- $183 million of Distributable
Earnings on a pre-tax basis in Q1 2014 and $852 million over last
twelve months; $0.52 per common unit on a post-tax basis
- Net accrued performance fee balance
of $2.0 billion up 36% over Q1 2013, or $6.16 per Adjusted Unit,
and gross accrued performance fee balance of $3.8 billion
- $5.5 billion in new capital raised
in Q1 2014 and $22.8 billion raised over the last twelve
months
- $3.1 billion in realized proceeds in
Q1 2014 and $16.3 billion realized over the last twelve
months
- $1.1 billion in equity invested in
Q1 2014 and another $3.1 billion committed, and $6.8 billion
invested over the last twelve months
- 6% carry fund portfolio appreciation
in Q1 2014, driving Economic Net Income of $322 million on a
pre-tax basis and $0.85 per Adjusted Unit on a post-tax
basis
- U.S. GAAP net income attributable to
The Carlyle Group L.P. of $25 million, or $0.41 per common unit on
a diluted basis, in Q1 2014
Global alternative asset manager The Carlyle Group L.P.
(NASDAQ:CG) today reported its unaudited results for the first
quarter of 2014, which ended on March 31, 2014.
Carlyle Co-CEO David M. Rubenstein said, “Carlyle had a solid
start to 2014, which has resulted in our last twelve month
Distributable Earnings increasing 25% over the prior twelve month
period to more than $850 million. Fundraising, fund performance,
and investing activity are all running at strong levels. As new top
talent joins our seasoned leadership team and we launch new fund
strategies and make targeted acquisitions, Carlyle continues to
meet the increasingly complex demands of our global investor
base.”
Carlyle Co-CEO William E. Conway, Jr. said, “Carlyle’s funds
produced great returns for our fund investors this quarter, led by
an 8% increase in the value of our Private Equity carry funds,
which helped drive a 36% increase in Carlyle’s net accrued
performance fee balance year over year to $2.0 billion. Although
the investing environment has grown more challenging over the past
few quarters, we have been successful in committing to several
exciting investment opportunities, and we are executing sales at
attractive prices around the world.”
U.S. GAAP results for Q1 2014 included income before provision
for income taxes of $472 million and net income attributable to the
common unitholders through The Carlyle Group L.P. of $25 million,
or net income per common unit of $0.41 on a diluted basis. Total
balance sheet assets were $36.3 billion as of March 31, 2014.
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 14, 2014, payable on May 22, 2014.
The Carlyle Group Distribution Policy
As further discussed in its Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, 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 2014, year-to-date (YTD) and for the last twelve months
(LTM)1.
Funds Raised Equity Invested
Q1
$5.5 billion
Q1
$1.1 billion
YTD: $5.5 bn
LTM: $22.8 bn
YTD: $1.1 bn
LTM: $6.8 bn
Realized Proceeds Carry Fund Returns
Q1
$3.1 billion
Q1
6%
YTD: $3.1 bn
LTM: $16.3 bn
YTD: 6%
LTM: 18%
Note: Equity Invested and Realized Proceeds reflect carry funds
only.
During Q1 2014, within its carry funds, Carlyle generated
realized proceeds of $3.1 billion from 124 different investments
across 35 carry funds. Carlyle deployed $1.1 billion of equity in
72 new or follow-on investments across 24 carry funds. On an LTM
basis, Carlyle realized proceeds of $16.3 billion and invested $6.8
billion.
Segment Realized Proceeds Equity Invested # of
# of
Investments
# of Funds
$ in millions
Investments
# of Funds
$ in millions
Corporate Private Equity
37
16
$2,205
13
11
$881
Global Market Strategies
29
6
$100
5 3
$56
Q1
Real Assets
62
13
$763
54
10
$210
Carlyle
124
35
$3,068
72
24
$1,147
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 2013
through Q1 2014. Prior LTM, or the prior rolling twelve month
period, refers to the period Q2 2012 through Q1 2013.
Carlyle All Segment
Results
- Distributable Earnings (DE): $183
million for Q1 2014 and $852 million on an LTM basis
- Pre-tax Distributable Earnings
were $183 million for Q1 2014, or $0.52 per common unit on a
post-tax basis. Distributable Earnings were $852 million on an LTM
basis, 25% higher than the prior rolling twelve month period.
- Fee-Related Earnings were $37
million for Q1 2014 and declined by $2 million from $39 million in
Q1 2013 due to higher compensation, fundraising, and G&A
expenses, offset by higher Fee-Earning Assets Under Management.
Fee-Related Earnings were $151 million on an LTM basis, 15% lower
than the prior rolling twelve month period.
- Realized Net Performance Fees
were $141 million for Q1 2014, compared to $142 million in Q1 2013.
For Q1 2014, Realized Net Performance Fees were positively impacted
by exits in Booz Allen, Commscope, The Nielsen Company, and Allison
Transmission among others. Realized Net Performance Fees were $677
million on an LTM basis, 35% higher than the prior rolling twelve
month period.
- Realized Investment
Income/(Loss) was $5 million in Q1 2014, driven by gains on
Buyout, Structured Credit, and Real Estate investments.
- Economic Net Income (ENI): $322
million for Q1 2014 and $1.2 billion on an LTM basis
- Economic Net Income was $322
million for Q1 2014 and $1,248 million on an LTM basis, 69% higher
than the prior rolling twelve month period. On a post-tax basis,
Carlyle generated $0.85 in ENI per Adjusted Unit for Q1 2014.
- Q1 2014 ENI was impacted by
appreciation of 6% in Carlyle’s carry fund portfolio. Corporate
Private Equity carry funds were up 8%, Global Market Strategies
carry funds increased 3%, and Real Assets carry funds increased 2%
compared to the end of Q4 2013. Carry fund appreciation was 18% on
an LTM basis.
The Carlyle Group L.P. - All Segments
Period
LTM % Change $ in millions, except per unit data and
where noted
Q1 2013 Q2 2013 Q3
2013 Q4 2013 Q1 2014 Q2
13 - Q1 14 QoQ YoY
LTM Revenues 852
508 615 1,394 897 3,413 (36%) 5% 70% Expenses 458 352 420
818 575 2,165 (30%) 25% 71%
Economic Net Income 394
156 195 576 322 1,248
(44%) (18%) 69% Fee-Related Earnings 39
31 44 39 37 151 (4%)
(4%) (15%) Net Performance Fees 355
123 157 592 307 1,178
(48%) (14%) 116% Realized Net Performance Fees
142 118 61 357 141 677
(61%) (0%) 35% Distributable Earnings
171 163 105 401 183 852
(54%) 7% 25% Distributable Earnings per
common unit (after taxes) $ 0.48 $ 0.53 $ 0.32
$ 1.18 $0.52 Distribution per common unit $
0.16 $ 0.16 $ 0.16 $ 1.40 $0.16
Total Assets Under Management ($ in billions) 176.3
180.4 185.0 188.8 198.9
5% 13% 13% Fee-Earning Assets Under Management
($ in billions) 122.9 132.0 137.9 139.9
142.1 2% 16% 16%
Note: Totals may not sum due to rounding.
Assets Under
Management and Remaining Fair Value of Capital
- Total Assets Under Management: $198.9 billion as of Q1 2014
(+13% LTM)
- Major drivers of change versus Q4 2013: New capital commitments
(+$6.1 billion), market appreciation (+$6.7 billion), acquisitions
(+$3.0 billion), changes in CLO par value (+$0.5 billion), offset
by net distributions (-$6.6 billion).
- Total Dry Powder of $56.3 billion as of Q1 2014,
comprised of $23.9 billion in Corporate Private Equity, $1.5
billion in Global Market Strategies, $10.1 billion in Real Assets
and $20.8 billion in Solutions.
- Fee-Earning Assets Under Management:
$142.1 billion as of Q1 2014 (+16% LTM)
- Major drivers of change versus Q4 2013:
Acquisitions (+$2.9 billion), asset inflows including commitments
(+$1.9 billion), changes in CLO par value (+$0.7 billion), and
market appreciation (+$0.3 billion) partially offset by net
distributions and outflows (-$3.7 billion).
- Since the end of Q4 2013, Fee-Earning
AUM was positively impacted by the addition of new commitments in
Carlyle’s latest vintage buyout funds in Europe and Asia and our
new international energy fund, in addition to other fundraising
across the Carlyle platform.
- Remaining Fair Value of Capital
(carry funds only) as of Q1 2014: $63.7 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: 40% of total fair
value.
- AUM in-carry ratio as of the end of Q1
2014: 72%.
Non-GAAP Operating
Results
Carlyle’s non-GAAP results for Q1 2014 are provided in the table
below:
Carlyle Group Summary $ in millions, except unit and
per unit amounts
Economic Net income Q1
2014 Economic Net Income (pre-tax) $ 321.9 Less:
Provision for income taxes (1) 46.4 Economic Net Income,
After Taxes $ 275.5 Fully diluted units (in millions) 323.8
Economic Net Income, After Taxes per Adjusted Unit
(2) $ 0.85 Distributable
Earnings Distributable Earnings $ 183.3
Less: Estimated foreign, state, and local taxes (3) 14.0
Distributable Earnings, After Taxes $ 169.3 Allocating
Distributable Earnings for only public unitholders of The Carlyle
Group L.P. Distributable Earnings to The Carlyle Group L.P.
$ 35.6 Less: Estimated current corporate income taxes (4)
0.8 Distributable Earnings to The Carlyle Group L.P. net of
corporate income taxes $ 34.8 Units in public float (in
millions)(5) 66.9 Distributable Earnings, net, per The
Carlyle Group L.P. common unit outstanding
$
0.52
(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) For information regarding our calculation of Adjusted Units,
please see page 29.
(3) 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.
(4) Represents current corporate income taxes payable upon
distributable earnings allocated to Carlyle Holdings I GP Inc. and
estimated current Tax Receivable Agreement payments owed.
(5) Includes 2,831,392 common units to be issued in May 2014 in
connection with the vesting of deferred restricted common units.
These newly issued units are included in this calculation because
they will participate in the unitholder distribution that will be
paid in May 2014.
Corporate Private
Equity (CPE)
Funds Raised Equity Invested Realized
Proceeds Carry Fund Returns
Q1
$0.6 bn
Q1
$0.9 bn
Q1
$2.2 bn
Q1
8%
YTD: $0.6 bn
LTM: $11.0 bn
YTD: $0.9 bn
LTM: $3.7 bn
YTD: $2.2 bn
LTM: $11.4 bn
YTD: 8%
LTM: 28%
- Distributable Earnings (DE): $148
million for Q1 2014 and $572 million on an LTM basis, 45% higher
than the prior LTM. The following components impacted
Distributable Earnings in Q1 2014:
- Fee-Related Earnings were $12
million in Q1 2014 and $20 million on an LTM basis, compared to $1
million in Q1 2013, with the increase driven by higher management
fees from higher Fee-Earning Assets Under Management.
- Realized Net Performance Fees
were $133 million for Q1 2014 and $536 million on an LTM basis,
compared to $111 million for Q1 2013.
- Economic Net Income (ENI): $258
million for Q1 2014 and $1.1 billion on an LTM basis, 126% higher
than the prior LTM.
- Economic Net Income of $258
million for Q1 2014 and $1.1 billion on an LTM basis, compared to
$239 million for Q1 2013.
- CPE carry fund valuations increased 8%
in Q1 2014 and 28% on an LTM basis, compared with an increase of 9%
in Q1 2013.
- Net Performance Fees of $246
million for Q1 2014 and $1,037 million on an LTM basis, compared to
$235 million for Q1 2013.
- Total Assets Under Management
(AUM): $64.5 billion as of Q1 2014
- Total AUM increased 17% to $64.5
billion from $55.1 billion as of Q1 2013.
- Funds Raised in Q1 2014 of $0.6
billion were largely driven by additional closings of our latest
vintage Asia, Europe and Japan Buyout funds.
- Fee-Earning Assets Under
Management were $42.9 billion as of Q1 2014, up 29% from $33.2
billion as of Q1 2013, with the increase driven by $17.5 billion in
inflows, and partially offset by $7.6 billion in outflows,
including distributions and basis step downs.
Corporate Private Equity
Period
LTM % Change $ in millions, except where noted
Q1
2013 Q2 2013 Q3 2013 Q4
2013 Q1 2014 Q2 13 - Q1 14 QoQ
YoY LTM Economic Net Income
239 106 159 549 258 1,073
(53%) 8% 126% Fee-Related
Earnings 1 (4) 8 4 12 20
188% 786% (60%) Net
Performance Fees 235 109 147 535
246 1,037 (54%) 5% 150%
Realized Net Performance Fees 111 86 45
271 133 536 (51%)
21% 57% Distributable Earnings 114 84
54 286 148 572
(48%) 30% 45% Total Assets Under Management ($
in billions) 55.1 57.9 62.2 64.9
64.5 (1%) 17%
Fee-Earning Assets Under Management ($ in billions)
33.2 38.5 41.9 43.0 42.9
(0%) 29%
Note: Totals may not sum due to rounding.
Global Market
Strategies (GMS)
Funds Raised Equity Invested Realized
Proceeds Carry Fund Returns Q1
$1.8 bn
Q1
$0.1 bn
Q1
$0.1 bn
Q1
3%
YTD: $1.8 bn
LTM: $6.3 bn
YTD: $0.1 bn
LTM: $0.8 bn
YTD: $0.1 bn
LTM: $0.8 bn
YTD: 3%
LTM: 24%
Note: Funds Raised excludes acquisitions, but includes hedge
funds and CLOs. Equity Invested and Realized Proceeds are for carry
funds only.
- Distributable Earnings (DE): $22
million for Q1 2014 and $195 million on an LTM basis, 9% higher
than the prior LTM. The following components impacted
Distributable Earnings in Q1 2014:
- Fee-Related Earnings were $17
million in Q1 2014 and $78 million on an LTM basis, compared to $25
million in Q1 2013. The decline in Q1 2014 was driven primarily by
higher management fees in Q1 2013 from two CLOs that were in the
process of liquidating and higher levels of compensation and other
expenses.
- Realized Net Performance Fees
were $5 million for Q1 2014 and $100 million on an LTM basis,
compared to $14 million for Q1 2013.
- Realized Investment Income was
$1 million for Q1 2014 and $17 million on an LTM basis.
- Economic Net Income (ENI): $56
million for Q1 2014 and $180 million on an LTM basis, 22% lower
than the prior LTM
- Economic Net Income of $56
million for Q1 2014 and $180 million on an LTM basis, compared to
$104 million for Q1 2013.
- GMS carry fund valuations increased 3%
in Q1 2014, compared with 9% appreciation in Q1 2013. The
asset-weighted hedge fund performance of our reported funds was
2.2% in Q1 2014.
- Net Performance Fees of $39
million for Q1 2014 and $95 million on an LTM basis, compared to
$73 million for Q1 2013.
- Total Assets Under Management
(AUM): $36.5 billion as of Q1 2014
- Total AUM of $36.5 billion as of
Q1 2014 increased 10% versus Q1 2013, while Fee-Earning AUM of
$34.3 billion increased 9% versus Q1 2013.
- Total hedge fund AUM ended Q1 2014 at
$14.6 billion.
- GMS carry fund AUM ended Q1 2014 at
$3.8 billion.
- Total structured credit AUM ended Q1
2014 at $17.8 billion.
- Total business development company AUM
ended Q1 2014 at $0.4 billion.
Global Market Strategies Period
LTM % Change $ in millions, except where noted
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 13 - Q1 14
QoQ
YoY
LTM
Economic Net Income
104
47
10
67
56
180
(15%)
(46%)
(22%)
Fee-Related Earnings
25
23
17
21
17
78
(23%)
(34%)
(21%)
Net Performance Fees
73
25
(12)
43
39
95
(9%)
(46%)
(12%)
Realized Net Performance Fees
14
11
5
79
5
100
(94%)
(69%)
51%
Distributable Earnings
41
46
24
102
22
195
(78%)
(46%)
9%
Total Assets Under Management ($ in billions)
33.1
34.7
35.4
35.5
36.5
3%
10%
Fee-Earning Assets Under Management ($ in billions)
31.4
33.1
33.7
33.4
34.3
3%
9%
Funds Raised, excluding hedge funds ($ in
billions)
1.3
1.5
1.1
0.7
1.5
4.9
115%
20%
Hedge Fund Net Inflows ($ in billions)
(0.1)
0.9
0.4
(0.2)
0.3
1.3
221%
440%
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 Q1
$1.7 bn
Q1
$0.2 bn
Q1
$0.8 bn
Q1
2%
YTD: $1.7 bn
LTM: $3.2 bn
YTD: $0.2 bn
LTM: $2.2 bn
YTD: $0.8 bn
LTM: $4.1 bn
YTD: 2%
LTM: 0%
Note: Funds Raised excludes acquisitions. Equity Invested and
Realized Proceeds are for carry funds only.
- Distributable Earnings (DE): $2
million for Q1 2014 and $36 million on an LTM basis, 61% lower than
the prior LTM. The following components impacted Distributable
Earnings:
- Fee-Related Earnings were ($0)
million in Q1 2014 and $15 million on an LTM basis, compared to $9
million in Q1 2013. The decline is largely attributable to higher
compensation expenses and fundraising costs attributable to various
significant funds raising capital.
- Realized Net Performance Fees
were $0 for Q1 2014 and $29 million on an LTM basis, compared to
$16 million for Q1 2013.
- Realized Investment
Income/(Loss) was $2 million during Q1 2014 and ($8) million on
a LTM basis.
- Economic Net Income/(Loss) (ENI):
($17) million for Q1 2014 and ($92) million on an LTM basis,
compared to $7 million in the prior LTM.
- Economic Net Income/(Loss) of
($17) million for Q1 2014 and ($92) million on an LTM basis
compared to $42 million for Q1 2013.
- Real Asset carry fund valuations
appreciated 2% in Q1 2014, compared to 3% in Q1 2013.
- Net Performance Fees of $6
million for Q1 2014 and ($5) million on an LTM basis, compared to
$42 million for Q1 2013.
- Unrealized investment losses of
($21) million for Q1 2014 were primarily attributable to unrealized
losses in certain Latin American and European real estate
investments.
- Total Assets Under Management (AUM):
$40.7 billion as of Q1 2014
- Total AUM of $40.7 billion
increased 1% from $40.3 billion in Q1 2013.
- Funds Raised in Q1 2014 of $1.7
billion were largely driven by closings in our latest vintage U.S.
real estate fund and new international energy fund. The new U.S.
real estate fund will not generate management fees until the
predecessor fund steps down its management fee basis.
- Fee-Earning AUM of $27.4 billion
was down 7% versus Q1 2013, with the decrease driven largely by
outflows, including step downs and distributions (-$4.5 billion),
partially offset by inflows, including commitments (+$2.3
billion).
Real Assets
Period
LTM % Change $ in millions, except where noted
Q1
2013 Q2 2013 Q3 2013 Q4
2013 Q1 2014 Q2 13 - Q1 14 QoQ
YoY LTM
Economic Net Income (Loss) 42 (11)
0 (65) (17) (92) 75%
(139%) (1281%) Fee-Related Earnings 9 6
7 3 (0) 15 (114%) (104%)
12% Net Performance Fees 42 (17)
10 (3) 6 (5) 297% (86%)
(140%) Realized Net Performance Fees 16 19
9 1 0 29 (67%) (98%)
(69%) Distributable Earnings 12 25
12 (2) 2 36 187% (83%)
(61%) Total Assets Under Management ($ in billions)
40.3 39.8 39.0 38.7 40.7
5% 1% Fee-Earning Assets
Under Management ($ in billions) 29.4 28.7
28.5 28.4 27.4 (4%) (7%)
Note: Totals may not sum due to rounding.
Solutions
- Distributable Earnings (DE): $11
million for Q1 2014 and $50 million on an LTM basis, 215% higher
than the prior LTM.
- Fee-Related Earnings were $9
million for Q1 2014 and $38 million on an LTM basis.
- Realized Net Performance Fees
were $3 million for Q1 2014 and $12 million on an LTM basis.
- Economic Net Income (ENI): $24
million for Q1 2014 and $88 million on an LTM basis, compared to $9
million in Q1 2013.
- Last twelve month Economic Net Income
increased 262% over the prior LTM.
- Total Assets Under Management
(AUM): $57.2 billion as of Q1 2014
- Total AUM of $57.2 billion was
up 20% compared to Q1 2013, driven in part by the acquisitions of
Diversified Global Asset Management (DGAM) and Metropolitan Real
Estate Equity Management (MRE) as well as net capital raised.
- Fee-Earning AUM of $37.5 billion
increased 30% versus Q1 2013, with the increase primarily driven by
the activation of mandates at AlpInvest and the acquisitions of
DGAM and MRE.
- Funds Raised in Q1 2014 of $1.4
billion were driven by new commitments into the AlpInvest
Secondaries Fund during the quarter, and substantial new
co-investment and fund investment capital.
- During the quarter, Carlyle completed
the acquisition of DGAM. The DGAM acquisition closed February 3,
2014. As of March 31, 2014, DGAM advised 13 fund of fund vehicles,
and had $2.9 billion in Fee-Earning Assets Under Management. DGAM
also advises on $3.6 billion in assets, for which it earns a
nominal advisory fee, and these assets are not included in Total
Assets Under Management or Fee Earning Assets Under
Management.
Solutions
Period
LTM % Change $ in millions, except where noted
Q1
2013 Q2 2013 Q3 2013 (1)
Q4 2013 (2) Q1 2014 (3)
Q2 13 - Q1 14 QoQ YoY LTM
Economic Net Income
9 13 25 26 24 88
(9%) 167% 262% Fee-Related Earnings 3
6 12 10 9 38 (14%)
156% 170% Net Performance Fees 6 7
12 16 16 51 (4%) 175%
385% Realized Net Performance Fees 1 1
3 5 3 12 (51%) 420%
547% Distributable Earnings 4 8
15 15 11 50 (27%) 190%
215% Total Assets Under Management ($ in billions)
47.8 48.0 48.4 49.8 57.2
15% 20% Fee-Earning Assets Under
Management ($ in billions) 28.9 31.8 33.7
35.1 37.5 7% 30%
Note: Totals may not sum due to rounding.
(1) - During Q3 2013, Carlyle acquired the remaining 40%
interest in AlpInvest. As such, amounts since the acquisition
represent 100% of the financial results of AlpInvest. Prior to Q3
2013, amounts represent Carlyle's 60% economic interest in
Alpinvest.
(2) - During Q4 2013, Carlyle acquired Metropolitan Real Estate
Equity Management, LLC ("MRE"). As such, amounts since the
acquisition include the financial results of Metropolitan.
(3) - During Q1 2014, Carlyle acquired Diversified Global Asset
Management Corporation ("DGAM"). As such, amounts since the
acquisition include the financial results of DGAM.
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, 2014.
- Cash and Cash Equivalents of $1,034
million.
- On-balance sheet investments
attributable to unitholders of $279 million, excluding the equity
investment by Carlyle in NGP Energy Capital Management.
- Net accrued performance fees
attributable to unitholders of $1,951 million. These performance
fees are comprised of gross accrued performance fees of $3,803
million less $46 million in accrued giveback obligation and $1,806
million in accrued performance fee compensation and non-controlling
interest.
- Loans payable and senior notes totaling
$1,149 million.
Conference Call
Carlyle will host a conference call at 8:30 a.m. EDT on
Wednesday, April 30, 2014 to announce and discuss financial results
for the first quarter of 2014.
The call may be accessed by dialing (800) 850-2903 (U.S.) or
+1-253-237-1169 (international) and referencing “The Carlyle Group
Financial Results Call.” The conference call will be webcast
simultaneously via a link on Carlyle’s investor relations website
at ir.carlyle.com and an archived replay of the webcast also will
be available on the website soon after the live call.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset
manager with $199 billion of assets under management across 120
funds and 133 fund of funds vehicles as of March 31, 2014.
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, real
estate, technology & business services, telecommunications
& media and transportation. The Carlyle Group employs more than
1,600 people in 38 offices across six continents.
Web: www.carlyle.comVideos: www.youtube.com/onecarlyleTweets:
www.twitter.com/onecarlylePodcasts:
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, 2013 filed with the SEC on February
27, 2014, 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,
2014 2013 (Dollars in millions, except unit
and per unit data) Revenues Fund management fees
$ 260.3 $ 231.4 Performance fees Realized 251.4 252.8 Unrealized
369.1 389.6 Total performance fees 620.5 642.4
Investment income (loss) Realized - (4.2 ) Unrealized 6.1
4.6 Total investment income (loss) 6.1 0.4 Interest
and other income 3.8 2.4 Interest and other income of Consolidated
Funds 250.7 268.4 Revenue of a consolidated real estate VIE
6.0 - Total revenues 1,147.4 1,145.0
Expenses Compensation and benefits Base compensation 204.6
178.5 Equity-based compensation 74.2 52.3 Performance fee related
Realized 108.7 108.7 Unrealized 221.6 195.0
Total compensation and benefits 609.1 534.5 General, administrative
and other expenses 134.3 111.4 Interest 12.2 10.5 Interest and
other expenses of Consolidated Funds 264.0 250.1 Interest and other
expenses of a consolidated real estate VIE 49.2 - Other
non-operating (income) expense 30.2 (2.4 ) Total
expenses 1,099.0 904.1
Other income Net investment
gains of Consolidated Funds 424.0 211.5
Income before provision for income taxes 472.4 452.4 Provision for
income taxes 16.0 24.9 Net income 456.4 427.5
Net income attributable to non-controlling
interests in consolidated entities
324.5 168.0 Net income attributable to Carlyle
Holdings 131.9 259.5
Net income attributable to non-controlling
interests in Carlyle Holdings
107.3 225.7 Net income attributable to The
Carlyle Group L.P. $ 24.6 $ 33.8 Net income
attributable to The Carlyle Group L.P. per common unit Basic (1) $
0.46 $ 0.78 Diluted (1) $ 0.41 $ 0.66
Weighted-average common units Basic 52,501,412
43,343,268 Diluted 59,453,670 51,109,008
(1) - Excluded from net income attributable to The Carlyle Group
L.P. was approximately $0.5 million which was allocable to
participating securities under the two-class method for the three
months ended March 31, 2014.
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, 2014 2013
2013 2014 2013 (Dollars in millions)
Segment Revenues Fund level fee revenues Fund management fees $
287.8 $ 240.1 $ 283.5 $ 1,102.4 $ 957.9 Portfolio advisory fees,
net 3.8 4.6 10.6 25.1 18.6 Transaction fees, net 3.2
10.4 1.6 17.5 35.2
Total fee revenues 294.8 255.1 295.7 1,145.0 1,011.7 Performance
fees Realized 249.4 248.9 584.0 1,129.1 836.2 Unrealized
355.7 342.7 560.3 1,177.7
119.9 Total performance fees 605.1 591.6 1,144.3
2,306.8 956.1 Investment income (loss) Realized 5.3 (9.3 ) 6.0 25.2
4.9 Unrealized (13.2 ) 12.3 (55.7 )
(78.7 ) 16.3 Total investment income (loss) (7.9 )
3.0 (49.7 ) (53.5 ) 21.2 Interest and other income 4.5
2.4 3.9 15.0
13.5 Total revenues 896.5 852.1 1,394.2 3,413.3 2,002.5
Segment Expenses Compensation and benefits Direct base
compensation 126.7 108.0 115.6 454.7 424.2 Indirect base
compensation 46.1 33.6 43.0 165.3 145.0 Equity-based compensation
14.0 2.6 4.9 27.1 4.4 Performance fee related Realized 108.6 107.4
227.3 452.5 335.3 Unrealized 189.9 129.5
325.1 676.1 76.3 Total
compensation and benefits 485.3 381.1 715.9 1,775.7 985.2 General,
administrative, and other indirect
expenses
71.7 62.3 85.1 318.8 234.1 Depreciation and amortization expense
5.4 6.3 5.6 23.4 22.6 Interest expense 12.2
8.5 11.7 47.3 23.2
Total expenses
574.6 458.2 818.3
2,165.2 1,265.1
Economic Net Income
$ 321.9 $ 393.9 $
575.9 $ 1,248.1 $
737.4 (-) Net Performance Fees 306.6 354.7 591.9 1,178.2
544.5 (-) Investment Income (Loss) (7.9 ) 3.0 (49.7 ) (53.5 ) 21.2
(+) Equity-based compensation 14.0 2.6
4.9 27.1 4.4
(=) Fee Related
Earnings $ 37.2 $ 38.8
$ 38.6 $ 150.5
$ 176.1 (+) Realized Net Performance Fees 140.8 141.5
356.7 676.6 500.9 (+) Realized Investment Income (Loss) 5.3
(9.3 ) 6.0 25.2
4.9
(=) Distributable Earnings $ 183.3
$ 171.0 $ 401.3 $
852.3 $ 681.9
Total Segment Information (Unaudited),
cont
Three Months Ended
Mar 31, 2014 vs. Mar 31, Jun 30, Sept
30, Dec 31, Mar 31,
2013 2013 2013 2013 2014
Mar 31, 2013
Dec 31, 2013
Economic Net Income,
(Dollars in millions)
Total Segments Revenues Segment fee revenues Fund management
fees $ 240.1 $ 249.9 $ 281.2 $ 283.5 $ 287.8 $ 47.7 $ 4.3 Portfolio
advisory fees, net 4.6 5.7 5.0 10.6 3.8 (0.8 ) (6.8 ) Transaction
fees, net 10.4 6.8 5.9
1.6 3.2 (7.2 ) 1.6
Total fee revenues 255.1 262.4 292.1 295.7 294.8 39.7 (0.9 )
Performance fees Realized 248.9 192.6 103.1 584.0 249.4 0.5 (334.6
) Unrealized 342.7 42.1 219.6
560.3 355.7 13.0
(204.6 ) Total performance fees 591.6 234.7 322.7 1,144.3
605.1 13.5 (539.2 ) Investment income (loss) Realized (9.3 ) 14.6
(0.7 ) 6.0 5.3 14.6 (0.7 ) Unrealized 12.3
(7.7 ) (2.1 ) (55.7 ) (13.2 ) (25.5 )
42.5 Total investment income (loss) 3.0 6.9 (2.8 )
(49.7 ) (7.9 ) (10.9 ) 41.8 Interest and other income 2.4
4.0 2.6 3.9
4.5 2.1 0.6 Total revenues 852.1
508.0 614.6 1,394.2 896.5 44.4 (497.7 ) Expenses
Compensation and benefits Direct base compensation 108.0 101.0
111.4 115.6 126.7 18.7 11.1 Indirect base compensation 33.6 35.0
41.2 43.0 46.1 12.5 3.1 Equity-based compensation 2.6 4.2 4.0 4.9
14.0 11.4 9.1 Performance fee related Realized 107.4 74.8 41.8
227.3 108.6 1.2 (118.7 ) Unrealized 129.5 37.4
123.7 325.1 189.9
60.4 (135.2 ) Total compensation and benefits
381.1 252.4 322.1 715.9 485.3 104.2 (230.6 )
General, administrative, and other
indirect expenses
62.3 82.0 80.0 85.1 71.7 9.4 (13.4 ) Depreciation and amortization
expense 6.3 6.2 6.2 5.6 5.4 (0.9 ) (0.2 ) Interest expense
8.5 11.6 11.8 11.7
12.2 3.7 0.5 Total
expenses 458.2 352.2 420.1
818.3 574.6 116.4
(243.7 )
Economic Net Income $
393.9 $ 155.8 $
194.5 $ 575.9 $
321.9 $ (72.0 ) $
(254.0 ) (-) Net Performance Fees 354.7 122.5 157.2
591.9 306.6 (48.1 ) (285.3 ) (-) Investment Income (Loss) 3.0 6.9
(2.8 ) (49.7 ) (7.9 ) (10.9 ) 41.8 (+) Equity-based compensation
2.6 4.2 4.0 4.9
14.0 11.4 9.1
(=) Fee Related Earnings $ 38.8
$ 30.6 $ 44.1 $
38.6 $ 37.2 $ (1.6
) $ (1.4 ) (+) Realized Net Performance
Fees 141.5 117.8 61.3 356.7 140.8 (0.7 ) (215.9 ) (+) Realized
Investment Income (Loss) (9.3 ) 14.6
(0.7 ) 6.0 5.3 14.6
(0.7 )
(=) Distributable Earnings $
171.0 $ 163.0 $
104.7 $ 401.3 $
183.3 $ 12.3 $
(218.0 )
Corporate Private Equity Segment
Results (Unaudited)
Three Months Ended
Mar 31, 2014 vs. Mar 31, Jun 30, Sept
30, Dec 31, Mar 31,
2013 2013 2013
2013 2014
Mar 31, 2013
Dec 31, 2013
Corporate Private Equity
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 108.3 $
108.8 $ 131.0 $ 123.5 $ 129.8 $ 21.5 $ 6.3 Portfolio advisory fees,
net 4.1 4.9 4.7 9.5 3.5 (0.6 ) (6.0 ) Transaction fees, net
10.4 4.0 5.7 0.6 3.2
(7.2 ) 2.6 Total fee revenues 122.8 117.7
141.4 133.6 136.5 13.7 2.9 Performance fees Realized 212.3 151.4
79.1 471.7 234.7 22.4 (237.0 ) Unrealized 207.6 31.2
182.2 538.1 212.9 5.3
(325.2 ) Total performance fees 419.9 182.6 261.3
1,009.8 447.6 27.7 (562.2 ) Investment income (loss) Realized 1.8
1.7 1.6 10.7 1.9 0.1 (8.8 ) Unrealized 2.8 2.4
5.5 (0.3 ) 5.4 2.6 5.7
Total investment income (loss) 4.6 4.1 7.1 10.4 7.3 2.7 (3.1
) Interest and other income 1.0 1.7 1.5
2.3 2.2 1.2 (0.1 ) Total
revenues 548.3 306.1 411.3 1,156.1 593.6 45.3 (562.5 )
Expenses Compensation and benefits Direct base compensation 55.0
50.0 53.9 53.7 59.5 4.5 5.8 Indirect base compensation 20.0 21.8
27.6 25.6 22.0 2.0 (3.6 ) Equity-based compensation 1.5 2.3 2.1 1.5
7.1 5.6 5.6 Performance fee related Realized 101.6 65.1 34.6 200.4
101.3 (0.3 ) (99.1 ) Unrealized 83.6 8.8
79.8 274.0 100.5 16.9
(173.5 ) Total compensation and benefits 261.7 148.0 198.0
555.2 290.4 28.7 (264.8 )
General, administrative, and other
indirect expenses
39.0 41.6 43.7 42.6 35.4 (3.6 ) (7.2 ) Depreciation and
amortization expense 3.5 3.4 3.3 3.0 2.7 (0.8 ) (0.3 ) Interest
expense 4.9 6.7 6.9 6.7
6.7 1.8 - Total expenses
309.1 199.7 251.9 607.5
335.2 26.1 (272.3 )
Economic Net
Income $ 239.2 $ 106.4
$ 159.4 $ 548.6 $
258.4 $ 19.2 $ (290.2
) (-) Net Performance Fees 234.7 108.7 146.9 535.4 245.8
11.1 (289.6 ) (-) Investment Income 4.6 4.1 7.1 10.4 7.3 2.7 (3.1 )
(+) Equity-based compensation 1.5 2.3
2.1 1.5 7.1 5.6 5.6
(=) Fee Related Earnings $ 1.4 $
(4.1 ) $ 7.5 $ 4.3
$ 12.4 $ 11.0 $
8.1 (+) Realized Net Performance Fees 110.7 86.3 44.5
271.3 133.4 22.7 (137.9 ) (+) Realized Investment Income 1.8
1.7 1.6 10.7 1.9
0.1 (8.8 )
(=) Distributable Earnings $
113.9 $ 83.9 $ 53.6
$ 286.3 $ 147.7 $
33.8 $ (138.6 )
Global Market Strategies Segment
Results (Unaudited)
Three Months Ended
Mar 31, 2014 vs. Mar 31, Jun 30, Sept
30, Dec 31, Mar 31,
2013 2013 2013 2013 2014
Mar 31, 2013
Dec 31, 2013
Global Market Strategies
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 66.3 $
73.8 $ 65.7 $ 69.4 $ 63.2 $ (3.1 ) $ (6.2 ) Portfolio advisory
fees, net 0.2 0.5 0.1 0.6 0.1 (0.1 ) (0.5 ) Transaction fees, net
- 0.1 - - -
- - Total fee revenues 66.5 74.4 65.8
70.0 63.3 (3.2 ) (6.7 ) Performance fees Realized 24.1 17.9 5.8
104.1 8.3 (15.8 ) (95.8 ) Unrealized 64.3 23.0
(13.6 ) (41.3 ) 49.5 (14.8 )
90.8 Total performance fees 88.4 40.9 (7.8 ) 62.8 57.8 (30.6
) (5.0 ) Investment income (loss) Realized 1.9 12.2 2.0 1.4 1.3
(0.6 ) (0.1 ) Unrealized 5.1 (11.9 ) 3.2
2.1 1.9 (3.2 ) (0.2 )
Total investment income (loss) 7.0 0.3 5.2 3.5 3.2 (3.8 ) (0.3 )
Interest and other income 1.1 1.5 0.7
0.9 1.3 0.2 0.4
Total revenues 163.0 117.1 63.9 137.2 125.6 (37.4 ) (11.6 )
Expenses Compensation and benefits Direct base compensation
25.7 24.9 23.6 25.4 27.5 1.8 2.1 Indirect base compensation 4.8 5.5
4.6 6.9 6.0 1.2 (0.9 ) Equity-based compensation 0.4 0.6 0.6 1.4
2.7 2.3 1.3 Performance fee related Realized 9.7 6.7 0.8 24.9 3.8
(5.9 ) (21.1 ) Unrealized 6.2 9.6 3.1
(5.2 ) 14.8 8.6 20.0
Total compensation and benefits 46.8 47.3 32.7 53.4 54.8 8.0
1.4
General, administrative, and other
indirect expenses
9.5 19.5 17.8 14.1 11.6 2.1 (2.5 ) Depreciation and amortization
expense 1.2 1.1 1.2 1.0 0.9 (0.3 ) (0.1 ) Interest expense
1.5 2.1 2.1 2.2
2.1 0.6 (0.1 ) Total expenses 59.0
70.0 53.8 70.7
69.4 10.4 (1.3 )
Economic Net
Income $ 104.0 $ 47.1
$ 10.1 $ 66.5 $
56.2 $ (47.8 ) $ (10.3
) (-) Net Performance Fees 72.5 24.6 (11.7 ) 43.1 39.2 (33.3
) (3.9 ) (-) Investment Income 7.0 0.3 5.2 3.5 3.2 (3.8 ) (0.3 )
(+) Equity-based compensation 0.4 0.6
0.6 1.4 2.7 2.3
1.3
(=) Fee Related Earnings $ 24.9
$ 22.8 $ 17.2 $
21.3 $ 16.5 $ (8.4
) $ (4.8 ) (+) Realized Net Performance
Fees 14.4 11.2 5.0 79.2 4.5 (9.9 ) (74.7 ) (+) Realized Investment
Income 1.9 12.2 2.0 1.4
1.3 (0.6 ) (0.1 )
(=) Distributable
Earnings $ 41.2 $ 46.2
$ 24.2 $ 101.9 $
22.3 $ (18.9 ) $ (79.6
)
Real Assets Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2014 vs. Mar 31, Jun 30, Sept
30, Dec 31, Mar 31,
2013 2013 2013 2013 2014
Mar 31, 2013
Dec 31, 2013
Real Assets
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 47.0 $
46.4 $ 47.3 $ 48.2 $ 50.3 $ 3.3 $ 2.1 Portfolio advisory fees, net
0.3 0.3 0.2 0.5 0.2 (0.1 ) (0.3 ) Transaction fees, net -
2.7 0.2 1.0
- - (1.0 ) Total fee revenues 47.3 49.4
47.7 49.7 50.5 3.2 0.8 Performance fees Realized 11.0 20.6 12.5
(3.6 ) 0.5 (10.5 ) 4.1 Unrealized 49.5 (33.4 )
12.1 15.2 14.0
(35.5 ) (1.2 ) Total performance fees 60.5 (12.8 ) 24.6 11.6
14.5 (46.0 ) 2.9 Investment income (loss) Realized (13.0 ) 0.7 (4.3
) (6.1 ) 2.1 15.1 8.2 Unrealized 4.5 1.7
(10.9 ) (57.6 ) (20.6 ) (25.1 )
37.0 Total investment income (loss) (8.5 ) 2.4 (15.2
) (63.7 ) (18.5 ) (10.0 ) 45.2 Interest and other income 0.3
0.6 0.4 0.7
0.7 0.4 - Total revenues 99.6
39.6 57.5 (1.7 ) 47.2 (52.4 ) 48.9 Expenses Compensation and
benefits Direct base compensation 17.9 18.2 17.1 17.0 18.7 0.8 1.7
Indirect base compensation 7.5 6.4 7.9 8.6 14.3 6.8 5.7
Equity-based compensation 0.6 1.2 1.2 1.6 3.5 2.9 1.9 Performance
fee related Realized (4.9 ) 1.6 3.8 (4.5 ) 0.2 5.1 4.7 Unrealized
23.6 2.9 11.1 19.1
8.4 (15.2 ) (10.7 ) Total
compensation and benefits 44.7 30.3 41.1 41.8 45.1 0.4 3.3
General, administrative, and other
indirect expenses
10.4 16.5 12.8 18.7 15.5 5.1 (3.2 ) Depreciation and amortization
expense 1.1 1.2 1.0 1.0 0.9 (0.2 ) (0.1 ) Interest expense
1.6 2.2 2.2 2.2
2.2 0.6 - Total expenses
57.8 50.2 57.1
63.7 63.7 5.9 -
Economic Net Income (Loss) $ 41.8
$ (10.6 ) $ 0.4
$ (65.4 ) $ (16.5 )
$ (58.3 ) $ 48.9 (-) Net
Performance Fees 41.8 (17.3 ) 9.7 (3.0 ) 5.9 (35.9 ) 8.9 (-)
Investment Income (Loss) (8.5 ) 2.4 (15.2 ) (63.7 ) (18.5 ) (10.0 )
45.2 (+) Equity-based compensation 0.6 1.2
1.2 1.6 3.5
2.9 1.9
(=) Fee Related Earnings
$ 9.1 $ 5.5 $
7.1 $ 2.9 $ (0.4
) $ (9.5 ) $ (3.3
) (+) Realized Net Performance Fees 15.9 19.0 8.7 0.9 0.3
(15.6 ) (0.6 ) (+) Realized Investment Income (Loss) (13.0 )
0.7 (4.3 ) (6.1 ) 2.1
15.1 8.2
(=) Distributable
Earnings $ 12.0 $ 25.2
$ 11.5 $ (2.3 )
$ 2.0 $ (10.0 ) $
4.3
Solutions Segment Results
(Unaudited)
Three Months Ended
Mar 31, 2014 vs. Mar
31, Jun 30, Sept 30, Dec 31, Mar
31,
2013 2013
2013 (1)
2013 (2)
2014 (3)
Mar 31, 2013
Dec 31, 2013
Solutions
(Dollars in millions)
Revenues Segment fee revenues Fund management fees $ 18.5 $
20.9 $ 37.2 $ 42.4 $ 44.5 $ 26.0 $ 2.1 Portfolio advisory fees, net
- - - - - - - Transaction fees, net - -
- - - - -
Total fee revenues 18.5 20.9 37.2 42.4 44.5 26.0 2.1 Performance
fees Realized 1.5 2.7 5.7 11.8 5.9 4.4 (5.9 ) Unrealized
21.3 21.3 38.9 48.3
79.3 58.0 31.0 Total performance
fees 22.8 24.0 44.6 60.1 85.2 62.4 25.1 Investment income (loss)
Realized - - - - - - - Unrealized (0.1 ) 0.1
0.1 0.1 0.1 0.2 -
Total investment income (loss) (0.1 ) 0.1 0.1 0.1 0.1 0.2 -
Interest and other income - 0.2 -
- 0.3 0.3 0.3
Total revenues 41.2 45.2 81.9 102.6 130.1 88.9 27.5
Expenses Compensation and benefits Direct base compensation 9.4 7.9
16.8 19.5 21.0 11.6 1.5 Indirect base compensation 1.3 1.3 1.1 1.9
3.8 2.5 1.9 Equity-based compensation 0.1 0.1 0.1 0.4 0.7 0.6 0.3
Performance fee related Realized 1.0 1.4 2.6 6.5 3.3 2.3 (3.2 )
Unrealized 16.1 16.1 29.7
37.2 66.2 50.1 29.0 Total
compensation and benefits 27.9 26.8 50.3 65.5 95.0 67.1 29.5
General, administrative, and other
indirect expenses
3.4 4.4 5.7 9.7 9.2 5.8 (0.5 ) Depreciation and amortization
expense 0.5 0.5 0.7 0.6 0.9 0.4 0.3 Interest expense 0.5
0.6 0.6 0.6 1.2
0.7 0.6 Total expenses 32.3
32.3 57.3 76.4
106.3 74.0 29.9
Economic Net
Income $ 8.9 $ 12.9 $
24.6 $ 26.2 $ 23.8
$ 14.9 $ (2.4 ) (-) Net
Performance Fees 5.7 6.5 12.3 16.4 15.7 10.0 (0.7 ) (-) Investment
Income (Loss) (0.1 ) 0.1 0.1 0.1 0.1 0.2 - (+) Equity-based
compensation 0.1 0.1 0.1
0.4 0.7 0.6 0.3
(=)
Fee Related Earnings $ 3.4 $
6.4 $ 12.3 $ 10.1
$ 8.7 $ 5.3 $ (1.4
) (+) Realized Net Performance Fees 0.5 1.3 3.1 5.3 2.6 2.1
(2.7 ) (+) Realized Investment Income - -
- - - - -
(=) Distributable Earnings $ 3.9
$ 7.7 $ 15.4 $
15.4 $ 11.3 $ 7.4
$ (4.1 )
(1) - During Q3 2013, Carlyle acquired the remaining 40%
ownership interest in AlpInvest. As such, amounts since the
acquisition represent 100% of the financial results of AlpInvest.
Prior to Q3 2013, amounts represent Carlyle's 60% economic interest
in Alpinvest.
(2) - During Q4 2013, Carlyle acquired Metropolitan Real Estate
Equity Management, LLC ("Metropolitan"). As such, amounts since the
acquisition include the financial results of Metropolitan.
(3) - During Q1 2014, Carlyle acquired Diversified Global Asset
Management Corporation ("DGAM"). As such, amounts since the
acquisition include the financial results of DGAM.
Total Assets Under Management Roll
Forward (Unaudited)
Corporate Private Equity Global Market Strategies
(8) Real Assets (9) Solutions (10) Total
Available Fair Value Available Fair
Value Available Fair Value Available
Fair Value Available Fair Value
(USD in millions)
Capital of Capital Total AUM
Capital of Capital Total AUM
Capital of Capital Total AUM
Capital of Capital Total AUM
Capital of Capital Total AUM
Balance, As of December 31, 2013 $ 24,743 $ 40,122
$
64,865 $ 1,458 $ 34,019
$ 35,477 $ 8,754 $
29,910
$ 38,664 $ 17,063 $ 32,741
$
49,804 $ 52,018 $ 136,792
$ 188,810 Acquisitions - -
- - -
- - -
- - 2,993
2,993 - 2,993 2,993
Commitments (1) (86 ) -
(86 ) - -
- 1,665 -
1,665 4,534 -
4,534 6,113 -
6,113 Capital Called, net (2) (886 ) 753
(133
) (32 ) 145
113 (512 ) 765
253 (919 ) 858
(61 ) (2,349 ) 2,521 172
Distributions (3) 130 (3,197 )
(3,067 ) 71 (190 )
(119 ) 209 (1,352 )
(1,143 ) 58 (2,337
)
(2,279 ) 468 (7,076 )
(6,608 ) Subscriptions, net of Redemptions (4) - -
- - 173
173 - -
- - (28 )
(28 )
- 145 145 Changes in CLO collateral balances
(5) - -
- - 544
544 - -
- - -
-
- 544 544
Market Appreciation/(Depreciation) (6)
- 2,844
2,844 - 354
354 - 1,238
1,238 - 2,239
2,239 - 6,675 6,675 Foreign Exchange
and other (7) 8 29
37
- (5 )
(5 )
(1 ) 27
26 19
24
43 26
75 101 Balance, As of
March 31, 2014 $ 23,909 $
40,551 $ 64,460 $
1,497 $ 35,040
$ 36,537 $ 10,115
$ 30,588 $ 40,703
$ 20,755 $ 36,490
$ 57,245 $ 56,276
$ 142,669 $
198,945 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 Acquisitions - -
- - 78
78 - -
- 622 4,514
5,136
622 4,592 5,214 Commitments (1) 9,954 -
9,954 331 -
331 3,207 -
3,207 5,074 -
5,074 18,566 - 18,566 Capital Called,
net (2) (4,259 ) 3,919
(340 ) (891 ) 1,282
391
(3,596 ) 3,988
392 (3,895 ) 3,860
(35 )
(12,641 ) 13,049 408 Distributions (3)
1,058 (11,996 )
(10,938 ) 295 (937 )
(642
) 951 (6,362 )
(5,411 ) 466 (9,384 )
(8,918 ) 2,770 (28,679 )
(25,909 ) Subscriptions, net of Redemptions (4) - -
- - 1,163
1,163 - -
- - (28 )
(28
) - 1,135 1,135 Changes in CLO
collateral balances (5) - -
- - 612
612 - -
-
- -
- - 612 612 Market
Appreciation/(Depreciation) (6) - 10,060
10,060 - 1,056
1,056 - 2,046
2,046 - 6,594
6,594 -
19,756 19,756 Foreign Exchange and other (7)
94 511
605 -
460
460 32
97
129 635
1,021
1,656 761
2,089 2,850 Balance,
As of March 31, 2014 $ 23,909
$ 40,551 $ 64,460
$ 1,497 $ 35,040
$ 36,537 $ 10,115
$ 30,588 $ 40,703
$ 20,755 $ 36,490
$ 57,245 $ 56,276
$ 142,669 $
198,945
(1) Represents capital raised by our carry funds, NGP management
fee funds, NGP carry funds and fund of funds vehicles, net of
expired available capital.
(2) Represents capital called by our carry funds, NGP management
fee funds, NGP carry funds and fund of funds vehicles, net of fund
fees and expenses. Equity invested amounts may vary from capital
called due to timing differences between investment acquisition and
capital call dates.
(3) Represents distributions from our carry funds, NGP
management fee funds, NGP 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 fund of hedge funds
vehicles.
(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 and fund of hedge funds
vehicles.
(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 $17.8 billion
from our structured credit funds, $14.6 billion in our hedge funds,
$3.8 billion (including $1.5 billion of Available Capital) in our
carry funds and $0.4 billion from our business development
companies.
(9) Amounts related to the NGP management fee funds and NGP
carry funds are based on the latest available information (in most
cases as of December 31, 2013).
(10) The fair market values for our Solutions fund of funds
vehicles are based on the latest available valuations of the
underlying limited partnership interests (in most cases as of
December 31, 2013) as provided by their general partners, plus the
net cash flows since the latest valuation, up to March 31,
2014.
Fee-Earning AUM Roll Forward
(Unaudited)
For the Three Months Ended March 31, 2014
Corporate Global Private Market Real
Assets
(USD in millions)
Equity Strategies (7)
Solutions Total Fee-earning AUM
Balance, Beginning of Period $ 43,033 $ 33,411 $ 28,438 $ 35,067 $
139,949 Acquisitions - - - 2,894 2,894 Inflows, including
Commitments(1) 697 136 408 700 1,941 Outflows, including
Distributions(2) (886 ) (301 ) (1,454 ) (1,097 ) (3,738 )
Subscriptions, net of Redemptions (3) - 103 - (28 ) 75 Changes in
CLO collateral balances (4) - 719 - - 719
Market Appreciation/(Depreciation) (5)
- 282 3 (34 ) 251 Foreign Exchange and other (6) 14
(4 ) 21 (34 )
(3 )
Balance, End of Period $
42,858 $ 34,346
$ 27,416 $ 37,468
$ 142,088
For the Twelve Months Ended March 31,
2014
Corporate Global Private Market Real
Assets
(USD in millions)
Equity Strategies (7)
Solutions Total Fee-earning AUM
Balance, Beginning of Period $ 33,195 $ 31,436 $ 29,419 $ 28,854 $
122,904 Acquisitions - 78 - 5,051 5,129 Inflows, including
Commitments(1) 17,485 721 2,280 7,061 27,547 Outflows, including
Distributions(2) (7,569 ) (551 ) (4,458 ) (5,854 ) (18,432 )
Subscriptions, net of Redemptions (3) - 1,118 - (28 ) 1,090 Changes
in CLO collateral balances (4) - 479 - - 479
Market Appreciation/(Depreciation) (5)
- 627 3 (14 ) 616 Foreign Exchange and other (6) (253 )
438 172
2,398 2,755
Balance, End of
Period $ 42,858 $
34,346 $ 27,416
$ 37,468 $ 142,088
(1) Inflows represent limited partner capital raised and capital
invested by our carry funds, NGP management fee funds, NGP carry
funds and fund of funds vehicles outside the investment period,
weighted-average investment period, or commitment fee period.
(2) Outflows represent limited partner distributions from our
carry funds and fund of funds vehicles and changes in basis for our
carry funds, NGP management fee funds, NGP carry funds and fund of
funds vehicles where the investment period, weighted-average
investment period, or commitment fee period has expired.
(3) Represents the net result of subscriptions to and
redemptions from our hedge funds and fund of hedge funds
vehicles.
(4) Represent 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, fund of hedge funds vehicles,
and of 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 March
31, 2014, the Legacy Energy Funds had, in the aggregate,
approximately $12.5 billion in AUM and $7.3 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”) and NGP
Agribusiness (the "NGP carry fund"), are managed by NGP Energy
Capital Management. As of March 31, 2014, the NGP mangement fee and
carry funds had, in the aggregate, approximately $12.3 billion in
AUM and $9.2 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.
REALIZED/PARTIALLY REALIZED TOTAL
INVESTMENTS INVESTMENTS (5) as of March 31, 2014
as of March 31, 2014 Fund Cumulative
Cumulative Inception Committed Invested
Total Fair MOIC Gross Net
Invested Total Fair MOIC Gross Date
(1) Capital Capital (2)
Value (3) (4) IRR (7)
IRR (8) Capital (2) Value (3)
(4) 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 $ 4,072.2 3.0x 34% 25% $ 1,362.4
$ 4,072.2 3.0x 34% CP III 2/2000 $ 3,912.7 $ 4,031.6 $ 10,146.6
2.5x 27% 21% $ 4,031.6 $ 10,146.6 2.5x 27% CP IV 12/2004 $ 7,850.0
$ 7,612.6 $ 17,710.2 2.3x 17% 13% $ 6,079.0 $ 16,265.7 2.7x 20% CP
V 5/2007 $ 13,719.7 $ 12,738.9 $ 22,295.1 1.8x 19% 14% $ 3,386.0 $
8,187.1 2.4x 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 € 2,048.5 €
3,866.4 1.9x 37% 20% € 1,230.8 € 3,088.0 2.5x 61% CEP III 12/2006 €
5,294.9 € 4,954.2 € 7,953.1 1.6x 15% 10% € 1,002.6 € 2,259.5 2.3x
27% CAP I 12/1998 $ 750.0 $ 627.7 $ 2,491.8 4.0x 25% 18% $ 627.7 $
2,491.8 4.0x 25% CAP II 2/2006 $ 1,810.0 $ 1,628.6 $ 2,841.8 1.7x
12% 8% $ 720.0 $ 2,127.9 3.0x 26% CAP III 5/2008 $ 2,551.6 $
2,406.1 $ 3,566.1 1.5x 18% 11% $ 765.4 $ 1,576.2 2.1x 25% CJP I
10/2001 ¥ 50,000.0 ¥ 47,291.4 ¥ 136,351.1 2.9x 61% 37% ¥ 39,756.6 ¥
131,454.6 3.3x 65% CJP II 7/2006 ¥ 165,600.0 ¥ 141,866.7 ¥
159,657.3 1.1x 3% (1%) ¥ 31,806.1 ¥ 57,537.9 1.8x 25% CGFSP I
9/2008 $ 1,100.2 $ 1,038.0 $ 1,634.6 1.6x 18% 11% $ 218.1 $ 529.8
2.4x 28% All Other Funds(9) Various $ 4,431.5 $ 6,914.1 1.6x 17% 7%
$ 2,802.4 $ 4,962.2 1.8x 20% Coinvestments and Other(10) Various $
7,730.5 $ 19,079.7 2.5x 36% 33% $
5,097.1 $ 15,410.6 3.0x 36%
Total Fully
Invested Funds $ 56,439.4 $
112,831.0 2.0x 26%
19% $ 30,211.7 $ 77,897.3
2.6x 30%
Funds in the
Investment Period(6)
CP VI (12) 5/2012 $ 13,000.0 $ 393.5 $ 382.5 1.0x n/m n/m CAP IV
(12) 11/2012 $ 2,130.5 n/a n/a n/a n/a n/m CAGP IV 6/2008 $ 1,041.4
$ 768.7 $ 1,032.2 1.3x 15% 6% CEOF I 5/2011 $ 1,119.1 $ 617.7 $
692.1 1.1x 13% 4% All Other Funds(11) Various $ 987.8 $
984.8 1.0x 1% (16%)
Total Funds in the Investment
Period $ 2,374.2 $ 2,709.1
1.1x 10% (6%) $
196.4 $ 449.6 2.3x
40% TOTAL CORPORATE PRIVATE EQUITY(13) $
58,813.6 $ 115,540.1 2.0x
26% 19% $ 30,408.1
$ 78,346.9 2.6x 30%
REALIZED/PARTIALLY REALIZED TOTAL
INVESTMENTS INVESTMENTS (5) as of March 31, 2014
as of March 31, 2014 Fund Cumulative
Cumulative Inception Committed Invested
Total Fair MOIC Gross Net
Invested Total Fair MOIC Gross Date
(1) Capital Capital (2)
Value (3) (4) IRR (7)
IRR (8) Capital (2) Value (3)
(4) 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 $ 1,379.5 2.6x 44% 30% $ 522.5 $
1,379.5 2.6x 44% CRP IV 12/2004 $ 950.0 $ 1,198.6 $ 1,286.0 1.1x 2%
(2%) $ 442.0 $ 472.4 1.1x 10% CRP V 11/2006 $ 3,000.0 $ 3,282.1 $
4,642.5 1.4x 11% 7% $ 2,459.2 $ 3,572.9 1.5x 13% CEREP I 3/2002 €
426.6 € 517.0 € 694.7 1.3x 12% 7% € 503.2 € 667.5 1.3x 13% CEREP II
4/2005 € 762.7 € 833.8 € 128.1 0.2x n/a n/a € 483.2 € 132.8 0.3x
n/a CEREP III 5/2007 € 2,229.5 € 1,956.2 € 1,883.7 1.0x (1%) (5%) €
257.2 € 347.8 1.4x 9% CIP 9/2006 $ 1,143.7 $ 1,011.7 $ 1,155.3 1.1x
4% 0% $ 180.7 $ - 0.0x n/a Energy II 7/2002 $ 1,100.0 $ 1,334.8 $
3,472.6 2.6x 81% 54% $ 827.4 $ 3,263.4 3.9x 105% Energy III 10/2005
$ 3,800.0 $ 3,559.9 $ 6,257.5 1.8x 13% 9% $ 1,545.4 $ 4,250.5 2.8x
27% Energy IV 12/2007 $ 5,979.1 $ 5,296.4 $ 8,598.4 1.6x 19% 13% $
1,997.1 $ 4,130.3 2.1x 31% All Other Funds(14) Various $ 2,497.4 $
2,628.3 1.1x 2% (3%) $ 1,638.3 $ 1,870.8 1.1x 7% Coinvestments and
Other(10) Various $ 5,224.7 $ 8,355.1 1.6x 18%
14% $ 2,122.2 $ 4,513.4 2.1x 28%
Total Fully Invested Funds $ 28,482.8
$ 41,502.9 1.5x 14%
8% $ 13,447.5 $
25,034.4 1.9x 25%
Funds in the
Investment Period(6)
CIEP I (12) 9/2013 $ 1,060.5 $ 108.6 $ 102.2 0.9x n/m n/m CRP VI
9/2010 $ 2,340.0 $ 1,437.5 $ 2,025.0 1.4x 32% 19% Renew II 3/2008 $
3,417.5 $ 2,791.6 $ 3,852.4 1.4x 12% 8% All Other Funds(15) Various
$ 226.8 $ 269.8 1.2x n/a n/a
Total Funds in the
Investment Period $ 4,564.5 $
6,249.4 1.4x 15%
9% $ 849.0 $ 1,258.1
1.5x 18% TOTAL Real Assets(13)
$ 33,047.3 $ 47,752.3
1.4x 14% 8% $
14,296.5 $ 26,292.4 1.8x
25%
Global Markets Strategies Carry Funds
and Solutions (Unaudited)
TOTAL INVESTMENTS as of March 31, 2014
Fund Cumulative Inception Committed
Invested Capital Total Fair Date (16)
Capital (17) 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 $ 2,447.1 1.8x 18% 13% CEMOF I
12/2010 $ 1,382.5 $ 814.2 $ 983.5 1.2x 26% 11%
TOTAL INVESTMENTS as of March 31, 2014
Cumulative Vintage Invested Capital Total
Fair Year Fund Size (2)(8)
Value (3)(20) MOIC (4) Gross
IRR (7) Net IRR (8) Solutions (19)
(Reported in Local Currency, in Millions)
Fully Committed
Funds (18)
Main Fund I - Fund Investments 2000 € 5,174.6 € 3,794.1 € 6,167.2
1.6x 12% 12% Main Fund II - Fund Investments 2003 € 4,545.0 €
4,329.8 € 6,557.3 1.5x 10% 10% Main Fund III - Fund Investments
2005 € 11,500.0 € 10,358.1 € 13,902.2 1.3x 8% 8% Main Fund IV -
Fund Investments 2009 € 4,880.0 € 2,177.6 € 2,513.9 1.2x 10% 9%
Main Fund I - Secondary Investments 2002 € 519.4 € 451.5 € 839.2
1.9x 54% 50% Main Fund II - Secondary Investments 2003 € 998.4 €
896.9 € 1,626.0 1.8x 28% 26% Main Fund III - Secondary Investments
2006 € 2,250.0 € 2,050.5 € 2,823.5 1.4x 10% 9% Main Fund IV -
Secondary Investments 2010 € 1,856.4 € 1,651.5 € 2,354.8 1.4x 20%
19% Main Fund II - Co-Investments 2003 € 1,090.0 € 855.2 € 2,386.5
2.8x 45% 43% Main Fund III - Co-Investments 2006 € 2,760.0 €
2,435.1 € 3,362.1 1.4x 6% 5% Main Fund IV - Co-Investments 2010 €
1,475.0 € 1,202.7 € 2,036.5 1.7x 23% 20% Main Fund II - Mezzanine
Investments 2004 € 700.0 € 685.6 € 926.6 1.4x 8% 7% Main Fund III -
Mezzanine Investments 2006 € 2,000.0 € 1,451.8 € 1,903.6 1.3x 11%
9% All Other Funds (21) Various € 1,353.2 € 1,979.6
1.5x 17% 14%
Total Fully Committed Funds €
33,693.6 € 49,378.9 1.5x
12% 11%
Funds in the
Commitment Period
Main Fund V - Fund Investments 2012 € 5,080.0 € 340.0 € 305.7 0.9x
(20%) (27%) Main Fund V - Secondary Investments 2011 € 3,718.3 €
1,156.4 € 1,521.9 1.3x 34% 31% Main Fund V - Co-Investments 2012 €
1,747.5 € 494.9 € 732.5 1.5x 56% 51% All Other Funds (21) Various €
144.7 € 175.2 1.2x 23% 20%
Total
Funds in the Commitment Period € 2,136.0 €
2,735.3 1.3x 34% 29%
TOTAL SOLUTIONS € 35,829.6 € 52,114.2
1.5x 12% 11% TOTAL
SOLUTIONS (USD) (22) $ 49,345.3 $
71,772.7 1.5x
(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.
(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, CUSGF III, CEVP, CETP I, CETP II, CAVP I, CAVP II, CAGP
III, Mexico, and MENA.
(10) Includes co-investments, prefund investments, and certain
other stand-alone investments arranged by us.
(11) Aggregate includes the following funds: CJP III, CGFSP II,
CSABF, CSSAF, CBPF, CPF I, and CCI.
(12) Returns are not considered meaningful, as the investment
period commenced in May 2012 for CP VI, November 2012 for CAP IV,
and September 2013 for CIEP.
(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, CRCP I, Energy I and Renew I.
(15) Aggregate includes the following fund: CPOCP.
(16) The data presented herein that provides "inception to date"
performance results for CSP II and CEMOF I related to the period
following the formation of the funds in June 2007 and December
2010, respectively.
(17) 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.
(18) Fully Committed funds are past the expiration date of the
commitment period as defined in the respective limited partnership
agreement.
(19) 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, 2014, these excluded investments
represent $0.7 billion of AUM.
(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) Represents the U.S. dollar equivalent balance translated at
the spot rate as of period end.
Remaining Fair Value Analysis
In Accrued Carry/ LTM Fee
Quarters Original Remaining Fair
Unrealized Total % (Clawback)
Realized Catch Initiation Since Fee
Investment
Value(1)
MOIC(2)
MOIC(3)
Invested(4)
(5)
Carry (6)
up Rate
Date(7)
Initiation Period End Date As of
March 31, 2014 Corporate Private Equity CP V $ 14,312.7
1.8x 1.8x 93%
√ √ 100% Nov-07 26 May-13 CEP III €
5,457.9 1.7x 1.6x 94%
√ 100% Dec-07 26 Dec-12 CP IV $
3,876.7 1.8x 2.3x 97%
√ √ 80% Dec-05 34 Dec-10 CAP
III $ 2,242.5 1.3x 1.5x 94%
√ 100% Dec-08 22 May-14 CAP II $
1,151.6 1.2x 1.7x 90%
√ 80% Dec-06 30 Feb-12 CJP II ¥
97,027.8 0.9x 1.1x 86% 80% Oct-06 30 Jul-12 CEP II € 716.0 0.9x
1.9x 113%
√ 80% Sep-03 43 Sep-08 CGFSP I $ 963.2 1.3x 1.6x
94%
√ √ 100% Oct-08 22 Sep-14 CAGP IV $ 776.6 1.1x
1.3x 74% 100% Dec-08 22 Jun-14 CEOF I $ 644.9 1.1x 1.1x 55% 80%
Dec-11 10 May-17 CP VI $ 412.2 1.0x 1.0x 3% 100% Oct-13 2 May-18
All Other Funds (8) $ 2,644.4 1.2x 2.2x n/m n/m Coinvestment and
Other (9) $ 4,068.5 1.7x 2.5x n/m n/m
Total
Corporate Private Equity $ 40,537.5
1.5x 2.0x Real Assets Energy IV
$ 4,867.9 1.3x 1.6x 89%
√ √ 80% Feb-08 25 Dec-13
Renew II $ 2,535.8 1.4x 1.4x 82%
(√) 80% Nov-08 22 May-14
CEREP III € 1,610.8 0.9x 1.0x 88% 67% Oct-07 26 May-11 Energy III $
1,917.5 0.9x 1.8x 94%
√ √ 80% Nov-05 34 Oct-11 CRP VI
$ 1,623.3 1.3x 1.4x 61%
√ 50% Dec-11 10 Mar-16 CRP V $
1,129.3 1.4x 1.4x 109% 50% Nov-06 30 Nov-11 CIP $ 949.1 1.4x 1.1x
88% 80% Oct-06 30 Sep-12 CRP IV $ 785.5 1.0x 1.1x 126%
(√)
50% Dec-05 34 Dec-09 Energy II $ 354.9 0.7x 2.6x 121%
(√)
√ 80% Dec-02 46 Jul-08 CRP III $ 236.5 38.3x 2.6x 93%
√ √ 50% Dec-01 50 May-05 CIEP I $ 101.7 0.9x 0.9x 10%
80% Oct-13 2 Sep-19 All Other Funds (10) $ 678.4 0.6x 0.9x n/m n/m
Coinvestment and Other (9) $ 3,533.6 1.1x 1.6x n/m
n/m
Total Real Assets $ 20,932.1
1.1x 1.4x Global Market
Strategies CEMOF I $ 682.7 1.1x 1.2x 59%
√ 100% Dec-10
14 Dec-15 CSP II $ 529.8 1.0x 1.8x 100%
√ √ 80%
Dec-07 26 Jun-11 All Other Funds (11) $ 871.3 1.2x 1.4x n/m n/m
Coinvestment and Other (9) $ 191.0 1.0x 1.2x n/m n/m
Total Global Market Strategies $ 2,274.8
1.1x 1.5x
Notes:
(1) Net asset value of our carry funds. Reflects significant
funds with remaining fair value of greater than $100 million.
(2) Unrealized multiple of invested capital ("MOIC") represents
remaining fair market value, before management fees, expenses and
carried interest, divided by investment cost.
(3) Total MOIC represents total fair value, before management
fees, expenses and carried interest, divided by cumulative invested
capital
(4) Represents cumulative equity invested as of the reporting
period divided by total commitments. Amount can be greater than
100% due to the re-investment of recallable distributions to fund
investors.
(5) Fund has accrued carry/(clawback) as of the reporting
period.
(6) Fund has realized carry in the last twelve months.
(7) Represents the date of the first capital contribution for
management fees.
(8) Aggregate includes the following funds: CMP, CP I, CP II, CP
III, CP IV, CEP I, CEP IV, CAP I, CAP IV, CBPF, CJP I, CJP III,
CEVP, CETP I, CETP II, CCI, CAVP I, CAVP II, CAGP III, Mexico,
MENA, CSABF, CGFSP II, CSSAF, CPF, CVP I, CVP II, and CUSGF III. In
Accrued Carry/(Clawback) and LTM Realized Carry not indicated
because the indicator does not apply to each fund within the
aggregate.
(9) Includes co-investments, prefund investments and certain
other stand-alone investments arranged by us. In Accrued
Carry/(Clawback) and LTM Realized Carry not indicated because the
indicator does not apply to each fund within the aggregate.
(10) Aggregate includes the following funds: CRP I, CRP II, CRCP
I, CEREP I, CEREP II, CAREP I, CAREP II, CPOCP I, Energy I and
Renew I. In Accrued Carry/(Clawback) and LTM Realized Carry not
indicated because the indicator does not apply to each fund within
the aggregate.
(11) Aggregate includes the following funds: CSP I, CSP III, CMP
I, and CMP II. In Accrued Carry/(Clawback) and LTM Realized Carry
not indicated because the indicator does not apply to each fund
within the aggregate.
Largest Publicly Traded Positions in
Carry Funds
Rank Largest Publicly Traded Equity
Positions Fund(s) Q1 2014 Value (1,2)
1 CommScope, Inc. CP V, CEP III $ 2,994,719,821 2 Booz Allen
Hamilton, Inc. CP V, CMP II 1,597,521,545 3 Pattern Energy Group
Holdings, L.P. RENEW II 1,563,805,618 4 Allison Transmission, Inc.
CP IV 1,057,518,225 5 Numericable & Completel CEP III, CEP II
1,038,372,867 6 HD Supply, Inc. CP V 953,739,453 7 The Nielsen
Company CP IV, CEP II 829,348,775 8 Freescale Semiconductor, Inc.
CP IV, CAP II, CJP I, CEP II 761,869,010 9 Wesco Holdings, Inc. CP
IV, CMP I 645,557,347 10 Cobalt International Energy ENERGY III,
ENERGY II 639,135,925
Top 10 Positions
12,081,588,586 Total Public Equity Portfolio (carry fund
only) 17,814,674,405 % of public portfolio
in top 10 positions 68%
(1) Includes gross fund only investment results including
external coinvestment. May include portion of private business in
value.
(2) In U.S. dollars, or converted to U.S. dollars at the
prevailing exchange rate on the last day of the fiscal period.
Note: Includes all classes of shares irrespective of trading
status
Reconciliation for Economic Net Income
and Distributable Earnings (Unaudited)
Three Months Ended Mar 31, Mar 31,
2014 2013 (Dollars in millions)
Income before provision for income taxes $ 472.4 $ 452.4
Adjustments:
Equity-based compensation issued in
conjunction with the initial public offering, acquisitions and
strategic investments
62.4 52.1 Acquisition related charges and amortization of
intangibles 80.1 62.5 Other non-operating expenses 30.2 (2.4 )
Net income attributable to non-controlling
interests in consolidated entities
(324.5 ) (168.0 ) Other adjustments 1.3 (2.7 )
Economic Net Income $ 321.9 $ 393.9 Net
performance fees 306.6 354.7 Investment income (loss) (7.9 ) 3.0
Equity-based compensation 14.0 2.6
Fee Related Earnings $ 37.2 $ 38.8 Realized
performance fees, net of related compensation 140.8 141.5
Investment income - realized 5.3 (9.3 )
Distributable Earnings $ 183.3 $ 171.0
Depreciation and amortization expense 5.4 6.3 Interest expense
12.2 8.5
Adjusted EBITDA $ 200.9
$ 185.8
Reconciliation for Economic Net income
and Distributable Earnings, cont. (Unaudited)
Three Months Ended Mar 31, 2014
(Dollars in millions, except unit and per unit amounts)
Economic Net Income $ 321.9 Less: Provision for
Income Taxes 46.4 Economic Net Income, After Taxes $ 275.5
Economic Net Income, After Taxes per Adjusted Unit(1) $ 0.85
Distributable Earnings $ 183.3 Less: Estimated
foreign, state, and local taxes 14.0 Distributable Earnings,
After Taxes $ 169.3 Distributable Earnings to The Carlyle
Group L.P. $ 35.6 Less: Estimated current corporate income taxes
and TRA payments 0.8 Distributable Earnings to The Carlyle
Group L.P. net of corporate income taxes $ 34.8
Distributable Earnings, net, per The Carlyle Group L.P. common unit
outstanding(2) $ 0.52
(1)
Adjusted Units were determined as
follows:
The Carlyle Group L.P. common units outstanding 64,092,165
Carlyle Holdings partnership units not held by The Carlyle Group
L.P. 252,718,742 Dilutive effect of unvested deferred restricted
common units 6,486,349 Contingently issuable Carlyle Holdings
partnership units 465,909 Total Adjusted Units
323,763,165
(2)
As of March 31, 2014, there were
64,092,165 outstanding common units of The Carlyle Group L.P. In
May 2014, an additional 2,831,392 common units will be 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, 2014, resulting in total common
units of 66,923,557.
GAAP for 12-Month Rolling Summary
(Unaudited)
Twelve Months Ended Mar 31, Mar 31,
2014 2013 (Dollars in millions)
Revenues Fund management fees $ 1,013.5 $ 974.6 Performance
fees Realized 1,175.3 879.7 Unrealized 1,178.1 163.0
Total performance fees 2,353.4 1,042.7 Investment income Realized
18.6 12.9 Unrealized 5.9 2.4 Total investment income
24.5 15.3 Interest and other income 13.3 14.2 Interest and other
income of Consolidated Funds 1,025.4 960.4 Revenue of a
consolidated real estate VIE 13.5 - Total revenues
4,443.6 3,007.2
Expenses Compensation and benefits
Base compensation 764.1 696.9 Equity-based compensation 344.3 254.0
Performance fee related Realized 539.2 359.9 Unrealized
671.1 172.4 Total compensation and benefits 2,318.7 1,483.2
General, administrative and other expenses 519.3 377.7 Interest
47.2 24.7 Interest and other expenses of Consolidated Funds 904.5
823.7 Interest and other expenses of a consolidated real estate VIE
83.0 - Other non-operating expenses 16.1 8.8 Total
expenses 3,888.8 2,718.1
Other income Net investment
gains of Consolidated Funds 909.2 1,097.4
Income before provision for income taxes 1,464.0 1,386.5 Provision
for income taxes 87.3 53.6 Net income 1,376.7 1,332.9
Net income attributable to non-controlling
interests in consolidated entities
832.5 1,059.8 Net income attributable to Carlyle
Holdings 544.2 273.1 Net income attributable to non-controlling
interests in Carlyle Holdings
449.3 219.0 Net income attributable to The Carlyle
Group L.P. $ 94.9 $ 54.1
Reconciliation of Non-GAAP to GAAP for
12-Month Rolling Summary (Unaudited)
Twelve Months Ended Mar 31, Mar
31, 2014 2013 (Dollars in millions)
Income before provision for income taxes $ 1,464.0 $ 1,386.5
Adjustments: Partner compensation - 5.6
Equity-based compensation issued in
conjunction with the IPO and strategic investments
324.7 252.2 Acquisition related charges and amortization of
intangibles 278.0 166.7 Other non-operating expenses 16.1 8.8 Net
income attributable to non-controlling interests
in consolidated entities
(832.5 ) (1,059.8 ) Other adjustments (2.2 ) (22.6 )
Economic Net Income $ 1,248.1 $ 737.4 Net
performance fees 1,178.2 544.5 Investment income (loss) (53.5 )
21.2 Equity-based compensation 27.1 4.4
Fee Related Earnings $ 150.5 $ 176.1 Realized
performance fees, net of related compensation 676.6 500.9
Investment income - realized 25.2 4.9
Distributable Earnings $ 852.3 $ 681.9
Depreciation and amortization expense 23.4 22.6 Interest expense
47.3 23.2
Adjusted EBITDA $
923.0 $ 727.7
The Carlyle Group
L.P. GAAP Balance Sheet (Unaudited)
As of March 31, 2014 Consolidated
Operating Consolidated Entities Funds
Eliminations Consolidated (Dollars in
millions) Assets Cash and cash equivalents $ 1,034.3 $ -
$ - $ 1,034.3 Cash and cash equivalents held at Consolidated Funds
- 2,149.8 - 2,149.8 Restricted cash 45.4 - - 45.4 Restricted cash
and securities of Consolidated Funds - 25.2 - 25.2 Accrued
performance fees 3,803.0 - (26.4 ) 3,776.6 Investments 903.4 -
(155.4 ) 748.0 Investments of Consolidated Funds - 27,081.4 (1.3 )
27,080.1 Due from affiliates and other receivables, net 179.0 -
(13.7 ) 165.3 Due from affiliates and other receivables of
Consolidated
Funds, net
- 282.9 - 282.9 Receivables and inventory of a consolidated real
estate VIE 170.9 - - 170.9 Fixed assets, net 67.4 - - 67.4 Deposits
and other 47.1 3.1 - 50.2 Other assets of a consolidated real
estate VIE 46.7 - - 46.7 Intangible assets, net 568.6 - - 568.6
Deferred tax assets 137.1 - -
137.1 Total assets $ 7,002.9 $ 29,542.4 $ (196.8 ) $ 36,348.5
Liabilities and partners' capital Loans payable $
42.4 $ - $ - $ 42.4 3.875% Senior Notes due 2023 499.8 - - 499.8
5.625% Senior Notes due 2043 607.0 - - 607.0 Loans payable of
Consolidated Funds - 15,801.4 (122.7 ) 15,678.7 Loans payable of a
consolidated real estate VIE at fair value
(principal amount of $278.3)
125.3 - - 125.3 Accounts payable, accrued expenses and other
liabilities 285.9 - (45.7 ) 240.2 Accrued compensation and benefits
2,193.3 - - 2,193.3 Due to affiliates 274.0 0.8 (0.5 ) 274.3
Deferred revenue 196.7 1.3 - 198.0 Deferred tax liabilities 120.4 -
- 120.4 Other liabilities of Consolidated Funds - 1,706.5 (58.8 )
1,647.7 Other liabilities of a consolidated real estate VIE 98.0 -
- 98.0 Accrued giveback obligations 45.9 -
(10.2 ) 35.7 Total liabilities 4,488.7 17,510.0 (237.9 )
21,760.8 Redeemable non-controlling interests in
consolidated entities 8.1 4,663.3 - 4,671.4 Total partners'
capital 2,506.1 7,369.1 41.1
9,916.3 Total liabilities and partners' capital $ 7,002.9 $
29,542.4 $ (196.8 ) $ 36,348.5
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 and its components are
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
excluding equity-based compensation, 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, NGP carry
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, fund of hedge funds vehicles, and other hedge funds;
and
(d) the gross assets (including assets acquired with leverage)
of our Business Development Companies.
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 and NGP carry
funds advised by NGP Energy Capital Management. In addition, our
Solutions segment includes certain assets under consultative
relationships. Total AUM includes only those assets which earn a
material fee. 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, NGP management fee funds, and NGP carry
funds refers to the amount of capital commitments available to be
called for investments. Amounts previously called may be added back
to available capital following certain distributions.
“Carlyle funds,” “our funds” and “our
investment funds” refer to the investment funds and vehicles
advised by Carlyle.
“Carry funds” refers to those investment funds that
Carlyle advises, including the buyout funds, growth capital funds,
real 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 and NGP carry 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 and Metropolitan fund of funds
vehicles where the weighted-average investment period of the
underlying funds has not expired, the amount of limited partner
capital commitments, for AlpInvest 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 and Metropolitan
fund of funds vehicles where the weighted-average investment period
of the underlying funds 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, fund of hedge funds
vehicles, and other hedge funds; and
(e) for AlpInvest 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
carry funds that Carlyle jointly advises with Riverstone and
certain NGP management fee and NGP carry funds advised by NGP
Energy Capital Management. In addition, our Solutions segment
includes certain assets under consultative relationships.
Fee-Earning AUM includes only those assets which earn a material
fee.
For Carlyle’s carry funds, co-investment vehicles, NGP
management fee funds, NGP carry 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” refers to those funds, accounts
and vehicles advised by AlpInvest Partners B.V., Metropolitan Real
Estate Equity Management, LLC, and Diversified Global Asset
Management Corporation.
“NGP carry funds” refer to those funds advised by NGP
Energy Capital Management (together with its affiliates and
subsidiaries) from which we are entitled to receive a carried
interest.
“NGP management fee funds” refer to those funds advised
by NGP Energy Capital Management (together with its affiliates and
subsidiaries) from which we only receive management fees.
“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 certain 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.
“VIE” refers to a variable interest entity, as that term
is defined in Accounting Standards Codification Topic 810,
Consolidation.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20140430005748/en/
The Carlyle Group L.P.Public Market Investor
RelationsDaniel Harris,
212-813-4527daniel.harris@carlyle.comorMediaElizabeth Gill,
202-729-5385elizabeth.gill@carlyle.com
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