had, in the aggregate, approximately $13.7 billion in AUM and $8.9
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 June 30, 2013,
the NGP management fee funds had, in the aggregate, approximately
$12.5 billion in AUM and $9.7 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 June 30, 2013 as of
June 30, 2013
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 $ 4,071.5 3.0x 34% 25% $ 1,362.4
$ 4,071.5 3.0x 34% CP III 2/2000 $ 3,912.7 $ 4,031.6 $ 10,146.3
2.5x 27% 21% $ 4,031.6 $ 10,146.3 2.5x 27% CP IV 12/2004 $ 7,850.0
$ 7,612.6 $ 16,387.7 2.2x 16% 13% $ 5,063.6 $ 12,297.8 2.4x 19% CP
V 5/2007 $ 13,719.7 $ 12,152.0 $ 19,081.5 1.6x 18% 12% $ 3,033.8 $
7,114.4 2.3x 28% 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
€
3,773.5
1.8x 38% 21%
€
1,230.8
€
3,052.3
2.5x 61% CAP I 12/1998 $ 750.0 $ 627.7 $ 2,491.0 4.0x 25% 18% $
627.7 $ 2,491.0 4.0x 25% CAP II 2/2006 $ 1,810.0 $ 1,626.1 $
2,822.4 1.7x 12% 8% $ 587.7 $ 1,759.4 3.0x 27% CAP III 5/2008 $
2,551.6 $ 2,112.3 $ 2,584.9 1.2x 11% 5% $ 373.5 $ 588.2 1.6x 17%
CJP I 10/2001
¥
50,000.0
¥
47,291.4
¥
133,763.5
2.8x 61% 37%
¥
39,756.6
¥
130,976.9
3.3x 65% CGFSP I 9/2008 $ 1,100.2 $ 1,007.2 $ 1,379.0 1.4x 15% 9% $
184.3 $ 414.2 2.2x 26% All Other Funds (9) Various $ 3,395.3 $
5,027.0 1.5x 17% 6% $ 2,396.6 $ 4,129.2 1.7x 21% Coinvestments and
Other (10) Various $ 7,412.8 $ 17,946.2 2.4x
36% 33% $ 4,653.4 $ 14,438.6 3.1x 36%
Total Fully Invested Funds $ 45,754.3
$ 90,957.5 2.0x 27%
20% $ 25,592.2 $
65,504.6 2.6x 30%
Funds in the
Investment Period (6)
CP VI 5/2012 $ 9,420.8 $ - n/a n/a n/a n/a CEP III 12/2006
€
5,294.9
€
4,521.8
€
6,118.1
1.4x 10% 7% CAP IV 11/2012 $ 1,132.3 $ - n/a n/a n/a n/a CJP II
7/2006
¥
165,600.0
¥
135,239.7
¥
142,884.5
1.1x 2% (3%) CAGP IV 6/2008 $ 1,041.4 $ 568.4 $ 685.6 1.2x 10% 0%
CEOF I 5/2011 $ 1,119.1 $ 304.6 $ 372.6 1.2x 24% 8% All Other Funds
(11) Various $ 1,325.8 $ 1,623.4 1.2x 10%
1%
Total Funds in the Investment Period $
9,441.1 $ 12,076.9 1.3x
9% 5% $ 1,266.8
$ 2,406.9 1.9x 20%
TOTAL CORPORATE PRIVATE EQUITY (12) $ 55,195.4
$ 103,034.5 1.9x
26% 18% $ 26,859.0
$ 67,911.5 2.5x 30%
TOTAL INVESTMENTS REALIZED/PARTIALLY
REALIZED INVESTMENTS (5) as of June 30, 2013 as of
June 30, 2013
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 $ 1,379.9 2.6x 44% 30% $ 522.5 $
1,379.9 2.6x 44% CRP IV 12/2004 $ 950.0 $ 1,186.2 $ 1,207.1 1.0x 0%
(3%) $ 441.9 $ 467.7 1.1x 10% CRP V 11/2006 $ 3,000.0 $ 3,235.3 $
4,464.4 1.4x 10% 7% $ 2,078.2 $ 2,966.1 1.4x 13% CEREP I 3/2002
€
426.6
€
517.0
€
741.6
1.4x 13% 7%
€
441.2
€
753.4
1.7x 19% CEREP II 4/2005
€
762.7
€
826.9
€
115.9
0.1x n/a n/a
€
416.6
€
125.8
0.3x n/a CEREP III 5/2007
€
2,229.5
€
1,821.0
€
1,870.1
1.0x 1% (4%)
€
63.3
€
30.9
0.5x (20%) Energy II 7/2002 $ 1,100.0 $ 1,334.8 $ 3,637.3 2.7x 81%
54% $ 827.4 $ 3,377.8 4.1x 105% Energy III 10/2005 $ 3,800.0 $
3,559.9 $ 6,783.2 1.9x 15% 11% $ 1,545.4 $ 4,450.9 2.9x 28% Energy
IV 12/2007 $ 5,979.1 $ 5,197.6 $ 8,203.8 1.6x 21% 14% $ 1,710.6 $
3,528.2 2.1x 31% All Other Funds (13) Various $ 2,289.6 $ 2,287.5
1.0x 0% (6%) $ 1,484.1 $ 1,702.9 1.1x 8% Coinvestments and Other
(10) Various $ 4,257.3 $ 7,034.0 1.7x 20%
15% $ 1,729.2 $ 3,851.2 2.2x 29%
Total Fully Invested Funds $ 25,699.4
$ 38,544.5 1.5x 16%
9% $ 11,537.2 $
22,908.3 2.0x 27%
Funds in the
Investment Period (6)
CRP VI 9/2010 $ 2,340.0 $ 932.7 $ 1,246.7 1.3x 33% 16% CIP 9/2006 $
1,143.7 $ 855.5 $ 873.8 1.0x 1% (4%) Renew II 3/2008 $ 3,417.5 $
2,718.9 $ 3,570.8 1.3x 12% 7% All Other Funds (14) Various $ 204.3
$ 254.3 1.2x 29% 21%
Total Funds in
the Investment Period $ 4,711.4 $
5,945.6 1.3x 11%
6% $ 839.7 $ 904.3
1.1x 3% TOTAL REAL ASSETS (12) $
30,410.9 $ 44,490.1 1.5x
15% 9% $ 12,376.8
$ 23,812.5 1.9x 27%
Global Markets Strategies Carry Funds and
Global Solutions (Unaudited)
TOTAL
INVESTMENTS as of June 30, 2013
FundInceptionDate
(1)
Fund Size
CumulativeInvested
Capital(15)
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 $ 2,429.2 1.8x 19%
13% CEMOF I 12/2010 $ 1,382.5 $ 481.7 $ 567.3 1.2x 29% 10%
TOTAL INVESTMENTS as of June 30, 2013
VintageYear
Fund Size
CumulativeInvested
Capital(2)(18)
Total FairValue (3)(18)
MOIC (4)
Gross IRR (7)
Net IRR (8)
Global Solutions (16) (Reported in Local Currency, in
Millions)
Fully Committed
Funds (17)
Main Fund I - Fund Investments 2000
€
5,174.6
€
3,932.3
€
6,307.6
1.6x 12% 12% Main Fund II - Fund Investments 2003
€
4,545.0
€
4,424.2
€
6,411.3
1.4x 10% 9% Main Fund III - Fund Investments 2005
€
11,500.0
€
10,181.3
€
12,649.1
1.2x 7% 6% Main Fund IV - Fund Investments 2009
€
4,880.0
€
1,631.3
€
1,718.5
1.1x 4% 3% Main Fund I - Secondary Investments 2002
€
519.4
€
459.2
€
865.3
1.9x 55% 51% Main Fund II - Secondary Investments 2003
€
998.4
€
930.0
€
1,654.6
1.8x 28% 26% Main Fund III - Secondary Investments 2006
€
2,250.0
€
2,092.0
€
2,811.7
1.3x 10% 9% Main Fund IV - Secondary Investments 2010
€
1,856.4
€
1,642.0
€
2,200.4
1.3x 20% 19% Main Fund II - Co-Investments 2003
€
1,090.0
€
867.8
€
2,330.9
2.7x 45% 43% Main Fund III - Co-Investments 2006
€
2,760.0
€
2,469.0
€
3,077.4
1.2x 5% 4% Main Fund IV - Co-Investments 2010
€
1,475.0
€
1,244.0
€
1,723.9
1.4x 19% 17% Main Fund II - Mezzanine Investments 2004
€
700.0
€
706.6
€
951.5
1.3x 8% 7% Main Fund III - Mezzanine Investments 2006
€
2,000.0
€
1,408.8
€
1,797.7
1.3x 10% 8% All Other Funds (19) Various
€
1,344.2
€
1,951.2
1.5x 18% 14%
Total Fully Committed
Funds
€
33,332.6
€
46,451.1
1.4x 11% 11%
Funds in the
Commitment Period
Main Fund V - Fund Investments 2012
€
4,830.4
€
67.8
€
59.0
0.9x (47%) (63%) Main Fund V - Secondary Investments 2011
€
2,665.3
€
615.1
€
814.6
1.3x 46% 42% Main Fund V - Co-Investments 2012
€
1,228.0
€
320.2
€
344.4
1.1x 20% 17% All Other Funds (19) Various
€
129.0
€
149.4
1.2x 34% 22%
Total Funds in the Commitment
Period
€
1,132.0
€
1,367.3
1.2x 38% 32% TOTAL
GLOBAL SOLUTIONS
€
34,464.7
€
47,818.5
1.4x 12% 11% TOTAL
GLOBAL SOLUTIONS (USD) (20) $ 44,823.4
$ 62,190.7 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)
Aggregate includes the following funds: MENA, CGFSP II, CSABF, CETP
II, CBPF, CSSAF and CPF 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, CAREP II, Energy I and
Renew I. (14) Aggregate includes the following fund: CRCP I. (15)
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. (16)
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 June
30, 2013, these excluded investments represent $0.7 billion of AUM.
(17) Fully Committed funds are past the expiration date of the
commitment period as defined in the respective limited partnership
agreement. (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.
Reconciliation for Economic Net Income and
Distributable Earnings (Unaudited)
Three Months Ended Six
Months Ended June 30,2013 June
30,2012
June 30,2013
(Dollars in millions) Income before provision for
income taxes $ 285.9 $ 186.1 $ 738.3 Adjustments: Partner
compensation - 5.6 -
Equity-based compensation issued in
conjunction with the IPO and strategic investments
123.1 93.6 175.2 Acquisition related charges and amortization of
intangibles 52.5 21.5 115.0 Losses associated with debt refinancing
activities - - 1.9 Other non-operating (income) expenses (3.3 ) 0.7
(5.7 )
Net income attributable to non-controlling
interests in consolidated entities
(300.0 ) (357.9 ) (468.0 )
Provision for income taxes attributable to
non-controlling interests in consolidated entities
(5.7 ) (5.7 ) (11.7 ) Severance and lease terminations 3.5 1.7 4.0
Other adjustments (0.2 ) (2.8 ) 0.7
Economic Net Income (Loss) $ 155.8 $ (57.2 ) $ 549.7
Net performance fees 122.5 (106.7 ) 477.2 Investment income
6.9 14.0 9.9
Fee
Related Earnings $ 26.4 $ 35.5 $ 62.6
Realized performance fees, net of related compensation 117.8 75.8
259.3 Investment income - realized 14.6 4.0 5.3 Equity-based
compensation 4.2 0.6
6.8
Distributable Earnings $ 163.0 $ 115.9
$ 334.0 Depreciation and amortization expense 6.2 4.0
12.5 Interest expense 11.6 6.1
20.1
Adjusted EBITDA $ 180.8 $ 126.0 $
366.6
Reconciliation for Economic Net income and
Distributable Earnings, cont. (Unaudited)
Three Months Ended
Six Months Ended June 30,2013 June
30,2013 (Dollars in millions, except unit and per
unit amounts) Economic Net Income $ 155.8 $
549.7
Less: Provision for Income Taxes 32.6 106.9
Economic Net Income, After Taxes $ 123.2 $ 442.8
Economic Net Income, After Taxes per Adjusted Unit(1)
$ 0.39 $ 1.39 Distributable Earnings $
163.0 $ 334.0 Less: Estimated foreign, state, and local taxes
6.7 17.7 Distributable Earnings, After
Taxes $ 156.3 $ 316.3 Distributable Earnings
to The Carlyle Group L.P. $ 24.6 $ 49.7 Less: Estimated current
corporate income taxes (benefit) and TRA payments (1.2 )
0.7 Distributable Earnings to The Carlyle Group L.P.
net of corporate income taxes $ 25.8 $ 49.0
Distributable Earnings, net, per The Carlyle Group L.P. common unit
outstanding(2) $ 0.53 $ 1.00 (1 )
Adjusted Units were determined as follows: The Carlyle Group
L.P. common units outstanding 46,109,886 46,109,886 Carlyle
Holdings partnership units not held by The Carlyle Group L.P.
262,873,250 262,873,250 Common units issued in August 2013 related
to the AlpInvest acquisition 2,887,970 2,887,970 Dilutive effect of
unvested deferred restricted common units 3,997,956 4,700,069
Contingently issuable Carlyle Holdings partnership units
931,818 931,818 Total Adjusted Units
316,800,880 317,502,993 (2)
As of June 30, 2013, there are 46,109,886
outstanding common units of The Carlyle Group L.P. In August 2013,
an additional 2,918,461 common units were issued that relate to the
closing of the AlpInvest transaction and to vested deferred
restricted common units. For purposes of this calculation, those
common units have been added to the common units outstanding as of
June 30, 2013, resulting in total common units of 49,028,347.
GAAP for 12-Month Rolling Summary
(Unaudited)
Twelve Months
Ended June 30,2013 June 30,2012
(Dollars in millions) Revenues Fund management fees $
976.9 $ 942.6 Performance fees Realized
966.2 1,209.8 Unrealized 556.0
(888.2 ) Total performance fees 1,522.2 321.6
Investment income (loss) Realized 23.2 23.9 Unrealized
(3.9 ) 21.0 Total
investment income (loss) 19.3 44.9 Interest and other income 15.6
8.1 Interest and other income of Consolidated Funds
994.1 814.3 Total
revenues 3,528.1 2,131.5
Expenses Compensation and
benefits Base compensation 720.6 455.2 Equity-based compensation
285.8 94.2 Performance fee related Realized 405.9 207.3 Unrealized
336.1 (223.0 )
Total compensation and benefits 1,748.4 533.7 General,
administrative and other expenses 414.0 354.4 Interest 30.1 44.4
Interest and other expenses of Consolidated Funds 845.9 626.2 Other
non-operating expenses 4.8
8.0 Total expenses 3,043.2 1,566.7
Other income Net investment gains of Consolidated Funds
1,001.4 1,212.4 Gain on business acquisition -
7.9 Income before
provision for income taxes 1,486.3 1,785.1 Provision for income
taxes 59.6 38.0
Net income 1,426.7 1,747.1
Net income attributable to non-controlling
interests in consolidated entities
1,001.9 1,211.3
Net income attributable to Carlyle Holdings 424.8 535.8
Net income attributable to non-controlling
interests in Carlyle Holdings
363.7 546.1
Net income (loss) attributable to The Carlyle Group L.P. $
61.1 $ (10.3 )
Reconciliation of Non-GAAP to GAAP for
12-Month Rolling Summary (Unaudited)
Twelve Months
Ended June 30,2013 June 30,2012
(Dollars in millions) Income before provision for
income taxes $ 1,486.3 $ 1,785.1
Adjustments: Partner compensation - (367.5 )
Equity-based compensation issued in
conjunction with the IPO and strategic investments
281.7 93.6 Acquisition related charges and amortization of
intangibles 197.7 102.6 Losses associated with debt refinancing
activities 1.9 - Gain on business acquisition - (7.9 ) Other
non-operating expenses 4.8 8.0
Net income attributable to non-controlling
interests in consolidated entities
(1,001.9 ) (1,211.3 )
Provision for income taxes attributable to
non-controlling interests in consolidated entities
(25.5 ) (5.7 ) Severance and lease terminations 5.8 4.3 Other
adjustments (0.4 ) (3.4 )
Economic Net Income $ 950.4 $
397.8 Net performance fees 773.7 227.6 Investment
income 14.1 50.3
Fee Related Earnings $ 162.6 $
119.9 Realized performance fees, net of
related compensation 542.9 629.1 Investment income - realized 15.5
36.3 Equity-based compensation 8.0
0.6
Distributable Earnings $
729.0 $ 785.9
Depreciation and amortization expense 24.8 19.2 Interest expense
28.7 43.8
Adjusted EBITDA $ 782.5 $
848.9
The Carlyle Group L.P.GAAP Balance
Sheet (Unaudited)
As of June 30, 2013
ConsolidatedOperatingEntities
ConsolidatedFunds
Eliminations
Consolidated (Dollars in millions)
Assets Cash and cash equivalents $
572.9
$ - $ - $
572.9
Cash and cash equivalents held at Consolidated Funds -
2,205.5
)
- 2,205.5 Restricted cash 41.0 - - 41.0 Restricted cash and
securities of Consolidated Funds - 29.2 - 29.2 Accrued performance
fees 2,680.8 - (33.9 ) 2,646.9 Investments 892.5 - (81.3 ) 811.2
Investments of Consolidated Funds - 26,068.1 - 26,068.1 Due from
affiliates and other receivables, net 195.8 - (10.9 ) 184.9
Due from affiliates and other receivables
of Consolidated Funds, net
- 431.6 - 431.6 Fixed assets, net 62.7 - - 62.7 Deposits and other
44.2 3.7 - 47.9 Intangible assets, net 624.6 - - 624.6 Deferred tax
assets 60.7 - -
60.7 Total assets $ 5,175.2 $ 28,738.1 $
(126.1 ) $ 33,787.2
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 - 15,089.3 (69.5 )
15,019.8 Accounts payable, accrued expenses and other liabilities
223.7 - - 223.7 Accrued compensation and benefits 1,554.0 - -
1,554.0 Due to affiliates 282.9 59.4 (0.5 ) 341.8 Deferred revenue
55.6 1.5 - 57.1 Deferred tax liabilities 78.2 - - 78.2 Other
liabilities of Consolidated Funds - 1,781.8 (51.6 ) 1,730.2 Accrued
giveback obligations 59.3 - (9.7
) 49.6 Total liabilities 3,176.9 16,932.0 (131.3 )
19,977.6 Redeemable non-controlling interests in
consolidated entities 7.1 3,934.4 - 3,941.5 Total partners'
capital 1,991.2 7,871.7 5.2
9,868.1 Total liabilities and partners'
capital $ 5,175.2 $ 28,738.1 $ (126.1 ) $ 33,787.2
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 and excluding equity-based compensation.
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, interest expense and
equity-based compensation.
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;
(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; and
(d) the gross assets (including assets
acquired with leverage) of our Business Development Company.
AUM includes certain energy and renewable resources funds that
Carlyle jointly advises with Riverstone Holdings 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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