Global alternative asset manager The Carlyle Group L.P. (NASDAQ:CG)
today reported its unaudited results for the third quarter ended
September 30, 2017.
Carlyle Co-CEO David M. Rubenstein said,
“Carlyle is performing well across all metrics enabling us to
declare a third quarter common unitholder distribution of $0.56. We
are pleased to have resolved and put behind us all of the major
challenges that we have faced over the past few years. This is the
right time to announce a change in leadership, and we believe the
best days for Carlyle are ahead of us.”
Carlyle Co-CEO William E. Conway, Jr. said, “Our
carry fund portfolio continued to generate solid returns, with
appreciation of 3% in the quarter and up 19% over the past twelve
months. Our global investment teams invested nearly $7 billion of
capital during the third quarter, the highest quarterly level since
our IPO, into a diverse mix of new assets and have deployed over
$20 billion of capital during the past twelve months.”
U.S. GAAP results for Q3 2017 included income
before provision for income taxes of $166 million, and net income
attributable to the common unitholders through The Carlyle Group
L.P. of $45 million, or net income per common unit of $0.43, on a
diluted basis. U.S. GAAP results for the twelve months ended
September 30, 2017 included income before provision for income
taxes of $749 million and net income attributable to The Carlyle
Group L.P. of $176 million. Total balance sheet assets were
$12 billion as of September 30, 2017.
In addition to this release, Carlyle issued a
full detailed presentation of its third quarter 2017 results, which
can be viewed on the investor relations section of our website at
ir.carlyle.com.
Notable Impacts on Q3 2017
ResultsCarlyle's Q3 2017 results reflect the financial
impacts from commodities related insurance recoveries, the disposal
of Urbplan Desenvolvimento Urbano S.A. (“Urbplan”) and a litigation
related reserve release:
- Commodities Related Insurance Recovery: Third
quarter results included incremental net insurance recoveries
related to commodities of $74 million, reducing the cumulative net
losses related to this matter that were previously recognized in
2016 and in the first half of 2017. This amount is included in
general, administrative and other expense in Global Market
Strategies and completes our recovery of general liability
insurance proceeds related to this matter, though we continue to
pursue additional recoveries of commodity assets and proceeds from
marine cargo insurance policies on behalf of affected fund
investors. The full amount of the net recovery affected GAAP
earnings, Economic Net Income, Fee Related Earnings and
Distributable Earnings.
- Disposal of Urbplan: During Q3 2017, Carlyle
disposed of its ownership interest in Urbplan, the Brazilian
residential subdivision and land development company that had been
consolidated into Carlyle's results since 2013. With this
transaction, Urbplan has been deconsolidated from Carlyle's
financial results. As a result, we recognized a pre-tax loss of $65
million in Real Assets. The GAAP and ENI loss net of related tax
benefits was $54 million and $26 million, respectively. The
smaller GAAP tax benefit reflects that The Carlyle Group L.P. owns
29% of Carlyle Holdings whereas ENI assumes that all of the Carlyle
Holdings partnership units are converted into common
units.
- Carlyle Capital Corporation Litigation Reserve
Release: Third quarter results included a $25 million
reserve reversal related to the resolution of the Carlyle Capital
Corporation (“CCC”) litigation. During the third quarter, Carlyle
prevailed in the litigation before the Royal Court of Guernsey
involving the 2008 insolvency of CCC. The Guernsey trial
court decided that Carlyle and Directors of CCC acted
reasonably and appropriately in the management and governance of
CCC. A reserve had been initiated in 2015 related to this matter,
and this reserve was reversed during Q3 2017. This resolution
impacts each of our business segments in the line item for Reserve
for Litigation and Contingencies, and affects GAAP earnings and
Economic Net Income, but not Fee Related Earnings or Distributable
Earnings, as the timing of future payment was uncertain at the time
the reserve was initiated.
Distributions
The Board of Directors has declared a quarterly
distribution of $0.56 per common unit to holders of record at the
close of business on November 10, 2017, payable on November 16,
2017.
On September 13, 2017, Carlyle issued 16
million of 5.875% Series A Preferred Units at a price of
$25.00 per unit for total gross proceeds of $400 million.
Distributions on the Series A Preferred Units, when and if
declared, will be payable quarterly on the 15th day of
March, June, September and December of
each year, beginning December 15, 2017. Distributions
on the Series A Preferred Units are discretionary and
non-cumulative. The Board of Directors has declared a
quarterly distribution of $0.375347 per Series A Preferred Unit to
holders of record at the close of business on December 1, 2017,
payable on December 15, 2017. The first distribution on the
Series A Preferred Units is calculated based on the date of
original issuance.
Conference Call
Carlyle will host a conference call at 8:30 a.m.
EDT on Tuesday, October 31, 2017, to announce its third quarter
2017 financial results. The call may be accessed by dialing +1
(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 $174 billion of assets under
management across 306 investment vehicles as of September 30,
2017. 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 Investment 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 1,550 people in 31 offices across six
continents.
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, contingencies, our distribution policy, 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. Such forward-looking statements are
subject to various risks, uncertainties and assumptions.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements including, but not limited to, those
described under the section entitled “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2016 filed
with the SEC on February 16, 2017, 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.
Contacts:
Public Market
Investor Relations |
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Media |
Daniel Harris |
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Elizabeth Gill |
Phone: +1 (212)
813-4527 |
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Phone: +1 (202)
729-5385 |
daniel.harris@carlyle.com |
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elizabeth.gill@carlyle.com |
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Web:
www.carlyle.com |
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Videos:
www.youtube.com/onecarlyle |
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Tweets:
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Podcasts:
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