Document


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
 
 
 
FORM 8-K
 
 
 
 
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 2018
 
 
 
 
 
The Carlyle Group L.P.
(Exact name of registrant as specified in its charter)
 
 
 
 
 

 
 
 
 
 
Delaware
 
001-35538
 
45-2832612
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
1001 Pennsylvania Avenue, NW
Washington, D.C.
 
20004-2505
(Address of Principal Executive Offices)
 
(Zip Code)
(202) 729-5626
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 
 
 
 
 






Item 2.02
Results of Operations and Financial Condition.
On August 1, 2018, The Carlyle Group L.P. issued a summary press release and a detailed earnings presentation announcing financial results for its second quarter ended June 30, 2018. The summary press release and the earnings presentation are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibits 99.1 and 99.2 incorporated in this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information or Exhibits 99.1 and 99.2 be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01
Financial Statements and Exhibits.
(d)
Exhibits.
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
 
 
99.2
  
 
 
 







SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
THE CARLYLE GROUP L.P.
 
 
 
 
 
 
 
 
By:
 
Carlyle Group Management L.L.C.,
 
 
 
 
 
 
its general partner
 
 
 
 
Date: August 1, 2018
 
 
 
By:
 
/s/ Curtis L. Buser
 
 
 
 
Name:
 
Curtis L. Buser
 
 
 
 
Title:
 
Chief Financial Officer





Exhibit


Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=4 

The Carlyle Group Announces Second Quarter 2018 Financial Results
Washington, DC, August 1, 2018Global alternative asset manager The Carlyle Group L.P. (NASDAQ: CG) today reported its unaudited results for the second quarter ended June 30, 2018.

Carlyle Co-CEOs Kewsong Lee and Glenn Youngkin said, “Carlyle’s momentum continued in the second quarter, with strong fund performance, fundraising and realization activity. We are making progress in growing Fee Related Earnings, with further room to accelerate. In addition, we are excited about our new partnership with AIG and DSA Reinsurance, where our 19.9% investment stake will drive new investment mandates across our firm.”
 
U.S. GAAP results for Q2 2018 included income before provision for income taxes of $253 million, and net income attributable to The Carlyle Group L.P. common unitholders of $64 million, or net income per common unit of $0.56, on a diluted basis. U.S. GAAP results for the twelve months ended June 30, 2018 included income before provision for income taxes of $939 million and net income attributable to The Carlyle Group L.P. common unitholders of $195 million. Total balance sheet assets were $13 billion as of June 30, 2018.

In addition to this release, Carlyle issued a full detailed presentation of its second quarter 2018 results, which can be viewed on the investor relations section of our website at ir.carlyle.com.
Distributions

The Board of Directors has declared a quarterly distribution of $0.22 per common unit to holders of record at the close of business on August 13, 2018, payable on August 17, 2018.

The Board of Directors has declared a quarterly distribution of $0.367188 per preferred unit to preferred unitholders of record at the close of business on September 1, 2018, payable on September 17, 2018.
Conference Call
Carlyle will host a conference call at 8:30 a.m. EDT on Wednesday, August 1, 2018, to announce its second quarter 2018 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 $210 billion of assets under management across 335 investment vehicles as of June 30, 2018. 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 Credit 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 1,625 people in 31 offices across six continents.


Page | 1



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, 2017 filed with the SEC on February 15, 2018, 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
  
Media
Daniel Harris
  
Jordan DeJarnette
Phone: +1 (212) 813-4527
  
Phone: +1 (202) 729-5025
daniel.harris@carlyle.com
  
jordan.dejarnette@carlyle.com
 
 
Web: www.carlyle.com
  
 
Videos: www.youtube.com/onecarlyle
  
 
Tweets: www.twitter.com/onecarlyle
  
 
Podcasts: www.carlyle.com/about-carlyle/market-commentary

Page | 2
Exhibit


Exhibit 99.2

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=5

For Immediate Release
August 1, 2018

The Carlyle Group Announces Second Quarter 2018 Financial Results

U.S. GAAP results included net income attributable to The Carlyle Group L.P. common unitholders of $64 million, or $0.56 per common unit on a diluted basis, for Q2 2018

Economic Income of $272 million on a pre-tax basis and Economic Net Income of $0.69 per Adjusted Unit on a post-tax basis in Q2 2018, driven by 5% carry fund portfolio appreciation

Distributable Earnings of $115 million on a pre-tax basis for Q2 2018 and $0.29 per common unit on a post-tax basis in Q2 2018

Declared a quarterly distribution of $0.22 per common unit for Q2 2018

Assets Under Management of $209.7 billion as of Q2 2018, up 24% over the last twelve months

Net accrued performance revenues of $2.0 billion as of Q2 2018, up 26% over the last twelve months

$7.0 billion in realized proceeds in Q2 2018 and $29.0 billion realized over the last twelve months
$3.5 billion of invested capital in Q2 2018 and $21.6 billion invested over the last twelve months
$12.3 billion in capital raised in Q2 2018 and a record $51.8 billion raised over the last twelve months
Washington, DC – Global alternative asset manager The Carlyle Group L.P. (NASDAQ: CG) today reported its unaudited results for the second quarter ended June 30, 2018.

Carlyle Co-CEOs Kewsong Lee and Glenn Youngkin said, “Carlyle’s momentum continued in the second quarter, with strong fund performance, fundraising and realization activity. We are making progress in growing Fee Related Earnings, with further room to accelerate. In addition, we are excited about our new partnership with AIG and DSA Reinsurance, where our 19.9% investment stake will drive new investment mandates across our firm.”
 
U.S. GAAP results for Q2 2018 included income before provision for income taxes of $253 million, and net income attributable to The Carlyle Group L.P. common unitholders of $64 million, or net income per common unit of $0.56, on a diluted basis. U.S. GAAP results for the twelve months ended June 30, 2018 included income before provision for income taxes of $939 million and net income attributable to The Carlyle Group L.P. common unitholders of $195 million. Total balance sheet assets were $13 billion as of June 30, 2018.

Page | 1




Carlyle Consolidated GAAP Results
 
The Carlyle Group L.P.
Summary U.S. GAAP Condensed Consolidated Statements of Operations (Unaudited)
 
 
Three Months Ended           
 
 
LTM
 
 
Jun 30, 2017
Sep 30, 2017
Dec 31, 2017
Mar 31, 2018
Jun 30,
2018
 
Jun 30,
2018
 
 
(Dollars in millions, except per unit data)
 
 
 
Revenues
 
 
 
 
 
 
 
 
Fund management fees
 
$
238.8

$
262.5

$
279.3

$
264.5

$
301.3

 
$
1,107.6

Incentive fees
 
11.1

10.4

8.2

6.3

7.4

 
32.3

Investment income, including performance allocations
 
591.5

312.4

664.4

362.2

503.3

 
1,842.3

Revenue from consolidated entities
 
5.6

44.7

45.1

47.3

53.6

 
190.7

All other revenues
 
61.4

9.9

10.8

22.5

28.0

 
71.2

Total revenues
 
908.4

639.9

1,007.8

702.8

893.6

 
3,244.1

 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
Cash-based compensation and benefits
 
151.0

174.1

181.6

187.3

176.0

 
719.0

Equity-based compensation
 
88.0

81.0

78.5

84.9

64.9

 
309.3

Performance allocations and incentive fee related compensation
 
257.1

137.6

276.5

158.0

222.0

 
794.1

General, administrative and other expenses
 
95.8

(18.7
)
105.9

95.0

126.8

 
309.0

Expenses from consolidated entities and loss on deconsolidation of Urbplan
 
96.9

101.7

36.7

35.9

45.3

 
219.6

Interest and other non-operating expenses (income)
 
16.6

16.9

(54.4
)
18.2

18.7

 
(0.6
)
Total expenses
 
705.4

492.6

624.8

579.3

653.7

 
2,350.4

 
 
 
 
 
 
 
 
 
Net investment gains of consolidated funds
 
40.7

18.6

12.0

2.0

12.9

 
45.5

Income before provision for income taxes
 
243.7

165.9

395.0

125.5

252.8

 
939.2

Provision (benefit) for income taxes
 
13.2

(1.3
)
107.2

7.8

11.6

 
125.3

Net income
 
230.5

167.2

287.8

117.7

241.2

 
813.9

Net income attributable to non-controlling interests in consolidated entities
 
16.5

27.6

25.1

11.0

16.7

 
80.4

Net income attributable to Carlyle Holdings
 
214.0

139.6

262.7

106.7

224.5

 
733.5

Net income attributable to non-controlling interests in Carlyle Holdings
 
156.4

95.0

203.8

67.0

155.1

 
520.9

Net income attributable to The Carlyle Group L.P.
 
57.6

44.6

58.9

39.7

69.4

 
212.6

Net income attributable to Series A Preferred Unitholders
 


6.0

5.9

5.9

 
17.8

Net income attributable to The Carlyle Group L.P. Common Unitholders
 
$
57.6

$
44.6

$
52.9

$
33.8

63.5

 
$
194.8

 
 
 
 
 
 
 
 
 
Net income attributable to The Carlyle Group L.P. per common unit
 
 
 
 
 
 
 
 
   Basic
 
$
0.65

$
0.47

$
0.53

$
0.34

$
0.62

 
$
1.96

   Diluted
 
$
0.59

$
0.43

$
0.49

$
0.30

$
0.56

 
$
1.79

 
 
 
 
 
 
 
 
 

Income before provision for income taxes(1) was $253 million for Q2 2018, compared to $244 million for Q2 2017. The increase in income before provision for income taxes in Q2 2018 compared to Q2 2017 was primarily due to, among other factors, a $63 million increase in fund management fees, partially offset by a $53 million decrease in investment income, including performance allocations, net of performance allocations and incentive fee related compensation.

Net income attributable to The Carlyle Group L.P. Common Unitholders was $64 million, or $0.56 per common unit on a diluted basis for Q2 2018, compared to $58 million, or $0.59 per common unit on a diluted basis for Q2 2017.




See Notes at end of document.


Page | 2




Non-GAAP Operating Results
Carlyle Group Summary ($ in millions, except unit and per unit amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
YTD
 
LTM
 
% Change    
$ in millions, except per unit data and where noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
 
Q2 2018
 
Q2 2018
 
Q3 17 -
Q2 18
 
QoQ  
 
YoY
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income
 
$
300.1

 
$
202.7

 
$
366.4

 
$
169.0

 
$
272.1

 
$
441.1

 
$1,010.2
 
61%
 
(9)%
 
33%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
 
20.2

 
108.0

 
26.7

 
28.2

 
57.8

 
86.0

 
220.7
 
105%
 
186%
 
487%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings
 
198.9

 
259.9

 
155.8

 
138.9

 
114.5

 
253.4

 
669.1
 
(18)%
 
(42)%
 
37%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income, Tax and Per Unit Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income
 
$
300.1

 
$
202.7

 
$
366.4

 
$
169.0

 
$
272.1

 
$
441.1

 
$
1,010.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less (Add): Provision (Benefit) for income taxes (1)
 
25.3

 
10.4

 
13.2

 
2.1

 
28.5

 
30.6

 
54.2

 
 
 
 
 
 
Less: Preferred unit distributions
 

 

 
6.0

 
5.9

 
5.9

 
11.8

 
17.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Economic Net Income (after taxes)
 
$
274.8

 
$
192.3

 
$
347.2

 
$
161.0

 
$
237.7

 
$
398.7

 
$
938.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Adjusted Units* (in millions)
 
337.5

 
342.8

 
343.5

 
345.9

 
345.4

 
345.4

 
343.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Net Income (after taxes and preferred unit
      distributions) per Adjusted Unit
 
$
0.81

 
$
0.56

 
$
1.01

 
$
0.47

 
$
0.69

 
$
1.16

 
$
2.73

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings, Tax and Per Unit Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings
 
$
198.9

 
$
259.9

 
$
155.8

 
$
138.9

 
$
114.5

 
$
253.4

 
$
669.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: Estimated foreign, state, and local taxes(2)
 
5.6

 
5.4

 
5.0

 
7.7

 
6.9

 
14.6

 
25.0

 
 
 
 
 
 
Less: Preferred unit distributions
 

 

 
6.0

 
5.9

 
5.9

 
11.8

 
17.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Distributable Earnings (after taxes and preferred
     unit distributions)
 
$
193.3

 
$
254.5

 
$
144.8

 
$
125.3

 
$
101.7

 
$
227.0

 
$
626.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocating Distributable Earnings for only public unitholders of The Carlyle Group L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings to The Carlyle Group L.P.
 
$
55.6

 
$
74.7

 
$
43.3

 
$
38.5

 
$
31.8

 
$
70.3

 
$
188.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: Estimated current corporate income taxes(3)
 
1.8

 
1.4

 
(0.5
)
 
1.1

 
1.1

 
2.2

 
3.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings Attributable to Common Unitholders
 
$
53.8

 
$
73.3

 
$
43.8

 
$
37.4

 
$
30.7

 
$
68.1

 
$
185.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Units in public float (in millions) **
 
96.2

 
98.3

 
100.5

 
103.7

 
106.2

 
106.2

 
100.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings, net, per The Carlyle
     Group L.P. common unit outstanding
 
$
0.56

 
$
0.75

 
$
0.44

 
$
0.36

 
$
0.29

 
$
0.65

 
$
1.84

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution per common unit
 
$
0.42

 
$
0.56

 
$
0.33

 
$
0.27

 
$
0.22

 
$
0.49

 
$
1.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Adjusted Units were determined as follows (in millions):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     The Carlyle Group L.P. common units
          outstanding
 
91.1

 
97.8

 
100.1

 
101.4

 
102.1

 
102.1

 
 
 
 
 
 
 
 
     Carlyle Holdings partnership units not held by
          The Carlyle Group L.P.
 
238.2

 
236.6

 
234.8

 
233.9

 
233.2

 
233.2

 
 
 
 
 
 
 
 
     Dilutive effect of unvested deferred restricted
          common units
 
7.6

 
7.8

 
8.0

 
10.2

 
9.7

 
9.9

 
 
 
 
 
 
 
 
      Issuable Carlyle Group L.P. common units
 

 

 

 
0.4

 
0.4

 
0.4

 
 
 
 
 
 
 
 
      Issuable Carlyle Holdings partnership units
 
0.6

 
0.6

 
0.6

 

 

 

 
 
 
 
 
 
 
 
Total Adjusted Units
 
337.5

 
342.8

 
343.5

 
345.9

 
345.4

 
345.6

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
** Excludes the repurchase of 134,424 common units that were pending settlement at June 30, 2018 and have been subtracted from the common units outstanding for purposes of this calculation. Includes approximately 4.2 million, net common units that will be issued in July and August 2018 in connection with the vesting of deferred restricted common units. For purposes of this calculation, these common units have been added to the common units outstanding as of June 30, 2018 because they will participate in the unitholder distribution that will be paid on the common units in August 2018.
 
 
 
 
 
 
Totals may not sum due to rounding. See Notes at end of document.



Page | 3



Carry Fund Appreciation and Net Accrued Performance Revenues
Carlyle's carry fund portfolio appreciated 5% during Q2 2018 and 17% over the past twelve months. Carlyle's private carry fund portfolio appreciated 4% and the public carry fund portfolio appreciated 5% during Q2 2018, in both cases excluding Investment Solutions. As of June 30, public positions accounted for 13% of remaining fair value in our Corporate Private Equity, Real Assets and Global Credit carry funds. Carry fund valuations for the second quarter were positively impacted by strength in our sixth U.S. Buyout (CP VI) and our fourth European Buyout (CEP IV) funds, the eleventh NGP Energy fund (NGP XI), our international energy fund (CIEP) and our U.S. Real Estate funds, among others. The Net Accrued Performance Revenues balance increased 10% during the quarter to $2.0 billion, and increased 26% over the LTM.
 
 
Carry Fund Appreciation/(Depreciation)(1)
 
LTM
 
Net Accrued
Performance Revenues(2)
  ($ in millions)
 
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
 
Q2 2018
 
Q3 2017 - Q2 2018
 
Q2 2018
Overall Carry Fund Appreciation/(Depreciation)
 
5%
 
3%
 
5%
 
3%
 
5%
 
17%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Private Equity
 
8%
 
4%
 
8%
 
4%
 
3%
 
19%
 
$1,268
Buyout
 
9%
 
3%
 
8%
 
4%
 
3%
 
19%
 
$1,201
Growth Capital
 
4%
 
6%
 
6%
 
2%
 
3%
 
17%
 
$67
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Assets
 
6%
 
2%
 
4%
 
2%
 
7%
 
16%
 
$580
Real Estate
 
6%
 
3%
 
3%
 
1%
 
5%
 
12%
 
$332
Natural Resources (3)
 
6%
 
5%
 
8%
 
2%
 
9%
 
29%
 
$264
Legacy Energy
 
4%
 
(3)%
 
2%
 
2%
 
4%
 
4%
 
$(16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Global Credit Carry Funds
 
0%
 
0%
 
1%
 
2%
 
3%
 
9%
 
$34
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Solutions Carry Funds
 
1%
 
3%
 
3%
 
4%
 
8%
 
17%
 
$87
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Accrued Performance Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
$1,969
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=12

The sum of quarters may not equal LTM due to rounding. See Notes at end of document.

Page | 4



Carlyle All Segment Results

Economic Income was $272 million in Q2 2018, driven by 5% carry fund appreciation in the quarter. Economic Income of $1.0 billion over the LTM increased 33% compared to the prior LTM, supported by 17% appreciation in our carry funds.
Fee Related Earnings were $58 million in Q2 2018, nearly triple the $20 million in Q2 2017. Fund Management Fees of $328 million for Q2 2018 increased 28% versus Q2 2017, generally in line with a 26% increase in Fee-Earning AUM. Catch-up management fees were $12 million in Q2 2018, up from less than $1 million in Q2 2017.
Distributable Earnings of $115 million included $58 million in Fee Related Earnings and $50 million in Realized Net Performance Revenues. Realized Net Performance Revenues were lower than Q2 2017 because a higher percentage of realized proceeds in Q2 2018 arose from funds that are accruing, but not yet realizing performance revenues. We continue to expect full year 2018 Realized Net Performance Revenues to be lower than full year 2017.
Total Assets Under Management (AUM) of $209.7 billion increased 24% compared to Q2 2017 due to a combination of $51.8 billion in fundraising and $16.7 billion in market appreciation, partially offset by $29.0 billion in realized proceeds to fund investors.
Fee-Earning AUM of $146.5 billion increased 26% from Q2 2017. As of Q2 2018, there was $10.1 billion in pending Fee-Earning AUM that will turn on fees either through activation of the underlying fund or additional capital deployment.
Business Drivers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in billions, unless noted
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fundraising
 
$8.4
 
$12.3
 
$11.4
 
$19.9
 
$15.9
 
$51.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invested Capital (carry funds)
 
3.4
 
3.5
 
7.9
 
7.5
 
16.8
 
21.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Proceeds (carry funds)
 
5.9
 
7.0
 
9.6
 
12.6
 
26.9
 
29.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carry Fund Appreciation
 
5%
 
5%
 
11%
 
9%
 
19%
 
17%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in millions
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings (FRE)
 
$20
 
$58
 
$57
 
$86
 
$(31)
 
$221
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+
Realized Net Performance Revenues
 
182
 
50
 
217
 
153
 
539
 
488
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+
Realized Principal Investment Income
 
11
 
18
 
5
 
36
 
33
 
5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+
Net Interest
 
(14)
 
(11)
 
(26)
 
(22)
 
(52)
 
(45)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
=
Distributable Earnings (DE)
 
$199
 
$115
 
$254
 
$253
 
$490
 
$669
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings (FRE)
 
$20
 
$58
 
$57
 
$86
 
$(31)
 
$221
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+
Net Performance Revenues
 
299
 
250
 
694
 
410
 
897
 
894
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+
Principal Investment Income
 
31
 
25
 
42
 
55
 
70
 
60
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based Compensation
 
37
 
50
 
67
 
88
 
124
 
145
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest
 
14
 
11
 
26
 
22
 
52
 
45
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other1
 
 
 
 
 
 
(25)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
=
Economic Income
 
$300
 
$272
 
$700
 
$441
 
$759
 
$1,010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=8

LTM, or last twelve months, refers to the period Q3 2017 through Q2 2018. Prior LTM, or the prior rolling 12-month period, refers to the period Q3 2016 through Q2 2017. Totals may not sum due to rounding. See Notes at end of document.

Page | 5



Corporate Private Equity (CPE)

Corporate Private Equity carry funds appreciated 3% in the quarter, driving Net Performance Revenues of $117 million.
Economic Income was $100 million in Q2 2018 and $555 million for the LTM, a decrease of 19% from the prior LTM, driven by Fee Related Earnings as well as carry fund appreciation of 19% in the LTM compared to 23% in the prior LTM.
Fee Related Earnings were $4 million in Q2 2018, compared to $20 million in Q2 2017. Fund Management Fees increased 26% versus Q2 2017, but were offset by a $34 million increase in fundraising expenses. We activated fees on $23.6 billion of Fee Earning AUM in our latest vintage U.S. Buyout (CP VII) and Asia Buyout (CAP V) funds during the quarter.
Distributable Earnings of $40 million in Q2 2018 include $28 million in Realized Net Performance Revenues, $12 million in Realized Investment Income and the $4 million in Fee Related Earnings. Realized proceeds of $2.9 billion in Q2 2018 were slightly higher than Q2 2017, but generated lower Realized Net Performance Revenues due to a higher portion of exits from funds that are accruing, but not yet realizing performance revenues.
Invested $1.6 billion in Q2 2018 into new and follow-on investments, including Accolade Wines (CAP IV) and a follow-on investment in Novolex (CP VI). As of the end of Q2 2018, CPE had announced approximately $4.3 billion of investments that are expected to close over the next few quarters.
Assets Under Management reached a record $81.2 billion, an increase of 49% compared to Q2 2017, positively impacted by $32.8 billion in fundraising and $6.6 billion in market appreciation, partially offset by $13.0 billion in realized proceeds.

Business Drivers
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in billions, unless noted
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fundraising
 
$0.3
 
$8.8
 
$0.5
 
$12.8
 
$0.9
 
$32.8
 
 
 
 
 
 
 
 
 
 
 
 
 
Invested Capital (carry funds)
 
1.4
 
1.6
 
3.9
 
2.4
 
7.1
 
9.5
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Proceeds (carry funds)
 
2.6
 
2.9
 
3.7
 
5.6
 
12.1
 
13.0
 
 
 
 
 
 
 
 
 
 
 
 
 
Carry Fund Appreciation
 
8%
 
3%
 
18%
 
7%
 
23%
 
19%
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in millions
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fund Management Fees
 
$118
 
$148
 
$233
 
$262
 
$478
 
$500
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Net Performance Revenues
 
151
 
28
 
176
 
125
 
502
 
408
Net Performance Revenues
 
224
 
117
 
537
 
253
 
638
 
594
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Principal Investment Income
 
9
 
12
 
9
 
20
 
47
 
37
Principal Investment Income
 
22
 
7
 
28
 
22
 
58
 
57
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings (FRE)
 
$20
 
$4
 
$36
 
$(10)
 
$84
 
$(19)
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings (DE)
 
$173
 
$40
 
$208
 
$126
 
$608
 
$406
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income
 
$242
 
$100
 
$555
 
$214
 
$689
 
$555
 
 
 
 
 
 
 
 
 
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=6

Totals may not sum due to rounding.


Page | 6



Real Assets

Real Assets carry funds appreciated 7% in the quarter, driving Net Performance Revenues of $115 million.
Economic Income was a record $144 million in Q2 2018 and $281 million for the LTM, an increase of 51% from the prior LTM, driven by fund appreciation as well as growth in Fee Related Earnings. Net performance revenues of $115 million in Q2 2018 increased 80% compared to Q2 2017, driven by strong appreciation in the eleventh NGP energy fund, our International Energy fund and our U.S. real estate funds.
Fee Related Earnings were $33 million in Q2 2018, compared to a $(7) million loss in Q2 2017, as Fund Management Fees increased 35% due to new capital raised, primarily in the latest vintage U.S. real estate and NGP carry funds. Catch up management fees were $8 million in the second quarter, up from less than $1 million in Q2 2017.
Distributable Earnings were $52 million in Q2 2018 and $95 million over the LTM. Realized Net Performance Revenues were $19 million in Q2 2018 driven by realized proceeds of $1.4 billion.
Invested $0.8 billion in the quarter, the same level as Q2 2017 and a record $5.6 billion in the LTM.
Assets Under Management of $45.4 billion increased 17% compared to Q2 2017, largely driven by $7.5 billion in fundraising and $3.7 billion in market appreciation, partially offset by $5.5 billion in realized proceeds. Fundraising of $0.7 billion in Q2 2018 included closes in our core plus real estate fund (CPI) and the latest vintage NGP energy fund.

Business Drivers
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in billions, unless noted
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fundraising
 
$3.6
 
$0.7
 
$4.6
 
$2.0
 
$5.2
 
$7.5
 
 
 
 
 
 
 
 
 
 
 
 
 
Invested Capital (carry funds)
 
0.8
 
0.8
 
1.5
 
2.7
 
4.6
 
5.6
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Proceeds (carry funds)
 
0.9
 
1.4
 
1.5
 
2.5
 
5.2
 
5.5
 
 
 
 
 
 
 
 
 
 
 
 
 
Carry Fund Appreciation
 
6%
 
7%
 
11%
 
9%
 
20%
 
16%
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in millions
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fund Management Fees
 
$58
 
$79
 
$114
 
$153
 
$234
 
$303
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Net Performance Revenues
 
22
 
19
 
29
 
22
 
10
 
44
Net Performance Revenues
 
64
 
115
 
130
 
126
 
210
 
240
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Principal Investment Income/(Loss)
 
 
3
 
(8)
 
11
 
(21)
 
(44)
Principal Investment Income/(Loss)
 
7
 
15
 
4
 
24
 
(10)
 
(17)
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings (FRE)
 
$(7)
 
$33
 
$2
 
$57
 
$32
 
$107
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings (DE)
 
$12
 
$52
 
$15
 
$85
 
$6
 
$95
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income
 
$51
 
$144
 
$110
 
$175
 
$186
 
$281
 
 
 
 
 
 
 
 
 
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381401&doc=13

Totals may not sum due to rounding.


Page | 7



Global Credit

Economic Income was $11 million in Q2 2018 and $109 million for the LTM. Global Credit carry funds appreciated 3% in the quarter and 9% over the LTM.
Fee Related Earnings were $12 million in Q2 2018 compared to less than $1 million in Q2 2017. Fund Management Fees increased 33% year over year, partially offset by higher compensation expense related to the continuing build out of our credit platform.
Distributable Earnings of $15 million in Q2 2018 included $12 million of Fee Related Earnings and $3 million of Realized Net Performance Revenues.
Invested $0.2 billion in Global Credit carry funds in the quarter and $2.1 billion for the LTM. Direct Lending originated gross new loans of approximately $665 million in the quarter and approximately $2.1 billion for the LTM. We raised $1.6 billion of CLO par value of in the quarter and $4.8 billion for the LTM.
Assets Under Management of $35.5 billion increased 15% compared to Q2 2017, largely driven by $6.4 billion of fundraising, partially offset by $0.9 billion in realized proceeds. Fundraising of $2.0 billion for Q2 2018 included two new CLOs and several CLO resets, as well as additional capital raised for Direct Lending. Fee-Earning AUM of $28.8 billion increased 14% compared to Q2 2017.

Business Drivers
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in billions, unless noted
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fundraising
 
$2.7
 
$2.0
 
$3.1
 
$2.9
 
$5.5
 
$6.4
 
 
 
 
 
 
 
 
 
 
 
 
 
Invested Capital (carry funds)
 
0.2
 
0.2
 
0.5
 
0.6
 
1.0
 
2.1
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Proceeds (carry funds)
 
0.1
 
0.3
 
0.2
 
0.5
 
0.4
 
0.9
 
 
 
 
 
 
 
 
 
 
 
 
 
Carry Fund Appreciation
 
0%
 
3%
 
8%
 
6%
 
11%
 
9%
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
$ in millions
 
Q2 2017
 
Q2 2018
 
Prior
YTD
 
YTD
 
Prior LTM
 
LTM
 
 
 
 
 
 
 
 
 
 
 
 
 
Fund Management Fees
 
$45
 
$60
 
$93
 
$119
 
$185
 
$217
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Net Performance Revenues
 
9
 
3
 
12
 
3
 
25
 
32
Net Performance Revenues
 
8
 
8
 
19
 
9
 
32
 
22
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Principal Investment Income
 
2
 
2
 
4
 
5
 
7
 
13
Principal Investment Income
 
2
 
1