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•	Corporate Private Equity (all): buyout & growth funds advised by Carlyle

•	Real Assets: Real estate, power, infrastructure and energy funds advised by Carlyle, as well as those energy funds advised by NGP Capital Management in which Carlyle is entitled to receive a share of carried interest

•	Global Credit (formerly known as Global Market Strategies): Distressed credit, energy credit, opportunistic credit and corporate mezzanine funds, and other closed-end credit funds advised by Carlyle

•	Investment Solutions: Funds and vehicles advised by AlpInvest Partners B.V. (“AlpInvest”) and Metropolitan Real Estate Equity Management, LLC (“Metropolitan), which include primary fund, secondary and co-investment strategies

(a)	the amount of limited partner capital commitments, generally for carry funds where the original investment period has not expired, for AlpInvest carry funds during the commitment fee period and for Metropolitan carry funds during the weighted-average investment period of the underlying funds;

(b)	the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment vehicles where the original investment period has expired, Metropolitan carry funds after the expiration of the weighted-average investment period of the underlying funds, and one of our business development companies;

(c)	the amount of aggregate fee-earning collateral balance at par of our CLOs, as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date for each CLO;

(d)	the external investor portion of the net asset value of our hedge fund and fund of hedge funds vehicles (pre redemptions and subscriptions), as well as certain carry funds;

(e)	the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds; or

(f)	the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired.

(b)	the amount of aggregate collateral balance and principal cash at par or aggregate principal amount of the notes of our CLOs and other structured products (inclusive of all positions);

(c)	the net asset value (pre-redemptions and subscriptions) of our long/short credit, emerging markets, multi-product macroeconomic, fund of hedge funds vehicles, mutual fund and other hedge funds; and

(d)	the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

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•	Excellence in Investing. Our primary goal is to invest wisely and create value for our fund investors. We strive to generate superior investment returns by combining deep industry expertise, a global network of local investment teams who can leverage extensive firm-wide resources and a consistent and disciplined investment process.

•	Commitment to our Fund Investors. Our fund investors come first. This commitment is a core component of our firm culture and informs every aspect of our business. We believe this philosophy is in the long-term best interests of Carlyle and its owners, including our common unitholders.

•	Expansion of our Platform. We innovate continuously to expand our investment capabilities through the creation or acquisition of new asset-, sector- and regional-focused strategies in order to provide our fund investors a variety of investment options.

•	Investment in the Firm. We have invested, and intend to continue to invest, significant resources in hiring and retaining a deep talent pool of investment professionals and in creating an efficient global infrastructure to ensure that we are providing our investors with world-class investment expertise and the customized service they require.

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Unified Culture. We seek to leverage the local market insights and operational capabilities that we have developed across our global platform through a unified culture we call “One Carlyle.” Our culture emphasizes collaboration and sharing of knowledge and expertise across the firm to create value. We believe our collaborative approach enhances our ability to analyze investments, deploy capital and improve the performance of our portfolio companies.

•	During 2017, we raised approximately $43 billion in new commitments across our platform, bringing the total gross commitments raised since 2016 to $57 billion.

•	During 2017, we made investments through our carry funds of approximately $22 billion, a record level, and we realized proceeds of approximately $26 billion.

•	During 2017, the value of our carry fund portfolio increased by approximately 20%.

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In October 2017, we appointed Kewsong Lee and Glenn Youngkin as Co-Chief Executive Officers of the firm, effective January 1, 2018. Carlyle’s three founders, William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein, will continue to remain actively involved in our business. Messrs. Conway and Rubenstein are now serving as Co-Executive Chairmen of the Board of Directors of our general partner and Mr. Conway is also serving as our Co-Chief Investment Officer. Mr. D’Aniello is serving as Chairman Emeritus of the Board of Directors of our general partner and all three of our founders continue to serve as members of our Executive Group. Peter Clare was also named as Co-Chief Investment Officer and is serving in such role alongside Mr. Conway. Mr. Clare also continues to serve as Co-head of our U.S. buyout team. Messrs. Clare, Lee and Youngkin also have joined the Board of Directors of our general partner and all three serve on our Executive Group.

•	On September 13, 2017, we issued 16 million 5.875% Series A Preferred Units at $25.00 a unit for total gross proceeds of $400 million that we will use for general corporate purposes.

•	We further aligned our interests with those of our fund investors as Carlyle, our senior Carlyle professionals, advisors and other professionals increased commitments to our investment funds by over $2.2 billion during the year for a total cumulative commitment of $11.9 billion as of December 31, 2017.

•	Each of our segments continued to leverage the One Carlyle platform to take advantage of economies of scale and we continue to work across the firm to develop different products for our fund investors.

•	CPE:

◦	CPE has many of its large buyout funds currently in the market, including our latest generation U.S. Buyout fund, European buyout fund and Asia buyout fund. During 2017, we raised $21 billion in new capital commitments for our CPE funds.

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Despite a challenging environment for investing due to high asset prices and significant competition, CPE invested a record $11 billion in 2017 in, among others, ADB Safegate (a CEP IV portfolio company), Albany Molecular (a CP VI portfolio company), Arctic Glacier (a CGP portfolio company), Atotech (a CP VI, CEP IV and CAP IV portfolio company), Golden Goose Deluxe Brand (a CEP IV and CAGP V portfolio company), MedRisk (a CP VI portfolio company), Pharmaceutical Product Development (a CP VI portfolio company), The TCW Group, (a CGP portfolio company), WellDyneRx (a CP VI portfolio company), Wildhorse Resource Development Corporation (a CP VI and NGP portfolio company) and ZeroChaos (a CP VI portfolio company).

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CPE realized proceeds of $11.2 billion for our CPE carry fund investors in 2017. We sold stakes or otherwise generated proceeds in, among others, Coates Hire Limited (a CAP II portfolio company), Dealogic (a CP VI portfolio company), ECi Software Solutions (a CEOF I portfolio company), Edgewood Partners Holdings (a CGFSP I and CGFSP II portfolio company), Focus Media (a CAP III portfolio company), Multi Packaging Solutions (a CEP III portfolio company), The Nature's Bounty Co. (a CP V and CEP III portfolio company), Pharmaceutical Product Development (a CP V portfolio company), The TCW Group (a CP V and CGFSP I portfolio company) and Tsubaki Nakashima Co. (a CJP II portfolio company).

•	Real Assets:

◦	Our strategic partner, NGP Energy Capital Management ("NGP"), launched fundraising for its twelfth fund and we continued fundraising for our open-ended core-plus real estate fund, our new global infrastructure opportunities fund and our eighth opportunistic U.S. real estate fund. In total, we closed on approximately $10.2 billion in new commitments to our Real Assets segment during 2017.

◦	During 2017, we invested $4.4 billion in our Real Assets segment. Of this amount, we invested approximately $2 billion to acquire or develop real estate properties, primarily in the U.S. across multiple sectors, including multifamily, commercial, senior living and for-sale residential properties. Our international energy team was particularly active during the year investing approximately $700

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We realized proceeds of approximately $4.6 billion for our Real Assets carry fund investors in 2017 and exited (fully or partially) a number of assets, including, among others, 71 Smith Street (a CRP IV portfolio company), ITS Technologies and Logistics (a CIP portfolio company), Pattern Energy Group (a Renew II portfolio company), Red Oak Power Holdings (a CIP and CPP portfolio company), Riverside (a CRP VI portfolio company), Talen Energy Corporation (an Energy III and Renew II portfolio company), Terraform Power (a Renew II portfolio company) and Varo Energy (a CIEP I portfolio company).

◦	Our international energy team formed Regalwood Global Energy, a special purpose acquisition company (SPAC) that will be investing in oil and gas assets. In December 2017, the SPAC closed its initial public offering of 30 million units at $10 per unit and is actively seeking investments.

•	Global Credit (formerly known as Global Market Strategies):

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We closed our fourth-generation distressed credit fund at $2.5 billion, closed our structured credit fund at more than $800 million, and raised approximately $750 million for our inaugural credit opportunities fund. We also continued fundraising for our direct lending platform across multiple vehicles, including two business development companies (BDCs). We closed four new collateralized loan obligations (“CLOs”) in the U.S. and three new CLOs in Europe in 2017, with $20.2 billion of AUM across all of our CLOs at December 31, 2017. In total, we raised more than $6.6 billion in new capital commitments for our Global Credit funds during 2017.

◦	TCG BDC Inc., the largest vehicle in our direct lending platform, was successfully listed on the NASDAQ Global Select Market in June 2017, in what was the largest initial public offering ever in its sector.

•	Investment Solutions:

◦	During 2017, we deployed $4.4 billion in investments across our platform. We finalized our fundraising for our sixth AlpInvest secondaries program and our seventh AlpInvest co-investment program and successfully raised over $9 billion for these two strategies including amounts reserved for managed accounts. We also began to deploy capital out of both of these strategies during the year.

◦	We signed 11 new managed accounts, finished investing our first real estate secondaries fund and launched our second Metropolitan Real Estate secondaries fund. We also launched a new platform through AlpInvest focused on investments in general partners. This platform seeks to invest directly in middle market general partners globally.

◦	Our exit activity in our Investment Solutions segment was robust this year, realizing proceeds of $9.6 billion for our Investment Solutions investors.

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Buyout Funds. Our buyout teams advise a diverse group of 23 active funds that invest in transactions that focus either on a particular geography (e.g., United States, Europe, Asia, Japan, MENA, Sub-Saharan Africa or South America) or a particular industry, (e.g., financial services). In general, we expect the next generation of our large buyout funds to be meaningfully larger than their predecessor funds. In 2017, we held first closings for our seventh U.S. buyout fund, our fifth Asia buyout fund and our third global financial services fund. We invested $10.3 billion in new and follow-on investments through our buyout funds. As of December 31, 2017, our buyout funds had, in the aggregate, approximately $66.5 billion in AUM.

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Growth Capital Funds. Our 10 active growth capital funds are advised by four regionally-focused teams in the United States, Europe and Asia, with each team generally focused on middle-market and growth companies consistent with specific regional investment considerations. The investment mandate for our growth capital funds is to seek out companies with the potential for growth, strategic redirection and operational improvements. These funds typically do not invest in early stage or venture-type investments. We invested $0.8 billion in new and follow-on investments through our growth capital funds. As of December 31, 2017, our growth capital funds had, in the aggregate, approximately $6.0 billion in AUM.

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Real Estate. Our eleven active real estate funds pursue real estate investment opportunities in Asia, Europe and the United States and generally focus on acquiring single-property assets rather than large-cap companies with real estate portfolios. Our team of 115 real estate investment professionals has made more than 850 investments in 397 cities/metropolitan statistical areas around the world as of December 31, 2017, including office buildings, hotels, retail and residential properties, industrial properties, warehouse and logistic assets and senior living facilities. In 2017, we held a first close on our eighth opportunistic U.S. real estate fund and closed a series of coinvestment transactions in our European real estate business. As of December 31, 2017, our real estate funds had, in the aggregate, approximately $18.3 billion in AUM.

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Energy and Natural Resources. Our energy and natural resources activities focus on buyouts, growth capital investments and strategic joint ventures in the midstream, upstream, energy and oilfield services sectors, the renewable and alternative sectors and the power and infrastructure industries around the world. Historically, we conducted our energy investing activities jointly with Riverstone, co-advising four funds with approximately $5.2 billion in AUM as of December 31, 2017 (we refer to these energy funds as our “Legacy Energy funds”). Currently, we conduct our North American energy investing through our partnership with NGP, an Irving, Texas-based energy investor. NGP advises nine funds with more than $13.0 billion in AUM as of December 31, 2017. Through our strategic partnership with NGP, we are entitled to 55% of the management fee-related revenue of the NGP entities that serve as advisors to the NGP management fee funds, and an allocation of income related to the carried interest received by such fund general partners. Our power team focuses on investment opportunities in the North American power generation sector. As of December 31, 2017, the power team managed approximately $2.0 billion in AUM through two funds. Our international energy investment team focuses on investments across the energy value chain outside of North America. As of December 31, 2017, the international energy team managed approximately $3.6 billion in AUM through one fund. In 2017, we held our first closing for our global infrastructure fund focused on infrastructure assets, business and investments in global developed markets. As of December 31, 2017, the global infrastructure team managed more than $0.8 billion in AUM through two funds. We have also invested previously in North American infrastructure companies and assets.

(1)	Excludes NGP and Riverstone employees.

(2)	Excludes investment activity of the NGP management fee funds.

(3)	Includes the five NGP management fee funds and four carry funds advised by NGP.

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Loans and Structured Credit. Our structured credit funds invest primarily in performing senior secured bank loans through structured vehicles and other investment vehicles. In 2017, we closed four new U.S. CLOs and three CLOs in Europe with a total of $2.4 billion and $1.5 billion, respectively, of AUM at December 31, 2017. As of December 31, 2017, our loans and structured credit team advised 46 structured credit funds and two carry funds in the United States, Europe and Asia totaling, in the aggregate, approximately $21.6 billion in AUM.

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Direct Lending. Our direct lending business includes our business development companies (“BDCs”) that invest primarily in middle market first-lien loans (which include unitranche, "first out" and "last out" loans) and second-lien loans of middle-market companies, typically defined as companies with annual EBITDA ranging from $10 million to $100 million, that lack access to the broadly syndicated loan and bond markets. As of December 31, 2017, our direct lending investment team advised four funds consisting of two BDCs, a CLO and one corporate mezzanine fund, totaling, in the aggregate, more than $2.9 billion in AUM.

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Opportunistic Credit. Our opportunistic credit team invests primarily in highly-structured and privately-negotiated capital solutions supporting corporate borrowers through secured loans, senior subordinated debt, mezzanine debt, convertible notes, and other debt like instruments, as well as preferred and common equity in such borrowers. The team will also look to invest in special situations (i.e., event-driven opportunities that exhibit hybrid credit and equity features) as well as market dislocations (i.e., primary and secondary market investments in liquid debt instruments that arise as a result of temporary market volatility). As of December 31, 2017, our opportunistic credit team advised one fund totaling, in the aggregate, approximately $0.8 billion in AUM.

•	Energy Credit. Our Energy credit team invests primarily in privately-negotiated mezzanine debt investments in North American energy and power projects and companies. As of December 31, 2017, our energy credit team advised two funds with approximately $4.7 billion in AUM.

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Distressed Credit. Our distressed credit funds generally invest in liquid and illiquid securities and obligations, including secured debt, senior and subordinated unsecured debt, convertible debt obligations, preferred stock and public and private equity of financially distressed companies in defensive and asset-rich industries. In certain investments, our funds may seek to restructure pre-reorganization debt claims into controlling positions in the equity of the reorganized companies. As of December 31, 2017, our distressed credit team advised three funds totaling, in the aggregate, more than $3.4 billion in AUM.

•	Private Equity Fund Investments. Our fund of funds vehicles advised by AlpInvest make investment commitments directly to buyout, growth capital, venture and other alternative asset funds advised by other general partners (“portfolio funds”). As of December 31, 2017, AlpInvest advised 67 vehicles totaling, in the aggregate, approximately $24.9 billion in AUM.

•	Private Equity Co-investments. AlpInvest invests alongside other private equity and mezzanine funds in which it typically has a primary fund investment throughout Europe, North America and Asia. These investments are generally made when an investment opportunity is too large for a particular fund and the sponsor of the fund

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Private Equity Secondary Investments. Funds managed by AlpInvest acquire limited partnership interests in the secondary market. Private equity investors who desire to sell or restructure their pre-existing investment commitments to a fund may negotiate to sell the fund interests to AlpInvest. In this manner, AlpInvest’s secondary investments team provides liquidity and restructuring alternatives for third-party private equity investors. As of December 31, 2017, our secondary investments program was conducted through 50 vehicles totaling, in the aggregate, more than $11.2 billion in AUM.

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Real Estate Funds of Funds and Co-Secondary Investments. The principal strategic focus in our real estate funds is on value add/opportunistic real estate investments through direct commitments to 90 highly-focused, specialist real estate managers across the globe. As of December 31, 2017, we advised 31 real estate vehicles with approximately $1.8 billion in AUM. We also focus on real estate secondaries and co-investments.

(1)

Under our arrangements with the historical owners and management team of AlpInvest, we generally do not retain any carried interest in respect of the historical investments and commitments to our AlpInvest carry fund vehicles that existed as of July 1, 2011 (including any options to increase any such commitments exercised after such date). We are entitled to 15% of the carried interest in respect of commitments from the historical owners of AlpInvest for the period between 2011 and 2020 and 40% of the carried interest in respect of all other commitments (including all future commitments from third parties).

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Consistent and Disciplined Investment Process. We believe our successful investment track record is the result, in part, of a consistent and disciplined application of our investment process. Investment opportunities for our CPE funds are initially sourced and evaluated by one or more of our deal teams. Deal teams consistently strive to be creative and look for deals in which we can leverage Carlyle's competitive advantages, sector experience and the global One Carlyle platform. The due diligence and transaction review process places a special emphasis on, among other considerations, the reputation of a target company’s shareholders and management, the company’s size and sensitivity of cash flow generation, the business sector and competitive risks, the portfolio fit, exit risks and other key factors specific to a particular investment. In evaluating each deal, we consider what expertise or experience (i.e., the “Carlyle Edge”) we can bring to the transaction to enhance value for our investors. Each investment opportunity must secure approval from the investment committee of the applicable investment fund to move forward. To help ensure consistency, we utilize a standard investment committee process across our corporate private equity funds. The investment committee approval process involves a detailed review of the transaction and investment thesis, business, risk factors and diligence issues, as well as financial models.

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Geographic- and Industry-Focused. We have developed a global network of local investment teams with deep local insight into the areas in which they invest and have adopted an industry-focused approach to investing. Our extensive network of global investment professionals has the knowledge, experience and relationships on a local level that allow them to identify and take advantage of opportunities that may be unavailable to firms that do not have our global reach and resources. We believe that our global platform helps enhance all stages of the investment process, including by facilitating faster and more effective diligence, a deeper understanding of global

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Variable Deal Sizes and Creative Structures. We believe that having the resources to complete investments of varying sizes provides us with the ability to enhance investment returns while providing for prudent industry, geographic and size diversification. Our teams are staffed not only to effectively pursue large transactions, but also other transactions of varying sizes. We often invest in smaller companies and this has allowed us to obtain greater diversity across our entire portfolio. Additionally, we may undertake large, strategic minority investments with certain control elements or private investment in public equity (PIPE) transactions in large companies with a clear exit strategy. In certain jurisdictions around the world, we may make investments with little or no debt financing and seek alternative structures to opportunistically pursue transactions. We generally seek to obtain board representation and typically appoint our investment professionals and advisors to represent us on the boards of the companies in which we invest. Where our funds, either alone or as part of a consortium, are not the controlling investor, we typically, subject to applicable regulatory requirements, acquire significant voting and other control rights with a view to securing influence over the conduct of the business.

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Driving Value Creation. Our CPE teams seek to make investments in portfolio companies in which our particular strengths and resources may be employed to their best advantage. Typically, as part of a CPE investment, our investment teams will prepare and execute a value creation plan that is developed during a thorough due diligence effort and draws on the deep resources available across our global platform, specifically relying on:

◦	Reach: Our global team and global presence enables us to support international expansion efforts and global supply chain initiatives.

◦	Expertise: Our deep bench of investment professionals and industry specialists provide extensive sector-specific knowledge and local market expertise.

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Insight: We engage approximately 30 operating executives as independent consultants to work with our investment teams during due diligence, provide board-level governance and support and advise our portfolio company CEOs. These operating executives are former CEOs and other high-level executives of some of the world’s most successful corporations and currently sit on the boards of directors of a diverse mix of companies. We use this collective group of operating executives to provide special expertise to support specific value creation initiatives.

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Data: The goal of our research function is to extract as much information as possible from our portfolio about the current state of the economy and its likely evolution over the near-to-medium term. Our CPE investment portfolio includes over 175 active portfolio companies as of December 31, 2017, across a diverse range of industries and geographies that each generate multiple data points (e.g., orders, shipments, production volumes, occupancy rates, bookings). By evaluating these data on a systematic basis, we work to identify the data with the highest correlation with macroeconomic data and map observed movements in the portfolio to anticipated variation in the economy, including changes in growth rates across industries and geographies. We incorporate this proprietary data into our investment portfolio management strategy and exit decisions on an ongoing basis. We believe this robust data gives us an advantage over our peers who do not have as large of a global reach.

◦	Information Technology Resources: Carlyle has established an Information Technology (“IT”) capability that contributes to due diligence, portfolio company strategy and portfolio company operations. The capability includes dedicated information technology and business process resources, including assistance with portfolio company risk assessments and enhanced deal analytics.

◦	Pursuing Best Exit Alternatives. In determining when to exit an investment, our private equity teams consider whether a portfolio company has achieved its objectives, the financial returns and the appropriate timing in industry cycles and company development to strive for the optimal value. The fund’s investment committee approves all exit decisions.

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Pursue Single Asset Transactions. In general, our U.S. real estate funds have focused on single asset transactions. We follow this approach in the U.S. because we believe that pursuing single assets enables us to better understand the factors that contribute to the fundamental value of each property, mitigate concentration risk, establish appropriate asset-by-asset capital structures and maintain governance over major property-level decisions. In addition, the direct ownership of assets typically enables us to effectively employ an active asset management approach and reduce financing and operating risk, while increasing the visibility of factors that affect the overall returns of the investment. In the U.S., we plan to continue to focus on single asset transactions in both our opportunistic and core plus investment strategies. Outside the U.S., we continue to opportunistically invest in the Asia and European markets.

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Seek out Strong Joint Venture Partners or Managers. Where appropriate, we seek out joint venture partners or managers with significant operational expertise and/or deal sourcing capability. For each joint venture, we design structures and terms to align interests and provide situationally appropriate incentives, often including, for example, the subordination of the joint venture partner’s equity and profits interest to that of a fund, giveback provisions and/or profits escrow accounts in favor of a fund and exclusivity. We also typically structure positions with control or veto rights over major decisions.

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Source Deals Directly. Our teams endeavor to establish “market presence” in our target geographies where we have a history of operating in local markets and benefit from extensive long-term relationships with developers, corporate real estate owners, institutional investors and private owners. These relationships have resulted in our ability to source a large number of investments on a direct negotiated basis.

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Focus on Sector-Specific Strategies. Our real estate funds focus on specific sectors and markets in areas where we believe the fundamentals are sound and dynamic capital markets allow for identification of assets whose value is not fully recognized. The real estate funds we advise have invested according to strategies established in several main sectors: office, hotel, retail, residential, industrial, warehouse and logistics and senior living.

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Actively Manage our Real Estate Investments. Our real estate investments often require active management to uncover and create value. Accordingly, we have put in place experienced local asset management teams to assist in communicating with operating partners and property managers on a regular basis. These teams add value through analysis and execution of capital expenditure programs, development projects, lease negotiations, operating cost reduction programs and asset dispositions. The asset management teams work closely with the other real estate professionals to effectively formulate and implement strategic management plans.

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Manage the Exit of Investments. We believe that “exit management” is as important as traditional asset management in order to take full advantage of the typically short windows of opportunity created by temporary imbalances in capital market forces that affect real estate. In determining when to exit an investment, our real estate teams consider whether an investment has fulfilled its strategic plan, the depth of the market and generally prevailing industry conditions. Throughout our investment holding period, our investment professionals remain actively engaged in and focused on managing the steps needed to proceed to a successful exit.

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International Energy Investing. Our international energy team pursues investment opportunities in oil and gas exploration and production, midstream, oilfield services and refining and marketing in Europe, Africa, Latin America and Asia. Seeking to take advantage of the lack of capital in the international energy market, we pursue transactions where we have a distinctive competitive advantage and can create tangible value for the companies in which we invest, through industry specialization, deployment of human capital and access to our global network. In seeking to build a geographically-diverse international energy portfolio, we focus on cash-generating opportunities, with a particular focus on proven reserves and production, and strategically seek to enhance the efficiency of the portfolio through exploration or infrastructure improvements. We may pursue investment

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North American Energy Investing. We conduct our current North American energy investing through our strategic partnership with NGP, an Irving, Texas-based energy investment firm that focuses on investments across a range of energy and natural resource assets, including oil and gas resources, oilfield services, pipelines and processing, as well as agricultural investments and properties. NGP seeks to align itself with “owner-managers” who are invested in the enterprise, have a top-tier technical team and who have a proprietary edge that differentiates their business plan. NGP strives to establish a portfolio of platform companies to grow through acquisitions and development and provides financial and strategic support and access to additional capital at the lowest cost. We do not control or manage the NGP management fee funds or the existing carry funds that are advised by NGP. NGP is managed by its senior leadership.

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Power Investing. Our power team focuses on investment opportunities in the North American power generation sector. Leveraging the expertise of the investment professionals at Cogentrix Energy L.L.C., one of our portfolio companies, the team seeks investments where it can obtain direct or indirect operational control to facilitate the implementation of technical enhancements. We seek to capitalize on secular trends and to identify assets where engineering and technical expertise, in addition to a strong management team, can facilitate performance.

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Global Infrastructure Investing. Our global infrastructure team pursues investments across a variety of sectors and geographies. The fund team targets investment opportunities primarily domiciled in developed markets with strong commercial systems and rule of law. The team utilizes a value-added approach to transaction sourcing, diligence and asset management and seeks to generate attractive risk-adjusted returns for the fund. The team seeks to enhance the value of its investments through strategic and operational impact including risk management techniques utilized across Carlyle's global corporate private equity and natural resources investment businesses. The goal of this approach is to increase the profitability of the investments, increase cash flow yield and enhance the attractiveness of the asset for ultimate exit to a trade buyer, core infrastructure buyer or the public markets.

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Source Investment Opportunities. Our Global Credit team sources investment opportunities from both the primary and secondary markets through our global network and strong relationships with the financial community. We typically target portfolio companies that have a demonstrated track record of profitability, market leadership in their respective niche, predictable cash flow, a definable competitive advantage and products or services that are value added to its customer base.

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Conduct Fundamental Due Diligence and Perform Capital Structure Analyses. After an opportunity is identified, our Global Credit investment professionals conduct fundamental due diligence to determine the relative value of the potential investment and capital structure analyses to determine credit worthiness. Our due diligence approach typically incorporates meetings with management, company facility visits, discussions with industry analysts and consultants and an in-depth examination of financial results and projections. In conducting due diligence, our Global Credit team employs an integrated, cross platform approach with industry-dedicated credit research analysts and non-investment grade expertise across the capital structure. Our Global Credit team also seeks to leverage resources from across the firm, utilizing information obtained from our more than 270 active portfolio companies and lending relationships with over 700 companies, 13 credit industry research analysts, and in-house government affairs and economic research teams.

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Evaluation of Macroeconomic Factors. Our Global Credit team evaluates technical factors such as supply and demand, the market’s expectations surrounding a company and the existence of short- and long-term value creation or destruction catalysts. Inherent in all stages of credit evaluation is a determination of the likelihood of potential catalysts emerging, such as corporate reorganizations, recapitalizations, asset sales, changes in a company’s liquidity and mergers and acquisitions.

•	Risk Minimization. Our Global Credit team seeks to make investments in capital structures to enable companies to both expand and weather downturns and/or below-plan performance. The team works to structure investments with strong financial covenants, frequent reporting requirements and board representation, if possible. Through

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Well-informed, Disciplined Investment Process: We follow a disciplined, highly-selective investment process and seek to achieve diversification by deploying capital across economic cycles, segments and investment styles. Our integrated and collaborative culture across our strategies, reinforced by investment in information technology solutions, provides deep insight into fund manager portfolios and operations to support our rigorous selection process.

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Proactive Sourcing: Our extensive network of private equity and real estate managers across the globe positions us to identify investment opportunities that may be unavailable to other investors. Our investment strategy is defined by a strong belief that the best opportunities are found in areas that are less subject to competitive pressures. As a result, our teams actively seek out proprietary investments that would otherwise be difficult for our investors to access.

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Global Scale and Presence: Our scale and on-the-ground presence across three continents - Asia, Europe and North America - give us a distinct and comprehensive perspective on the private equity and real estate markets. Our stable, dedicated, and experienced teams have deep knowledge of their respective markets across the globe. We believe this enhances our visibility across the global investment market and provides detailed local information that enhances our investment evaluation process.

(1)	Amounts represent gross assets plus any available capital as of December 31, 2017.

(2)	Includes NGP ETP I, NGP M&R, NGP ETP II, NGP VIII and NGP IX.

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(1)

The Carlyle Group L.P. common unitholders have only limited voting rights and have no right to remove our general partner or, except in limited circumstances, elect the directors of our general partner. TCG Carlyle Global Partners L.L.C., an entity wholly owned by our senior Carlyle professionals, holds a special voting unit in The Carlyle Group L.P. that entitles it, on those few matters that may be submitted for a vote of The Carlyle Group L.P. common unitholders, to participate in the vote on the same basis as the common unitholders and provides it with a number of votes that is equal to the aggregate number of vested and unvested partnership units in Carlyle Holdings held by the limited partners of Carlyle Holdings on the relevant record date.

(2)	Certain individuals engaged in our business own interests directly in selected subsidiaries, including, in certain instances, entities that receive management fees from funds that we advise. See “— Structure and Operation of Our Investment Funds — Incentive Arrangements/Fee Structure” in this Item 1 for additional information.

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•	potential compliance with certain commodities interest position limits or position accountability rules;

•	administrative requirements, including recordkeeping, confirmation of transactions and reconciliation of trade data; and

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•	mandatory central clearing and collateral requirements.

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•	our ability to correctly identify and create products that appeal to our investors;

•	the diversion of management’s time and attention from our existing businesses;

•	management's ability to spend time developing and integrating the new business and the success of the integration effort;

•	our ability to properly manage conflicts of interests;

•	our ability to identify and manage risks in new lines of businesses;

•	our ability to obtain requisite approvals and licenses from the relevant governmental authorities and to comply with applicable laws and regulations without incurring undue costs and delays; and

•	our ability to successfully negotiate and enter into beneficial arrangements with our counterparties.

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•	difficulties and costs associated with the integration of operations and systems;

•	difficulties integrating the acquired business’s internal controls and procedures into our existing control structure;

•	difficulties and costs associated with the assimilation of employees; and

•	the risk that a change in ownership will negatively impact the relationship between an acquiree and the investors in its investment vehicles.

•	the required investment of capital and other resources;

•	the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk;

•	the diversion of management’s attention from our core businesses;

•	assumption of liabilities in any acquired business;

•	the disruption of our ongoing business;

•	the increasing demands on or issues related to the combination or integration of operational and management systems and controls;

•	compliance with or applicability to our business or our portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection related laws) and customs in the numerous global jurisdictions in which we operate and the impact that noncompliance or even perceived noncompliance could have on us and our portfolio companies;

•	a potential increase in investor concentration; and

•	the broadening of our geographic footprint, including the risks associated with conducting operations in certain foreign jurisdictions where we currently have no presence.

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The Dodd-Frank Act imposes a number of restrictions on the relationship and activities of banking organizations with private equity funds and hedge funds and other provisions that will affect the private equity industry, either directly or indirectly. Among other things, the Volcker Rule generally prohibits any “banking entity” (broadly defined as any insured depository institution, any company that controls such an institution, a non-U.S. bank that is treated as a bank holding company for purposes of U.S. banking law and any affiliate or subsidiary of the foregoing entities) from sponsoring or acquiring or retaining an ownership interest in a fund that is not subject to the provisions of the 1940 Act in reliance upon either Section 3(c)(1) or Section 3(c)(7) of the 1940 Act. The Volcker Rule also requires certain nonbank financial companies that have been designated as systemically important by the Financial Stability Oversight Council ("FSOC") and subject to supervision by the Federal Reserve to comply with additional capital requirements and comply with certain other quantitative limits on such activities, although such entities are not expressly prohibited from engaging in proprietary trading or sponsoring or investing in such funds. Furthermore, divestitures by banking entities of impermissible ownership interests in covered funds to comply with the Volcker Rule may lead to lower prices in the secondary market for interests in our funds, which could have adverse implications for our ability to raise funds from investors who may have considered the availability of secondary market liquidity as a factor in determining whether to invest.

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The Dodd-Frank Act also imposes a new regulatory structure on the “swaps” market, including requirements for clearing, exchange trading, capital, margin, reporting, and recordkeeping. In connection with the Dodd-Frank Act, the CFTC has finalized many rules applicable to swap market participants, including business conduct standards for swap dealers, reporting and recordkeeping, mandatory clearing for certain swaps, exchange trading rules applicable to swaps, initial and variation margin requirements for uncleared swap transactions and regulatory requirements for cross-border swap activities. For example, the CFTC finalized a rule governing margin requirements for uncleared swaps entered into by swap dealers and major swap participants who are not supervised by a “prudential regulator” (“covered swap entities”). The final rule generally requires covered swap entities, subject to certain thresholds and exemptions for inter-affiliate swaps, to collect and post margin in respect of uncleared swap transactions with other covered swap entities and financial end-users. In particular, the finalized rule requires covered swap entities and financial end-users having “material swaps exposure,” defined as such entity and certain affiliates have an average aggregate daily notional amount of uncleared swaps exceeding $8 billion for June, July and August of the previous calendar year, to collect and post a minimum amount of “initial margin” in respect of each uncleared swap. In addition, the finalized rule requires covered swap entities entering into uncleared swaps with other covered swap entities or financial-end users, regardless of swaps exposure, to post or collect (as appropriate) “variation margin”. These margin requirements for uncleared swaps could adversely affect our business, including our ability to enter such swaps or our available liquidity.

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The Dodd-Frank Act amended the Exchange Act to direct the Federal Reserve and other federal regulatory agencies to adopt rules requiring sponsors of asset-backed securities (or a majority-owned affiliate thereof) to retain at least 5% of the credit risk relating to the assets collateralizing the asset-backed securities (the “U.S. Risk Retention Rules”). The U.S. Risk Retention Rules were issued by five federal banking and housing agencies (the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Department of Housing and Urban Development, and the Federal Housing Finance Agency) and the SEC in October 2014 and became effective on December 24, 2016 (the "U.S. Risk Retention Effective Date"). CLOs issued prior to the U.S. Risk Retention Effective Date are exempt from the requirements set forth in the U.S. Risk Retention Rules, except in connection with certain offers and sales of securities thereunder after the U.S. Risk Retention Effective Date (typically made in connection with any repricing, refinancing or reset of such CLO). With respect to the regulation of CLOs, the U.S. Risk Retention Rules require that either (i) the “sponsor” (which, in most cases, will be us) or a “majority-owned affiliate” thereof (in each case as defined in the U.S. Risk Retention Rules) retain such 5% portion described above as an “eligible vertical interest” or as an “eligible horizontal residual interest” (in each case as defined in the U.S. Risk Retention Rules) or any combination thereof in the CLO in the manner required by the U.S. Risk Retention Rules (provided that in certain circumstances, as described therein, a “sponsor” may offset the amount of “eligible interests” (as defined in the U.S. Risk Retention Rules) it is required to own by the eligible interests in the CLO acquired by an “originator” (as defined in the U.S. Risk Retention Rules) in such CLO) or (ii) the CLO is an “open market CLO” that buys and holds only certain “CLO-eligible loan tranches” (in each case as defined in the U.S. Risk Retention Rules) and for which the "lead arranger" - contrary to current market practice - retains at least 20% of the aggregate principal balance of the funded portion of the syndicated credit facility (that includes each "CLO-eligible loan tranche") at origination and thereafter retains (unhedged) at least 5% of the funded portion of the syndicated credit facility (that includes each "CLO-eligible loan tranche") through the life of the related CLO. The U.S. Risk Retention Rules contain provisions that may have adverse effects on us and/or the holders of the notes or other securities issued by our CLOs. The U.S. Risk Retention Rules permit the financing of a required retention interest to be financed only on a full recourse basis and, to the extent that we were to employ leverage for our required retention investments, the U.S. Risk Retention Rules generally prohibit the transfer or hedging of the related risk, which could cause losses to be earlier and larger than they would have been if leverage were not employed.

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The Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk taking by covered financial institutions. On May 16, 2016, the SEC re-proposed a rule, as part of a joint rulemaking effort with U.S. federal banking regulators, that would apply to "covered financial institutions," including registered investment advisers and broker-dealers that have total consolidated assets of at least $1 billion, and impose substantive and procedural requirements on incentive-based compensation arrangements. The application of this rule, if adopted, to us could limit our ability to recruit and retain investment professionals and senior management executives. However, the proposed rule remains pending and may be subject to significant modifications.

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•	The Dodd-Frank Act requires public companies to adopt and disclose policies requiring, in the event the company is required to issue an accounting restatement, the giveback of any related incentive compensation from current and former executive officers.

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The Dodd-Frank Act amended the Exchange Act to compensate and protect whistleblowers who voluntarily provide original information to the SEC and establishes a fund to be used to pay whistleblowers who will be entitled to receive a payment equal to between 10% and 30% of certain monetary sanctions imposed in a successful government action resulting from the information provided by the whistleblower.

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•	we may create new funds in the future that reflect a different asset mix and different investment strategies, as well as a varied geographic and industry exposure as compared to our present funds, and any such new funds could have different returns than our existing or previous funds;

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•	the rates of returns of our carry funds reflect unrealized gains as of the applicable measurement date that may never be realized, which may adversely affect the ultimate value realized from those funds’ investments;

•	unitholders will not benefit from any value that was created in our funds prior to our becoming a public company to the extent such value was previously realized;

•	in recent years, there has been increased competition for private equity investment opportunities resulting from the increased amount of capital invested in alternative investment funds, high liquidity in debt markets and strong equity markets, and the increased competition for investments may reduce our returns in the future;

•	the rates of returns of some of our funds in certain years have been positively influenced by a number of investments that experienced rapid and substantial increases in value following the dates on which those investments were made, which may not occur with respect to future investments;

•	our investment funds’ returns in some years have benefited from investment opportunities and general market conditions that may not repeat themselves;

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our current or future investment funds might not be able to avail themselves of comparable investment opportunities or market conditions; and the circumstances under which our funds may make future investments may differ significantly from those conditions prevailing in the past (including, for example, particularly favorable borrowing conditions from 2013 through early 2015 for many of our investments that relied heavily on the use of leverage);

•	newly-established funds may generate lower returns during the period that they take to deploy their capital.

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•	subject the entity to a number of restrictive covenants, terms and conditions, any violation of which could be viewed by creditors as an event of default and could materially impact our ability to realize value from the investment;

•	allow even moderate reductions in operating cash flow to render the entity unable to service its indebtedness, leading to a bankruptcy or other reorganization of the entity and a loss of part or all of the equity investment in it;

•	give rise to an obligation to make mandatory prepayments of debt using excess cash flow, which might limit the entity’s ability to respond to changing industry conditions to the extent additional cash is needed for the response, to make unplanned but necessary capital expenditures or to take advantage of growth opportunities;

•	limit the entity’s ability to adjust to changing market conditions, thereby placing it at a competitive disadvantage compared to its competitors that have relatively less debt;

•	limit the entity’s ability to engage in strategic acquisitions that might be necessary to generate attractive returns or further growth; and

•	limit the entity’s ability to obtain additional financing or increase the cost of obtaining such financing, including for capital expenditures, working capital or other general corporate purposes.

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•	the inability of our investment professionals to identify attractive investment opportunities;

•	competition for such opportunities among other potential acquirers;

•	decreased availability of capital on attractive terms; and

•	our failure to consummate identified investment opportunities because of business, regulatory or legal complexities and adverse developments in the U.S. or global economy or financial markets.

•	a number of our competitors in some of our businesses have greater financial, technical, marketing and other resources and more personnel than we do;

•	some of our funds may not perform as well as competitors’ funds or other available investment products;

•	several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that otherwise could be exploited;

•	some of these competitors (including strategic competitors) may also have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for our funds with respect to investment opportunities;

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•	some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds than us, which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments that we want to make;

•	some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we do and/or bear less compliance expense than us;

•	some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors;

•	some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do;

•	our competitors that are corporate buyers may be able to achieve synergistic cost savings in respect of an investment, which may provide them with a competitive advantage in bidding for an investment;

•	our competitors have instituted or may institute low cost high speed financial applications and services based on artificial intelligence and new competitors may enter the asset management space using new investment platforms based on artificial intelligence;

•	there are relatively few barriers to entry impeding the formation of new alternative asset management firms, and the successful efforts of new entrants into our various businesses, including former “star” portfolio managers at large diversified financial institutions as well as such institutions themselves, is expected to continue to result in increased competition;

•	some investors may prefer to pursue investments directly instead of investing through one of our funds;

•	some investors may prefer to invest with an asset manager that is not publicly traded or is smaller with only one or two investment products that it manages; and

•	other industry participants may, from time to time, seek to recruit our investment professionals and other employees away from us.

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we advise funds that invest in businesses that operate in a variety of industries that are subject to extensive domestic and foreign regulation, such as the telecommunications industry, the aerospace, defense and government services industry and the healthcare industry (including companies that supply equipment and services to governmental agencies), that may involve greater risk due to rapidly changing market and governmental conditions in those sectors;

•	significant failures of our portfolio companies to comply with laws and regulations applicable to them could affect the ability of our funds to invest in other companies in certain industries in the future and could harm our reputation;

•	companies in which private equity investments are made may have limited financial resources and may be unable to meet their obligations, which may be accompanied by a deterioration in the value of their equity securities or any collateral or guarantees provided with respect to their debt;

•	companies in which private equity investments are made are more likely to depend on the management talents and efforts of a small group of persons and, as a result, the death, disability, resignation or termination of one or more of those persons could have a material adverse impact on their business and prospects and the investment made;

•	companies in which private equity investments are made may be businesses or divisions acquired from larger operating entities which may require a rebuilding or replacement of financial reporting, information technology, back office and other operations;

•	companies in which private equity investments are made may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position;

•	companies in which private equity investments are made generally have less predictable operating results;

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instances of fraud, corruption and other deceptive practices committed by senior management of portfolio companies in which our funds invest may undermine our due diligence efforts with respect to such companies and, upon the discovery of such fraud, negatively affect the valuation of a fund’s investments as well as contribute to overall market volatility that can negatively impact a fund’s investment program;

•	our funds may make investments that they do not advantageously dispose of prior to the date the applicable fund is dissolved, either by expiration of such fund’s term or otherwise, resulting in a lower than expected return on the investments and, potentially, on the fund itself;

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our funds generally establish the capital structure of portfolio companies on the basis of the financial projections based primarily on management judgments and assumptions, and general economic conditions and other factors may cause actual performance to fall short of these financial projections, which could cause a substantial decrease in the value of our equity holdings in the portfolio company and cause our funds’ performance to fall short of our expectations;

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under ERISA, a “trade or business” within a “controlled group” can be liable for the ERISA Title IV pension obligations (including withdrawal liability for union multiemployer plans) of any other member of the controlled group. This “controlled group” liability represents one of the few situations in which one entity’s liability can be imposed upon another simply because the entities are united by common ownership, but in order for such joint and several liability to be imposed, two tests must be satisfied: (1) the entity on which such liability is to be imposed must be a “trade or business” and (2) a “controlled group” relationship must exist among such entity and the pension plan sponsor or the contributing employer. While a number of cases have held that managing investments is not a “trade or business” for tax purposes, at least one federal Circuit Court case has concluded that an investment fund could be a “trade or business” for ERISA purposes (and,

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•	executive officers, directors and employees of an equity sponsor may be named as defendants in litigation involving a company in which a private equity investment is made or is being made.

•	those associated with the burdens of ownership of real property;

•	general and local economic conditions;

•	changes in supply of and demand for competing properties in an area (as a result, for instance, of overbuilding);

•	fluctuations in the average occupancy and room rates for hotel properties;

•	the financial resources of tenants;

•	changes in building, environmental and other laws;

•	failure to obtain necessary approvals and/or permits;

•	energy and supply shortages;

•	various uninsured or uninsurable risks;

•	natural disasters;

•	changes in government regulations (such as rent control);

•	changes in real property tax rates;

•	changes in interest rates;

•	the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable;

•	negative developments in the economy that depress travel activity;

•	environmental liabilities;

•	contingent liabilities on disposition of assets;

•	unexpected cost overruns in connection with development projects;

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•	terrorist attacks, war and other factors that are beyond our control; and

•	dependence on local operating partners.

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•	certain economic and political risks, including potential exchange control regulations and restrictions on our non-U.S. investments and repatriation of profits on investments or of capital invested, the risks of political, economic or social instability, the possibility of expropriation or confiscatory taxation and adverse economic and political developments;

•	the imposition of non-U.S. taxes on gains from the sale of investments or other distributions by our funds;

•	the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation;

•	changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could adversely impact the returns on our investments;

•	limitations on the deductibility of interest for income tax purposes in certain jurisdictions;

•	differences in the legal and regulatory environment or enhanced legal and regulatory compliance;

•	limitations on borrowings to be used to fund acquisitions or dividends;

•	political hostility to investments by foreign or private equity investors, including increased risk of government expropriation;

•	less liquid markets;

•	reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms;

•	adverse fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another;

•	higher rates of inflation;

•	higher transaction costs;

•	less government supervision of exchanges, brokers and issuers;

•	less developed bankruptcy, limited liability company, corporate, partnership and other laws (which may have the effect of disregarding or otherwise circumventing the limited liability structures potentially causing the actions or liabilities of one fund or a portfolio company to adversely impact us or an unrelated fund or portfolio company);

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•	difficulty in enforcing contractual obligations;

•	less stringent requirements relating to fiduciary duties;

•	fewer investor protections and less publicly available information in respect of companies in non-U.S. markets; and

•	greater price volatility.

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•	the use of new technologies;

•	reliance on estimates of oil and gas reserves in the evaluation of available geological, geophysical, engineering and economic data for each reservoir;

•	encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, equipment failures and other accidents in completing wells and otherwise, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, pollution, fires, spills and other environmental risks; and

•	the volatility of oil and natural gas prices.

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•	labor disputes, work stoppages or shortages of skilled labor;

•	shortages of fuels or materials;

•	slower than projected construction progress and the unavailability or late delivery of necessary equipment;

•	delays caused by or in obtaining the necessary regulatory approvals or permits;

•	adverse weather conditions and unexpected construction conditions;

•	accidents or the breakdown or failure of construction equipment or processes;

•	difficulties in obtaining suitable or sufficient financing; and

•	force majeure or catastrophic events such as explosions, fires and terrorist activities and other similar events beyond our control.

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The Investment Solutions business is subject to business and other risks and uncertainties generally consistent with our business as a whole, including without limitation legal, tax and regulatory risks, the avoidance or management of conflicts of interest and the ability to attract and retain investment professionals and other personnel, and risks associated with the acquisition of new investment platforms.

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Pursuant to our current arrangements with the various businesses, we currently restrict our participation in the investment activities undertaken by our Investment Solutions segment (including with respect to AlpInvest and Metropolitan), which may in turn limit our ability to address risks arising from their investment activities. For example, although we maintain ultimate control over AlpInvest, AlpInvest’s management team (who are our employees) continues to exercise independent investment authority without involvement by other Carlyle personnel. For so long as these arrangements are in place, Carlyle representatives will serve on the management board of AlpInvest, but we will observe substantial restrictions on our ability to access investment information or engage in day-to-day participation in the AlpInvest investment business, including a restriction that AlpInvest investment decisions are made and maintained without involvement by other Carlyle personnel and that no specific investment data, other than data on the investment performance of its investment funds and managed accounts, will be shared. Generally, we have a reduced ability to identify or

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•	Similar to other parts of our business, Investment Solutions is seeking to broaden its investor base by raising funds and advising separate accounts for investors on an account-by-account basis and the number and complexity of such investor mandates and fund structures has increased as a result of continuing fundraising efforts, and the activation of mandates with existing investors.

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Conflicts may arise between such Investment Solutions funds or separate managed accounts (e.g., competition for investment opportunities), and in some cases conflicts may arise between a managed account and a Carlyle fund. In addition, such managed accounts may have different or heightened standards of care, and if they invest in other investment funds sponsored by us could result in lower management fees and carried interest to us than Carlyle’s typical investment funds.

•	Our Investment Solutions business is separated from the rest of the firm by an informational wall designed to prevent certain types of information from flowing from the Investment Solutions platform to the rest of the firm. This information barrier could limit the collaboration between our investment professionals with respect to specific investments.

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•	our general partner determines the amount and timing of our investments and dispositions, indebtedness, issuances of additional partnership interests and amounts of reserves, each of which can affect the amount of cash that is available for distribution to common and preferred unitholders;

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our general partner is allowed to take into account the interests of parties other than us and the common and preferred unitholders in resolving conflicts of interest, which has the effect of limiting its duties (including fiduciary duties) to our common and preferred unitholders. For example, our subsidiaries that serve as the general partners of our investment funds have certain duties and obligations to those funds and their investors

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because our senior Carlyle professionals hold their Carlyle Holdings partnership units directly or through entities that are not subject to corporate income taxation and The Carlyle Group L.P. holds Carlyle Holdings partnership units through wholly owned subsidiaries, some of which are subject to corporate income taxation, conflicts may arise between our senior Carlyle professionals and The Carlyle Group L.P. relating to the selection, structuring and disposition of investments and other matters. For example, the earlier disposition of assets following an exchange or acquisition transaction by a limited partner of the Carlyle Holdings partnerships generally will accelerate payments under the tax receivable agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase the tax liability of a limited partner of the Carlyle Holdings partnerships without giving rise to any rights of a limited partner of the Carlyle Holdings partnerships to receive payments under the tax receivable agreement;

•	our partnership agreement does not prohibit affiliates of the general partner, including its owners, from engaging in other businesses or activities, including those that might directly compete with us;

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our general partner has limited its liability and reduced or eliminated its duties (including fiduciary duties) under the partnership agreement, while also restricting the remedies available to our common and preferred unitholders for actions that, without these limitations, might constitute breaches of duty (including fiduciary duty). In addition, we have agreed to indemnify our general partner and its affiliates to the fullest extent permitted by law, except with respect to conduct involving bad faith, fraud or willful misconduct. By purchasing our common and preferred units, common and preferred unitholders have agreed and consented to the provisions set forth in our partnership agreement, including the provisions regarding conflicts of interest situations that, in the absence of such provisions, might constitute a breach of fiduciary or other duties under applicable state law;

•	our partnership agreement will not restrict our general partner from causing us to pay it or its affiliates for any services rendered, or from entering into additional contractual arrangements with any of these entities on our behalf, so long as our general partner agrees to the terms of any such additional contractual arrangements in good faith as determined under the partnership agreement;

•	our general partner determines how much we pay for acquisition targets and the structure of such consideration, including whether to incur debt to fund the transaction, whether to issue units as consideration and the number of units to be issued and the amount and timing of any earn-out payments;

•	our general partner determines whether to waive certain restrictions relating to such units pursuant to the terms of the Exchange Agreement;

•	our general partner determines how much debt we incur and whether to issue preferred securities and those decisions may adversely affect our credit ratings;

•	our general partner determines which costs incurred by it and its affiliates are reimbursable by us;

•	our general partner controls the enforcement of obligations owed to us by it and its affiliates; and

•	our general partner decides whether to retain separate counsel, accountants or others to perform services for us.

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•	the timing of exchanges — for instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the depreciable or amortizable assets of Carlyle Holdings at the time of each exchange;

•	the price of our common units at the time of the exchange — the increase in any tax deductions, as well as the tax basis increase in other assets, of Carlyle Holdings, is directly proportional to the price of our common units at the time of the exchange;

•	the extent to which such exchanges are taxable — if an exchange is not taxable for any reason, increased deductions will not be available;

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the amount and timing of our income — the corporate taxpayers will be required to pay 85% of the cash tax savings as and when realized, if any. If the corporate taxpayers do not have taxable income (without the tax receivable agreement related tax deductions), the corporate taxpayers are not required (absent a change of control or other circumstances requiring an early termination payment) to make payments under the tax receivable agreement for that taxable year because no cash tax savings will have been realized. However, any cash tax savings that do not result in realized benefits in a given tax year will likely generate tax attributes that may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments under the tax receivables agreement; and

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tax rate and tax legislation - the impact of changes in tax rates or tax legislation may impact the tax paid, which would modify the amount paid under the agreement. For example the TCJA includes permanent reduction in the federal corporate income tax rate from 35% to 21%, which will likely reduce future amounts to be paid under the agreement with respect to tax years beginning in 2018. In addition, there are numerous other provisions which may also have an impact on the amount of tax to be paid.

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•	it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or

•	absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

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•	the trading price of our common units;

•	the incurrence of additional indebtedness or additional issuances of other series or classes of preferred units;

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•	whether we declare or fail to declare distributions on the preferred units from time to time and our ability to make distributions under the terms of our indebtedness;

•	our creditworthiness, results of operations and financial condition;

•	the credit ratings of the preferred units;

•	the prevailing interest rates or rates of return being paid by other companies similar to us and the market for similar securities; and

•	economic, financial, geopolitical, regulatory or judicial events that affect us or the financial markets generally.

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•	first, we will cause Carlyle Holdings to make distributions to its partners, including The Carlyle Group L.P.’s wholly owned subsidiaries. If Carlyle Holdings makes such distributions, the limited partners of Carlyle Holdings will be entitled to receive equivalent distributions pro rata based on their partnership interests in Carlyle Holdings;

•	second, we will cause The Carlyle Group L.P.’s wholly owned subsidiaries to distribute to The Carlyle Group L.P. their share of such distributions, net of taxes and amounts payable under the tax receivable agreement by such wholly owned subsidiaries; and

•	third, The Carlyle Group L.P. will distribute its net share of such distributions to our common unitholders on a pro rata basis.

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(1)

The entities comprising our Consolidated Funds are not the same entities for all periods presented. On January 1, 2016, The Carlyle Group L.P. adopted ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which provides a revised consolidation model to use in evaluating whether to consolidate certain types of legal entities. As a result, The Carlyle Group L.P. deconsolidated a majority of its consolidated funds on January 1, 2016. The consolidation or deconsolidation of funds generally has the effect of grossing up or down, respectively, reported assets, liabilities, and cash flows, and has no effect on net income attributable to The Carlyle Group L.P. or partners’ capital.

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Corporate Private Equity — Our Corporate Private Equity segment advises our 23 buyout and 10 growth capital funds, which seek a wide variety of investments of different sizes and growth potentials. As of December 31, 2017, our Corporate Private Equity segment had approximately $73 billion in AUM and approximately $36 billion in Fee-earning AUM (Fee-earning AUM excludes $18 billion* in pending AUM for which we have not yet activated fees, although this capital is included in total AUM).

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Real Assets — Our Real Assets segment advises our 11 U.S. and internationally focused real estate funds, our two infrastructure funds, our two power funds, our international energy fund, as well as our four Legacy Energy funds (funds that we jointly advise with Riverstone). The segment also includes five NGP management fee funds and four carry funds advised by NGP. As of December 31, 2017, our Real Assets segment had approximately $43 billion in AUM and approximately $32 billion in Fee-earning AUM.

•	Global Credit — Our Global Credit segment advises a group of 58 funds that pursue investment opportunities across structured credit, direct lending, distressed credit, energy credit and opportunistic credit. As of December 31, 2017, our Global Credit segment had approximately $33 billion in AUM and approximately $27 billion in Fee-earning AUM.

•	Investment Solutions — Our Investment Solutions segment advises global private equity and real estate fund of funds programs and related co-investment and secondary activities across 197 fund vehicles. As of December 31, 2017, our Investment Solutions segment had approximately $46 billion in AUM and approximately $30 billion in Fee-earning AUM.

*	For the Partnership, Fee-earning AUM excludes $22 billion in pending AUM for which we have not yet activated fees, although this capital is included in total AUM.

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•	$649.1 million from CP VI (with total AUM of approximately $15.2 billion at December 31, 2017),

•	$312.7 million from Carlyle Asia Partners IV, L.P. (“CAP IV”) (with total AUM of approximately $5.5 billion at December 31, 2017), and

•	$311.4 million from Carlyle Partners V, L.P. (“CP V”) (with total AUM of approximately $3.7 billion at December 31, 2017).

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(a)

the amount of limited partner capital commitments, generally for carry funds where the original investment period has not expired, for AlpInvest carry funds during the commitment fee period and for Metropolitan carry funds during the weighted-average investment period of the underlying funds (see “Fee-earning AUM based on capital commitments” in the table below for the amount of this component at each period);

(b)

the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment vehicles where the original investment period has expired, Metropolitan carry funds after the expiration of the weighted-average investment period of the underlying funds, and one of our business development companies (see “Fee-earning AUM based on invested capital” in the table below for the amount of this component at each period);

(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 (see “Fee-earning AUM based on collateral balances, at par” in the table below for the amount of this component at each period);

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(d)	the external investor portion of the net asset value of our hedge fund and fund of hedge funds vehicles (pre redemptions and subscriptions), as well as certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);

(e)	the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period); and

(f)	the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired, (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period).

(1)	Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.

(2)	Reflects limited partner invested capital at cost and includes amounts committed to or reserved for investments for certain Real Assets and Investment Solutions funds.

(3)	Represents the amount of aggregate Fee-earning collateral balances and principal balances, at par, for our CLOs/structured products.

(4)	Reflects the net asset value (pre-redemptions and subscriptions) of our hedge funds, mutual fund and fund of hedge funds vehicles, as well as certain other carry funds.

(5)	Includes funds with fees based on gross asset value.

(6)

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 is required for investment decisions. As of December 31, 2017, the Legacy Energy Funds had, in the aggregate, approximately $5.2 billion in AUM and $3.8 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down.

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(1)	Divestment activity in 2016 represents ESG assets which were transferred to the ESG founders in a transaction that closed in October 2016 and Claren Road assets which were transferred to the Claren Road founders in a transaction that closed in January 2017.

(2)	Inflows represent limited partner capital raised and capital invested by our carry funds and the NGP management fee funds outside the investment period, weighted-average investment period or commitment fee period. Inflows do not include funds raised of $22.1 billion, which are not yet earning fees.

(3)	Outflows represent limited partner distributions from our carry funds and NGP management fee funds, changes in basis for our carry funds where the investment period, weighted-average investment period or commitment fee period has expired, and reductions for funds that are no longer calling for fees.

(4)	Represents the net result of subscriptions to and redemptions from our hedge funds, mutual fund and fund of hedge funds vehicles.

(5)	Represents the change in the aggregate Fee-earning collateral balances at par of our CLOs/structured products, as of the quarterly cut-off dates.

(6)	Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value.

(7)	Includes activity of funds with fees based on gross asset value. 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.

(b)	the amount of aggregate collateral balance and principal cash at par or aggregate principal amount of the notes of our CLOs and other structured products (inclusive of all positions);

(c)	the net asset value (pre-redemptions and subscriptions) of our long/short credit, emerging markets, multi-product macroeconomic, fund of hedge funds vehicles, mutual fund and other hedge funds; and

(d)	the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitles to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

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(1)	Divestment activity represents ESG assets which were transferred to the ESG founders in a transaction that closed in October 2016 and Claren Road assets which were transferred to the Claren Road founders in a transaction that closed in January 2017.

(2)	New Commitments reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(3)	Outflows includes distributions in our carry funds and related co-investment vehicles, NGP management fee funds and separately managed accounts, as well as runoff of CLO collateral balances and redemptions in our hedge funds and fund of hedge funds vehicles.

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(4)

Market Appreciation/(Depreciation) generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, NGP management fee funds, separately managed accounts, hedge funds and fund of hedge funds vehicles. Appreciation for 2017 was driven by 29% appreciation ($2.6 billion) in the public portfolio and 26% appreciation ($10.3 billion) in the private portfolio of our Corporate Private Equity, Real Assets, and Global Credit carry funds, in addition to $3.6 billion of appreciation in our Investment Solutions carry funds.

(5)	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.

(6)	Includes expiring available capital, the impact of capital calls for fees and expenses, change in gross asset value for our business development companies and other changes in AUM.

(1)	Corporate Private Equity, Real Assets, and Global Credit carry funds only, excluding external co-investment.

(2)

For Carlyle returns, “Appreciation/Depreciation” represents realized and unrealized gain / loss for the period on a total return basis before fees and expenses. The percentage of return is calculated as the sum of ending remaining investment fair market value ("FMV") and net investment outflow (sales proceeds less net purchases) less beginning remaining investment FMV divided by beginning remaining investment FMV.

(3)	Public portfolio includes initial public offerings ("IPO") that occurred in the quarter. Investments may be reported as private in quarters prior to the IPO quarter.

(4)

The MSCI ACWI - All Cap Index represents the performance of the MSCI All Country World Index across all market capitalization sizes of the global equity market.  There are significant differences between the types of securities and assets typically acquired by our carry funds and the investments covered by the MSCI All Country World Index. Specifically, our carry funds may make investments in securities and other assets that have a greater degree of risk and volatility, and less liquidity, than those securities included in the MSCI All Country World Index.  Moreover, investors in the securities included in the MSCI All Country World Index may not be subject to the management fees, carried interest or expenses to which investors in our carry funds are typically subject.  Comparisons between the our carry fund appreciation and the MSCI All Country World Index are included for informational purposes only.

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(1)	Included in other non-operating (income) expense for the year ended December 31, 2017 is a $71.5 million adjustment for the revaluation of the tax receivable agreement liability as result of the passage of the Tax Cuts and Jobs Act of 2017.

(2)	See reconciliation to most directly comparable U.S. GAAP measure below:

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(3)

Adjustments to performance fees and investment income (loss) relate to (i) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the Non-GAAP results, (ii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the Non-GAAP results, (iii) the reclassification of NGP performance fees, which are included in investment income in the U.S. GAAP financial statements, and (iv) the reclassification of certain tax expenses associated with performance fees. Adjustments to investment income (loss) also include the reclassification of earnings for the investment in NGP Management and its affiliates to the appropriate operating captions for the Non-GAAP results, the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from the Non-GAAP results, and adjustments to reflect the Partnership's share of Urbplan net losses, until Urbplan was deconsolidated during 2017, as investment losses for the Non-GAAP results. Adjustments are also included in these financial statement captions to reflect the Partnership's economic interests in Claren Road (through January 2017), ESG (through June 2016) and Vermillion.

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(1)	For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”

(2)	Represents the aggregate effective management fee rate of each fund in the segment, weighted by each fund’s Fee-earning AUM, as of the end of each period presented.

(1)	Inflows represent limited partner capital raised and capital invested by carry funds outside the original investment period. Inflows do not include funds raised of $18.3 billion, which are not yet earning fees.

(2)	Outflows represent distributions from funds outside the investment period and changes in fee basis for our carry funds where the original investment period has expired.

(3)	Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value.

(4)	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 period end.

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(1)	New Commitments reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(2)	Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts.

(3)	Market Appreciation/(Depreciation) generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related co-investment vehicles and separately managed accounts.

(4)	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.

(5)	Includes expiring available capital, the impact of capital calls for fees and expenses and other changes in AUM.

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(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.

(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

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(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. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance fees with a blended Net IRR that is below the preferred return hurdle for that fund.

(9)	Aggregate includes the following funds: CP I, CMG, CVP I, CVP II, CUSGF III, CEVP, CETP I, CAVP I, CAVP II, CAGP III, CSABF, Mexico, CBPF, and MENA.

(10)	Includes co-investments and certain other stand-alone investments arranged by us.

(11)	Aggregate, which is considered not meaningful, includes the following funds and their respective commencement dates: CSSAF (April 2012) , CPF I (June 2012), CCI (December 2012), CETP III (May 2014), CAGP V (May 2016), and CBPF II (November 2017).

(12)	For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.

(13)	For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.

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(1)	Remaining Fair Value reflects the unrealized carrying value of investments in carry funds and related co-investment vehicles. Significant funds with remaining fair value of greater than $100 million are listed individually.

(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. For certain funds, 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.

(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/(giveback) 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: CMG, CP I, CP II, CP III, CEP I, CEP II, CAP I, CAP II, CBPF, CBPF II, CJP I, CEVP, CETP I, CETP III, CCI, CAVP I, CAVP II, CAGP III, CAGP V, Mexico, MENA, CSABF, 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/(Giveback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.

(10)	For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.

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(1)	For additional information concerning the components of Fee-earning AUM, See “—Fee-earning Assets under Management.”

(2)	Includes amounts committed to or reserved for investments for certain real estate funds.

(3)	Includes certain funds that are calculated on gross asset value.

(4)

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 is required for investment decisions. As of December 31, 2017, the Legacy Energy Funds had, in the aggregate, approximately $5.2 billion in AUM and $3.8 billion in Fee-earning AUM. NGP VII, NGP VIII, NGP IX, or in the case of NGP M&R, NGP ETP I, and NGP ETP II, certain affiliated entities (collectively, the “NGP management fee funds”) and NGP X, NGP GAP and NGP XI (referred to herein as, "carry funds"), are managed by NGP Energy Capital Management. As of December 31, 2017, the NGP management fee funds and carry funds had, in the aggregate, approximately $13.0 billion in AUM and $11.2 billion in Fee-earning AUM.

(5)	Represents the aggregate effective management fee rate of each fund in the segment, weighted by each fund's Fee-earning AUM, as of the end of each period presented. Calculation reflects Carlyle’s 10% and 55% interest in management fees earned by the Legacy Energy funds, NGP management fee funds, and carry funds, respectively.

(1)	Inflows represent limited partner capital raised and capital invested by funds outside the investment period.

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(2)	Outflows represent distributions from funds outside the investment period and changes in fee basis for our carry funds where the investment period has expired.

(3)	Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value.

(4)	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.

(1)	New Commitments reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(2)	Outflows includes distributions in our carry funds and related co-investment vehicles, NGP management fee funds and separately managed accounts.

(3)	Market Appreciation/(Depreciation) generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, NGP management fee funds and separately managed accounts.

(4)	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.

(5)	Includes expiring available capital, the impact of capital calls for fees and expenses and other changes in AUM.

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(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

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(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. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance fees with a blended Net IRR that is below the preferred return hurdle for that fund.

(9)	Aggregate includes the following funds: CRP I, CRP II, CAREP I, CAREP II, CRCP I, CPOCP, Renew I and Energy I.

(10)	Includes co-investments and certain other stand-alone investments arranged by us.

(11)	Aggregate includes NGP GAP and CCR. Return is not considered meaningful, as the investment period commenced in December 2013 for NGP GAP and October 2016 for CCR.

(12)	For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.

(13)	For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.

(1)	Remaining Fair Value reflects the unrealized carrying value of investments in carry funds and related co-investment vehicles. Significant funds with remaining fair value of greater than $100 million are listed individually.

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(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. For certain funds, 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.

(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/(giveback) 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: CRP I, CRP II, CRCP I, CEREP I, CEREP II, CAREP I, CAREP II, CCR, CPOCP, CGIOF, NGP GAP, Energy I, Energy II 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.

(9)	Includes co-investments, prefund investments and certain other stand-alone investments arranged by us. In Accrued Carry/(Giveback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.

(10)	For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.

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(1)	For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”

(2)	Includes funds with fees based on gross asset value.

(3)	Represents the aggregate effective management fee rate for carry funds and hedge funds, weighted by each fund’s Fee-earning AUM, as of the end of each period presented. Management fees for CLOs are based on the total par amount of the assets (collateral) and principal balance of the notes in the fund and are not calculated as a percentage of equity and are therefore not included.

(1)	Divestment activity represents ESG assets which were transferred to the ESG founders in a transaction that closed in October 2016 and Claren Road assets which were transferred to the Claren Road founders in a transaction that closed in January 2017.

(2)	Inflows represent limited partner capital raised and capital invested by our carry funds outside the investment period.

(3)	Outflows represent limited partner distributions from our carry funds, changes in fee basis for our carry funds where the investment period has expired, and reductions for funds that are no longer calling fees.

(4)	Represents the net result of subscriptions to and redemptions from our hedge funds and mutual fund.

(5)	Represents the change in the aggregate Fee-earning collateral balances at par of our CLOs/structured products, as of the quarterly cut-off dates.

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(6)	Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value.

(7)	Includes activity of funds with fees based on gross asset value. 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.

(1)	Divestment activity represents ESG assets which were transferred to the ESG founders in a transaction that closed in October 2016 and Claren Road assets which were transferred to the Claren Road founders in a transaction that closed in January 2017.

(2)	New Commitments reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(3)	Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts, as well as runoff of CLO collateral balances and redemptions in our hedge funds.

(4)	Market Appreciation/(Depreciation) generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, separately managed accounts and hedge funds.

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(5)	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.

(6)	Includes expiring available capital, the impact of capital calls for fees and expenses, change in gross asset value for our business development companies and other changes in AUM.

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(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 Global Credit segment our first carry fund was formed in 2004.

(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)	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.

(6)

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. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance fees with a blended Net IRR that is below the preferred return hurdle for that fund.

(7)	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.

(8)	Aggregate includes the following funds: CMP I, CMP II, CSP I, and CASCOF.

(9)	Includes co-investments and certain other stand-alone investments arranged by us.

(10)	For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.

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(1)	Remaining Fair Value reflects the unrealized carrying value of investments in carry funds and related co-investment vehicles. Significant funds with remaining fair value of greater than $100 million are listed individually.

(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. For certain funds, 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.

(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/(giveback) 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: CSP I, CSP II, CMP I, CMP II, CSC, CCOF, and CASCOF. 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/(Giveback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.

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(1)	For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”

(2)	Includes amounts committed to or reserved for certain AlpInvest and Metropolitan carry funds.

(1)	Inflows represent mandates where commitment fee period was activated and capital invested by carry fund vehicles outside the commitment fee period or weighted-average investment period.

(2)	Outflows represent distributions from carry fund vehicles outside the commitment fee period or weighted-average investment period and changes in fee basis for carry fund vehicles where the commitment fee period or weighted-average investment period has expired.

(3)	Represents subscriptions and redemptions in our fund of hedge funds vehicles.

(4)	Market Appreciation/(Depreciation) represents changes in the net asset value of our fund of hedge funds vehicles and realized and unrealized gains (losses) on our carry fund vehicles based on the lower of cost or fair value.

(5)	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.

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(1)	New Commitments reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(2)	Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts, as well as redemptions in our fund of hedge funds vehicles.

(3)

Market Appreciation/(Depreciation) generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, separately managed accounts, and fund of hedge funds vehicles. The fair market values for our Investment Solutions carry funds are based on the latest available valuations of the underlying limited partnership interests (in most cases as of September 30, 2017) as provided by their general partners, plus the net cash flows since the latest valuation, up to December 31, 2017.

(4)	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.

(5)	Includes expiring available capital, the impact of capital calls for fees and expenses and other changes in AUM.

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(1)

Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments originated by the AlpInvest team, as well as real estate primary fund investments, secondary fund investments and co-investments originated by the Metropolitan Real Estate 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 and c) LP co-investment vehicles. As of December 31, 2017, these excluded investments represent $0.3 billion of AUM at AlpInvest.

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(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)	Fully Committed funds are past the expiration date of the commitment period as defined in the respective limited partnership agreement.

(6)	Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on investment contributions, distributions and unrealized value of the underlying investments before management fees, expenses and carried interest at the AlpInvest/Metropolitan Real Estate level.

(7)

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. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance fees with a blended Net IRR that is below the preferred return hurdle for that fund.

(8)	To exclude the impact of FX, all AlpInvest foreign currency cash flows have been converted to Euro at the reporting period spot rate.

(9)	Aggregate includes Main Fund VII - Fund Investments, Main Fund VIII - Fund Investments, Main Fund I - Co-Investments, Main Fund I - Mezzanine Investments, Main Fund IV - Mezzanine Investments, Main Fund V - Mezzanine Investments, AlpInvest CleanTech Funds and funds which are not included as part of a main fund.

(10)	For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.

(11)	Represents the U.S. dollar equivalent balance translated at the spot rate as of period end.

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(4)	Incurs interest at the weighted average rate of the underlying senior notes. Interest income on the underlying collateral approximated the amount of interest expense and was not significant for the year ended December 31, 2017.

(5)	Original borrowing of €61.8 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.

(6)	Incurs interest at LIBOR plus 1.932%.

(7)	Incurs interest at LIBOR plus 1.923%.

(8)	Incurs interest at LIBOR plus 1.536%.

(9)	Incurs interest at LIBOR plus 1.808%.

(10)	Original borrowing of €17.4 million; incurs interest at LIBOR plus 1.75% and has full recourse to the Partnership.

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(11)	Incurs interest at LIBOR plus 1.848%.

(13)	Incurs interest at LIBOR plus 1.647%.

(14)	Incurs interest at LIBOR plus 1.365%.

(15)	Term loan issued under master credit agreement.

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•	provide capital to facilitate the growth of our existing business lines;

•	provide capital to facilitate our expansion into new, complementary business lines, including acquisitions;

•	pay operating expenses, including compensation and compliance costs and other obligations as they arise;

•	fund costs of litigation and contingencies, including related legal costs;

•	fund the capital investments of Carlyle in our funds;

•	fund capital expenditures;

•	repay borrowings and related interest costs and expenses;

•	pay earnouts and contingent cash consideration associated with our acquisitions and strategic investments;

•	pay income taxes;

•	make distributions to our common and preferred unitholders and the holders of the Carlyle Holdings partnership units in accordance with our distribution policy, and;

•	repurchase our units.

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(a)	The table above assumes that no prepayments are made on the CLO term loans, promissory notes or senior notes and that the outstanding balance on the revolving credit facility is repaid on the maturity date of the senior credit facility, which is May 5, 2020. See Note 7 to the consolidated financial statements for the various maturity dates of the CLO term loans, promissory notes and senior notes.

(b)

The interest rate on the debt obligations as of December 31, 2017 consist of: 3.875% on $500.0 million of senior notes, 5.625% on $600.0 million of senior notes, approximately 2.60% on $25.0 million remaining term loan under our senior credit facility, a range of approximately 1.75% to 3.29% for our CLO term loans, approximately 4.19% on $108.8 million of the NGP promissory note and approximately 3.36% on $53.9 million of our settlement promissory notes. Interest payments assume that no prepayments are made and loans are held until maturity.

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(c)	These obligations represent our estimate of amounts to be paid on the contingent cash and other consideration obligations associated with our business acquisitions, strategic investment in NGP Management, payments related to the acquisition of secondary interests in Carlyle funds and other obligations.

(d)

We lease office space in various countries around the world and maintain our headquarters in Washington, D.C., where we lease our primary office space under a non-cancelable lease agreement expiring on July 31, 2026. Our office leases in other locations expire in various years from 2018 through 2032. The amounts in this table represent the minimum lease payments required over the term of the lease.

(e)

These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These amounts are generally due on demand and are therefore presented in the less than one year category. A substantial majority of these investments is expected to be funded by senior Carlyle professionals and other professionals through our internal co-investment program. Of the $3.8 billion of unfunded commitments, approximately $3.4 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Partnership.

(f)

Represents obligations by the Partnership’s corporate taxpayers to make payments under the tax receivable agreement. Holders of partnership units in Carlyle Holdings may exchange their Carlyle Holdings partnership units for common units in The Carlyle Group L.P. on a one-for-one basis. These exchanges may reduce the amount of tax that the corporate taxpayers would be required to pay in the future. The corporate taxpayers will pay to the limited partner of Carlyle Holdings making the exchange 85% of the amount of cash savings that the corporate taxpayers realize upon an exchange. See “Tax Receivable Agreement” below. Further, the amount and timing of payments is subject to change as the Partnership continues to analyze the 2017 Tax Reform Act (see Note 11 for more information about the Tax Reform Act).

(g)

These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles. These obligations include interest to be paid on debt securities issued by the consolidated CLO vehicles. Interest payments assume that no prepayments are made and loans are held until maturity. For debt securities with rights only to the residual value of the CLO and no stated interest, no interest payments were included in this calculation. Interest payments on variable-rate debt securities are based on interest rates in effect as of December 31, 2017, at spreads to market rates pursuant to the debt agreements, and range from 0.74% to 8.96%.

(h)	These obligations represent commitments of the CLOs to fund certain investments. These amounts are generally due on demand and are therefore presented in the less than one year category.

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In evaluating whether the Partnership holds a variable interest, fees (including management fees and performance fees) that are customary and commensurate with the level of services provided, and where the Partnership does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not considered variable interests. The Partnership considers all economic interests, including indirect interests, to determine if a fee is considered a variable interest.

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For those entities where the Partnership holds a variable interest, the Partnership determines whether each of these entities qualifies as a VIE and, if so, whether or not the Partnership is the primary beneficiary. The assessment of whether the entity is a VIE is generally performed qualitatively, which requires judgment. These judgments include: (a) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the economic performance of the entity, (c) determining whether two or more parties' equity interests should be aggregated, and (d) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity.

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For entities that are determined to be VIEs, the Partnership consolidates those entities where it has concluded it is the primary beneficiary. The primary beneficiary is defined as the variable interest holder with (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. In evaluating whether the Partnership is the primary beneficiary, the Partnership evaluates its economic interests in the entity held either directly or indirectly by the Partnership.

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(1)	Comprised of approximately $20.2 billion (100% Level III Investments) in our structured credit/other structured products funds, $3.9 billion (87% Level III Investments) in our carry funds, and $2.3 billion (95% Level III Investments) in our business development companies.

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(1)	Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.

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(1)	Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.

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(1)	As a result of the adoption of ASU 2015-2 and the deconsolidation of certain CLOs on January 1, 2016, $123.8 million of investments that the Partnership held in those CLOs were no longer eliminated in consolidation and were included in investments in CLOs and other for the year ended December 31, 2016.

(2)	As a result of the retrospective adoption of ASU 2015-7, the beginning balance of Partnership and LLC interests that are measured at fair value using the NAV per share practical expedient have been revised to reflect their exclusion from the fair value hierarchy.

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(1)	Beginning on January 1, 2016, CLO loan payables held by third party beneficial interest holders are measured on the basis of fair value of the financial assets of the CLOs and the beneficial interests held by the Partnership.

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(5)	Original borrowing of €61.8 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.

(6)	Incurs interest at LIBOR plus 1.932%.

(7)	Incurs interest at LIBOR plus 1.923%.

(8)	Incurs interest at LIBOR plus 1.536%.

(9)	Incurs interest at LIBOR plus 1.808%.

(10)	Original borrowing of €17.4 million; incurs interest at LIBOR plus 1.75% and has full recourse to the Partnership.

(11)	Incurs interest at LIBOR plus 1.848%.

(12)	Incurs interest at LIBOR plus 1.7312%.

(13)	Incurs interest at LIBOR plus 1.647%.

(14)	Incurs interest at LIBOR plus 1.365%.

(15)	Term loan issued under master credit agreement.

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(a)	The subordinated notes and preferred shares do not have contractual interest rates, but instead receive distributions from the excess cash flows of the CLOs.

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(1)	As of December 31, 2017 and 2016, $52.7 million and $44.7 million, respectively, of deferred tax liabilities were offset and presented as a single deferred tax asset amount on the Partnership’s balance sheet as these deferred tax assets and liabilities relate to the same jurisdiction.

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(1)	The Partnership is organized as a series of pass through entities pursuant to the United States Internal Revenue Code. As such, the Partnership is not responsible for the tax liability due on certain income earned during the year. Such income is taxed at the unitholder and non-controlling interest holder level, and any income tax is the responsibility of the unitholders and is paid at that level.

(2)	The effective income tax rate is calculated on income before provision for income taxes. The effective tax rate is impacted by a variety of factors, including, but not limited to, changes in the sources of income or loss during the period and whether such income or loss is attributable to the Partnership's taxable subsidiaries.

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(a)

The Revenues adjustment principally represents fund management and performance fees earned from the Consolidated Funds that were eliminated in consolidation to arrive at the Partnership’s total revenues, adjustments for amounts attributable to non-controlling interests in consolidated entities, adjustments related to expenses associated with the investments in NGP Management and its affiliates that are included in operating captions or are excluded from the segment results, adjustments to reflect the Partnership’s share of Urbplan’s net losses as a component of investment income until Urbplan was deconsolidated during the third quarter of 2017, the inclusion of tax expenses associated with certain performance fees, and adjustments to reflect the Partnership’s ownership interests in Claren Road (through January 2017) and ESG (through June 2016) that were included in Revenues in the Partnership’s segment reporting.

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(b)

The Expenses adjustment represents the elimination of intercompany expenses of the Consolidated Funds payable to the Partnership, the inclusion of certain tax expenses associated with performance fee compensation, adjustments related to expenses associated with the investment in NGP Management that are included in operating captions, adjustments to reflect the Partnership’s share of Urbplan’s net losses as a component of investment income until Urbplan was deconsolidated during the third quarter of 2017, changes in the tax receivable agreement liability, charges and credits associated with Carlyle corporate actions and non-recurring items and adjustments to reflect the Partnership’s economic interests in Claren Road (through January 2017) and ESG (through June 2016) as detailed below (Dollars in millions):

(c)	The Other Income (Loss) adjustment results from the Consolidated Funds which were eliminated in consolidation to arrive at the Partnership’s total Other Income (Loss).

(d)	The following table is a reconciliation of Income Before Provision for Income Taxes to Economic Income, to Fee Related Earnings, and to Distributable Earnings (Dollars in millions):

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(3)

Adjustments to performance fees and investment income (loss) relate to (i) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the segment results, (ii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the segment results and (iii) the reclassification of NGP performance fees, which are included in investment income in the U.S. GAAP financial statements, and (iv) the reclassification of certain tax expenses associated with performance fees. Adjustments to investment income (loss) also include the reclassification of earnings for the investments in NGP Management and its affiliates to the appropriate operating captions for the segment results, the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from the segment results, and adjustments to reflect the Partnership’s share of Urbplan’s net losses as investment losses for the segment results until Urbplan was deconsolidated during the third quarter of 2017. Adjustments are also included in these financial statement captions to reflect the Partnership’s economic interest in Claren Road (through January 2017) and ESG (through June 2016).

(e)	The Total Assets adjustment represents the addition of the assets of the Consolidated Funds that were eliminated in consolidation to arrive at the Partnership’s total assets.

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(1)	Relates to investment vehicles whose primary focus is the United States, Mexico or South America.

(2)	Relates to investment vehicles whose primary focus is Europe, the Middle East, and Africa.

(3)	Relates to investment vehicles whose primary focus is Asia, including China, Japan, India and Australia.

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(1)	The sum of the quarterly earnings per common unit amounts may not equal the total for the year due to the effects of rounding and dilution.

(2)	Distributions declared reflects the calendar date of the declaration of each distribution.

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•

Messrs. Conway, D’Aniello and Rubenstein — We considered that these three individuals are the original founders of our firm, that each has played an integral role in our firm’s successful growth since its founding in 1987, and that each has developed a unique and unparalleled understanding of our business. Finally, we also noted that these three individuals are our largest equity owners and, as a consequence of such alignment of interest with our other equity owners, each has additional motivation to diligently fulfill his oversight responsibilities as a member of the Board of Directors of our general partner.

•	Mr. Lee — We considered his business acumen, creative ideas and leadership experience in a variety of senior roles at financial institutions.

•	Mr. Youngkin — We considered his leadership and extensive knowledge of our business and operations gained through his years of service at our firm.

•	Ms. Fitt — We considered her extensive financial background and experience in a distinguished career at Goldman Sachs in the areas of investment banking and risk analysis, including her unique insights into the operation of global capital markets.

•	Mr. Hance — We considered his invaluable perspective owing to his experience in various senior leadership roles in the financial services industry, including his role as the Chief Financial Officer of Bank of America Corporation, which included responsibility for financial and accounting matters, as well as his familiarity with our business and operations as an Operating Executive of Carlyle.

•	Ms. Hill — We considered her insights into the operations of public companies owing to her experience as a consultant, as well as her familiarity with board responsibilities, oversight and control resulting from her significant experience serving on the boards of directors of various public companies.

•	Dr. Robertson — We considered his distinguished career as a professor and Dean of the Wharton School at the University of Pennsylvania and his extensive knowledge and expertise in finance and business administration.

•	Mr. Shaw — We considered his extensive financial background and public company operating and management experience resulting from his distinguished career in various senior leadership roles at Marriott.

•	Mr. Welters — We considered his business acumen and entrepreneurial experience, extensive operating expertise as well as his familiarity with board responsibilities, oversight and control resulting from his significant experience serving on the boards of directors of various public companies.

•	Mr. Clare — We considered his extensive investment and leadership experience as a co-head of our U.S. buyout business and as Co-Deputy CIO of our CPE segment.

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the director is, or has been within the preceding three years, employed by a Carlyle Entity. A Carlyle Entity means the general partner, us and any parent or subsidiary that the general partner or we control and consolidate into the general partner’s or our financial statements, respectively, filed with the SEC, (but not if the general partner or we reflect such entity solely as an investment in these financial statements);

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the director, or an immediate family member of that director, accepted any compensation from a Carlyle Entity in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than (i) compensation for director or committee service, (ii) compensation paid to an immediate family member who is an employee (other than an executive officer) of a Carlyle Entity and (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation;

•	the director is an immediate family member of an individual who is, or at any time during the past three years was, employed by us as an executive officer;

•

the director is, or has an immediate family member who is, a partner in, or a controlling shareholder or an executive officer of any organization to which a Carlyle Entity made, or from which a Carlyle Entity received, payments for property or services in the current or any of the past three fiscal years that exceed five percent (5%) of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following:

•	payments arising solely from investments in a Carlyle Entity’s securities; or

•	payments under non-discretionary charitable contribution matching programs

•	the director is, or has an immediate family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of a Carlyle Entity serve on the compensation committee of such other entity; or

•	the director is, or has an immediate family member who is, a current partner of a Carlyle Entity’s outside auditor, or was a partner or employee of a Carlyle Entity’s outside auditor who worked on a Carlyle Entity’s audit at any time during any of the past three years.

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if the director or an immediate family member of that director serves as an executive officer, director or trustee of a charitable organization, and our annual charitable contributions to that organization (excluding contributions by us under any established matching gift program) are less than the greater of $200,000 or five percent (5%) of that organization’s consolidated gross revenues in its most recent fiscal year, provided, however, that in calculating such amount (i) payments arising solely from investments in the Carlyle Entity’s securities and (ii) payments under non-discretionary charitable contribution matching programs shall be excluded; and

•	if the director or an immediate family member of that director (or a company for which the director serves as a director or executive officer) invests in or alongside of one or more investment funds or investment companies managed by us or any of our subsidiaries, whether or not fees or other incentive arrangements for us or our subsidiaries are borne by the investing person.

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•	Achieving strong investment fund performance to create value for our investors;

•	Strategically expanding the firm's product offerings for our fund investors;

•	Raising approximately $43 billion in new commitments across our platform during 2017;

•	Managing our business through a continuing period of intense regulatory scrutiny of our industry;

•	Resolving certain historical legacy liabilities;

•	Continuing to enhance and grow our Global Credit business and develop additional ancillary Global Credit investment products;

•	Driving and overseeing the development of new or improved processes to further enhance the capabilities of our our investor services teams;

•	Maintaining disciplined cost control management and accountability for meeting or exceeding our firm operating budget.

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Time-Vested DRU Grants. On February 1, 2018, Mr. Youngkin received a grant of 100,000 time-vesting DRUs, Mr. Buser received a grant of 113,379 time-vesting DRUs and Mr. Ferguson received a grant of 68,028 time-vesting DRUs. These time-vesting DRU grants vest 40% on August 1, 2019, 30% on August 1, 2020 and 30% on August 1, 2021. Mr. Youngkin received this grant due to his overall leadership role, including in evaluating new products and business strategies and in investor outreach, and his operational oversight of our business on a global basis. Mr. Buser received this grant due to his strong performance during 2017 as our Chief Financial Officer, including his oversight of our accounting, finance and treasury functions and his leadership role in managing our preferred unit offering that closed in September 2017, driving and overseeing the development of new or improved processes to further enhance the capabilities of our investor services teams and maintaining disciplined cost control management and accountability for meeting or exceeding our firm operating budget across our global business. Mr. Ferguson received this grant due to his oversight of our global legal and compliance team, his role in managing our litigation and his efforts to address legal and regulatory considerations applicable to our

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Performance DRU Grants. On February 6, 2018, Mr. Buser received a performance-vesting DRU award with respect to a target of 45,352 performance-vesting DRUs. Mr. Buser will have the opportunity to earn between 0% and 200% of the target amount of performance-vesting DRUs based on the level of achievement against the performance targets, subject to Mr. Buser's continued employment by the Partnership. Mr. Buser's performance-vesting DRUs will vest subject to the Partnership's achievement of the same performance targets and weighting as is applicable to our Co-CEOs which are described above under "—Appointment of New Co-Chief Executive Officers and Directors." Mr. Buser received this DRU grant due to his strong performance during 2017 as our Chief Financial Officer, including his oversight of our accounting, finance and treasury functions and his leadership role in managing our preferred unit offering that closed in September 2017, driving and overseeing the development of new or improved processes to further enhance the capabilities of our investor services teams and maintaining disciplined cost control management and accountability for meeting or exceeding our firm operating budget across our global business. These DRUs will be reflected as stock awards for 2018 in the Summary Compensation Table and in the Grants of Plan-Based Awards in 2018 table in our Form 10-K for the year-ended December 31, 2018.

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(1)	For each year shown, the amount shown represents the cash portion of the year-end bonus paid in December of that year, but excludes the portion paid in Bonus Holdback DRUs in February of the following year. As part of the discretionary bonuses for services provided in 2017, 2016 and 2015, each of our named executive officers (other than our founders) received 10% of his bonus in a grant of DRUs.

(2)

This amount represents the grant-date fair value of DRUs granted in for the year shown, computed in accordance with U.S. GAAP pertaining to equity-based compensation. For additional information regarding the determination of grant-date fair value see Note 14 to our consolidated financial statements included in this Annual Report on Form 10-K. Amounts reported for 2017 reflect the portion of the 2016 year-end bonus paid in Bonus Holdback DRU awards, which were granted to Messrs. Buser, Youngkin and Ferguson on February 1, 2017. The grant-date fair value of the Bonus Holdback DRU awards is computed in accordance with GAAP and differs from the dollar amount of the portion of the 2016 year-end bonus that was held back. Amounts reported also reflect a DRU award granted to Mr. Youngkin on May 1, 2017 with respect to his accrued KEIP distributions through December 31, 2016 and the annual discretionary DRU awards that were granted to Messrs. Buser and Ferguson on February 1, 2017.

(3)	This amount represents our 401(k) matching contributions.

(4)	This amount represents cash distributions of $126,050, $126,267 and $240,851 received by Mr. Buser in respect of his equity pool interest for 2017, 2016 and 2015 respectively, and also includes $6,750, $6,625, and $6,625 in 401(k) matching contributions for 2017, 2016 and 2015, respectively.

(5)	This amount represents actual cash distributions received by Mr. Youngkin in respect of direct carried interest allocations at the fund level of $3,697,525, $3,382,859 and $1,353,408 for 2017, 2016 and 2015, respectively; and also includes $6,750, $6,625 and $6,625 in 401(k) matching contributions for 2017, 2016 and 2015, respectively.

(6)

This amount represents actual cash distributions received by Mr. Ferguson in respect of direct carried interest allocations at the fund level of $0, $206,770 and $615,065 for 2017, 2016 and 2015, respectively. This amount also includes $6,750, $6,625 and $6,625 in 401(k) matching contributions for 2017, 2016 and 2015, respectively and $2,130 received by Mr. Ferguson in respect of his equity pool interest for 2017.

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(1)	The references to “stock,” “shares” or “units” in this table refer to DRUs.

(2)	Represents discretionary DRU grants awarded to Messrs. Buser and Ferguson. These DRU grants will vest 40% on August 1, 2018; 30% on August 1, 2019; and 30% on August 1, 2020.

(3)	Represents Bonus Holdback DRUs awarded to Messrs. Buser, Youngkin and Ferguson, all of which will vest on August 1, 2018.

(4)	Represents a DRU grant with respect to Mr. Youngkin's accrued KEIP distributions through December 31, 2016. These DRUs vested on November 1, 2017.

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(1)	The references to “stock,” “shares” or “units” in this table refer to Carlyle Holdings partnership units and DRUs.

(2)	Mr. Buser's 316,864 units are composed of 32,588 unvested Carlyle Holdings partnership units, all of which will vest on May 2, 2018; 276,717 discretionary DRUs of which 105,097 will vest on August 1, 2018, 119,362 will vest on August 1, 2019, 52,258 will vest on August 1, 2020; and 7,559 Bonus Holdback DRUs, all of which will vest on August 1, 2018.

(3)	Mr. Youngkin’s 724,824 units are composed of 650,199 unvested Carlyle Holdings partnership units, all of which will vest on May 2, 2018; 65,904 discretionary DRUs of which 22,813 will vest on August 1, 2018 and 43,091 will vest on August 1, 2019; and 8,721 Bonus Holdback DRUs, all of which will vest on August 1, 2018.

(4)	Mr. Ferguson's 216,055 units are composed of 85,951 unvested Carlyle Holdings partnership units, all of which will vest on May 2, 2018; 122,545 discretionary DRUs, of which 50,116 will vest on August 1, 2018; 43,397 will vest on August 1, 2019; and 29,032 will vest on August 1, 2020; and 7,559 Bonus Holdback DRUs, all of which will vest on August 1, 2018.

(1)	The references to “stock”, “shares” or “units” in this table refer to Carlyle Holdings partnership units and Carlyle common units.

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(2)	The value for Mr. Buser is based on the value of 32,588 Carlyle Holdings partnership units that vested on May 2, 2017 and 58,945 common units received upon the vesting of DRUs on August 1, 2017.

(3)	The value for Mr. Youngkin is based on the value of 650,200 Carlyle Holdings partnership units that vested on May 2, 2017 and 82,723 common units received upon the vesting of DRUs on August 1, 2017 and 6,470 common units received upon vesting of DRUs on November 1, 2017.

(4)	The value for Mr. Ferguson is based on the value of 85,951 Carlyle Holdings partnership units that vested on May 2, 2017 and 36,235 common units received upon the vesting of DRUs on August 1, 2017.

(5)	For both Carlyle Holdings partnership units and common units, the value realized on vesting was calculated by multiplying the number of Carlyle Holdings partnership units and the number of common units received upon vesting by the closing market price per common unit on the applicable vesting date.

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(1)	The reference to “stock” in this table refers to DRUs. Amounts represent the grant date fair value of the DRU awards granted on May 1, 2017 to each director who is not an employee of or advisor to the Partnership, computed in accordance with U.S. GAAP pertaining to equity-based compensation. For

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(2)	As Mr. Hance is an Operating Executive and Mr. Mathias is an employee, no additional remuneration is paid to them as directors of our general partner. Mr. Hance and Mr. Mathias’ compensation is discussed in “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

(3)	Mr. Mathias resigned as a director of our general partner effective December 31, 2017.

(1)	The references to “stock” or “shares” in this table refer to our DRUs.

(2)	The dollar amounts shown under this column were calculated by multiplying the number of unvested DRUs held by the director by the closing market price of $22.90 per Carlyle common unit on December 29, 2017, the last trading day of 2017.

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*	Less than 1%

(1)

Subject to certain requirements and restrictions, the partnership units of Carlyle Holdings are exchangeable for common units of The Carlyle Group L.P. on a one-for-one basis (subject to the terms of the exchange agreement). A Carlyle Holdings limited partner must exchange one partnership unit in each of the three Carlyle Holdings partnerships to effect an exchange for a common unit. See “Item 13. Certain Relationships and Related Transactions, and Director Independence—Exchange Agreement.” Beneficial ownership of Carlyle Holdings partnership units reflected in this table is presented separately from the beneficial ownership of the common units of The Carlyle Group L.P. for which such partnership units may be exchanged.

(2)

TCG Carlyle Global Partners L.L.C., an entity wholly owned by our senior Carlyle professionals, holds a special voting unit of The Carlyle Group L.P. that entitles it, on those few matters that may be submitted for a vote of the common unitholders of The Carlyle Group L.P., to participate in the vote on the same basis as the common unitholders and provides it with a number of votes that is equal to the aggregate number of vested and unvested partnership units in Carlyle Holdings held by the limited partners of Carlyle Holdings on the relevant record date.

(3)

The Carlyle Holdings partnership units shown in the table above for the named executive officers and directors include the following units held for the benefit of family members with respect to which such person disclaims beneficial ownership: Mr. D’Aniello – 285,714 units held in a trust for which Mr. D’Aniello is the investment trustee; Mr. Youngkin – 142,857 units held in a trust for which Mr. Youngkin is the investment trustee; and Mr. Clare – 273,632 units held in a trust for which Mr. Clare is the investment trustee.

(1)	Reflects the outstanding number of our deferred restricted common units granted under the Equity Incentive Plan as of December 31, 2017.

(2)

The aggregate number of our common units and Carlyle Holdings partnership units covered by the Equity Incentive Plan is increased on the first day of each fiscal year during its term by a number of units equal to the positive difference, if any, of (a) 10% of the aggregate number of our common units and Carlyle Holdings partnership units outstanding on the last day of the immediately preceding fiscal year (excluding Carlyle Holdings partnership units held by The Carlyle Group L.P. or its wholly owned subsidiaries) minus (b) the aggregate number of our common units and Carlyle Holdings partnership units which were available for the issuance of future awards under the Equity Plan as of such last day (unless the administrator of the Equity Incentive Plan should decide to increase the number of our common units and Carlyle Holdings partnership units available for future grants under the plan by a lesser amount). As of January 1, 2018, pursuant to this formula, 33,491,450 units were available for issuance under the Equity Incentive Plan. We have filed a registration statement and intend to file additional registration statements on Form S-8 under the Securities Act to register common units covered by the Equity Incentive Plan (including pursuant to automatic annual increases). Any such Form S-8 registration statement will automatically become effective upon filing. Accordingly, common units registered under such registration statement will be available for sale in the open market.

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(a)

Audit Fees consisted of fees for (1) the audits of our consolidated financial statements included in this Annual Report on Form 10-K and our internal controls over financial reporting, and services required by statute or regulation; (2) reviews of interim consolidated financial statements included in our quarterly reports on Form 10-Q; (3) comfort letters, consents and other services related to SEC and other regulatory filings. This also includes fees for accounting consultation billed as audit services.

(b)	Audit-Related Fees consisted of due diligence in connection with acquisitions, and other audit and attest services not required by statute or regulation.

(c)	Tax Fees consisted of fees for services rendered for tax compliance and tax planning and advisory services. We also use other accounting firms to provide these services. Fees for tax compliance services were approximately $0.4 million and $0 for the years ended December 31, 2017 and 2016, respectively.

(d)

Ernst & Young also provided audit and tax services to certain investment funds managed by Carlyle in its capacity as the general partner or investment advisor. The tax services provided consist primarily of tax compliance and tax advisory services. We also use other accounting firms to provide these services. Fees for tax compliance services were approximately $0 and $0.3 million for the years ended December 31, 2017 and 2016, respectively.

(e)

Audit-Related Fees included assurance, merger and acquisition due diligence services provided in connection with contemplated investments by Carlyle-sponsored investment funds and attest services not required by statute or regulation. In addition, Ernst & Young provided audit, audit-related, tax and other services to certain Carlyle fund portfolio companies, which are approved directly by the portfolio company’s management and are not included in the amounts presented here. We also use other accounting firms to provide these services.

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*	Filed herewith.

+	Management contract or compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.

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1.1	The following terms shall have the following meanings for all purposes of this Agreement:

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2.1	Lease. Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the Aircraft, on the terms and conditions of this Agreement.

2.2

Delivery. The Aircraft shall be delivered by Lessor to the Lessee at the Operating Base or at such other location that is mutually agreeable by Lessor and Lessee prior to each use of the Aircraft in “AS IS”, “WHERE AS” condition subject to each and every disclaimer of warranty and requirements as set forth in Section 4.3 hereof. Upon each such delivery, the United States standard airworthiness certificate issued for the Aircraft shall be present on board the Aircraft, and said standard airworthiness certificate shall be effective in accordance with FAR 21.181(a)(1). Lessor shall not be liable for delay or failure to furnish the Aircraft pursuant to this Agreement when such failure is caused by government regulation or authority, mechanical difficulty, war, terrorism, civil commotion, strikes or labor disputes, weather conditions, or acts of God.

2.3

Non-Exclusivity. Lessee and Lessor acknowledge that the Aircraft is leased to Lessee on a non-exclusive basis, and that the Aircraft shall, at other times, be operated by Lessor and may be otherwise subject to lease to others during the Term at Lessor’s sole discretion. During any period during which the Lessor or any other person or entity is utilizing the Aircraft, Lessee’s leasehold rights to possession of the Aircraft under this Agreement shall temporarily abate, but all other provisions of this Agreement shall nevertheless continue in full force and effect.

2.4	FSDO Notice. At least 48 hours prior to the first flight to be conducted under this Agreement, Lessee shall complete the FSDO Notice attached hereto as Schedule B and deliver the completed FSDO Notice by facsimile to the FAA Flight Standards District Office located nearest to the departure airport of said first flight.

3.1

Term. The Term shall commence on the Effective Date, and be effective for a period of one (1) year. At the end of the first one (1) year period or any subsequent one (1) year period, the Term shall automatically be renewed for an additional one (1) year period, unless terminated by either party. Either party may terminate this Agreement with or without cause upon forty-eight (48) hours notice to the other party; provided, however, that Lessee shall be permitted to complete any scheduled use of the Aircraft which has commenced.

3.2	Scheduling. Lessee's use of the Aircraft during the Term of this Agreement is non-exclusive. The parties agree as follows:

(a)

Use by Lessor and Other Lessees. Lessor and Lessee agree that Lessor may lease the Aircraft to one or more other lessees during the Term on a non-exclusive basis, that Lessor has the absolute right to determine the availability of the Aircraft for Lessee and that Lessor's use of the Aircraft shall have priority over the availability of the Aircraft for lease to Lessee or any other party. Lessor agrees that at such times as the Aircraft is not undergoing maintenance or being used by Lessor, Lessee and all other lessees of the Aircraft shall have equal rights to use of the Aircraft and that all use of the Aircraft shall be scheduled

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(b)	Designation of Schedule Keeper. Lessor shall advise Lessee of the individual or entity that will coordinate the scheduling of the Aircraft.

(c)	Minimum Usage by Lessee. Nothing contained herein shall obligate Lessee to any minimum usage of the Aircraft, it being understood and agreed that Lessee’s usage shall be on an “as-needed” basis.

3.3

Rent. The Lessee shall pay rent in an amount equal to the Hourly Rent specified in Schedule A attached hereto (which amount may be modified from time to time upon mutual agreement of the parties hereto by executing a supplement in the form attached hereto as Schedule A-1) for each Flight Hour of use of the Aircraft by Lessee. All rent accrued during any calendar month shall be payable in arrears on the Rent Payment Date in the immediately succeeding calendar month without further demand or invoice. All rent shall be paid to the Lessor in immediately available U.S. funds and in form and manner as the Lessor in its sole discretion may instruct Lessee from time to time. In the event the Lease is terminated by either party pursuant to Section 3.1, Lessee shall pay upon demand all outstanding Hourly Rent for each used Flight Hour.

3.4	Taxes.     Neither rent nor any other payments to be made by Lessee under this Agreement includes the amount of any Taxes which may be assessed or levied by any Taxing Jurisdictions as a result of the lease of the Aircraft to Lessee. Lessee shall remit to Lessor all such Taxes together with each payment of rent pursuant to Section 3.3.

4.1	Representations and Warranties of Lessee. Lessee represents and warrants as of the date hereof and during the entire Term hereof as follows:

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4.2	Intentionally Omitted.

4.3

Disclaimer of Warranties. THE AIRCRAFT IS BEING LEASED BY THE LESSOR TO THE LESSEE HEREUNDER ON AN "AS IS" BASIS. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES, AND LESSOR HAS NOT MADE AND SHALL NOT BE CONSIDERED OR DEEMED TO HAVE MADE AND LESSEE HEREBY WAIVES, RELEASES, DISCLAIMS AND RENOUNCES ALL EXPECTATION OF OR RELIANCE UPON ANY WARRANTIES, OBLIGATIONS AND LIABILITIES OF LESSOR, EXPRESS, IMPLIED, ARISING BY LAW, COURSE OF DEALING, USAGE OF TRADE OR OTHERWISE WITH RESPECT TO THE DESIGN, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT. LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON WITH RESPECT TO ANY OF THE FOLLOWING, REGARDLESS OF ANY NEGLIGENCE OR FAULT OF LESSOR: (A) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY COMPONENT OF THE AIRCRAFT OR BY ANY INADEQUACY THEREOF, ANY DEFICIENCY OR DEFECT IN THIS AGREEMENT OR ANY OTHER CIRCUMSTANCES IN CONNECTION WITH THE AIRCRAFT OR THIS AGREEMENT; (B) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY COMPONENT OF THE AIRCRAFT OR ANY RISKS RELATING THERETO; OR (C) ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR CONSEQUENTIAL DAMAGES. LESSEE SHALL INDEMNIFY, DEFEND AND HOLD LESSOR HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, SUITS, PROCEEDINGS, INJURIES (OR DEATH), DAMAGES, LIABILITIES, COSTS OR EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES) ARISING FROM OR IN ANY WAY RELATING TO LESSEE'S LEASE OR POSSESSION OF THE AIRCRAFT DURING THE TERM AND SUCH INDEMNIFICATION SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT.

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5.1

Title and Registration. Title to the Aircraft shall remain vested in Owner at all times during the Term to the exclusion of Lessee and that Lessor shall have only such rights as shall be specifically set forth herein. Lessor represents that as of the date of this Agreement the Aircraft is, and throughout the Term the Aircraft shall remain, lawfully registered as a civil aircraft of the United States.

5.2

Use and Operation. Except as otherwise expressly provided herein, Lessee shall be solely and exclusively responsible for the use, operation and control of the Aircraft while in its possession during the Term of this Agreement. Lessee shall operate the Aircraft in accordance with the provisions of Part 91 of the FARs and shall not operate the Aircraft in commercial service, as a common carrier, or otherwise on a compensatory or "for hire" basis except to the limited extent permitted under Subpart F of Part 91 of the FARs, if applicable. Lessee agrees not to operate or locate the Airframe or any Engine, or suffer the Airframe or any Engine to be operated or located, in any area excluded from coverage by any insurance policy in effect or required to be maintained hereunder with respect to the Airframe or Engines, or in any war zone. Lessee agrees not to knowingly operate the Airframe or any Engine or knowingly permit the Airframe or any Engine to be operated during the Term except in operations for which Lessee is duly authorized, or to knowingly use or permit the Aircraft to be used for a purpose for which the Aircraft is not designed or reasonably suitable. Lessee will not knowingly use or operate the Aircraft in violation of any Applicable Law, or contrary to any manufacturer's operating manuals or instructions. Lessee shall not knowingly permit the Aircraft to be used for the carriage of any persons or property prohibited by law nor shall it be used during the existence of any known defect except in accordance with the FARs.

5.3

Operating Costs. Except as otherwise provided herein, Lessor shall pay certain fixed and variable costs of operating the Aircraft, including, without limitation, all costs of insurance, hangarage at the Operating Base, maintenance and inspections, overhauls, oil, and other lubricants. The foregoing notwithstanding, Lessee shall, at its own expense, (i) pay costs of fuel required for operation of Lessee’s flights, (ii) pay standard catering costs, (iii) locate and retain (either through direct employment or contracting with an independent contractor for flight services) all pilots and other cabin personnel (including mechanic) required for Lessee's operations of the Aircraft (collectively the "Flight Crew"), and (iv) pay all miscellaneous out-of-pocket expenses incurred in connection with Lessee's operation of the Aircraft, including, but not limited to, landing fees, ramp fees, overnight hangar fees, de-icing costs, contaminant recovery costs, special-request catering and commissary costs, in-flight entertainment and telecommunications charges, ground transportation, Flight Crew travel expenses, charts, manuals, and other publications obtained for the specific flight, and any other similar items.

5.4

Maintenance of Aircraft. Lessee shall perform, or cause to be performed, all pre- and post-flight inspections in accordance and as required by the FAA-approved inspection program for the Aircraft. Lessee shall notify Lessor, or cause Lessor to be notified, of any maintenance requirement, dangerous condition, malfunction or worn part that may be discovered during any such inspection. Subject to the foregoing, Lessor shall be solely responsible for arranging the performance of all maintenance and inspections of the Aircraft during the Term, shall ensure that the Aircraft is maintained in an airworthy condition during the Term, and shall coordinate the performance of and payment for all repairs and maintenance of the Aircraft.

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5.5

Flight Crew. All members of the Flight Crew shall be fully competent and experienced, duly licensed, and qualified in accordance with the requirements of Applicable Law and all insurance policies covering the Aircraft. All members of the Flight Crew who are pilots shall be fully trained in accordance with an FAA-approved training program, including initial and recurrent training and, where appropriate, contractor-provided simulator training.

5.6

Operational Control. THE PARTIES EXPRESSLY AGREE THAT LESSEE SHALL AT ALL TIMES WHILE THE AIRCRAFT IS IN ITS POSSESSION DURING THE TERM MAINTAIN OPERATIONAL CONTROL OF THE AIRCRAFT, AND THAT THE INTENT OF THE PARTIES IS THAT THIS AGREEMENT CONSTITUTE A "DRY" OPERATING LEASE. Lessee shall exercise exclusive authority over initiating, conducting, or terminating any flight conducted pursuant to this Agreement, and the Flight Crew shall be under the exclusive command and control of Lessee in all phases of such flights.

5.7

Authority of Pilot in Command. Notwithstanding that Lessee shall have operational control of the Aircraft during any flight conducted pursuant to this Agreement, Lessor and Lessee expressly agree that the Pilot in Command member of the Flight Crew retained by Lessee pursuant to Section 5.3, in his or her sole discretion, may terminate any flight, refuse to commence any flight, or take any other flight-related action which in the judgment of the Pilot in Command is necessitated by considerations of safety. The Pilot in Command shall have final and complete authority to postpone or cancel any flight for any reason or condition which in his or her judgment would compromise the safety of the flight. No such action of the Pilot in Command shall create or support any liability for loss, injury, damage or delay to Lessor.

5.8

Right to Inspect. Lessor and its agents shall have the right to inspect the Aircraft at any reasonable time, upon giving Lessee reasonable notice, to ascertain the condition of the Aircraft and to satisfy Lessor that the Aircraft is being properly repaired and maintained in accordance with the requirements of this Agreement. All required repairs shall be performed as soon as practicable after such inspection.

5.9	Modification of Aircraft. Lessee shall not make or permit to be made any modification or alteration, improvement, or addition to the Aircraft without the express written consent of Lessor.

5.10	Fines, Penalties and Forfeitures. Lessee shall be solely responsible for any fines, penalties or forfeitures relating in any manner to the operation or use of the Aircraft by Lessee under this Agreement.

6.1

Return. Upon completion of each use of the Aircraft by Lessee during the Term, Lessee shall return the Aircraft to the Lessor by delivering the same to the Operating Base, fully equipped with all Engines installed thereon. Upon each such delivery, the Aircraft shall be in as good operating condition as at it was in when Lessor delivered the Aircraft to Lessee, ordinary wear and tear excepted, and the United States standard airworthiness certificate issued for the Aircraft shall be present on board the Aircraft and said standard airworthiness certificate shall be effective in accordance with FAR 21.181(a)(1). Nothing contained in this Section 6.1 may be interpreted to

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7.1

Lessee shall ensure that no Liens are created or placed against the Aircraft by Lessee or third parties as a result of Lessee's or its agents' or representatives' action or inaction. Lessee shall notify Lessor promptly upon learning of any liens not permitted by these terms. Lessee shall, at its own cost and expense, take all such actions as may be necessary to discharge and satisfy in full any such lien promptly after the same becomes known to it.

8.1

Liability. Lessor shall maintain, or cause to be maintained, bodily injury and property damage, liability insurance in an amount no less than Three Hundred Million United States Dollars (USD$300,000,000.00) Combined Single Limit for the benefit of itself and Lessee in connection with the use of the Aircraft. Said policy shall be an occurrence policy and shall include Lessee as an operator and an Additional Insured.

8.2

Hull. Lessor shall maintain aircraft hull insurance in the amount of Eleven Million Five Hundred Thousand United States Dollars (US$11,500,000.00) which the parties agree shall be deemed to be the full replacement value of the Aircraft, and such insurance shall name Lessor and any first lien mortgage holder as loss payees as their interests may appear. Said policy shall contain a waiver of subrogation clause in favor of all Additional Insureds.

8.3	Insurance Certificates. Lessor will provide Lessee with a Certificate of Insurance upon execution of this Agreement and thereafter reasonably upon request therefor.

8.4

Conditions of Insurance. Each insurance policy required hereunder shall insure the interest of Lessee regardless of any breach or violation by Lessor of any warranties, declarations, or conditions contained in such policies. Each such policy shall be primary without any right of contribution from any insurance maintained by Lessee. The geographic limits, if any, contained in each and every such policy of insurance shall include at the minimum all territories over which Lessee will operate the Aircraft for which the insurance is placed. Each policy shall contain an agreement by the insurer that notwithstanding the lapse of any such policy for any reason or any right of cancellation by the insurer or Lessor, whether voluntary or involuntary, such policy shall continue in force for the benefit of Lessee for at least thirty (30) days (or such lesser time as may be permitted in the case of War Risk Insurance, if such War Risk Insurance so requires) after written notice of such lapse or cancellation shall have been given to Lessee. Each policy shall contain an agreement by the Insurer to provide Lessee with thirty (30) days' advance written notice of any deletion, cancellation, or material change in coverage.

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8.5

Insurance Companies. Each insurance policy required hereunder shall be issued by a company or companies who are qualified to do business in the United States and who (i) will submit to the jurisdiction of any competent state or federal court in the United States with regard to any dispute arising out of the policy of insurance or concerning the parties herein; and (ii) will respond to any claim or judgment against Lessee in any competent state or federal court in the United States or its territories.

10.1

All communications, declarations, demands, consents, directions, approvals, instructions, requests and notices required or permitted by this Agreement shall be in writing and shall be deemed to have been duly given or made when delivered by hand or on the next Business Day when sent by overnight courier or when transmitted by means of facsimile or e-mail (with request for assurance of receipt in a manner typical with respect to communications of that type and followed promptly with the original thereof and a copy sent simultaneously therewith by first class mail, postage prepaid) in each case at the address set forth below:

If to Lessor:	Kewsong Lee

If to Lessee:	Carlyle Investment Management L.L.C.

11.1

Notification of Event of Loss. In the event any damage to or destruction of the Aircraft shall occur, while the Aircraft is in the possession of Lessee, or in the event of any whole or partial loss of the Aircraft during such time, including, without limitation, any loss resulting from the theft, condemnation, confiscation or seizure of, or requisition of title to or use of, the Aircraft by private persons or by any governmental or purported governmental authority, Lessee shall immediately:

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11.2

Repair or Termination. In the event the Aircraft is partially destroyed or damaged, Lessor shall have the option, in its sole discretion, to either (i) fully repair the Aircraft in order that it shall be placed in at least as good condition as it was prior to such partial destruction or damage; or (ii) terminate this Agreement. Within five (5) days after the date of such partial destruction or damage, Lessor shall give written notice to Lessee specifying whether Lessor has elected fully to repair the Aircraft and, if so, the expected date the Aircraft will be fully repaired and available for Lessee’s use in accordance with this Agreement, or to terminate this Agreement, which termination shall be effective immediately upon such written notice from Lessor to Lessee setting forth Lessor's election to so terminate this Agreement.

11.3

Indemnification. Lessee hereby releases, and shall defend, indemnify and hold harmless Lessor and its shareholders, members, directors, officers, managers, employees, successors and assigns, from and against, any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, civil and criminal legal proceedings, penalties, fines, and other sanctions, and any attorneys' fees and other reasonable costs and expenses, directly or indirectly arising from the use of the Aircraft by Lessee to the extent of available insurance.

12.1

Entire Agreement. This Agreement, and all terms, conditions, warranties, and representations herein, are for the sole and exclusive benefit of the signatories hereto. This Agreement constitutes the entire agreement of the parties as of its Effective Date and supersedes all prior or independent, oral or written agreements, understandings, statements, representations, commitments, promises, and warranties made with respect to the subject matter of this Agreement.

12.2

Other Transactions. Except as specifically provided in this Agreement, none of the provisions of this Agreement, nor any oral or written statements, representations, commitments, promises, or warranties made with respect to the subject matter of this Agreement shall be construed or relied upon by any party as the basis of, consideration for, or inducement to engage in, any separate agreement, transaction or commitment for any purpose whatsoever.

12.3

Prohibited and Unenforceable Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibitions or unenforceability in any jurisdiction. To the extent permitted by applicable law, each of Lessor and Lessee hereby waives any provision of applicable law which renders any provision hereof prohibited or unenforceable in any respect.

12.4	Enforcement. This Agreement, including all agreements, covenants, representations and warranties, shall be binding upon and inure to the benefit of, and may be enforced by Lessor, Lessee, and each of their agents, servants and personal representatives.

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12.5	Headings. The section and subsection headings in this Agreement are for convenience of reference only and shall not modify, define, expand, or limit any of the terms or provisions hereof.

12.6	Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

12.7	Amendments. No term or provision of this Agreement may be amended, changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge, or termination is sought.

12.8	No Waiver. No delay or omission in the exercise or enforcement or any right or remedy hereunder by either party shall be construed as a waiver of such right or remedy. All remedies, rights, undertakings, obligations, and agreements contained herein shall be cumulative and not mutually exclusive, and in addition to all other rights and remedies which either party possesses at law or in equity.

12.9	No Assignments. Neither party may assign its rights or obligations under this Agreement without the prior written permission of the other.

12.10	Governing Law. This Agreement has been negotiated and delivered in the State of New York and shall in all respects be governed by, and construed in accordance with, the laws of the State of New York, including all matters of construction, validity and performance, without giving effect to its conflict of laws provisions.

12.11

Jurisdiction and Venue. Each party hereby consents to the nonexclusive jurisdiction and venue of the state and federal courts serving the State of New York. Nothing in this Agreement shall, however, prohibit any party from seeking enforcement of this Agreement in any appropriate court and in any jurisdiction where the party against whom enforcement is sought is subject to personal jurisdiction and where venue is proper.

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13.1	THE PURPOSE OF THIS PROVISION IS TO COMPLY WITH 14 CODE OF FEDERAL REGULATIONS PART 91.23 ENTITLED “TRUTH IN LEASING”.

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RE:	FAR Section 91.23 FSDO Notification

A.	Employer desires to employ Employee on the terms and conditions set forth herein in connection with Employee’s promotion to Co-Chief Executive Officer of the Company; and

B.	Employee desires to be employed by Employer on such terms and conditions.

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b.	If at any time during the Term Employee’s employment is terminated due to death pursuant to Section 5.a. or disability pursuant to Section 5.b.i., then Employer shall pay Employee (or Employee’s beneficiary, as applicable) the Pro Rata Bonus.

c.	In the case of a termination of Employee’s employment at any time for any reason, Employer shall pay to Employee, within 30 days after the Termination Date (to the extent not previously paid), the Base Salary Amount, but only to the extent such compensation has accrued through the Termination Date.

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d.

The sole liability of Employer under this Agreement upon a termination of Employee’s employment shall be: (i) to pay the amounts expressly provided for in this Section 6 and Section 4.b. as being due and owed upon such termination; (ii) to reimburse Employee pursuant to Section 4.d. for business expenses incurred by Employee during the Term; (iii) to honor the vested portion of any equity participation (including, without limitation, the Existing Interests) granted to Employee in accordance with the terms and conditions applicable thereto (which may include the forfeiture of such vested portion in the case of a termination for cause); and (iv) to comply with any other obligations under this Agreement that expressly survive termination of Employee’s employment or pursuant to any other written agreements between Employee and Employer or pursuant to any employee benefit plan.

a.

All memoranda, notices, files, records and other documents made or compiled by Employee during the Term in the ordinary course of business (other than business cards and names and contact information retained in Employee’s rolodex or Outlook), or made available to Employee concerning the business of Carlyle (including, without limitation, any “best practices” materials made available to Employee), shall be Employer’s property and shall be delivered to Employer promptly following its request therefore or automatically promptly following the end of the Term. Notwithstanding anything herein to the contrary, Employee shall be entitled to retain, both during and following the Term, (i) all business cards and names and contact information retained in Employee’s rolodex or Outlook and (ii) shall be entitled to remove from Carlyle’s premises (and, upon a termination of employment for any reason, Employer shall reasonably assist Employee in gathering and removing) any personal documents (including, without limitation, any documents relating to his financial interests in Carlyle, including any funds, investment vehicles and accounts whose investments are or were managed by Carlyle, tax information, agreements or other contracts to which Employee is a party or a beneficiary, and information relating to employee benefit plans and entitlements) that is on Carlyle property (including electronically); provided that all documents covered by clause (ii) shall remain subject to all covenants and agreements for the benefit of Carlyle regarding confidentiality applicable thereto and under which Employee has any obligation.

b.

Employee acknowledges that, in and as a result of Employee’s employment hereunder, Employee will be making use of and/or acquiring confidential or proprietary information, knowledge and data developed by Carlyle that is of a special and unique nature and value to Carlyle, including, but not limited to, the nature and material terms of business opportunities and proposals available to Carlyle and financial records of Carlyle, Carlyle investment funds and investors in such funds (collectively, “Confidential Information”). Employee shall not at

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c.	Employee will not publicly disclose any private placement fundraising information about a Carlyle fund vehicle that has not had a final closing of capital commitments if such disclosure would violate the federal “private placement” rules that permit fund offerings to be unregistered.

d.

Notwithstanding any other provision of this Agreement: (i) no provision of this Agreement prohibits or restricts any employee from reporting possible violations of law or other whistleblower information to a government regulator or governmental agency or other authorized individuals; (ii) Carlyle’s consent is not required for such disclosure to a government regulator or governmental agency; and (iii) notice to Carlyle is not required in the case of such whistleblower disclosure to a government regulator or governmental agency. Notwithstanding the foregoing, under no circumstance is Employee authorized to disclose any information covered by Carlyle’s attorney-client privileged or attorney work product without Carlyle’s prior written consent. The obligations under this Section 7 shall survive the termination or expiration of this Agreement and any termination of Employee’s employment.

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i.

Except as provided in Section 18.b. or prohibited by applicable law, any dispute, claim or controversy arising in connection with or relating to this Agreement or otherwise in connection with or relating to Employee’s employment with Employer (including any statutory claims), Employee’s carried interest participation, Employee’s DRUs and Employee’s personal coinvestments shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (except as modified herein). No such arbitration proceedings shall be commenced or conducted until at least 60 days

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ii.

Notwithstanding the foregoing, in the event of any claim or controversy arising in connection with this Agreement for which the remedy is equitable or injunctive relief, unless otherwise prohibited by law, the aggrieved party shall be entitled to seek injunctive or other equitable relief from any court of competent jurisdiction, including where necessary: (i) to compel arbitration; (ii) to obtain interim measures of protection prior to or pending arbitration; (iii) to seek injunctive relief in the courts of any jurisdiction as may be necessary and appropriate to protect the unauthorized disclosure of its proprietary or confidential information, or to enforce the provisions of Sections 7, 8, 9, 10 and 11 of this Agreement; and (iv) to enforce any decision of the arbitrators, including the final award.

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a.

Immunity. An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made in confidence, and solely for the purpose of reporting or investigating a suspected violation of law, to a federal, state or local government official, either directly or indirectly, or to an attorney; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

b.

Use of Trade Secret Information in Anti-Retaliation Lawsuit. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

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1.	“Annual Bonus” means the bonus granted to Employee pursuant to Section 4.b. of the Employment Agreement.

2.	“Arbitration Location” means New York, New York.

3.	“Arbitration Notice” has the meaning given to it in Section 18.a. of the Employment Agreement.

4.

“Average Annual Bonus” means the average of the Annual Bonuses paid to Employee with respect to the two most recently preceding calendar years during the Term or (i) if less than two years have elapsed during the Term, the Annual Bonus that was paid in the first year of the Term and (ii) if less than one year has elapsed during the Term, the actual Annual Bonus that would have been paid in respect of the 2018 calendar year had Employee remained employed through the payment date of such Annual Bonus.

5.	“Base Salary Amount” means $275,000 per annum in Currency, or such increased amount as may be approved by the Board from time to time in accordance with Section 4.a. of the Employment Agreement.

6.	“Board” means the Board of Directors of Carlyle Group Management L.L.C., a Delaware limited liability company.

7.	“Carlyle” means Carlyle Investment Management, L.L.C. and its affiliates collectively operating under the trade name “The Carlyle Group,” which, for the avoidance of doubt, includes Employer and the Company and their affiliates.

8.	“Carlyle Business” means all of the activities of the investment funds and other investment products and investment advisory and investment businesses operated under The Carlyle Group name.

9.	“Cause” has the meaning given to it in Section 5.b.ii. of the Employment Agreement.

10.	“Change of Control” means a “Change of Control” as defined in Section 16.2 of the Second Amended and Restated Agreement of Limited Partnership of The Carlyle Group L.P. dated as of September 13, 2017.

11.	“Commencement Date” means January 1, 2018.

12.	“Common Unit” means one common unit of the Company.

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13.	“Company” means The Carlyle Group L.P., a Delaware limited partnership.

14.	“Confidential Information” has the meaning given to it in Section 7.b. of the Employment Agreement.

15.	“Currency” means USD.

16.	“Effective Date” means October 23, 2017.

17.	“Employee” means Kewsong Lee.

18.	“Employer” means The Carlyle Group Employee Co., L.L.C., a Delaware limited liability company.

19.	“Equity Plan” means The Carlyle Group L.P. 2012 Equity Incentive Plan.

20.	“Founders” means William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein.

21.	“Good Reason” has the meaning given to it in Section 5.c.i. of the Employment Agreement.

22.	“Governing Jurisdiction” means New York, New York.

23.	“Person” means all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures and other entities and governments and agencies and political subdivisions.

24.

“Severance Period” means the period commencing on the date that is 45 days following the Termination Date and ending on (i) if the Termination Date occurs during the first four years of the Term, the date that is 12 months immediately following the commencement of the Severance Period, and (ii) if the Termination Date is during the fifth year of the Term, on the date that is 45 days after the end of the Term.

25.	“Term” has the meaning given to it in Section 1 of the Employment Agreement.

26.	“Termination Date” means the date on which Employee’s termination of employment with Employer and its affiliates is effective.

27.

Wherever the word “willful” occurs in this Agreement, no act or failure to act on a Person’s part will be considered willful if done, or omitted to be done, by such Person in good faith and with the reasonable belief that the action or omission was in the best interests of (i) Carlyle with respect to any act or failure to act by Employee, or (ii) Employee with respect to any act or failure to act by Carlyle.

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1.

General. Employer intends that the Company will grant to Employee deferred restricted common units (“DRUs”) of the Company as described in this Term Sheet, subject to Employee’s continued employment from the Effective Date through the grant date of such DRUs. Each DRU represents the right to receive a Common Unit upon satisfaction of the applicable vesting and delivery requirements. The terms of the DRUs will be determined by the Board and shall be materially consistent with the terms of similar DRUs granted to other executive officers of Carlyle to the extent not conflicting with this Term Sheet. The DRUs will be governed by and issued pursuant to the Equity Plan and the corresponding DRU grant agreement. Any grant of DRUs described in this Term Sheet is subject to the prior approval of the Board, and, to the extent required by the Equity Plan, the Administrator. Pursuant to the terms of the Equity Plan and the applicable grant agreement, when the DRU grants described in this Term Sheet vest, Common Units will be delivered to an Employer-designated brokerage account for Employee’s benefit as soon as administratively possible. In the event of a termination of employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement, all vested and unvested awards granted to Employee pursuant to this Term Sheet that have not been previously disposed of by Employee shall be forfeited. Vesting of DRUs following the Termination Date (i) is subject to execution of a release in accordance with Section 6 of the Employment Agreement if Employee’s employment is terminated pursuant to either Section 5.c.i. or Section 5.b.iii. of the Employment Agreement, and (ii) is subject to compliance with Sections 9, 10 and 11 of the Employment Agreement to the extent applicable in all cases.

2.

Time-Vesting DRUs. Employer intends that the Company will grant to Employee on or prior to February 28, 2018, subject to the approvals set forth above and Employee’s continued employment from the Effective Date through the grant date, DRUs with respect to 1,250,000 Common Units (the “Time-Vesting DRUs”). The Time-Vesting DRUs will be subject to a five-year vesting period, vesting annually in five equal portions of 250,000 Common Units beginning in February 2019 on the date that is the ordinary DRU vesting date of the Company occurring in such month, subject to Employee’s continued employment from the Effective Date through each vesting date (unless terminated due to death pursuant to Section 5.a. of the Employment Agreement or disability pursuant to Section 5.b.i. of the Employment Agreement, in which case the Time-Vesting DRUs will vest in full on such termination); provided, however, that if (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the

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3.

Performance-Vesting DRUs. Employer intends that the Board will approve on or prior to February 28, 2018 the Company’s grant to Employee, subject to the approvals set forth above and Employee’s continued employment from the Effective Date through the grant date, of DRUs with respect to a target of 1,250,000 Common Units (the “Performance-Vesting DRUs”). The Performance-Vesting DRUs will be subject to a five-year vesting period, vesting annually with respect to five equal target portions of 250,000 Common Units beginning in the first quarter of 2019, based on the level of attainment of annual performance metrics. The level at which a Performance-Vesting DRU vests (between 0% and 200% of target) will be based on the level of attainment of one-year performance metrics established by the Board in each of 2018 through 2022 (with respect to performance for such year) promptly (but no more than 8 business days) following certification of the Company’s fourth quarter results for the prior calendar year. The level of attainment of the established performance metrics shall be certified in the year immediately following the performance year (in each of 2019 through 2023) promptly (but no more than 8 business days) following certification of the Company’s fourth quarter results for the prior calendar year and at such a time that the Common Units subject to any vested portion of the Performance-Vesting DRUs will be delivered on or prior to the first Common Unit distribution record date of such applicable calendar year. Any Performance-Vesting DRU that vests will vest upon the certification of the performance metrics applicable to such Performance-Vesting DRU, subject to Employee’s continued employment from the Effective Date through the applicable vesting date (unless terminated due to death pursuant to Section 5.a. of the Employment Agreement or disability pursuant to Section 5.b.i. of the Employment Agreement, in which case the Performance-Vesting DRUs will vest in full on such termination at target); provided, however, that if (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement or (ii) Employer terminates Employee’s employment pursuant to Section 5.b.iii. of the Employment Agreement, in each case prior to the final vesting date of the Performance-Vesting DRUs, then a portion of the Performance-Vesting DRUs will vest at target on the next scheduled vesting date following the Termination Date with respect to (x) the Performance-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Performance-Vesting DRUs, a number of Performance-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if

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4.

Following the Term. If the Term ends on December 31, 2022 and Employee’s employment has not been terminated for any reason either by Employer or Employee on or on or prior to such date, and following the end of the Term, Employee’s employment terminates for any reason other than for Cause, as defined in the Employment Agreement, prior to vesting of the Time-Vesting DRUs or the Performance-Vesting DRUs in 2023, then (i) the Time-Vesting DRUs scheduled to vest in 2023 and (ii) the Performance-Vesting DRUs scheduled to vest in 2023 shall all vest on their respective scheduled vesting date (based on actual performance with respect to the Performance-Vesting DRUs scheduled to vest in 2023).

5.	Change of Control.

a.

If following the occurrence of a Change of Control, (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement or (ii) Employer terminates Employee’s employment pursuant to Section 5.b.iii. of the Employment Agreement, in each case prior to the final vesting date of the Time-Vesting DRUs and the Performance-Vesting DRUs, then a portion of the Time-Vesting and Performance-Vesting DRUs will vest as follows:

i.

a portion of the Time-Vesting DRUs will vest on the next scheduled vesting date following the Termination Date with respect to (x) the Time-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Time-Vesting DRUs, the Time-Vesting DRUs scheduled to vest on the next immediately following vesting date plus (z) if the Termination Date occurs prior to the third vesting date of the Time-Vesting DRUs, a number of Time-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if the Termination Date occurs in January or February of a calendar year and prior to the applicable vesting date in respect of the prior year, multiplied by 12); and

ii.

a portion of the Performance-Vesting DRUs will vest at target on the next scheduled vesting date following the Termination Date with respect to (x) the Performance-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Performance-Vesting DRUs, the Performance-Vesting DRUs scheduled to vest on the next immediately following vesting date plus (z) if the Termination Date occurs prior to the third vesting date of the Performance-Vesting DRUs, a number of Performance-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if the Termination Date occurs in January or February of a calendar year and prior to the applicable vesting date in respect of the prior year, multiplied by 12).

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b.

Effective promptly following the consummation of a Change of Control, Employee and Employer shall negotiate in good faith and agree on a framework or methodology for determining the future performance metrics applicable to the Performance-Vesting DRUs (or an alternative structure of such awards) to preserve after the Change of Control performance metrics that provide for a reasonable opportunity to achieve threshold, target and maximum level performance that is substantially similar to the opportunity to achieve threshold, target and maximum level performance in place immediately prior to the Change of Control.

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A.	Employer desires to employ Employee on the terms and conditions set forth herein in connection with Employee’s promotion to Co-Chief Executive Officer of the Company; and

B.	Employee desires to be employed by Employer on such terms and conditions.

a.

Employee shall have the position of Co-Chief Executive Officer of the Company and shall report directly to the Board. During the Term, Employee shall also serve as (i) a member of the Board, (ii) Chairman of the Company’s Management Committee and (iii) a member of the Executive Committee. Employee shall have the authorities, duties and responsibilities in his position as Co-Chief Executive Officer of the Company as communicated to Employee by a representative of the Board prior to the Effective Date, together with such other authorities, duties and responsibilities consistent with Employee’s position as Co-Chief Executive Officer of the Company as may reasonably be assigned to Employee by the Board from time to time.

b.	Employee shall devote Employee’s energies, attention, reasonable best efforts and full and exclusive business time to the business and affairs of Carlyle, provided that nothing in this Agreement shall preclude Employee from: (i) engaging in personal investment activities (subject to Carlyle’s insider trading and conflict of interest policies); (ii) engaging in activities consented to by the

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c.

Employee acknowledges and agrees that, during the Term, Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of Carlyle and to do no act in breach of such fiduciary duty that willfully injures the business, interests or reputation of Carlyle. In keeping with these duties, Employee shall make full disclosure during the Term to Employer of all significant business opportunities that pertain to Carlyle’s business, and, during the Term, Employee shall not appropriate for Employee’s own benefit business opportunities concerning the subject matter of the fiduciary relationship.

d.

Employee shall at all times comply in all material respects with: (i) all applicable laws, rules and regulations that are related to Employee’s duties and responsibilities assumed hereunder and (ii) all corporate and business policies and procedures of Carlyle that are applicable to Employee that are written or, to the extent generally applicable to executive officers of Carlyle, communicated to Employee, including, without limitation, the New York Attorney General’s Code of Conduct.

e.	Employee shall not, without the prior written approval of the Board, receive compensation or any direct or indirect financial benefit for services rendered during the Term to (i) any Person other than Carlyle or (ii) any board of directors (or similar governing body) of a non-competitive business on which Employee serves in accordance with Section 2.b.iii. from time to time.

i.	Employer shall pay to Employee the Base Salary Amount per annum throughout the Term (payable in accordance with Employer’s payroll policies, but in no event less frequently than once every month). The Base Salary Amount may be prospectively increased from time to time in the Board’s sole discretion.

ii.	Employer shall for each of the first five calendar years of the Term pay Employee a lump sum cash bonus payment in an amount equal to the distributions per Common Unit paid with respect to the applicable calendar year multiplied by

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iii.	Employee may be eligible to receive discretionary bonuses as may be determined by the Board from time to time.

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iv.

Employee shall be reimbursed for all reasonable expenses for travel, lodging, entertainment and other business expenses in connection with Carlyle’s business to the extent such expenses are consistent with Carlyle’s internal reimbursement guidelines. Further, Employer shall, within 30 days of receipt of an invoice therefore, directly pay all reasonable legal fees incurred by Employee in the course of negotiating this Agreement (and matters ancillary thereto).

v.	Employee shall be afforded, as incidences of employment, health, insurance, retirement, vacation benefits and other perquisites on terms at least as beneficial as, and to the same extent as offered to, other executive officers of Carlyle in the United States.

vi.

To the extent permitted by applicable securities and other laws, Employee may be permitted (but not obligated) to make personal investments directly in investments made by Carlyle and its investment funds during the Term without fees or carried interest (unless otherwise specified in the applicable subscription documents), provided that the amounts available for personal investment by Employee shall be determined by Carlyle in a manner consistent with Carlyle’s policies established for coinvestments by other executive officers of Carlyle, including an expense recovery allocation. Coinvestments with respect to investments made by a particular Carlyle investment fund may require Employee to make a commitment to invest in all investments acquired by such fund during the Term, in accordance with internal coinvestment policies adopted by Carlyle with respect to such fund.

a.	Employee will be entitled to receive the equity-based awards outlined in, and subject to the terms, of the Equity-Based Award Term Sheet that is attached to this Agreement as Attachment 2, which is considered a part of this Agreement for all purposes and is incorporated herein by reference.

a.	automatically upon Employee’s death;

b.	by Employer, subject only to such notification requirements as are required by this Section 5.b.:

i.	upon Employee’s incapacitation by accident, sickness or other circumstance that renders Employee mentally or physically incapable of performing the duties and services required of Employee hereunder for a period of at least 180 days during any 12-month period, subject to the requirements of the Americans With Disabilities Act or any similar law;

ii.	for Cause, which for purposes of this Agreement and the awards granted hereunder, means that Employee has: (A) engaged in gross negligence

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iii.	for any other reason whatsoever, upon 60 days written notice to Employee, which such notice period may be waived, all or in part, by Employer; and

c.	by Employee, at any time during the Term, subject only to such notification requirements as are required by this Section 5.c.:

i.

for Good Reason, which for purposes of this Agreement and the awards granted hereunder means, without Employee’s consent, (A) Carlyle willfully and materially breached a material provision of this Agreement other than Section 2.a. (for the avoidance of doubt, it shall not be a breach of this Agreement to not reach agreement in connection with any discussion in good faith undertaken pursuant hereto), (B) an adverse change in title or reporting line or removal from the Board or removal from being the Chairman of the Management Committee or a member

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ii.	for any other reason whatsoever, upon 60 days written notice to Employer, which such notice period may be waived, all or in part, by Employer.

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a.	If at any time during the Term, and subject to compliance with Sections 9, 10 and 11: (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. and Employer could not have terminated Employee’s employment for Cause pursuant to Section 5.b.ii. or (ii) Employer terminates Employee’s employment pursuant to Section 5.b.iii., then Employer shall pay:

(A)

(1) if the Termination Date is on or prior to December 31, 2018, (I) beginning on the first payroll date following the 45th day after the Termination Date, cash severance to Employee, in monthly installments during the Severance Period, in an aggregate amount per month equal to (x) the Base Salary Amount divided by 12 plus (y) Employee’s (and his covered dependents’) monthly COBRA premium and (II) a lump sum payment equal to the Average Annual Bonus, payable in 2019 on the later of (x) the scheduled payment date of the Annual Bonus paid in respect of the 2018 calendar year as if Employee had been employed on the payment date or (y) the 12 month anniversary of the Termination Date or (2) if the Termination Date is on or after January 1, 2019, beginning on the first payroll date following the 45th day after the Termination Date, cash severance to Employee, in monthly installments during the Severance Period, in an aggregate amount per month (prorated for any partial months) equal to (x) the Base Salary Amount divided by 12 plus (y) the Average Annual Bonus divided by 12 plus (z) Employee’s (and his covered dependents’) monthly COBRA premium; and

(B)

a pro rata portion (calculated using a proportion, the numerator of which is the number of days from January 1 of the year in which the Termination Date occurs to the Termination Date and the denominator of which is 365) of the Annual Bonus for the year in which the Termination Date occurs based on actual distributions and payable on the scheduled payment date of such Annual Bonus as if Employee had been employed on the payment date (the “Pro Rata Bonus”).

b.	If at any time during the Term Employee’s employment is terminated due to death pursuant to Section 5.a. or disability pursuant to Section 5.b.i., then Employer shall pay Employee (or Employee’s beneficiary, as applicable) the Pro Rata Bonus.

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c.	In the case of a termination of Employee’s employment at any time for any reason, Employer shall pay to Employee, within 30 days after the Termination Date (to the extent not previously paid), the Base Salary Amount, but only to the extent such compensation has accrued through the Termination Date.

d.

The sole liability of Employer under this Agreement upon a termination of Employee’s employment shall be: (i) to pay the amounts expressly provided for in this Section 6 and Section 4.b. as being due and owed upon such termination; (ii) to reimburse Employee pursuant to Section 4.d. for business expenses incurred by Employee during the Term; (iii) to honor the vested portion of any equity participation (including, without limitation, the Existing Interests) granted to Employee in accordance with the terms and conditions applicable thereto (which may include the forfeiture of such vested portion in the case of a termination for cause); and (iv) to comply with any other obligations under this Agreement that expressly survive termination of Employee’s employment or pursuant to any other written agreements between Employee and Employer or pursuant to any employee benefit plan.

a.

All memoranda, notices, files, records and other documents made or compiled by Employee during the Term in the ordinary course of business (other than business cards and names and contact information retained in Employee’s rolodex or Outlook), or made available to Employee concerning the business of Carlyle (including, without limitation, any “best practices” materials made available to Employee), shall be Employer’s property and shall be delivered to Employer promptly following its request therefore or automatically promptly following the end of the Term. Notwithstanding anything herein to the contrary, Employee shall be entitled to retain, both during and following the Term, (i) all business cards and names and contact information retained in Employee’s rolodex or Outlook and (ii) shall be entitled to remove from Carlyle’s premises (and, upon a termination of employment for any reason, Employer shall reasonably assist Employee in gathering and removing) any personal documents (including, without limitation, any documents relating to his financial interests in Carlyle, including any funds, investment vehicles and accounts whose investments are or were managed by Carlyle, tax information, agreements or other contracts to which Employee is a party or a beneficiary, and information relating to employee benefit plans and entitlements) that is on Carlyle property (including electronically); provided that all documents covered by clause (ii) shall remain subject to all covenants and agreements for the benefit of Carlyle regarding confidentiality applicable thereto and under which Employee has any obligation.

b.	Employee acknowledges that, in and as a result of Employee’s employment hereunder, Employee will be making use of and/or acquiring confidential or

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c.	Employee will not publicly disclose any private placement fundraising information about a Carlyle fund vehicle that has not had a final closing of capital commitments if such disclosure would violate the federal “private placement” rules that permit fund offerings to be unregistered.

d.

Notwithstanding any other provision of this Agreement: (i) no provision of this Agreement prohibits or restricts any employee from reporting possible violations of law or other whistleblower information to a government regulator or governmental agency or other authorized individuals; (ii) Carlyle’s consent is not required for such disclosure to a government regulator or governmental agency; and (iii) notice to Carlyle is not required in the case of such whistleblower disclosure to a government regulator or governmental agency. Notwithstanding the foregoing, under no circumstance is Employee authorized to disclose any information covered by Carlyle’s attorney-client privileged or attorney work product without Carlyle’s prior written consent. The obligations under this Section 7 shall survive the termination or expiration of this Agreement and any termination of Employee’s employment.

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i.	Except as provided in Section 18.b. or prohibited by applicable law, any dispute, claim or controversy arising in connection with or relating to this Agreement or otherwise in connection with or relating to Employee’s employment with

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ii.

Notwithstanding the foregoing, in the event of any claim or controversy arising in connection with this Agreement for which the remedy is equitable or injunctive relief, unless otherwise prohibited by law, the aggrieved party shall be entitled to seek injunctive or other equitable relief from any court of competent jurisdiction, including where necessary: (i) to compel arbitration; (ii) to obtain interim measures of protection prior to or pending arbitration; (iii) to seek injunctive relief in the courts of any jurisdiction as may be necessary and appropriate to protect the unauthorized disclosure of its proprietary or confidential information, or to enforce the provisions of Sections 7, 8, 9, 10 and 11 of this Agreement; and (iv) to enforce any decision of the arbitrators, including the final award.

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a.

Immunity. An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made in confidence, and solely for the purpose of reporting or investigating a suspected violation of law, to a federal, state or local government official, either directly or indirectly, or to an attorney; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

b.	Use of Trade Secret Information in Anti-Retaliation Lawsuit. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any

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1.	“Annual Bonus” means the bonus granted to Employee pursuant to Section 4.b. of the Employment Agreement.

2.	“Arbitration Location” means New York, New York.

3.	“Arbitration Notice” has the meaning given to it in Section 18.a. of the Employment Agreement.

4.

“Average Annual Bonus” means the average of the Annual Bonuses paid to Employee with respect to the two most recently preceding calendar years during the Term or (i) if less than two years have elapsed during the Term, the Annual Bonus that was paid in the first year of the Term and (ii) if less than one year has elapsed during the Term, the actual Annual Bonus that would have been paid in respect of the 2018 calendar year had Employee remained employed through the payment date of such Annual Bonus.

5.	“Base Salary Amount” means $275,000 per annum in Currency, or such increased amount as may be approved by the Board from time to time in accordance with Section 4.a. of the Employment Agreement.

6.	“Board” means the Board of Directors of Carlyle Group Management L.L.C., a Delaware limited liability company.

7.	“Carlyle” means Carlyle Investment Management, L.L.C. and its affiliates collectively operating under the trade name “The Carlyle Group,” which, for the avoidance of doubt, includes Employer and the Company and their affiliates.

8.	“Carlyle Business” means all of the activities of the investment funds and other investment products and investment advisory and investment businesses operated under The Carlyle Group name.

9.	“Cause” has the meaning given to it in Section 5.b.ii. of the Employment Agreement.

10.	“Change of Control” means a “Change of Control” as defined in Section 16.2 of the Second Amended and Restated Agreement of Limited Partnership of The Carlyle Group L.P. dated as of September 13, 2017.

11.	“Commencement Date” means January 1, 2018.

12.	“Common Unit” means one common unit of the Company.

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13.	“Company” means The Carlyle Group L.P., a Delaware limited partnership.

14.	“Confidential Information” has the meaning given to it in Section 7.b. of the Employment Agreement.

15.	“Currency” means USD.

16.	“Effective Date” means October 23, 2017.

17.	“Employee” means Glenn A. Youngkin.

18.	“Employer” means The Carlyle Group Employee Co., L.L.C., a Delaware limited liability company.

19.	“Equity Plan” means The Carlyle Group L.P. 2012 Equity Incentive Plan.

20.	“Founders” means William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein.

21.	“Good Reason” has the meaning given to it in Section 5.c.i. of the Employment Agreement.

22.	“Governing Jurisdiction” means New York, New York.

23.	“Person” means all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures and other entities and governments and agencies and political subdivisions.

24.

“Severance Period” means the period commencing on the date that is 45 days following the Termination Date and ending on (i) if the Termination Date occurs during the first four years of the Term, the date that is 12 months immediately following the commencement of the Severance Period, and (ii) if the Termination Date is during the fifth year of the Term, on the date that is 45 days after the end of the Term.

25.	“Term” has the meaning given to it in Section 1 of the Employment Agreement.

26.	“Termination Date” means the date on which Employee’s termination of employment with Employer and its affiliates is effective.

27.

Wherever the word “willful” occurs in this Agreement, no act or failure to act on a Person’s part will be considered willful if done, or omitted to be done, by such Person in good faith and with the reasonable belief that the action or omission was in the best interests of (i) Carlyle with respect to any act or failure to act by Employee, or (ii) Employee with respect to any act or failure to act by Carlyle.

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1.

General. Employer intends that the Company will grant to Employee deferred restricted common units (“DRUs”) of the Company as described in this Term Sheet, subject to Employee’s continued employment from the Effective Date through the grant date of such DRUs. Each DRU represents the right to receive a Common Unit upon satisfaction of the applicable vesting and delivery requirements. The terms of the DRUs will be determined by the Board and shall be materially consistent with the terms of similar DRUs granted to other executive officers of Carlyle to the extent not conflicting with this Term Sheet. The DRUs will be governed by and issued pursuant to the Equity Plan and the corresponding DRU grant agreement. Any grant of DRUs described in this Term Sheet is subject to the prior approval of the Board, and, to the extent required by the Equity Plan, the Administrator. Pursuant to the terms of the Equity Plan and the applicable grant agreement, when the DRU grants described in this Term Sheet vest, Common Units will be delivered to an Employer-designated brokerage account for Employee’s benefit as soon as administratively possible. In the event of a termination of employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement, all vested and unvested awards granted to Employee pursuant to this Term Sheet that have not been previously disposed of by Employee shall be forfeited. Vesting of DRUs following the Termination Date (i) is subject to execution of a release in accordance with Section 6 of the Employment Agreement if Employee’s employment is terminated pursuant to either Section 5.c.i. or Section 5.b.iii. of the Employment Agreement, and (ii) is subject to compliance with Sections 9, 10 and 11 of the Employment Agreement to the extent applicable in all cases.

2.

Time-Vesting DRUs. Employer intends that the Company will grant to Employee on or prior to February 28, 2018, subject to the approvals set forth above and Employee’s continued employment from the Effective Date through the grant date, DRUs with respect to 1,250,000 Common Units (the “Time-Vesting DRUs”). The Time-Vesting DRUs will be subject to a five-year vesting period, vesting annually in five equal portions of 250,000 Common Units beginning in February 2019 on the date that is the ordinary DRU vesting date of the Company occurring in such month, subject to Employee’s continued employment from the Effective Date through each vesting date (unless terminated due to death pursuant to Section 5.a. of the Employment Agreement or disability pursuant to Section 5.b.i. of the Employment Agreement, in which case the Time-Vesting DRUs will vest in full on such termination); provided, however, that if (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the

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3.

Performance-Vesting DRUs. Employer intends that the Board will approve on or prior to February 28, 2018 the Company’s grant to Employee, subject to the approvals set forth above and Employee’s continued employment from the Effective Date through the grant date, of DRUs with respect to a target of 1,250,000 Common Units (the “Performance-Vesting DRUs”). The Performance-Vesting DRUs will be subject to a five-year vesting period, vesting annually with respect to five equal target portions of 250,000 Common Units beginning in the first quarter of 2019, based on the level of attainment of annual performance metrics. The level at which a Performance-Vesting DRU vests (between 0% and 200% of target) will be based on the level of attainment of one-year performance metrics established by the Board in each of 2018 through 2022 (with respect to performance for such year) promptly (but no more than 8 business days) following certification of the Company’s fourth quarter results for the prior calendar year. The level of attainment of the established performance metrics shall be certified in the year immediately following the performance year (in each of 2019 through 2023) promptly (but no more than 8 business days) following certification of the Company’s fourth quarter results for the prior calendar year and at such a time that the Common Units subject to any vested portion of the Performance-Vesting DRUs will be delivered on or prior to the first Common Unit distribution record date of such applicable calendar year. Any Performance-Vesting DRU that vests will vest upon the certification of the performance metrics applicable to such Performance-Vesting DRU, subject to Employee’s continued employment from the Effective Date through the applicable vesting date (unless terminated due to death pursuant to Section 5.a. of the Employment Agreement or disability pursuant to Section 5.b.i. of the Employment Agreement, in which case the Performance-Vesting DRUs will vest in full on such termination at target); provided, however, that if (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement or (ii) Employer terminates Employee’s employment pursuant to Section 5.b.iii. of the Employment Agreement, in each case prior to the final vesting date of the Performance-Vesting DRUs, then a portion of the Performance-Vesting DRUs will vest at target on the next scheduled vesting date following the Termination Date with respect to (x) the Performance-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Performance-Vesting DRUs, a number of Performance-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if

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4.

Following the Term. If the Term ends on December 31, 2022 and Employee’s employment has not been terminated for any reason either by Employer or Employee on or on or prior to such date, and following the end of the Term, Employee’s employment terminates for any reason other than for Cause, as defined in the Employment Agreement, prior to vesting of the Time-Vesting DRUs or the Performance-Vesting DRUs in 2023, then (i) the Time-Vesting DRUs scheduled to vest in 2023 and (ii) the Performance-Vesting DRUs scheduled to vest in 2023 shall all vest on their respective scheduled vesting date (based on actual performance with respect to the Performance-Vesting DRUs scheduled to vest in 2023).

5.	Change of Control.

a.

If following the occurrence of a Change of Control, (i) Employee terminates Employee’s employment pursuant to Section 5.c.i. of the Employment Agreement and Employer could not have terminated Employee’s employment for Cause as defined in, and pursuant to Section 5.b.ii. of, the Employment Agreement or (ii) Employer terminates Employee’s employment pursuant to Section 5.b.iii. of the Employment Agreement, in each case prior to the final vesting date of the Time-Vesting DRUs and the Performance-Vesting DRUs, then a portion of the Time-Vesting and Performance-Vesting DRUs will vest as follows:

i.

a portion of the Time-Vesting DRUs will vest on the next scheduled vesting date following the Termination Date with respect to (x) the Time-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Time-Vesting DRUs, the Time-Vesting DRUs scheduled to vest on the next immediately following vesting date plus (z) if the Termination Date occurs prior to the third vesting date of the Time-Vesting DRUs, a number of Time-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if the Termination Date occurs in January or February of a calendar year and prior to the applicable vesting date in respect of the prior year, multiplied by 12); and

ii.

a portion of the Performance-Vesting DRUs will vest at target on the next scheduled vesting date following the Termination Date with respect to (x) the Performance-Vesting DRUs scheduled to vest on such date plus (y) if the Termination Date occurs prior to the fourth vesting date of the Performance-Vesting DRUs, the Performance-Vesting DRUs scheduled to vest on the next immediately following vesting date plus (z) if the Termination Date occurs prior to the third vesting date of the Performance-Vesting DRUs, a number of Performance-Vesting DRUs equal to 20,834 multiplied by the number of full months from January 1 of the year in which the Termination Date occurs to the Termination Date (or, if the Termination Date occurs in January or February of a calendar year and prior to the applicable vesting date in respect of the prior year, multiplied by 12).

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b.

Effective promptly following the consummation of a Change of Control, Employee and Employer shall negotiate in good faith and agree on a framework or methodology for determining the future performance metrics applicable to the Performance-Vesting DRUs (or an alternative structure of such awards) to preserve after the Change of Control performance metrics that provide for a reasonable opportunity to achieve threshold, target and maximum level performance that is substantially similar to the opportunity to achieve threshold, target and maximum level performance in place immediately prior to the Change of Control.

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(a)	all outstanding DRUs (whether or not vested, as allowable under applicable law) shall immediately terminate and be forfeited without consideration and no further Common Units with respect of the Award shall be delivered to the Participant or to the Participant’s legal representative, beneficiaries or heirs; and

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(b)	any Common Units that have previously been delivered to the Participant or the Participant’s legal representative, beneficiaries or heirs pursuant to the Award, which are still held by the Participant or the Participant’s legal representative, or beneficiaries or heirs as of the date of such breach, shall also immediately terminate and be forfeited without consideration.

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(1)	Registration Statement (Form S-8 No. 333-181109) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(2)	Registration Statement (Form S-8 No. 333-187264) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(3)	Registration Statement (Form S-8 No. 333-194164) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(4)	Registration Statement (Form S-8 No. 333-202315) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(5)	Registration Statement (Form S-8 No. 333-209690) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(6)	Registration Statement (Form S-8 No. 333-216100) pertaining to The Carlyle Group L.P. 2012 Equity Incentive Plan,

(7)	Registration Statement (Form S-3/A No. 333-188180) of The Carlyle Group L.P.,

(8)	Registration Statement (Form S-3 No. 333-192934) of The Carlyle Group L.P.,

(9)	Registration Statement (Form S-3 No. 333-199687) of The Carlyle Group L.P., and

(10)	Registration Statement (Form S-3ASR No. 333-220355) of The Carlyle Group L.P.;

1.	I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2017 of The Carlyle Group L.P.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2017 of The Carlyle Group L.P.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2017 of The Carlyle Group L.P.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.