0001527166-21-000055 | 10-Q | XBRL Viewer

Print Document View Excel Document

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2021	Oct. 25, 2021
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-35538
Entity Registrant Name	Carlyle Group Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-2832612
Entity Address, Address Line One	1001 Pennsylvania Avenue, NW
Entity Address, City or Town	Washington
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20004-2505
City Area Code	202
Local Phone Number	729-5626
Entity Common Stock, Shares Outstanding		356,527,526
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001527166
Current Fiscal Year End Date	--12-31
Common Stock
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	CG
Security Exchange Name	NASDAQ
4.625% Subordinated Notes due 2061 of Carlyle Finance L.L.C.
Entity Listings [Line Items]
Title of 12(b) Security	4.625% Subordinated Notes due 2061 of Carlyle Finance L.L.C.
Trading Symbol	CGABL
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 2,399.0	$ 987.6
Cash and cash equivalents held at Consolidated Funds	134.8	148.6
Restricted cash	6.9	2.0
Investments, including accrued performance allocations of $8,100.3 million and $4,968.6 million as of September 30, 2021 and December 31, 2020, respectively	10,678.5	7,380.9
Investments of Consolidated Funds	6,469.7	6,056.9
Due from affiliates and other receivables, net	293.4	272.5
Due from affiliates and other receivables of Consolidated Funds, net	173.7	89.1
Fixed assets, net	139.2	149.2
Lease right-of-use assets, net	364.4	361.1
Deposits and other	72.4	51.7
Intangible assets, net	36.9	48.7
Deferred tax assets	19.8	96.5
Total assets	20,788.7	15,644.8
Liabilities and equity
Debt obligations	2,370.7	1,970.9
Loans payable of Consolidated Funds	5,955.1	5,563.0
Accounts payable, accrued expenses and other liabilities	374.5	286.3
Accrued compensation and benefits	4,710.2	3,222.6
Due to affiliates	391.2	436.7
Deferred revenue	334.0	89.0
Deferred tax liabilities	433.4	57.8
Other liabilities of Consolidated Funds	619.5	556.1
Lease liabilities	542.4	513.5
Accrued giveback obligations	24.7	18.7
Total liabilities	15,755.7	12,714.6
Commitments and contingencies
Common stock, $0.01 par value, 100,000,000,000 shares authorized (356,527,526 and 353,520,576 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)	3.6	3.5
Additional paid-in-capital	2,671.7	2,546.2
Retained earnings	2,324.1	348.2
Accumulated other comprehensive loss	(240.2)	(208.7)
Non-controlling interests in consolidated entities	273.8	241.0
Total equity	5,033.0	2,930.2
Total liabilities and equity	$ 20,788.7	$ 15,644.8

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Accrued performance allocations	$ 8,100.3	$ 4,968.6
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	100,000,000,000	100,000,000,000
Common stock, issued (in shares)	356,527,526	353,520,576
Common stock, outstanding (in shares)	356,527,526	353,520,576

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues
Investment income (loss)	$ 1,134,900,000	$ 584,100,000	$ 5,318,500,000	$ 72,400,000
Interest and other income	21,900,000	21,300,000	63,300,000	64,500,000
Interest and other income of Consolidated Funds	62,100,000	56,300,000	185,300,000	164,500,000
Total revenues	1,639,500,000	1,034,600,000	6,783,000,000	1,419,900,000
Compensation and benefits
Cash-based compensation and benefits	224,900,000	222,200,000	685,200,000	639,000,000.0
Equity-based compensation	42,400,000	18,700,000	122,000,000.0	78,300,000
Performance allocations and incentive fee related compensation	495,200,000	250,600,000	2,355,800,000	343,700,000
Total compensation and benefits	762,500,000	491,500,000	3,163,000,000	1,061,000,000
General, administrative and other expenses	99,600,000	91,100,000	300,400,000	240,900,000
Interest	27,900,000	23,000,000.0	76,400,000	72,800,000
Interest and other expenses of Consolidated Funds	44,600,000	37,200,000	133,500,000	122,100,000
Other non-operating expenses	3,500,000	600,000	1,000,000.0	1,300,000
Total expenses	938,100,000	643,400,000	3,674,300,000	1,498,100,000
Other income (loss)
Net investment income (loss) of Consolidated Funds	(100,000)	23,900,000	9,600,000	(38,900,000)
Income (loss) before provision for income taxes	701,300,000	415,100,000	3,118,300,000	(117,100,000)
Provision for income taxes	153,900,000	82,400,000	733,500,000	54,700,000
Net income (loss)	547,400,000	332,700,000	2,384,800,000	(171,800,000)
Net income (loss) attributable to non-controlling interests in consolidated entities	14,600,000	37,200,000	57,700,000	(1,200,000)
Net income attributable to common shares	$ 532,800,000	$ 295,500,000	$ 2,327,100,000	$ (170,600,000)
Net income (loss) attributable to The Carlyle Group Inc. per common share
Basic (in dollars per share)	$ 1.50	$ 0.84	$ 6.56	$ (0.49)
Diluted (in dollars per share)	$ 1.46	$ 0.82	$ 6.42	$ (0.49)
Weighted-average common shares
Basic (in shares)	355,954,734	351,567,631	354,903,371	349,468,329
Diluted (in shares)	364,740,675	358,405,845	362,471,998	349,468,329
Fund management fees
Revenues
Fund management fees and incentive fees	$ 407,500,000	$ 363,800,000	$ 1,182,900,000	$ 1,091,500,000
Incentive fees
Revenues
Fund management fees and incentive fees	13,100,000	9,100,000	33,000,000.0	27,000,000.0
Performance allocations
Revenues
Investment income (loss)	974,500,000	477,400,000	4,841,300,000	731,600,000
Principal investment income (loss)
Revenues
Investment income (loss)	$ 160,400,000	$ 106,700,000	$ 477,200,000	$ (659,200,000)

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 547.4	$ 332.7	$ 2,384.8	$ (171.8)
Other comprehensive income (loss)
Foreign currency translation adjustments	(18.0)	27.0	(41.2)	16.3
Unrealized losses on Fortitude Re available-for-sale securities	0.0	0.0	0.0	(20.0)
Defined benefit plans
Unrealized gain (loss) for the period	0.4	(0.4)	2.3	(2.2)
Less: reclassification adjustment for gain during the period, included in cash-based compensation and benefits expense	0.5	0.4	1.6	1.3
Other comprehensive income (loss)	(17.1)	27.0	(37.3)	(4.6)
Comprehensive income (loss)	530.3	359.7	2,347.5	(176.4)
Comprehensive income (loss) attributable to non-controlling interests in consolidated entities	9.4	42.4	51.9	(8.8)
Comprehensive income (loss) attributable to The Carlyle Group Inc.	$ 520.9	$ 317.3	$ 2,295.6	$ (167.6)

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Common Units	Common Stock	Partners’ Capital	Additional Paid-in-Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non- controlling Interests in Consolidated Entities	Non- controlling Interests in Carlyle Holdings
Beginning balance (in shares) at Dec. 31, 2019			0
Beginning balance at Dec. 31, 2019	$ 2,969.6		$ 0.0		$ 0.0	$ 0.0	$ (85.2)	$ 333.5	$ 2,017.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification resulting from Conversion - Partners' Capital (in shares)			117,800,000
Reclassification resulting from Conversion - Partners' Capital			$ 1.2		702.6
Reclassification resulting from Conversion - Non-controlling Interest in Carlyle Holdings (in shares)			229,400,000
Reclassification resulting from Conversion - Non-controlling Interest in Carlyle Holdings			$ 2.3		2,180.9		(165.7)		(2,017.5)
Shares repurchased (in shares)			(1,100,000)
Shares/units repurchased	(26.4)				(26.4)
Tax effects resulting from Conversion	(53.6)				(64.4)		10.8
Equity-based compensation	85.9				85.9
Shares issued for equity-based awards (in shares)			7,200,000
Contributions	24.2							24.2
Distributions	(316.4)				(262.9)			(53.5)
Net income (loss)	(171.8)					(170.6)		(1.2)
Deconsolidation of Consolidated Entities	(76.7)							(76.7)
Currency translation adjustments	16.3						23.9	(7.6)
Unrealized losses on Fortitude Re available-for-sale securities	(20.0)						(20.0)
Defined benefit plans, net	(0.9)						(0.9)
Ending balance (in shares) at Sep. 30, 2020			353,300,000
Ending balance at Sep. 30, 2020	2,430.2		$ 3.5		2,615.7	(170.6)	(237.1)	218.7	0.0
Beginning balance (in units) at Dec. 31, 2019		117,800,000
Beginning balance at Dec. 31, 2019				$ 703.8
Increase (Decrease) in Partners' Capital [Roll Forward]
Reclassification resulting from Conversion - Partners' Capital (in shares)		(117,800,000)
Reclassification resulting from Conversion - Partners' Capital				(703.8)
Ending balance (in units) at Sep. 30, 2020		0
Ending balance at Sep. 30, 2020				0.0
Beginning balance (in shares) at Jun. 30, 2020			348,700,000
Beginning balance at Jun. 30, 2020	2,142.7		$ 3.5		2,679.8	(466.1)	(258.9)	184.4	0.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	24.2				24.2
Shares issued for equity-based awards (in shares)			4,600,000
Contributions	10.2							10.2
Distributions	(106.6)				(88.3)			(18.3)
Net income (loss)	332.7					295.5		37.2
Currency translation adjustments	27.0						21.8	5.2
Unrealized losses on Fortitude Re available-for-sale securities	0.0
Ending balance (in shares) at Sep. 30, 2020			353,300,000
Ending balance at Sep. 30, 2020	$ 2,430.2		$ 3.5		2,615.7	(170.6)	(237.1)	218.7	$ 0.0
Beginning balance (in units) at Jun. 30, 2020		0
Beginning balance at Jun. 30, 2020				0.0
Ending balance (in units) at Sep. 30, 2020		0
Ending balance at Sep. 30, 2020				$ 0.0
Beginning balance (in shares) at Dec. 31, 2020	353,520,576		353,500,000
Beginning balance at Dec. 31, 2020	$ 2,930.2		$ 3.5		2,546.2	348.2	(208.7)	241.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares repurchased (in shares)	(1,900,000)		(1,900,000)
Shares/units repurchased	$ (84.5)					(84.5)
Equity-based compensation	125.6		$ 0.1		125.5
Shares issued for equity-based awards (in shares)			4,900,000
Contributions	57.2							57.2
Distributions	(343.0)					(266.7)		(76.3)
Net income (loss)	2,384.8					2,327.1		57.7
Currency translation adjustments	(41.2)						(35.4)	(5.8)
Unrealized losses on Fortitude Re available-for-sale securities	0.0
Defined benefit plans, net	$ 3.9						3.9
Ending balance (in shares) at Sep. 30, 2021	356,527,526		356,500,000
Ending balance at Sep. 30, 2021	$ 5,033.0		$ 3.6		2,671.7	2,324.1	(240.2)	273.8
Beginning balance (in shares) at Jun. 30, 2021			354,500,000
Beginning balance at Jun. 30, 2021	$ 4,622.0		$ 3.5		2,621.7	1,940.1	(228.3)	285.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares repurchased (in shares)	(1,200,000)		(1,200,000)
Shares/units repurchased	$ (59.5)					(59.5)
Equity-based compensation	50.1		$ 0.1		50.0
Shares issued for equity-based awards (in shares)			3,200,000
Contributions	12.8							12.8
Distributions	(122.7)					(89.3)		(33.4)
Net income (loss)	547.4					532.8		14.6
Currency translation adjustments	(18.0)						(12.8)	(5.2)
Unrealized losses on Fortitude Re available-for-sale securities	0.0
Defined benefit plans, net	$ 0.9						0.9
Ending balance (in shares) at Sep. 30, 2021	356,527,526		356,500,000
Ending balance at Sep. 30, 2021	$ 5,033.0		$ 3.6		$ 2,671.7	$ 2,324.1	$ (240.2)	$ 273.8

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net income (loss)	$ 2,384.8	$ (171.8)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	40.5	38.9
Right-of-use asset impairment, net of broker fees	24.8	0.0
Equity-based compensation	122.0	78.3
Non-cash performance allocations and incentive fees	(1,662.3)	(239.6)
Non-cash principal investment (income) loss	(458.3)	646.3
Other non-cash amounts	20.7	(3.5)
Consolidated Funds related:
Realized/unrealized (gain) loss on investments of Consolidated Funds	(100.3)	219.2
Realized/unrealized (gain) loss from loans payable of Consolidated Funds	90.7	(180.3)
Purchases of investments by Consolidated Funds	(3,864.4)	(2,049.1)
Proceeds from sale and settlements of investments by Consolidated Funds	3,631.7	1,571.4
Non-cash interest income, net	(9.0)	(4.6)
Change in cash and cash equivalents held at Consolidated Funds	43.5	(258.2)
Change in other receivables held at Consolidated Funds	(78.7)	(20.0)
Change in other liabilities held at Consolidated Funds	43.4	149.4
Other non-cash amounts of Consolidated Funds	0.0	0.4
Purchases of investments	(178.0)	(293.7)
Proceeds from the sale of investments	533.8	233.6
Payments of contingent consideration	(50.0)	0.0
Changes in deferred taxes, net	449.1	4.7
Change in due from affiliates and other receivables	(21.4)	(8.3)
Change in deposits and other	(23.3)	(1.3)
Change in accounts payable, accrued expenses and other liabilities	90.9	(57.5)
Change in accrued compensation and benefits	17.3	73.0
Change in due to affiliates	1.4	(31.5)
Change in lease right-of-use assets and lease liabilities	5.9	(6.7)
Change in deferred revenue	247.6	200.3
Net cash provided by (used in) operating activities	1,302.4	(110.6)
Cash flows from investing activities
Purchases of fixed assets, net	(27.0)	(37.3)
Net cash used in investing activities	(17.8)	(37.3)
Cash flows from financing activities
Borrowings under credit facilities	70.0	287.1
Repayments under credit facilities	0.0	(300.6)
Issuance of 4.625% subordinated notes due 2061, net of financing costs	484.1	0.0
Payments on debt obligations	(231.5)	(2.7)
Proceeds from debt obligations, net of financing costs	87.5	20.5
Net borrowings (payments) on loans payable of Consolidated Funds	165.2	594.6
Payments of contingent consideration	(0.1)	(0.3)
Dividends to common stockholders	(266.7)	(262.9)
Payment of deferred consideration for Carlyle Holdings units	(68.8)	(68.8)
Contributions from non-controlling interest holders	57.2	24.2
Distributions to non-controlling interest holders	(76.3)	(53.5)
Common shares repurchased	(84.5)	(26.4)
Change in due to/from affiliates financing activities	21.8	40.9
Net cash provided by financing activities	157.9	252.1
Effect of foreign exchange rate changes	(26.2)	6.6
Increase in cash, cash equivalents and restricted cash	1,416.3	110.8
Cash, cash equivalents and restricted cash, beginning of period	989.6	828.0
Cash, cash equivalents and restricted cash, end of period	2,405.9	938.8
Supplemental non-cash disclosures
Tax effects from the conversion to a Corporation recorded in equity	0.0	53.9
Net asset impact of deconsolidation of Consolidated Funds	(34.4)	0.0
Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	2,399.0	938.4
Restricted cash	6.9	0.4
Total cash, cash equivalents and restricted cash, end of period	2,405.9	938.8
Cash and cash equivalents held at Consolidated Funds	134.8	377.8
MRE
Cash flows from investing activities
Proceeds from sale, net of cash sold	5.9	0.0
Brazil management entity
Cash flows from investing activities
Proceeds from sale, net of cash sold	$ 3.3	$ 0.0

Condensed Consolidated Statements of Cash Flows (Parenthetical)	Sep. 30, 2021
Subordinated Notes Due 2061
Interest rate (percent)	4.625%

Organization and Basis of Presentation	9 Months Ended
Organization and Basis of Presentation	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	1. Organization and Basis of Presentation Effective on January 1, 2020, The Carlyle Group L.P. converted from a Delaware limited partnership to a Delaware corporation named The Carlyle Group Inc. (the “Conversion”). As a result of the Conversion, each common unit was converted into a share of common stock. Under the laws of its incorporation, The Carlyle Group Inc. is deemed to be the same entity as The Carlyle Group L.P. (the “Partnership”). Unless the context suggests otherwise, references to “Carlyle” or the “Company,” refer to (i) The Carlyle Group Inc. and its consolidated subsidiaries following the Conversion and (ii) The Carlyle Group L.P. and its consolidated subsidiaries prior to the Conversion. Prior to the Conversion, the Company recorded significant non-controlling interests in Carlyle Holdings I L.P., Carlyle Holdings II L.P. and Carlyle Holdings III L.P. (collectively, “Carlyle Holdings”), the holdings partnerships through which the Company and senior Carlyle professionals and other holders of Carlyle Holdings partnership units owned their respective interests in the business. In the Conversion, the limited partners of the Carlyle Holdings partnerships exchanged their Carlyle Holdings partnership units for an equivalent number of shares of common stock of The Carlyle Group Inc. As a result, in periods following the Conversion, the consolidated balance sheet and statement of operations of The Carlyle Group Inc. does not reflect any non-controlling interests in Carlyle Holdings, and net income (loss) attributable to Carlyle Holdings refers to the net income (loss) of The Carlyle Group Inc. and its consolidated subsidiaries, net of non-controlling interests in consolidated entities. Additionally, at the time of the exchange, certain senior Carlyle professionals and certain of the other former limited partners of Carlyle Holdings who became holders of shares of common stock in connection with the Conversion were generally required to grant an irrevocable proxy to Carlyle Group Management L.L.C., which is wholly owned by our founders and other senior Carlyle professionals. As a result, we were a “controlled company” and qualified for exceptions from certain corporate governance and other requirements of the rules of The Nasdaq Global Select Market (“Nasdaq”). As of August 5, 2021, the Company no longer qualifies as a “controlled company” under the Nasdaq rules. Carlyle is one of the world’s largest global investment firms that originates, structures, and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, growth capital financings, real estate opportunities, bank loans, high-yield debt, distressed assets, mezzanine debt, and other investment opportunities. Carlyle provides investment management services to, and has transactions with, various private equity funds, real estate funds, private credit funds, collateralized loan obligations (“CLOs”), and other investment products sponsored by the Company for the investment of client assets in the normal course of business. Carlyle typically serves as the general partner, investment manager or collateral manager, making day-to-day investment decisions concerning the assets of these products. Carlyle operates its business through three reportable segments: Global Private Equity, Global Credit, and Global Investment Solutions (see Note 14). On August 31, 2021, the Company sold 100% of its interest in its local Brazilian management entity and entered into a sub-advisory agreement with the acquiring company, which will provide advisory services with respect to Carlyle’s Brazilian portfolio. The Company recorded a loss on the sale and related transaction costs of $4.7 million, which are included in other non-operating expenses (income) on the unaudited condensed consolidated statements of operations, as well as a foreign currency translation loss of $14.7 million related to amounts previously recorded in accumulated other comprehensive income, which is primarily included in general, administrative and other expenses on the unaudited condensed consolidated statements of operations. These amounts are excluded from the Company’s segment reporting. Basis of Presentation The accompanying financial statements include the accounts of the Company and its consolidated subsidiaries. In addition, certain Carlyle-affiliated funds, related co-investment entities and certain CLOs managed by the Company (collectively the “Consolidated Funds”) have been consolidated in the accompanying financial statements pursuant to accounting principles generally accepted in the United States (“U.S. GAAP”), as described in Note 2. The consolidation of the Consolidated Funds generally has a gross-up effect on assets, liabilities and cash flows, and generally has no effect on the net income attributable to the Company. The economic ownership interests of the other investors in the Consolidated Funds are reflected as non-controlling interests in consolidated entities in the accompanying consolidated financial statements (see Note 2). The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. These statements, including notes, have not been audited, exclude some of the disclosures required for annual financial statements, and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”). The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Company consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of variable interest entities (“VIEs”).

The Company evaluates (1) whether it holds a variable interest in an entity, (2) whether the entity is a VIE, and (3) whether the Company’s involvement would make it the primary beneficiary. In evaluating whether the Company holds a variable interest, fees (including management fees, incentive fees and performance allocations) that are customary and commensurate with the level of services provided, and where the Company 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 Company considers all economic interests, including indirect interests, to determine if a fee is considered a variable interest.

For those entities where the Company holds a variable interest, the Company determines whether each of these entities qualifies as a VIE and, if so, whether or not the Company 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.

For entities that are determined to be VIEs, the Company 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 Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company.

As of September 30, 2021, assets and liabilities of the consolidated VIEs reflected in the unaudited condensed consolidated balance sheets were $6.8 billion and $6.6 billion, respectively. Except to the extent of the consolidated assets of the VIEs, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company.

Substantially all of the Company’s Consolidated Funds are CLOs, which are VIEs that issue loans payable that are backed by diversified collateral asset portfolios consisting primarily of loans or structured debt. In exchange for managing the collateral for the CLOs, the Company earns investment management fees, including in some cases subordinated management fees and contingent incentive fees. In cases where the Company consolidates the CLOs (primarily because of a retained interest that is significant to the CLO), those management fees have been eliminated as intercompany transactions. As of September 30, 2021, the Company held $172.8 million of investments in these CLOs which represents its maximum risk of loss. The Company’s investments in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Investors in the CLOs have no recourse against the Company for any losses sustained in the CLO structure.

Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting interest entity model, the Company consolidates those entities it controls through a majority voting interest.

All significant inter-entity transactions and balances of entities consolidated have been eliminated.

Investments in Unconsolidated Variable Interest Entities

The Company holds variable interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary, including its investments in certain Global Investment Solutions carry funds, certain CLOs and its strategic investment in NGP Management Company, L.L.C. (“NGP Management” and, together with its affiliates, “NGP”). Refer to Note 4 for information on the strategic investment in NGP. The Company’s involvement with such entities is in the form of direct or indirect equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by the Company relating to its variable interests in these unconsolidated entities.

The assets recognized in the Company’s consolidated balance sheets related to the Company’s variable interests in these non-consolidated VIEs were as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)

Investments	$	882.7	$	988.6
Accrued performance revenues	330.0		177.1
Management fee receivables	27.9		26.5
Total	$	1,240.6	$	1,192.2

These amounts represent the Company’s maximum exposure to loss related to the unconsolidated VIEs as of September 30, 2021 and December 31, 2020.

Basis of Accounting

The accompanying financial statements are prepared in accordance with U.S. GAAP. Management has determined that the Company’s Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the unrealized gains and/or losses in an investment’s fair value are recognized on a current basis in the statements of operations. Additionally, the Funds do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). In the preparation of these unaudited condensed consolidated financial statements, the Company has retained the specialized accounting for the Funds.

All of the investments held and notes issued by the Consolidated Funds are presented at their estimated fair values in the Company’s condensed consolidated balance sheets. Interest and other income of the Consolidated Funds as well as interest expense and other expenses of the Consolidated Funds are included in the Company’s unaudited condensed consolidated statements of operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance allocations involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements and the resulting impact on performance allocations and incentive fees. Actual results could differ from these estimates and such differences could be material.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations that are elements of consideration transferred are recognized as of the acquisition date as part of the fair value transferred in exchange for the acquired business. Acquisition-related costs incurred in connection with a business combination are expensed as incurred.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. ASC 606 includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, which includes assessing the collectibility of the consideration to which it will be entitled in exchange for the goods or services transferred to the customer, (ii) identify the

performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation.

The Company accounts for performance allocations that represent a performance-based capital allocation from fund limited partners to the Company (commonly known as “carried interest”, which comprises substantially all of the Company’s previously reported performance fee revenues) as earnings from financial assets within the scope of ASC 323, Investments - Equity Method and Joint Ventures, and therefore are not in the scope of ASC 606. In accordance with ASC 323, the Company records equity method income (losses) as a component of investment income based on the change in its proportionate claim on net assets of the investment fund, including performance allocations, assuming the investment fund was liquidated as of each reporting date pursuant to each fund’s governing agreements. See Note 4 for additional information on the components of investments and investment income. Performance fees that do not meet the definition of performance-based capital allocations are in the scope of ASC 606 and are included in incentive fees in the unaudited condensed consolidated statements of operations. The calculation of unrealized performance revenues utilizes investment valuations of the funds’ underlying investments, which are derived using the policies, methodologies and templates prepared by the Company’s valuation group, as described in Note 3, Fair Value Measurement.

While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts. The customer determination impacts the Company’s analysis of the accounting for contract costs. Also, the recovery of certain costs incurred on behalf of Carlyle funds, primarily travel and entertainment costs, are presented gross in the unaudited condensed consolidated statements of operations, as the Company controls the inputs to its investment management performance obligation.

Fund Management Fees

The Company provides management services to funds in which it holds a general partner interest or has a management agreement. The Company considers the performance obligations in its contracts with its funds to be the promise to provide (or to arrange for third parties to provide) investment management services related to the management, policies and operations of the funds.

As it relates to the Company’s performance obligation to provide investment management services, the Company typically satisfies this performance obligation over time as the services are rendered, since the funds simultaneously receive and consume the benefits provided as the Company performs the service. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the funds. Management fees earned from each investment management contract over the contract life represent variable consideration because the consideration the Company is entitled to varies based on fluctuations in the basis for the management fee, for example fund net asset value (“NAV”) or assets under management (“AUM”). Given that the management fee basis is susceptible to market factors outside of the Company’s influence, management fees are constrained and, therefore, estimates of future period management fees are generally not included in the transaction price. Revenue recognized for the investment management services provided is generally the amount determined at the end of the period because that is when the uncertainty for that period is resolved.

For closed-end carry funds in the Global Private Equity and Global Credit segments, management fees generally range from 1.0% to 2.0% of commitments during the fund’s investment period based on limited partners’ capital commitments to the funds. Following the expiration or termination of the investment period, management fees generally are based on the lower of cost or fair value of invested capital and the rate charged may also be reduced to between 0.5% and 2.0%. For certain separately managed accounts, longer-dated carry funds, and other closed-end funds, management fees generally range from 0.2% to 1.0% based on contributions for unrealized investments, the current value of the investment, or adjusted book value. The Company will receive management fees during a specified period of time, which is generally ten years from the initial closing date, or, in some instances, from the final closing date, but such termination date may be earlier in certain limited circumstances or later if extended for successive one-year periods, typically up to a maximum of two years. Depending upon the contracted terms of investment advisory or investment management and related agreements, these fees are generally called semi-annually in advance and are recognized as earned over the subsequent six month period. For certain longer-dated carry funds and certain other closed-end funds, management fees are called quarterly over the life of the funds.

Within the Global Credit segment, for CLOs and other structured products, management fees generally range from 0.4% to 0.5% based on the total par amounts of assets or the aggregate principal amount of the notes in the CLO and are due quarterly based on the terms and recognized over the respective period. Management fees for the CLOs and other structured products are governed by indentures and collateral management agreements. The Company will receive management fees for

the CLOs until redemption of the securities issued by the CLOs, which is generally five to ten years after issuance. Management fees for the business development companies are due quarterly in arrears at annual rates that range from 1.25% of invested capital to 1.5% of gross assets, excluding cash and cash equivalents.

Management fees for the Company’s carry fund vehicles in the Global Investment Solutions segment generally range from 0.25% to 1.0% of the vehicle’s capital commitments during the commitment fee period of the relevant fund or the weighted-average investment period of the underlying funds. Following the expiration of the commitment fee period or weighted-average investment period of such funds, the management fees generally range from 0.25% to 1.0% on (i) the lower of cost or fair value of the capital invested, (ii) the net asset value for unrealized investments, or (iii) the contributions for unrealized investments; however, certain separately managed accounts earn management fees at all times on contributions for unrealized investments or on the initial commitment amount. Management fees for the Global Investment Solutions carry fund vehicles are generally due quarterly and recognized over the related quarter.

As of September 30, 2021 and December 31, 2020, management fee receivables, net of allowances for credit losses, were $135.5 million and $102.7 million, respectively, and are included in due from affiliates and other receivables, net, in the unaudited condensed consolidated balance sheets.

The Company also provides transaction advisory and portfolio advisory services to the portfolio companies, and where covered by separate contractual agreements, recognizes fees for these services when the performance obligation has been satisfied and collection is reasonably assured. The Company also recognizes underwriting fees from the Company’s loan syndication and capital markets business, Carlyle Global Capital Markets. Fund management fees include transaction and portfolio advisory fees, as well as capital markets fees, of $21.9 million and $3.9 million for the three months ended September 30, 2021 and 2020, respectively, and $54.3 million and $25.5 million for the nine months ended September 30, 2021 and 2020, respectively, net of any offsets as defined in the respective partnership agreements.

Fund management fees exclude the reimbursement of any partnership expenses paid by the Company on behalf of the Carlyle funds pursuant to the limited partnership agreements, including amounts related to the pursuit of actual, proposed, or unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of investments, and other fund administrative expenses. For the professional fees that the Company arranges for the investment funds, the Company concluded that the nature of its promise is to arrange for the services to be provided and it does not control the services provided by third parties before they are transferred to the customer. Therefore, the Company concluded it is acting in the capacity of an agent. Accordingly, the reimbursement for these professional fees paid on behalf of the investment funds is presented on a net basis in general, administrative and other expenses in the unaudited condensed consolidated statements of operations.

The Company also incurs certain costs, primarily employee travel and entertainment costs, employee compensation and systems costs, for which it receives reimbursement from the investment funds in connection with its performance obligation to provide investment and management services. For reimbursable travel, compensation and systems costs, the Company concluded it controls the services provided by its employees and the resources used to develop applicable systems before they are transferred to the customer and therefore is a principal. Accordingly, the reimbursement for these costs incurred by the Company to manage the fund limited partnerships are presented on a gross basis in interest and other income in the unaudited condensed consolidated statements of operations and the expense in general, administrative and other expenses or cash-based compensation and benefits expenses in the unaudited condensed consolidated statements of operations.

Incentive Fees

In connection with management contracts from certain of its Global Credit funds, the Company is also entitled to receive performance-based incentive fees when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, incentive fees are recognized when the performance benchmark has been achieved. Incentive fees are variable consideration because they are contingent upon the investment vehicle achieving stipulated investment return hurdles. Investment returns are highly susceptible to market factors outside of the Company’s influence. Accordingly, incentive fees are constrained until the uncertainty is resolved. Estimates of future period incentive fees are generally not included in the transaction price because these estimates are constrained. The transaction price for incentive fees is generally the amount determined at the end of each accounting period to which they relate because that is when the uncertainty for that period is resolved, as these fees are not subject to clawback.

Investment Income (Loss), including Performance Allocations

Investment income (loss) represents the unrealized and realized gains and losses resulting from the Company’s equity method investments, including any associated general partner performance allocations, and other principal investments, including CLOs.

General partner performance allocations consist of the allocation of profits from certain of the funds to which the Company is entitled (commonly known as carried interest).

For closed-end carry funds in the Global Private Equity and Global Credit segments, the Company is generally entitled to a 20% allocation (or 10% to 20% on certain longer-dated carry funds, certain credit funds, and external co-investment vehicles, up to 25% on certain Global Private Equity funds in the event performance benchmarks are achieved, or approximately 2% to 12.5% for most of the Global Investment Solutions segment carry fund vehicles) of the net realized income or gain as a carried interest after returning the invested capital, the allocation of preferred returns of generally 7% to 9% (or 4% to 7% for certain longer-dated carry funds) and return of certain fund costs (generally subject to catch-up provisions as set forth in the fund limited partnership agreement). Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in each respective partnership agreement. The Company recognizes revenues attributable to performance allocations based upon the amount that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized as investment income for performance allocations reflects the Company’s share of the gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Because of the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

Carried interest is ultimately realized when: (i) an underlying investment is profitably disposed of, (ii) certain costs borne by the limited partner investors have been reimbursed, (iii) the fund’s cumulative returns are in excess of the preferred return and (iv) the Company has decided to collect carry rather than return additional capital to limited partner investors. Realized carried interest may be required to be returned by the Company in future periods if the funds’ investment values decline below certain levels. When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized performance allocations are reversed. In all cases, each fund is considered separately in this regard, and for a given fund, performance allocations can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments at their then-current fair values, previously recognized and distributed carried interest would be required to be returned, a liability is established for the potential giveback obligation.

Principal investment income (loss) is realized when the Company redeems all or a portion of its investment or when the Company receives or is due cash income, such as dividends or distributions. Principal investment income (loss) also includes the Company’s allocation of earnings from its investment in Fortitude Re through June 2, 2020 (see Note 4). As it relates to the Company’s investments in NGP (see Note 4), principal investment income includes the related amortization of the basis difference between the Company’s carrying value of its investment and the Company’s share of underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by the Company to employees of its equity method investee. Unrealized principal investment income (loss) results from the Company’s proportionate share of the investee’s unrealized earnings, including changes in the fair value of the underlying investment, as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest Income

Interest income is recognized when earned. For debt securities representing non-investment grade beneficial interests in securitizations, the effective yield is determined based on the estimated cash flows of the security. Changes in the effective yield of these securities due to changes in estimated cash flows are recognized on a prospective basis as adjustments to interest income in future periods. Interest income earned by the Company is included in interest and other income in the accompanying unaudited condensed consolidated statements of operations. Interest income of the Consolidated Funds was $56.9 million and $50.8 million for the three months ended September 30, 2021 and 2020, respectively, and $170.4 million and $155.0 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in interest and other income of Consolidated Funds in the accompanying unaudited condensed consolidated statements of operations.

Credit Losses

Under ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), the Company measures all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable

forecasts. As part of its adoption process, the Company assessed the collection risk characteristics of the outstanding amounts in its due from affiliates balance to define the following pools of receivables:

•Reimbursable fund expenses receivables,

•Management fee receivables,

•Incentive fee receivables,

•Transaction fee receivables,

•Portfolio fee receivables, and

•Notes receivable.

The Company generally utilizes either historical credit loss information or discounted cash flows to calculate expected credit losses for each pool. The Company’s receivables are predominantly with its investment funds, which have low risk of credit loss based on the Company’s historical experience. Historical credit loss data may be adjusted for current conditions and reasonable and supportable forecasts, including the Company’s expectation of near-term realization based on the liquidity of the affiliated investment funds.

Compensation and Benefits

Cash-based Compensation and Benefits – Cash-based compensation and benefits includes salaries, bonuses (discretionary awards and guaranteed amounts), performance payment arrangements and benefits paid and payable to Carlyle employees. Bonuses are accrued over the service period to which they relate.

Equity-Based Compensation – Compensation expense relating to the issuance of equity-based awards is measured at fair value on the grant date. The compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. The compensation expense for awards that do not require future service is recognized immediately. Cash settled equity-based awards are classified as liabilities and are re-measured at the end of each reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable that the performance conditions will be achieved; in certain instances, such compensation expense may be recognized prior to the grant date of the award. The compensation expense for awards that contain market conditions is based on a grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized over the requisite service period on a straight-line basis.

Equity-based awards issued to non-employees are generally recognized as general, administrative and other expenses, except to the extent they are recognized as part of the Company’s equity method earnings because they are issued to employees of equity method investees.

The Company recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. Furthermore, the Company recognizes all excess tax benefits and deficiencies as income tax benefit or expense in the unaudited condensed consolidated statements of operations.

Performance Allocations and Incentive Fee Related Compensation – A portion of the performance allocations and incentive fees earned is due to employees and advisors of the Company. These amounts are accounted for as compensation expense in conjunction with the recognition of the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued compensation and benefits liability. Accordingly, upon a reversal of performance allocations or incentive fee revenue, the related compensation expense, if any, is also reversed. In October 2021, the Company commenced a program under which, at the Company’s discretion, up to 20% of realized performance allocation related compensation over a threshold amount may be distributed in fully vested newly issued shares of the Company’s common stock. These shares will be accounted for as performance allocations and incentive fee related compensation and will not result in incremental compensation expense. As of September 30, 2021 and December 31, 2020, the Company had recorded a liability of $4.1 billion and $2.5 billion, respectively, related to the portion of accrued performance allocations and incentive fees due to employees and advisors, respectively, which was included in accrued compensation and benefits in the accompanying unaudited condensed consolidated balance sheets.

Income Taxes

The Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and thus is subject to U.S. federal, state and local corporate income taxes. Tax positions taken by the Company are subject to periodic audit by U.S. federal, state, local and foreign taxing authorities. The interim provision for income taxes is calculated using the discrete effective tax rate method as allowed by ASC 740, Accounting for Income Taxes. The discrete method is applied when the application of the estimated

annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement reporting and the tax basis of assets and liabilities using enacted tax rates in effect for the period in which the difference is expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change in the provision for income taxes. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carry forwards. A valuation allowance is recorded on the Company’s gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of the Company’s deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries.

Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established, which is included in accounts payable, accrued expenses and other liabilities in the unaudited condensed consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. If recognized, the entire amount of unrecognized tax positions would be recorded as a reduction in the provision for income taxes.

Non-controlling Interests

Non-controlling interests in consolidated entities represent the component of equity in consolidated entities held by third-party investors. These interests are adjusted for general partner allocations which occur during the reporting period. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests. Transaction costs incurred in connection with such changes in ownership of a subsidiary are recorded as a direct charge to equity.

Earnings Per Common Share

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share is calculated by dividing net income (loss) attributable to the common shares of the Company by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.

Investments, at Fair Value

Investments include (i) the Company’s ownership interests (typically general partner interests) in the Funds, (ii) strategic investments made by the Company (both of which are accounted for as equity method investments), (iii) the investments held by the Consolidated Funds (which are presented at fair value in the Company’s unaudited condensed consolidated financial statements), and (iv) certain credit-oriented investments, including investments in the CLOs and the preferred securities of TCG BDC, Inc. (the “BDC Preferred Shares”) (which are accounted for as trading securities).

The valuation procedures utilized for investments of the Funds vary depending on the nature of the investment. The fair value of investments in publicly-traded securities is based on the closing price of the security with adjustments to reflect appropriate discounts if the securities are subject to restrictions.

The fair value of non-equity securities or other investments, which may include instruments that are not listed on an exchange, considers, among other factors, external pricing sources, such as dealer quotes or independent pricing services, recent trading activity or other information that, in the opinion of the Company, may not have been reflected in pricing obtained from external sources.

When valuing private securities or assets without readily determinable market prices, the Company gives consideration to operating results, financial condition, economic and/or market events, recent sales prices and other pertinent information. These

valuation procedures may vary by investment, but include such techniques as comparable public market valuation, comparable acquisition valuation and discounted cash flow analysis. Because of the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material. Furthermore, there is no assurance that, upon liquidation, the Company will realize the values presented herein.

Upon the sale of a security or other investment, the realized net gain or loss is computed on a weighted average cost basis, with the exception of the investments held by the CLOs, which compute the realized net gain or loss on a first in, first out basis. Securities transactions are recorded on a trade date basis.

Equity Method Investments

The Company accounts for all investments in which it has or is otherwise presumed to have significant influence, including investments in the unconsolidated Funds and strategic investments, using the equity method of accounting. The carrying value of equity method investments is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee (including performance allocations) allocated based on the respective partnership agreement, less distributions received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

Cash and Cash Equivalents

Cash and cash equivalents include cash held at banks and cash held for distributions, including investments with original maturities of less than three months when purchased.

Cash and Cash Equivalents Held at Consolidated Funds

Cash and cash equivalents held at Consolidated Funds consists of cash and cash equivalents held by the Consolidated Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Company.

Restricted Cash

Restricted cash primarily represents cash held by the Company’s foreign subsidiaries due to certain government regulatory capital requirements as well as certain amounts held on behalf of Carlyle funds.

Derivative Instruments

The Company uses derivative instruments primarily to reduce its exposure to changes in foreign currency exchange rates. Derivative instruments are recognized at fair value in the unaudited condensed consolidated balance sheets with changes in fair value recognized in the unaudited condensed consolidated statements of operations for all derivatives not designated as hedging instruments.

Securities Sold Under Agreements to Repurchase

As it relates to certain European CLOs sponsored by the Company, securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. As of September 30, 2021, $148.8 million of securities were transferred to counterparties under repurchase agreements and are included within investments in the unaudited condensed consolidated balance sheets. Cash received under repurchase agreements is recognized as a liability within debt obligations in the unaudited condensed consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expense in the unaudited condensed consolidated statements of operations. See Note 5 for additional information.

Fixed Assets

Fixed assets consist of furniture, fixtures and equipment, leasehold improvements, and computer hardware and software and are stated at cost, less accumulated depreciation and amortization. Depreciation is recognized on a straight-line method over the assets’ estimated useful lives, which for leasehold improvements are the lesser of the lease terms or the life of the asset, and three to seven years for other fixed assets. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Leases

The Company accounts for its leases in accordance with ASU 2016-2, Leases (Topic 842), and recognizes a lease liability and right-of-use asset in the condensed consolidated balance sheet for contracts that it determines are leases or contain a lease. The Company’s leases primarily consist of operating leases for office space in various countries around the world. The Company also has operating leases for office equipment and vehicles, which are not significant. The Company does not separate non-lease components from lease components for its office space and equipment operating leases and instead accounts for each separate lease component and its associated non-lease component as a single lease component. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.

Intangible Assets and Goodwill

The Company’s intangible assets consist of acquired contractual rights to earn future fee income, including management and advisory fees, customer relationships, and acquired trademarks. Finite-lived intangible assets are amortized over their estimated useful lives, which range from four to ten years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Intangible asset amortization expense was $1.8 million and $3.7 million during the three months ended September 30, 2021 and 2020, respectively, and $8.4 million and $10.9 million during the nine months ended September 30, 2021 and 2020, respectively, and is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.

Goodwill represents the excess of cost over the identifiable net assets of businesses acquired and is recorded in the functional currency of the acquired entity. Goodwill is recognized as an asset and is reviewed for impairment annually as of October 1st and between annual tests when events and circumstances indicate that impairment may have occurred.

Deferred Revenue

Deferred revenue represents management fees and other revenue received prior to the balance sheet date, which has not yet been earned. The increase in the deferred revenue balance for the nine months ended September 30, 2021 was primarily driven by cash payments received in advance of the Company satisfying its performance obligations, partially offset by revenues that were included in the deferred revenue balance at the beginning of the period.

Accumulated Other Comprehensive Income (Loss)

The Company’s accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments and gains and losses on defined benefit plans sponsored by AlpInvest. The components of accumulated other comprehensive income (loss) as of September 30, 2021 and December 31, 2020 were as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)

Currency translation adjustments	$	(216.8)	$	(181.4)
Unrealized losses on defined benefit plans	(23.4)		(27.3)

Total	$	(240.2)	$	(208.7)

Foreign Currency Translation

Non-U.S. dollar denominated assets and liabilities are translated at period-end rates of exchange, and the unaudited condensed consolidated statements of operations are translated at rates of exchange in effect throughout the period. Foreign currency gains (losses) resulting from transactions outside of the functional currency of an entity of $(9.9) million and $(2.6) million for the three months ended September 30, 2021 and 2020, respectively, and $(11.8) million and $18.9 million for the nine months ended September 30, 2021 and 2020, respectively, are included in general, administrative and other expenses in the unaudited condensed consolidated statements of operations.

Recent Accounting Pronouncements

Recently Issued Accounting Standards Adopted as of January 1, 2021

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12, among other changes, (i) removes certain exceptions to the general principles in Topic 740, (ii) provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and (iii) provides guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The guidance was adopted by the Company on January 1, 2021 and the impact was not material.

Fair Value Measurement

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurement

3. Fair Value Measurement

The fair value measurement accounting guidance establishes a hierarchical disclosure framework which ranks the observability of market price inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

Level I – inputs to the valuation methodology are quoted prices available in active markets for identical instruments as of the reporting date. The types of financial instruments in this category include unrestricted securities, such as equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

Level II – inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

Level III – inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately-held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

In certain cases, debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of September 30, 2021:


(Dollars in millions)	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Funds:
Equity securities	$	—	$	—	$	18.9	$	18.9
Bonds	—		—		581.1		581.1
Loans	—		—		5,852.9		5,852.9



	—		—		6,452.9		6,452.9

Investments in CLOs and other(1)	1.4		45.6		423.4		470.4








Subtotal	$	1.4	$	45.6	$	6,876.3	$	6,923.3
Investments measured at net asset value(2)							33.9
Total							$	6,957.2
Liabilities
Loans payable of Consolidated Funds(3)	$	—	$	—	$	5,938.3	$	5,938.3




Foreign currency forward contracts	—		0.2		—		0.2
Total	$	—	$	0.2	$	5,938.3	$	5,938.5

(1)The Level III balance excludes a corporate investment in equity securities which the Company has elected to account for under the measurement alternative for equity securities without readily determinable fair values pursuant to ASC 321, Investments – Equity Securities. In July 2021, the Company remeasured this investment to a fair value of $36.6 million due to an observable price change. As such, the fair value of $36.6 million is not as of September 30, 2021. As a non-recurring fair value measurement, the fair value of these equity securities is excluded from the tabular Level III rollforward disclosures.

(2)Balance represents Fund Investments that the Company reports based on the most recent available information which typically has a lag of up to 90 days, of which $16.8 million relates to investments of consolidated funds.

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

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2020:


(Dollars in millions)	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Funds:
Equity securities	$	—	$	—	$	9.4	$	9.4
Bonds	—		—		550.4		550.4
Loans	—		—		5,497.1		5,497.1



	—		—		6,056.9		6,056.9

Investments in CLOs and other	—		—		570.8		570.8






Foreign currency forward contracts	—		0.7		—		0.7
Subtotal	$	—	$	0.7	$	6,627.7	$	6,628.4
Investments measured at net asset value(1)							16.4
Total							$	6,644.8
Liabilities
Loans payable of Consolidated Funds(2)	$	—	$	—	$	5,563.0	$	5,563.0



Foreign currency forward contracts	—		0.4		—		0.4
Total	$	—	$	0.4	$	5,563.0	$	5,563.4

(1)Balance represents Fund Investments that the Company reports based on the most recent available information which typically has a lag of up to 90 days.

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

Investment professionals with responsibility for the underlying investments are responsible for preparing the investment valuations pursuant to the policies, methodologies and templates prepared by the Company’s valuation group, which is a team made up of dedicated valuation professionals reporting to the Company’s chief accounting officer. The valuation group is responsible for maintaining the Company’s valuation policy and related guidance, templates and systems that are designed to be consistent with the guidance found in ASC 820, Fair Value Measurement. These valuations, inputs and preliminary conclusions are reviewed by the fund accounting teams. The valuations are then reviewed and approved by the respective fund valuation subcommittees, which include the respective fund head(s), segment head, chief financial officer and chief accounting officer, as well as members of the valuation group. The valuation group compiles the aggregate results and significant matters and presents them for review and approval by the global valuation committee, which includes the Company’s co-chairmen of the board, chairman emeritus, chief executive officer, chief risk officer, chief financial officer, chief accounting officer, and the business segment heads, and observed by the chief compliance officer, the director of internal audit, the Company’s audit committee and others. Additionally, each quarter a sample of valuations is reviewed by external valuation firms. Valuations of the funds’ investments are used in the calculation of accrued performance allocations, or “carried interest”.

In the absence of observable market prices, the Company values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist. Management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involve a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies and real estate properties, and certain debt positions. The valuation technique for each of these investments is described below:

Private Equity and Real Estate Investments – The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies or sales of comparable assets, and other measures which, in many cases, are unaudited at the time received. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rate (“cap rate”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (e.g., applying a key performance metric of the investment such as EBITDA or net operating income to a relevant valuation multiple or cap rate observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar models. Adjustments to observable valuation measures are frequently made upon the initial investment to calibrate the initial investment valuation to industry observable inputs. Such adjustments are made to align the investment to observable industry inputs for differences in size, profitability, projected growth rates, geography and capital structure if applicable. The adjustments are reviewed with each subsequent valuation to assess how the investment has evolved relative to the observable inputs. Additionally, the investment may be subject to certain specific risks and/or development milestones which are also taken into account in the valuation assessment. Option pricing models and similar tools do not currently drive a significant portion of private equity or real estate valuations and are used primarily to value warrants, derivatives, certain restrictions and other atypical investment instruments.

Credit-Oriented Investments – The fair values of credit-oriented investments (including corporate treasury investments) are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments. Specifically, for investments in distressed debt and corporate loans and bonds, the fair values are generally determined by valuations of comparable investments. In some instances, the Company may utilize other valuation techniques, including the discounted cash flow method.

CLO Investments and CLO Loans Payable – The Company measures the financial liabilities of its consolidated CLOs based on the fair value of the financial assets of its consolidated CLOs, as the Company believes the fair value of the financial assets are more observable. The fair values of the CLO assets are primarily based on quotations from reputable dealers or relevant pricing services. In situations where valuation quotations are unavailable, the assets are valued based on similar securities, market index changes, and other factors. Generally, the assets of the CLOs are not publicly traded and are classified as Level III. Similar to the CLO assets, the fair values of the CLO structured asset positions are

primarily determined based on relevant pricing services or, in certain instances, discounted cash flow analyses. Those analyses consider the position size, liquidity, current financial condition of the CLOs, the third party financing environment, reinvestment rates, recovery lags, discount rates and default forecasts and are compared to broker quotations from market makers and third party dealers. The Company performs certain procedures to ensure the reliability of the quotations from pricing services for its CLO assets and CLO structured asset positions, which generally includes corroborating prices with a discounted cash flow analysis.

The Company measures the CLO loans payable held by third party beneficial interest holders on the basis of the fair value of the financial assets of the CLO and the beneficial interests held by the Company. The Company continues to measure the CLO loans payable that it holds at fair value based on relevant pricing services or discounted cash flow analyses, as described above.

Fund Investments – The Company’s primary and secondary investments in external funds are valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days. The terms of the investments generally preclude the ability to redeem the investment. Distributions from these investments will be received as the underlying assets in the funds are liquidated, the timing of which cannot be readily determined.

The changes in financial instruments measured at fair value for which the Company has used Level III inputs to determine fair value are as follows (Dollars in millions):


	Financial Assets
	Three Months Ended September 30, 2021
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other			Total
Balance, beginning of period	$	18.3	$	542.0	$	5,543.6	$	431.5		$	6,535.4
Consolidation of funds (1)	3.3		—		490.4		(3.0)			490.7


Purchases	0.1		108.1		1,058.4		9.6			1,176.2
Sales and distributions	(1.2)		(44.0)		(781.0)		(14.9)			(841.1)
Settlements	—		(0.2)		(378.4)		—			(378.6)
Realized and unrealized gains (losses), net
Included in earnings	(1.3)		(11.3)		13.3		6.9			7.6
Included in other comprehensive income	(0.3)		(13.5)		(93.4)		(6.7)			(113.9)
Balance, end of period	$	18.9	$	581.1	$	5,852.9	$	423.4		$	6,876.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	(1.9)	$	1.5	$	(4.2)	$	7.3		$	2.7
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	(0.3)	$	(13.7)	$	(92.3)	$	(6.7)		$	(113.0)

	Financial Assets
	Nine Months Ended September 30, 2021
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other (2)		Total
Balance, beginning of period	$	9.4	$	550.4	$	5,497.1	$	570.8		$	6,627.7
Deconsolidation/consolidation of funds (1)	5.7		—		314.2		23.1			343.0


Purchases	0.6		472.0		3,375.3		71.7			3,919.6
Sales and distributions	(3.5)		(405.2)		(2,199.0)		(254.9)			(2,862.6)
Settlements	—		(3.8)		(1,020.2)		—			(1,024.0)
Realized and unrealized gains (losses), net
Included in earnings	7.3		(1.3)		103.1		16.5			125.6
Included in other comprehensive income	(0.6)		(31.0)		(217.6)		(3.8)			(253.0)
Balance, end of period	$	18.9	$	581.1	$	5,852.9	$	423.4		$	6,876.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	5.2	$	7.7	$	61.1	$	16.3		$	90.3
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	(0.4)	$	(22.0)	$	(185.3)	$	(3.8)		$	(211.5)

(1) As a result of the consolidation of one CLO during the three months ended September 30, 2021 and two CLOs during the nine months ended September 30, 2021, the investments that the Company held in those CLOs are now eliminated in consolidation and no longer included in investments in CLOs and other. As a result of the deconsolidation of one CLO during the nine months ended September 30, 2021, the investment that the Company held in that CLO is no longer eliminated in consolidation and is now included in investments in CLOs and other.

(2) The beginning balance of Investments in CLOs and other has been revised to reflect the exclusion of Fund Investments measured at fair value using the NAV per share practical expedient from the fair value hierarchy.


	Financial Assets
	Three Months Ended September 30, 2020
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other		Total
Balance, beginning of period	$	108.8	$	438.4	$	4,034.0	$	530.5	$	5,111.7



Purchases	0.4		68.6		933.7		23.8		1,026.5
Sales and distributions	(33.5)		(98.6)		(261.7)		(8.1)		(401.9)
Settlements	—		—		(89.0)		—		(89.0)
Realized and unrealized gains (losses), net
Included in earnings	4.0		34.9		126.0		32.2		197.1
Included in other comprehensive income	—		18.6		130.2		9.1		157.9
Balance, end of period	$	79.7	$	461.9	$	4,873.2	$	587.5	$	6,002.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	4.0	$	31.1	$	108.0	$	32.2	$	175.3
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	—	$	14.5	$	119.9	$	9.1	$	143.5

	Financial Assets
	Nine Months Ended September 30, 2020
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other		Total
Balance, beginning of period	$	19.4	$	574.1	$	4,413.8	$	496.2	$	5,503.5



Purchases	87.8		209.5		1,751.8		147.5		2,196.6
Sales and distributions	(33.7)		(313.5)		(941.4)		(64.4)		(1,353.0)
Settlements	—		—		(282.8)		—		(282.8)
Realized and unrealized gains (losses), net
Included in earnings	6.2		(26.1)		(204.1)		12.8		(211.2)
Included in other comprehensive income	—		17.9		135.9		(4.6)		149.2
Balance, end of period	$	79.7	$	461.9	$	4,873.2	$	587.5	$	6,002.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	6.1	$	(22.7)	$	(193.2)	$	12.8	$	(197.0)
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	—	$	14.6	$	110.3	$	(4.6)	$	120.3


	Financial Liabilities
	Loans Payable of Consolidated Funds
	Three Months Ended September 30,
	2021		2020
Balance, beginning of period	$	5,373.9	$	4,412.0
Consolidation of funds	480.0		—
Borrowings	1,133.0		745.2
Paydowns	(712.0)		(1.3)
Sales	(237.5)		(260.4)
Realized and unrealized (gains) losses, net
Included in earnings	(2.4)		139.1
Included in other comprehensive income	(96.7)		147.1
Balance, end of period	$	5,938.3	$	5,181.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date	$	3.7	$	139.1
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date	$	(127.0)	$	147.1

	Financial Liabilities
	Loans Payable of Consolidated Funds
	Nine Months Ended September 30,
	2021		2020
Balance, beginning of period	$	5,563.0	$	4,685.2
Deconsolidation/consolidation of funds	360.8		—
Borrowings	1,966.6		1,886.9
Paydowns	(1,303.0)		(1,092.0)
Sales	(515.2)		(260.4)
Realized and unrealized (gains) losses, net
Included in earnings	90.7		(188.5)
Included in other comprehensive income	(224.6)		150.5
Balance, end of period	$	5,938.3	$	5,181.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date	$	98.1	$	(203.4)
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date	$	(281.4)	$	158.9

Realized and unrealized gains and losses included in earnings for Level III investments for investments in CLOs and other investments are included in investment income (loss), and such gains and losses for investments of Consolidated Funds and loans payable of Consolidated Funds are included in net investment gains (losses) of Consolidated Funds in the unaudited condensed consolidated statements of operations.

Gains and losses included in other comprehensive income for all Level III financial asset and liabilities are included in accumulated other comprehensive loss, non-controlling interests in consolidated entities.

The following table summarizes quantitative information about the Company’s Level III inputs as of September 30, 2021:


	Fair Value at		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
(Dollars in millions)	September 30, 2021
Assets
Investments of Consolidated Funds:
Equity securities	$	18.9	Consensus Pricing	Indicative Quotes ($ per share)	0.00 - 74.50 (0.66)

Bonds	581.1		Consensus Pricing	Indicative Quotes (% of Par)	94 - 109 (100)
Loans	5,834.3		Consensus Pricing	Indicative Quotes (% of Par)	37 - 109 (99)
	18.6		Discounted Cash Flow	Discount Rates	3% - 8% (6%)




	6,452.9
Investments in CLOs and other:
Senior secured notes	274.9		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	84 - 101 (99)
				Discount Margins (Basis Points)	50 - 1,330 (256)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)
Subordinated notes and preferred shares	69.8		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	43 - 88 (72)
				Discount Rates	10% - 25% (17%)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)

BDC preferred shares	71.8		Discounted Cash Flow	Discount Rates	7% - 7% (7%)
Aviation subordinated notes	6.9		Discounted Cash Flow	Discount Rates	16% - 16% (16%)

Total	$	6,876.3
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes	$	5,700.1	Other (1)	N/A	N/A

Subordinated notes and preferred shares	238.2		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	42 - 77 (56)
				Discount Rates	15% - 25% (20%)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)




Total	$	5,938.3

(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 Company and (ii) the carrying value of any beneficial interests that represent compensation for services.

The following table summarizes quantitative information about the Company’s Level III inputs as of December 31, 2020:

Fair Value at

Valuation Technique(s)

Unobservable Input(s)

Range
(Weighted Average)

(Dollars in millions)

December 31, 2020

Assets

Investments of Consolidated Funds:

Equity securities

9.4

Consensus Pricing

Indicative Quotes ($ per share)

0.00 - 40.00 (0.57)

Bonds

550.4

Consensus Pricing

Indicative Quotes (% of Par)

85 - 108 (98)

Loans

5,497.1

Consensus Pricing

Indicative Quotes (% of Par)

15 - 108 (97)

6,056.9

Investments in CLOs and other

Senior secured notes

437.0

Discounted Cash Flow with Consensus Pricing

Discount Margins (Basis Points)

85 - 1,725 (227)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

71 - 100 (98)

Subordinated notes and preferred shares

52.5

Discounted Cash Flow with Consensus Pricing

Discount Rate

16% - 30% (23%)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

31 - 90 (46)

BDC preferred shares

60.0

Discounted Cash Flow

Discount Rates

7% - 7% (7%)

Aviation subordinated notes

7.2

Discounted Cash Flow

Discount Rates

20% - 20% (20%)

Loans

14.1

Consensus Pricing

Indicative Quotes (% of Par)

98 - 100 (100)

Total

6,627.7

Liabilities

Loans payable of Consolidated Funds:

Senior secured notes

5,358.9

Other (1)

N/A

Subordinated notes and preferred shares

204.1

Discounted Cash Flow with Consensus Pricing

Discount Rates

16% - 30% (22%)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

30 - 91 (50)

Total

5,563.0

The significant unobservable inputs used in the fair value measurement of investments of the Company’s consolidated funds are indicative quotes. Significant decreases in indicative quotes in isolation would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s investments in CLOs and other investments include indicative quotes, discount margins, discount rates, default rates, and recovery rates. Significant decreases in indicative quotes or recovery rates in isolation would result in a significantly lower fair value measurement. Significant increases in discount margins, discount rates or default rates in isolation would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s loans payable of Consolidated Funds are indicative quotes, discount rates, default rates, and recovery rates. Significant increases in discount rates or default rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or recovery rates in isolation would result in a significantly lower fair value measurement.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Investments

9 Months Ended

Sep. 30, 2021

Investments [Abstract]

Investments

4. Investments

Investments consist of the following:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Accrued performance allocations	$	8,100.3	$	4,968.6
Principal equity method investments, excluding performance allocations	2,039.3		1,810.8
Principal investments in CLOs and other	538.9		601.5
Total	$	10,678.5	$	7,380.9

Accrued Performance Allocations

The components of accrued performance allocations are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	6,485.7	$	3,926.1

Global Credit	262.8		132.3
Global Investment Solutions (1)	1,351.8		910.2
Total	$	8,100.3	$	4,968.6

(1) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days. As a result, amounts presented may not include the impact of economic activity in the current quarter.

Approximately 30% and 41% of accrued performance allocations at September 30, 2021 and December 31, 2020, respectively, are related to Carlyle Partners VI, L.P., one of the Company’s Global Private Equity funds.

Accrued performance allocations are shown gross of the Company’s accrued performance allocations and incentive fee-related compensation (see Note 6), and accrued giveback obligations, which are separately presented in the unaudited condensed consolidated balance sheets. The components of the accrued giveback obligations are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	(18.4)	$	(18.4)

Global Credit	(6.3)		(0.3)
Total	$	(24.7)	$	(18.7)

Principal Equity Method Investments, Excluding Performance Allocations

The Company’s principal equity method investments (excluding performance allocations) include its fund investments in Global Private Equity, Global Credit, and Global Investment Solutions typically as general partner interests, and its strategic investments in Fortitude Re (included within Global Credit) and NGP (included within Global Private Equity), which are not consolidated. Principal investments are related to the following segments:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	1,220.2	$	1,082.1

Global Credit	749.1		671.9
Global Investment Solutions	70.0		56.8
Total	$	2,039.3	$	1,810.8

Strategic Investment in Fortitude Re (f/k/a DSA Re)

On November 13, 2018, the Company acquired a 19.9% interest in Fortitude Group Holdings, LLC (“Fortitude Holdings”), a wholly owned subsidiary of American International Group, Inc. (“AIG”) (“the Minority Transaction”), pursuant to a Membership Interest Purchase Agreement by and among the Company, AIG and Fortitude Holdings, dated as of July 31, 2018 (the “2018 MIPA”). Fortitude Holdings owns 100% of the outstanding common shares of Fortitude Reinsurance Company Ltd., a Bermuda domiciled reinsurer (“Fortitude Re”, f/k/a “DSA Re”) established to reinsure a portfolio of AIG’s legacy life, annuity and property and casualty liabilities.

The Company paid $381 million in cash at closing of the Minority Transaction (the “Initial Purchase Price”) and expects to pay up to $95 million in additional deferred consideration following December 31, 2023. In May 2020, the Initial Purchase Price was adjusted upward by $99.5 million in accordance with the 2018 MIPA as Fortitude Holdings chose not to distribute a planned non-pro rata dividend to AIG prior to May 13, 2020. The Company paid $79.6 million of such adjustment in May 2020 and will pay the remaining $19.9 million following December 31, 2023.

On June 2, 2020, Carlyle FRL, L.P. (“Carlyle FRL”), a Carlyle-affiliated investment fund, acquired a 51.6% ownership interest in Fortitude Holdings from AIG (the “Control Transaction”) and T&D United Capital Co., Ltd. (“T&D”), a subsidiary of T&D Holdings, Inc., purchased a 25.0% ownership interest as a strategic third-party investor pursuant to a Membership Interest Purchase Agreement by and among the Company, AIG, Carlyle FRL, and T&D, dated as of November 25, 2019 (the “2019 MIPA”). At closing, the Company contributed its existing 19.9% interest in Fortitude Holdings to Carlyle FRL, such that Carlyle FRL holds a 71.5% interest in Fortitude Holdings. Taken together, Carlyle FRL and T&D have 96.5% ownership of Fortitude Holdings. AIG initially agreed to a post-closing purchase price adjustment in the event of certain adverse reserve developments in the Fortitude Re property and casualty insurance business. Effective June 30, 2021, Fortitude Re and AIG entered into an agreement resulting in the termination of any obligations of AIG to Fortitude Re related to such adverse reserve development.

The Company entered into a strategic asset management relationship with Fortitude Holdings pursuant to which Fortitude Holdings committed to allocate assets in asset management strategies and vehicles of the Company and its affiliates. If Fortitude Holdings fails to allocate an agreed upon amount of assets to the Company’s asset management strategies and vehicles within 30 to 36 months of the closing of the Minority Transaction, the Company may be entitled to certain payments from Fortitude Holdings based on the commitment shortfall and assumed customary rates. As of September 30, 2021, Fortitude Holdings and AIG have committed approximately $6.3 billion of capital to-date to various Carlyle strategies, and the Company does not expect to receive any payments for a commitment shortfall.

Prior to the Control Transaction, the Company’s investment was accounted for under the equity method of accounting by recognizing its pro rata share of Fortitude Holdings’ U.S. GAAP earnings, which is included in principal investment income in the unaudited condensed consolidated statements of operations. These amounts are inclusive of unrealized gains (losses) related to the change in fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude Re’s U.S. GAAP financial statements. Modified coinsurance is subject to the general accounting principles for hedging, specifically the guidance originally issued as Derivatives Implementation Group Issue No. B36: Embedded Derivatives: Modified Coinsurance Agreements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments (“DIG B36”). As of December 31, 2019, the Company’s investment

in Fortitude Holdings was $1,200.9 million, which reflected $628.2 million of cumulative unrealized gains related to the change in the fair value of embedded derivatives.

At the time the Company contributed its existing 19.9% stake in Fortitude Holdings to Carlyle FRL, the Company’s investment became an ownership interest in the fund. Accordingly, the Company began accounting for its investment under the equity method based on its net asset value in Carlyle FRL, which is an investment company that accounts for its investment in Fortitude Holdings at fair value. The contribution of the Company’s 19.9% interest to Carlyle FRL resulted in a loss in principal investment income (loss) of $620.7 million in the three months ended June 30, 2020. As of September 30, 2021, the Company’s investment in Carlyle FRL was $655.7 million, relative to its cost of $465.3 million. Following the contribution, the Company no longer records its pro rata share of the U.S. GAAP earnings of Fortitude Holdings. Refer to Note 4 in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 for summarized financial information of Fortitude Holdings for the three and six months ended June 30, 2020, given the significance of the results of Fortitude Holdings relative to the Company’s results prior to the contribution of its interest to Carlyle FRL.

Strategic Investment in NGP

The Company has equity interests in NGP Management Company, L.L.C. (“NGP Management”), the general partners of certain carry funds advised by NGP, and principal investments in certain NGP funds. The Company accounts for its investments in NGP under the equity method of accounting, and includes these investments in the Global Private Equity segment. These interests entitle the Company to an allocation of income equal to 55.0% of the management fee-related revenues of NGP Management which serves as the investment advisor to certain NGP funds as well as 47.5% of the performance allocations received by certain current and future NGP fund general partners.

The Company’s investments in NGP as of September 30, 2021 and December 31, 2020 are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Investment in NGP Management	$	372.5	$	373.5
Investments in NGP general partners - accrued performance allocations	2.9		—
Principal investments in NGP funds	62.3		51.4
Total investments in NGP	$	437.7	$	424.9

Investment in NGP Management. The Company’s equity interests in NGP Management entitle the Company to an allocation of income equal to 55.0% of the management fee-related revenues of NGP Management, which serves as the investment advisor to the NGP Energy Funds. Management fees are generally calculated as 1.0% to 2.0% of the limited partners’ commitments during the fund’s investment period, and 0.5% to 2.0% based on the lower of cost or fair market value of invested capital following the expiration or termination of the investment period. Management fee-related revenues from NGP Management are primarily driven by NGP XII, NGP XI and NGP X during the three and nine months ended September 30, 2021 and 2020.

The Company records investment income (loss) for its equity income allocation from NGP management fee-related revenues and also records its share of any allocated expenses from NGP Management, expenses associated with the compensatory elements of the strategic investment, and the amortization of the basis differences related to the definite-lived identifiable intangible assets of NGP Management. The net investment income (loss) recognized in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Management fee-related revenues from NGP Management	$	18.2	$	18.6	$	54.9	$	56.8
Expenses related to the investment in NGP Management	(2.9)		(2.9)		(8.1)		(8.6)
Amortization of basis differences from the investment in NGP Management	(0.7)		(1.1)		(2.1)		(3.2)
Net investment income from NGP Management	$	14.6	$	14.6	$	44.7	$	45.0

The difference between the Company’s remaining carrying value of its investment and its share of the underlying net assets of the investee was $2.1 million and $4.2 million as of September 30, 2021 and December 31, 2020, respectively; these differences are amortized over a period of 10 years from the initial investment date. The Company assesses the remaining carrying value of its equity method investment for impairment whenever events or circumstances indicate that the carrying value may not be recoverable, and considers factors including, but not limited to, expected cash flows from its interest in future management fees and NGP’s ability to raise new funds.

Investment in the General Partners of NGP Carry Funds. The Company’s investment in the general partners of the NGP Carry Funds entitle it to 47.5% of the performance allocations received by certain current and future NGP fund general partners. The Company records its equity income allocation from NGP performance allocations in principal investment income (loss) from equity method investments rather than performance allocations in its unaudited condensed consolidated statements of operations. The Company recognized $1.7 million and $2.8 million of net investment earnings related to these performance allocations for both the three and nine months ended September 30, 2021, respectively. There were no net investment earnings (losses) related to these performance allocations for the three and nine months ended September 30, 2020.

Principal Investments in NGP Funds. The Company also holds principal investments in the NGP Carry Funds. The Company recognized net investment earnings (losses) of $5.1 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $16.8 million and $(14.0) million for the nine months ended September 30, 2021 and 2020, respectively, related to these investments and which are included in principal investment income in its unaudited condensed consolidated statements of operations.

Principal Investments in CLOs and Other Investments

Principal investments in CLOs and other investments as of September 30, 2021 and December 31, 2020 were $538.9 million and $601.5 million, respectively, and primarily consisted of investments in CLO senior and subordinated notes. A portion of these investments is collateral to CLO term loans (see Note 5). As of September 30, 2021 and December 31, 2020, principal investments in CLOs and other investments also included the Company’s investment in the BDC Preferred Shares at fair value of $71.8 million and $60.0 million, respectively (see Note 8).

Investment Income (Loss)

The components of investment income (loss) are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Performance allocations
Realized	$	1,018.1	$	86.8	$	1,645.6	$	415.7
Unrealized	(43.6)		390.6		3,195.7		315.9
	974.5		477.4		4,841.3		731.6
Principal investment income (loss) from equity method investments (excluding performance allocations)
Realized	87.7		26.9		175.5		105.3
Unrealized	30.5		48.8		239.4		(756.3)
	118.2		75.7		414.9		(651.0)
Principal investment income (loss) from investments in CLOs and other investments
Realized	4.4		0.3		3.9		0.5
Unrealized (1)	37.8		30.7		58.4		(8.7)
	42.2		31.0		62.3		(8.2)



Total	$	1,134.9	$	584.1	$	5,318.5	$	72.4

(1) The three and nine months ended September 30, 2021 include investment income of $31.5 million associated with the remeasurement of a corporate investment, which was carried at cost, resulting from an observable price change pursuant to ASC 321, Investments – Equity Securities.

The performance allocations included in revenues are derived from the following segments:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Global Private Equity	$	777.8	$	336.6	$	4,142.5	$	726.0

Global Credit	27.4		16.3		124.6		(24.0)
Global Investment Solutions	169.3		124.5		574.2		29.6
Total	$	974.5	$	477.4	$	4,841.3	$	731.6

Approximately 22%, or $216.0 million, of performance allocations for the three months ended September 30, 2021 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):

•Carlyle Partners VI, L.P. (Global Private Equity segment) - $130.7 million, and

•Carlyle Realty Partners VIII, L.P. (Global Private Equity segment) - $119.1 million.

Approximately 35%, or $1,715.9 million, of performance allocations for the nine months ended September 30, 2021 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):

•Carlyle Partners VI, L.P. (Global Private Equity segment) - $1,281.0 million, and

•Carlyle Europe Partners IV, L.P. (Global Private Equity segment) - $579.3 million.

Approximately 46%, or $217.9 million, of performance allocations for the three months ended September 30, 2020 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):

•Carlyle Partners VI, L.P. (Global Private Equity segment) - $141.7 million, and

•Carlyle Asia Partners IV, L.P. (Global Private Equity segment) - $112.4 million.

Performance allocations for the nine months ended September 30, 2020 are primarily related to Carlyle Partners VI, L.P. (Global Private Equity segment) with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income) of $773.4 million. In addition to Carlyle Partners VI, L.P., performance allocations of $129.9 million, for the nine months ended September 30, 2020 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):

•Carlyle Asia Partners IV, L.P. (Global Private Equity segment) - $323.5 million, and

•Carlyle International Energy Partners I, L.P. (Global Private Equity segment) - $(144.9) million.

Carlyle’s income (loss) from its principal equity method investments consists of:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Global Private Equity	$	63.8	$	40.7	$	272.9	$	60.7

Global Credit (1)	47.5		33.9		120.6		(709.9)
Global Investment Solutions	6.9		1.1		21.4		(1.8)
Total	$	118.2	$	75.7	$	414.9	$	(651.0)

(1) The nine months ended September 30, 2020 includes a loss of $620.7 million related to the contribution of the Company's investment in Fortitude Holdings to Carlyle FRL, as discussed above in "Strategic Investment in Fortitude Re (f/k/a DSA Re)".

Investments of Consolidated Funds

The Company consolidates the financial positions and results of operations of certain CLOs in which it is the primary beneficiary. During the nine months ended September 30, 2021, the Company consolidated two CLOs for which the Company is the primary beneficiary.

There were no individual investments with a fair value greater than five percent of the Company’s total assets for any period presented.

Interest and Other Income of Consolidated Funds

The components of interest and other income of Consolidated Funds are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Interest income from investments	$	56.9	$	50.8	$	170.4	$	155.0
Other income	5.2		5.5		14.9		9.5
Total	$	62.1	$	56.3	$	185.3	$	164.5

Net Investment Gains (Losses) of Consolidated Funds

Net investment gains (losses) of Consolidated Funds include net realized gains (losses) from sales of investments and unrealized gains (losses) resulting from changes in fair value of the Consolidated Funds’ investments. The components of net investment gains (losses) of Consolidated Funds are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Gains (losses) from investments of Consolidated Funds	$	(2.5)	$	163.1	$	100.3	$	(219.2)
Gains (losses) from liabilities of CLOs	2.4		(139.2)		(90.7)		180.3

Total	$	(0.1)	$	23.9	$	9.6	$	(38.9)

The following table presents realized and unrealized gains (losses) earned from investments of the Consolidated Funds:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Realized gains (losses)	$	(10.7)	$	(9.6)	$	6.5	$	(49.9)
Net change in unrealized gains (losses)	8.2		172.7		93.8		(169.3)
Total	$	(2.5)	$	163.1	$	100.3	$	(219.2)

Borrowings

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Borrowings

5. Borrowings

The Company borrows and enters into credit agreements for its general operating and investment purposes. The Company’s debt obligations consist of the following:


	September 30, 2021				December 31, 2020
	Borrowing Outstanding		Carrying Value		Borrowing Outstanding		Carrying Value
	(Dollars in millions)

Global Credit Revolving Credit Facility	$	70.0	$	70.0	$	—	$	—
CLO Borrowings (See below)	203.0		198.7		356.1		353.6
3.875% Senior Notes Due 2/01/2023	250.0		249.7		250.0		249.5
5.625% Senior Notes Due 3/30/2043	600.0		600.6		600.0		600.7
5.650% Senior Notes Due 9/15/2048	350.0		346.1		350.0		346.0
3.500% Senior Notes Due 9/19/2029	425.0		421.4		425.0		421.1
4.625% Subordinated Notes Due 5/15/2061	500.0		484.2		—		—
Total debt obligations	$	2,398.0	$	2,370.7	$	1,981.1	$	1,970.9

Senior Credit Facility

As of September 30, 2021, the senior credit facility included $775.0 million in a revolving credit facility. The revolving credit facility is scheduled to mature on February 11, 2024, and principal amounts outstanding under the revolving credit facility accrue interest, at the option of the borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed 0.50%, or (b) at LIBOR plus an applicable margin not to exceed 1.50% (at September 30, 2021, the interest rate was 1.33%). The Company made no borrowings under the senior credit facility during the three and nine months ended September 30, 2021 and there were no amounts outstanding at September 30, 2021.

Global Credit Revolving Credit Facility

On December 17, 2018, certain subsidiaries of the Company established a $250.0 million revolving line of credit, primarily intended to support certain lending activities within the Global Credit segment. The credit facility initially included a $125.0 million line of credit with a one-year term, which was amended in December 2020 to extend its maturity to December

2021, and a $125.0 million line of credit with a three-year term. In September 2021, the revolving line of credit was further amended to terminate the one-year line of credit, and extend the term of the three-year line of credit to September 2024 as well as increase its capacity from $125.0 million to $250.0 million. Principal amounts outstanding under the facility accrue interest, at the option of the borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed 1.00%, or (b) at the Eurocurrency rate plus an applicable margin, not to exceed 2.00% (at September 30, 2021, the interest rate was 2.085%). The Company borrowed $70.0 million under the credit facility during the three and nine months ended September 30, 2021, and $70.0 million remained outstanding as of September 30, 2021. The balance outstanding as of September 30, 2021 was repaid in October 2021.

CLO Borrowings

For certain of the Company’s CLOs, the Company finances a portion of its investment in the CLOs through the proceeds received from term loans and other financing arrangements with financial institutions. The Company’s outstanding CLO borrowings consist of the following (Dollars in millions):


Formation Date	Borrowing Outstanding September 30, 2021		Borrowing Outstanding December 31, 2020		Maturity Date (1)	Interest Rate as of September 30, 2021

February 28, 2017	$	54.2	$	79.9	November 17, 2031	2.35%	(2)
April 19, 2017	—		22.7		April 22, 2031	N/A	(3) (14)
June 28, 2017	—		22.9		July 22, 2031	N/A	(4) (14)
August 2, 2017	—		22.7		July 23, 2029	N/A	(5) (14)
August 2, 2017	—		21.3		August 3, 2022	N/A	(6)
August 14, 2017	—		22.4		August 15, 2030	N/A	(7) (14)
November 30, 2017	—		22.7		January 16, 2030	N/A	(8)(14)(15)
December 6, 2017	—		19.0		October 16, 2030	N/A	(9)(14)(15)
December 7, 2017	—		20.8		January 19, 2029	N/A	(10)(14)(15)
January 30, 2018	—		19.2		January 23, 2030	N/A	(11)(14)(15)
March 1, 2018	—		15.2		January 16, 2031	N/A	(12)(14)(15)
March 15, 2019	1.9		22.6		March 15, 2032	8.11%	(13)
August 20, 2019	4.2		22.9		August 15, 2032	4.74%	(13)
September 15, 2020	20.6		21.8		April 15, 2033	1.59%	(13)
January 8, 2021	21.6		—		January 15, 2034	2.49%	(13)
March 9, 2021	20.7		—		August 15, 2030	1.37%	(13)
March 30, 2021	19.4		—		March 15, 2032	1.71%	(13)
April 21, 2021	3.7		—		April 15, 2033	5.85%	(13)
May 21, 2021	16.2		—		November 17, 2031	1.36%	(13)
June 4, 2021	21.6		—		January 16, 2034	2.28%	(13)
June 10, 2021	1.4		—		November 17, 2031	2.85%	(13)
August 4, 2021	17.5		—		August 15, 2032	1.98%	(13)
	$	203.0	$	356.1

(1) Maturity date is earlier of date indicated or the date that the CLO is dissolved.

(2) Outstanding borrowing of €46.8 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.

(3) Incurs interest at LIBOR plus 1.932%. This term loan was fully repaid in April 2021.

(4) Incurs interest at LIBOR plus 1.923%. This term loan was fully repaid in April 2021.

(5) Incurred interest at LIBOR plus 1.808%. This term loan was fully repaid in February 2021.

(6) Original borrowing of €17.4 million; incurred interest at EURIBOR plus 1.75% and had full recourse to the Company. This term loan was fully repaid in March 2021.

(7) Incurred interest at LIBOR plus 1.848%. This term loan was fully repaid in March 2021.

(8) Incurs interest at LIBOR plus 1.731%. This term loan was fully repaid in April 2021.

(9) Incurred interest at LIBOR plus 1.647%. This term loan was fully repaid in May 2021.

(10) Incurred interest at LIBOR plus 1.365%. This term loan was fully repaid in May 2021.

(11) Incurred interest at LIBOR plus 1.624%. This term loan was fully repaid in April 2021.

(12) Incurred interest at LIBOR plus 1.552%. This term loan was fully repaid in May 2021.

(13) Incurs interest at the average effective interest rate of each class of purchased securities plus 0.50% spread percentage.

(14) Term loan issued under master credit agreement.

(15) CLO Indentures for the respective CLO borrowings entered on November 30, 2017 and after provided for an alternative rate framework determined at the Company’s discretion upon a trigger event of LIBOR.

The CLO term loans are secured by the Company’s investments in the respective CLO, have a general unsecured interest in the Carlyle entity that manages the CLO, and generally do not have recourse to any other Carlyle entity. Interest expense for the three months ended September 30, 2021 and 2020 was $1.2 million and $1.9 million, respectively. Interest expense for the nine months ended September 30, 2021 and 2020 was $4.4 million and $6.6 million, respectively. The fair value of the outstanding balance of the CLO term loans at September 30, 2021 approximated par value based on current market rates for similar debt instruments. These CLO term loans are classified as Level III within the fair value hierarchy.

European CLO Financing - February 28, 2017

On February 28, 2017, a subsidiary of the Company entered into a financing agreement with several financial institutions under which these financial institutions have provided a €46.8 million term loan ($54.2 million at September 30, 2021) to the Company. This term loan is secured by the Company’s investments in the retained notes in certain European CLOs that were formed in 2014 and 2015. This term loan will mature on the earlier of November 17, 2031 or the date that the certain European CLO retained notes have been redeemed. The Company may prepay the term loan in whole or in part at any time. Interest on this term loan accrues at EURIBOR plus applicable margins (2.35% at September 30, 2021).

Master Credit Agreement - Term Loans

In January 2017, the Company entered into a master credit agreement with a financial institution under which the financial institution provided term loans to the Company for the purchase of eligible interests in CLOs. Term loans issued under this master credit agreement were secured by the Company’s investment in the respective CLO as well as any senior management fee and subordinated management fee payable by each CLO. Term loans bore interest at LIBOR plus a weighted average spread over LIBOR on the CLO notes and an applicable margin, which was due quarterly. CLO indentures for the respective CLO borrowings entered on November 30, 2017 and after provided for an alternative rate framework determined at the Company’s discretion upon a trigger event of LIBOR. This agreement terminated in January 2020. As of September 30, 2021, all outstanding CLO term loans under this agreement have been fully repaid.

CLO Repurchase Agreements

On February 5, 2019, the Company entered into a master credit facility agreement (the “CLO Financing Facility”) to finance a portion of the risk retention investments in certain European CLOs managed by the Company. The maximum facility amount is €100.0 million, but may be expanded on such terms agreed upon by the Company and the counterparty subject to the terms and conditions of the CLO Financing Facility. Each transaction entered into under the CLO Financing Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been sold plus a spread to be agreed upon by the parties. As of September 30, 2021, €128.6 million was outstanding under the CLO Financing Facility.

Each transaction entered into under the CLO Financing Facility provides for payment netting and, in the case of a default or similar event with respect to the counterparty to the CLO Financing Facility, provides for netting across transactions. Generally, upon a counterparty default, the Company can terminate all transactions under the CLO Financing Facility and offset amounts it owes in respect of any one transaction against collateral, if any, or other amounts it has received in respect of any other transactions under the CLO Financing Facility; provided, however, that in the case of certain defaults, the Company may only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to the counterparty if the securities sold are in default. Upon termination of a transaction, the Company will repurchase the previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may be terminated at any time upon certain defaults or circumstances agreed upon by the parties.

The repurchase agreements may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional

terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities pledged as collateral.

Senior Notes

Certain indirect subsidiaries of the the Company have issued long term borrowings in the form of senior notes, on which interest is payable semi-annually in arrears. The following table provides information regarding these senior notes (Dollars in millions):


							Interest Expense
			Fair Value (1) As of				Three Months Ended September 30,				Nine Months Ended September 30,
	Aggregate Principal Amount		September 30, 2021		December 31, 2020		2021		2020		2021		2020
3.875% Senior Notes Due 2/1/2023 (2)	$	250.0	$	262.1	$	270.0	$	2.5	$	2.5	$	7.5	$	7.5
5.625% Senior Notes Due 3/30/2043 (3)	600.0		790.0		782.6		8.4		8.4		25.3		25.3
5.650% Senior Notes Due 9/15/2048 (4)	350.0		482.7		469.3		5.0		5.0		14.9		14.9
3.500% Senior Notes Due 9/19/2029 (5)	425.0		456.8		476.6		3.8		3.8		11.5		11.5
							$	19.7	$	19.7	$	59.2	$	59.2

(1) Including accrued interest. Fair value is based on indicative quotes and the notes are classified as Level II within the fair value hierarchy.

(2) Issued in January 2013 at 99.966% of par.

(3) Issued $400.0 million in aggregate principal at 99.583% of par in March 2013. An additional $200.0 million in aggregate principal was issued at 104.315% of par in March 2014, and is treated as a single class with the outstanding $400.0 million in senior notes previously issued.

(4) Issued in September 2018 at 99.914% of par.

(5) Issued in September 2019 at 99.841% of par.

The issuers may redeem the senior notes, in whole at any time or in part from time to time, at a price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on any notes being redeemed discounted to the redemption date on a semiannual basis at the Treasury Rate plus 40 basis points (30 basis points in the case of the 3.875% and 3.500% senior notes), plus in each case accrued and unpaid interest on the principal amounts being redeemed. On October 22, 2021, the Company announced its intention to redeem the remaining 3.875% Senior Notes in whole at the make-whole redemption price as set forth in the notes, which is expected to be completed in November 2021.

Subordinated Notes

In May 2021, an indirect subsidiary of the Company issued $435.0 million aggregate principal amount of 4.625% Subordinated Notes due May 15, 2061 (the “Subordinated Notes”), on which interest is payable quarterly accruing from May 11, 2021. In June 2021, an additional $65.0 million aggregate principal amount of these Subordinated Notes were issued and are treated as a single series with the already outstanding $435.0 million aggregate principal amount. The Subordinated Notes are unsecured and subordinated obligations of the issuer, and are fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, on a subordinated basis, by the Company, each of the Carlyle Holdings partnerships, and CG Subsidiary Holdings L.L.C., an indirect subsidiary of the Company (collectively, the “Guarantors”). The Consolidated Funds are not guarantors, and as such, the assets of the Consolidated Funds are not available to service the Subordinated Notes under the Guarantee. The Subordinated Notes may be redeemed at the issuer’s option in whole at any time or in part from time to time on or after June 15, 2026 at a redemption price equal to their principal amount plus any accrued and unpaid interest to, but excluding, the date of redemption. If interest due on the Subordinated Notes is deemed no longer to be deductible in the U.S., a “Tax Redemption Event”, the Subordinated Notes may be redeemed, in whole, but not in part, within 120 days of the occurrence of such event at a redemption price equal to their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Subordinated Notes may be redeemed, in whole, but not in part, at any time prior to May 15, 2026, within 90 days of the rating agencies determining that the Subordinated Notes should no longer receive partial equity treatment pursuant to the rating agency’s criteria, a “rating agency event”, at a redemption price equal to 102% of their principal amount plus any accrued and unpaid interest to, but excluding, the date of redemption.

As of September 30, 2021, the fair value of the Subordinated Notes was $512.4 million. Fair value is based on active market quotes and the notes are classified as Level I within the fair value hierarchy. For the three months ended September 30, 2021 and for the period from May 11, 2021 through September 30, 2021, the Company incurred $5.6 million and $8.9 million, respectively, of interest expense on the Subordinated Notes.

Debt Covenants

The Company is subject to various financial covenants under its loan agreements including, among other items, maintenance of a minimum amount of management fee-earning assets. The Company is also subject to various non-financial covenants under its loan agreements and the indentures governing its senior and subordinated notes. The Company was in compliance with all financial and non-financial covenants under its various loan agreements as of September 30, 2021.

Loans Payable of Consolidated Funds

Loans payable of Consolidated Funds primarily represent amounts due to holders of debt securities issued by the CLOs. Several of the CLOs issued preferred shares representing the most subordinated interest, however these tranches are mandatorily redeemable upon the maturity dates of the senior secured loans payable, and as a result have been classified as liabilities and are included in loans payable of Consolidated Funds in the unaudited condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, the following borrowings were outstanding, which includes preferred shares classified as liabilities (Dollars in millions):


	As of September 30, 2021
	Borrowing Outstanding		Fair Value		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years
Senior secured notes	$	5,697.8	$	5,700.1	1.72	%		10.46
Subordinated notes, preferred shares and other	312.5		238.2		N/A		(1)	10.67

Total	$	6,010.3	$	5,938.3


	As of December 31, 2020
	Borrowing Outstanding		Fair Value		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years
Senior secured notes	$	5,442.2	$	5,358.9	1.74	%		10.36
Subordinated notes, preferred shares and other	164.2		204.1		N/A		(1)	10.49

Total	$	5,606.4	$	5,563.0

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

Loans payable of the CLOs are collateralized by the assets held by the CLOs and the assets of one CLO may not be used to satisfy the liabilities of another. This collateral consisted of cash and cash equivalents, corporate loans, corporate bonds and other securities. As of September 30, 2021 and December 31, 2020, the fair value of the CLO assets was $6.7 billion and $6.3 billion, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Accrued Compensation and Benefits

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Accrued Compensation and Benefits

6. Accrued Compensation and Benefits

Accrued compensation and benefits consist of the following:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Accrued performance allocations and incentive fee related compensation	$	4,057.2	$	2,534.4
Accrued bonuses	376.1		469.6
Employment-based contingent cash consideration	28.2		50.6
Other	248.7		168.0
Total	$	4,710.2	$	3,222.6

The following table presents realized and unrealized performance allocations and incentive fee related compensation:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Realized	$	478.5	$	50.0	$	789.8	$	245.7
Unrealized	16.7		200.6		1,566.0		98.0
Total	$	495.2	$	250.6	$	2,355.8	$	343.7

Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Capital Commitments

The Company and its unconsolidated affiliates have unfunded commitments to entities within the following segments as of September 30, 2021 (Dollars in millions):


	Unfunded Commitments
Global Private Equity	$	3,766.8

Global Credit	342.9
Global Investment Solutions	292.7
Total	$	4,402.4

Of the $4.4 billion of unfunded commitments, approximately $3.9 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Company. In addition to these unfunded commitments, the Company may from time to time exercise its right to purchase additional interests in its investment funds that become available in the ordinary course of their operations.

Under the Carlyle Global Capital Markets platform, certain subsidiaries of the Company may act as an underwriter, syndicator or placement agent for security offerings and loan originations. The Company earns fees in connection with these activities and bears the risk of the sale of such securities and placement of such loans, which may be longer dated. As of September 30, 2021, certain subsidiaries of the Company had $62.9 million in unfunded commitments related to the origination and syndication of loans and securities under the Carlyle Global Capital Markets platform, which were extinguished in October 2021.

Guaranteed Loans

On September 3, 2019, the Company entered into an agreement with a financial institution pursuant to which the Company is the guarantor on loans made to eligible employees investing in Carlyle sponsored funds (the “Program”). The Program has an initial period of one year, renewed annually, and accrues interest at either the WSJ Prime Rate minus 1.00% floating or the 12MAT Index plus 2.00% floating, in either case with a floor rate of 3.50% (versus actual rates of 2.25% and 2.08%, respectively, as of September 30, 2021). The aggregate Program limit of all loans is $100.0 million, and is collateralized

by each borrower’s interest in the Carlyle sponsored funds. As of September 30, 2021, approximately $15.0 million was outstanding under the Program and payable by the employees. The Company has not funded any amounts under the guarantee to date, and believes the likelihood of any material funding under this guarantee to be remote. The fair value of the guarantee is not significant to the consolidated financial statements. The Program replaced a similar agreement with another financial institution, the remaining amount outstanding and guaranteed under which was immaterial as of September 30, 2021.

From time to time, the Company or its subsidiaries may enter into agreements to guarantee certain obligations of the investment funds related to, for example, credit facilities or equity commitments. Certain consolidated subsidiaries of the Company are the guarantors of revolving credit facilities for certain funds in the Global Investment Solutions segment. The guarantee is limited to the lesser of the total amount drawn under the credit facilities or the net asset value of the guarantor subsidiaries, which was approximately $9.8 million as of September 30, 2021. The outstanding balances are secured by uncalled capital commitments from the underlying funds and the Company believes the likelihood of any material funding under this guarantee to be remote.

Contingent Obligations (Giveback)

A liability for potential repayment of previously received performance allocations of $24.7 million at September 30, 2021 is shown as accrued giveback obligations in the unaudited condensed consolidated balance sheets, representing the giveback obligation that would need to be paid if the funds were liquidated at their current fair values at September 30, 2021. However, the ultimate giveback obligation, if any, generally is not paid until the end of a fund’s life or earlier if the giveback becomes fixed and early payment is agreed upon by the fund’s partners (see Note 2). The Company has no unbilled receivables from former and current employees and senior Carlyle professionals as of September 30, 2021 or December 31, 2020 related to giveback obligations. Any such receivables would be collateralized by investments made by individual senior Carlyle professionals and employees in Carlyle-sponsored funds. In addition, $173.8 million and $175.9 million have been withheld from distributions of carried interest to senior Carlyle professionals and employees for potential giveback obligations as of September 30, 2021 and December 31, 2020, respectively. Such amounts are held on behalf of the respective current and former Carlyle employees to satisfy any givebacks they may owe and are held by entities not included in the accompanying condensed consolidated balance sheets. Current and former senior Carlyle professionals and employees are personally responsible for their giveback obligations. As of September 30, 2021, approximately $11.6 million of the Company’s accrued giveback obligation is the responsibility of various current and former senior Carlyle professionals and other former limited partners of the Carlyle Holdings partnerships, and the net accrued giveback obligation attributable to the Company is $13.1 million.

If, at September 30, 2021, all of the investments held by the Company’s Funds were deemed worthless, a possibility that management views as remote, the amount of realized and distributed carried interest subject to potential giveback would be $1.0 billion, on an after-tax basis where applicable, of which approximately $0.5 billion would be the responsibility of current and former senior Carlyle professionals.

Leases

The Company’s leases primarily consist of operating leases for office space in various countries around the world, including its headquarters in Washington, D.C. The Company relocated one of its New York City offices in December 2020 to new office space in Midtown New York. These leases have remaining lease terms of one year to 15 years, some of which include options to extend for up to five years and some of which include an option to terminate the leases within one year. The Company also has operating leases for office equipment and vehicles, which are not significant.

The Company assesses its lease right-of-use assets for impairment consistent with its impairment assessment of other long-lived assets. In connection with the April 1, 2021 sale of Metropolitan Real Estate, the Company entered into a sublease agreement for a portion of its existing office space in New York during the three months ended June 30, 2021. As a result of the sublease transaction, the Company recorded a lease impairment charge of $26.8 million during the three months ended June 30, 2021, which was the excess of the carrying value of the associated lease right-of-use asset over its estimated fair value. The Company estimated the fair value using discounted cash flows from the estimated net sublease rental income. The impairment charge is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.

The following table summarizes the Company’s lease cost, cash flows and other supplemental information related to its operating leases (Dollars in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
Operating lease cost	$	14.1	$	12.1	$	41.6		$	35.8
Sublease income	(1.0)		(0.6)		(2.2)			(1.8)
Total operating lease cost	$	13.1	$	11.5	$	39.4		$	34.0

Cash paid for amounts included in the measurement of operating lease liabilities	$	12.4	$	13.4	$	35.1		$	42.2

Weighted-average remaining lease term					12.1 years			9.4 years
Weighted-average discount rate					4.1		%	5.3		%

Maturities of lease liabilities related to operating leases were as follows (Dollars in millions):


Year ending December 31,
2021 (excluding the nine months ended September 30, 2021)	$	15.7
2022	64.1
2023	61.3
2024	57.5
2025	55.3
Thereafter	433.4
Total lease payments	$	687.3

Less imputed interest	(144.9)
Total lease liabilities	$	542.4

Legal Matters

In the ordinary course of business, the Company is a party to litigation, investigations, inquiries, employment-related matters, disputes and other potential claims. Certain of these matters are described below. The Company is not currently able to estimate the reasonably possible amount of loss or range of loss, in excess of any amounts accrued, for the matters that have not been resolved. The Company does not believe it is probable that the outcome of any existing litigation, investigations, disputes or other potential claims will materially affect the Company or these financial statements in excess of amounts accrued. The Company believes that the matters described below are without merit.

Along with many other companies and individuals in the financial sector, the Company and Carlyle Mezzanine Partners, L.P. (“CMP”) are named as defendants in Foy v. Austin Capital, a case filed in June 2009 in state court in New Mexico, which purports to be a qui tam suit on behalf of the State of New Mexico under the state Fraud Against Taxpayers Act (“FATA”). The suit alleges that investment decisions by New Mexico public investment funds were improperly influenced by campaign contributions and payments to politically connected placement agents. The plaintiffs seek, among other things, actual damages for lost income, rescission of the investment transactions described in the complaint and disgorgement of all fees received. In September 2017, the Court dismissed the lawsuit and the plaintiffs then filed an appeal seeking to reverse that decision. In June 2020, the Court of Appeals affirmed the decision dismissing the case. On June 24, 2020, plaintiffs filed a motion for rehearing with the Court of Appeals. On June 30, 2020, the Court of Appeals denied that motion. Plaintiffs filed an appeal to the New Mexico Supreme Court. On October 9, 2020, the New Mexico Supreme Court denied Foy’s petition for certiorari. On October 27, 2020, Foy filed two motions for rehearing with the New Mexico Supreme Court. On May 26, 2021, certain other defendants in the actions filed in the New Mexico Supreme Court a motion to dismiss due to the deaths of the two qui tam plaintiffs.

Carlyle Capital Corporation Limited (“CCC”) was a fund sponsored by the Company that invested in AAA-rated residential mortgage backed securities on a highly leveraged basis. It filed for insolvency protection in Guernsey in 2008 during

the financial crisis. The Guernsey liquidators who took control of CCC in March 2008 pursued litigation against the Company, certain of its affiliates and the former directors of CCC (collectively, the “Carlyle Defendants”) in the Royal Court of Guernsey. The Carlyle Defendants prevailed in the litigation and also prevailed in the liquidator’s appeal of the trial court decision. On April 21, 2020, the parties executed a definitive settlement agreement to end further appeals. The liquidators paid the Company approximately £24.2 million to reimburse legal fees and expenses to defend the claims, and the Company recognized $29.9 million as a reduction to general, administrative and other expenses in the accompanying unaudited condensed consolidated statements of operations during the nine months ended September 30, 2020.

The Company currently is and expects to continue to be, from time to time, subject to examinations, formal and informal inquiries and investigations by various U.S. and non-U.S. governmental and regulatory agencies, including but not limited to, the SEC, Department of Justice, state attorneys general, FINRA, National Futures Association and the U.K. Financial Conduct Authority. The Company routinely cooperates with such examinations, inquiries and investigations, and they may result in the commencement of civil, criminal, or administrative or other proceedings against the Company or its personnel.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings and employment-related matters, and some of the matters discussed above involve claims for potentially large and/or indeterminate amounts of damages. Based on information known by management, management does not believe that as of the date of this filing the final resolutions of the matters above will have a material effect upon the Company’s unaudited condensed consolidated financial statements. However, given the potentially large and/or indeterminate amounts of damages sought in certain of these matters and the inherent unpredictability of investigations and litigations, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s financial results in any particular period.

The Company accrues an estimated loss contingency liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. As of September 30, 2021, the Company had recorded liabilities aggregating to approximately $35 million for litigation-related contingencies, regulatory examinations and inquiries, and other matters. The Company evaluates its outstanding legal and regulatory proceedings and other matters each quarter to assess its loss contingency accruals, and makes adjustments in such accruals, upward or downward, as appropriate, based on management’s best judgment after consultation with counsel. There is no assurance that the Company’s accruals for loss contingencies will not need to be adjusted in the future or that, in light of the uncertainties involved in such matters, the ultimate resolution of these matters will not significantly exceed the accruals that the Company has recorded.

Indemnifications

In the normal course of business, the Company and its subsidiaries enter into contracts that contain a variety of representations and warranties and provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company believes the risk of material loss to be remote.

In connection with the sale of the Company’s interest in its local Brazilian management entity in August 2021, the Company provided a guarantee to the acquiring company of up to BRL 100.0 million ($18.3 million as of September 30, 2021) for liabilities arising from tax-related indemnifications. This guarantee, which will expire in August 2027, would only come into effect after all alternative remedies have been exhausted. The Company believes the likelihood of any material funding under this guarantee to be remote.

Risks and Uncertainties

Carlyle’s funds seek investment opportunities that offer the possibility of attaining substantial capital appreciation. Certain events particular to each industry in which the underlying investees conduct their operations, as well as general economic, political, regulatory and public health conditions, may have a significant negative impact on the Company’s investments and profitability. The funds managed by the Company may also experience a slowdown in the deployment of capital, which could adversely affect the Company’s ability to raise capital for new or successor funds and could also impact the management fees the Company earns on its carry funds and managed accounts. Such events are beyond the Company’s control, and the likelihood that they may occur and the effect on the Company cannot be predicted.

Furthermore, certain of the funds’ investments are made in private companies and there are generally no public markets for the underlying securities at the current time. The funds’ ability to liquidate their publicly-traded investments are often subject to limitations, including discounts that may be required to be taken on quoted prices due to the number of shares being sold. The funds’ ability to liquidate their investments and realize value is subject to significant limitations and uncertainties, including among others currency fluctuations and natural disasters.

The Company and the funds make investments outside of the United States. Investments outside the United States may be subject to less developed bankruptcy, 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 the Company or an unrelated fund or portfolio company). Non-U.S. investments are subject to the same risks associated with the Company’s U.S. investments as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing non-U.S. investments, potentially adverse tax consequences and the burden of complying with a wide variety of foreign laws.

Furthermore, Carlyle is exposed to economic risk concentrations related to certain large investments as well as concentrations of investments in certain industries and geographies.

Additionally, the Company encounters credit risk. Credit risk is the risk of default by a counterparty in the Company’s investments in debt securities, loans, leases and derivatives that result from a borrower’s, lessee’s or derivative counterparty’s inability or unwillingness to make required or expected payments.

The Company considers cash, cash equivalents, securities, receivables, principal equity method investments, accounts payable, accrued expenses, other liabilities, loans, senior notes, assets and liabilities of Consolidated Funds and contingent and other consideration for acquisitions to be its financial instruments. Except for the senior and subordinated notes, the carrying amounts reported in the unaudited condensed consolidated balance sheets for these financial instruments equal or closely approximate their fair values. The fair value of the senior and subordinated notes is disclosed in Note 5.

Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions

8. Related Party Transactions

Due from Affiliates and Other Receivables, Net

The Company had the following due from affiliates and other receivables at September 30, 2021 and December 31, 2020:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Accrued incentive fees	$	11.1	$	9.5

Notes receivable and accrued interest from affiliates	10.6		17.9
Management fee, reimbursable expenses and other receivables from unconsolidated funds and affiliates, net	271.7		245.1
Total	$	293.4	$	272.5

Notes receivable represent loans that the Company has provided to certain unconsolidated funds to meet short-term obligations to purchase investments. Reimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate to management fees receivable from limited partners, advisory fees receivable and expenses paid on behalf of these entities. These costs represent costs related to the pursuit of actual or proposed investments, professional fees and expenses associated with the acquisition, holding and disposition of the investments. The affiliates are obligated at the discretion of the Company to reimburse the expenses. Based on management’s determination, the Company accrues and charges interest on amounts due from affiliate accounts at interest rates ranging up to 6.90% as of September 30, 2021. The accrued and charged interest to the affiliates was not significant for any period presented.

These receivables are assessed regularly for collectability and amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the condensed consolidated statements of operations. A corresponding allowance for doubtful accounts is recorded and such amounts were not significant for any period presented.

Due to Affiliates

The Company had the following due to affiliates balances at September 30, 2021 and December 31, 2020:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)

Due to non-consolidated affiliates	$	70.2	$	49.2
Deferred consideration for Carlyle Holdings units	200.1		266.7
Amounts owed under the tax receivable agreement	98.0		98.0
Other	22.9		22.8
Total	$	391.2	$	436.7

The Company has recorded obligations for amounts due to certain of its affiliates. The Company periodically offsets expenses it has paid on behalf of its affiliates against these obligations.

Deferred consideration for Carlyle Holdings units relates to the remaining obligation to the holders of Carlyle Holdings partnership units who will receive cash payments aggregating to $1.50 per Carlyle Holdings partnership unit exchanged in connection with the Conversion, payable in five annual installments of $0.30. The first and second annual installment payments occurred in January 2020 and January 2021, respectively. The obligation was initially recorded at fair value, net of a discount of $11.3 million and measured using Level III inputs in the fair value hierarchy.

In connection with the Company’s initial public offering, the Company entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships whereby certain subsidiaries of the Partnership agreed to pay to the limited partners of the Carlyle Holdings partnerships involved in any exchange transaction 85% of the amount of cash tax savings, if any, in U.S. federal, state and local income tax realized as a result of increases in tax basis resulting from exchanges of Carlyle Holdings Partnership units for common units of The Carlyle Group L.P.

Other Related Party Transactions

In the normal course of business, the Company has made use of aircraft owned by entities controlled by senior Carlyle professionals. The senior Carlyle professionals paid for their purchases of aircraft and bear all operating, personnel and maintenance costs associated with their operation for personal use. Payment by the Company for the business use of these aircraft by senior Carlyle professionals and other employees is made at market rates throughout the year based on budgeted business usage. When actual business use exceeds budgeted aircraft use, the Company makes additional payments to the aircraft owner and/or the aircraft management company, as appropriate. Similarly, when the aggregate amount paid for budgeted aircraft use exceeds the calculated costs of actual business use, or results in rates which exceed market aircraft charter rates, we receive reimbursement of such excess payments from the aircraft owner and/or the aircraft management company, as appropriate. These adjustments are calculated annually and payments or reimbursements are generally made after year-end. During the three months ended September 30, 2021, the Company made payments of $0.5 million, and during the nine months ended September 30, 2021, the Company received net reimbursements of $1.2 million. During the three and nine months ended September 30, 2020, the Company made payments totaling $0.9 million and $4.2 million, respectively. The accrual of aircraft fees is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.

On May 5, 2020, the Company purchased 2,000,000 shares of cumulative convertible preferred stock from TCG BDC in a private placement at a price of $25 per share (the “BDC Preferred Shares”). Dividends are payable on a quarterly basis in an initial amount equal to 7.0% per annum payable in cash, or, at TCG BDC’s option, 9.0% per annual payable in additional shares of BDC Preferred Stock. The Company recorded TCG BDC dividend income of $0.8 million and $0.8 million during the three months ended September 30, 2021 and 2020, respectively, and $2.6 million and $1.4 million during the nine months ended September 30, 2021 and 2020, respectively, which is included in interest and other income in the unaudited condensed consolidated statements of operations. The Company’s investment in the BDC Preferred Shares, which is recorded at fair value, was $71.8 million and $60.0 million as of September 30, 2021 and December 31, 2020, respectively, and is included in investments, including accrued performance allocations, in the unaudited condensed consolidated balance sheets.

Senior Carlyle professionals and employees are permitted to participate in co-investment entities that invest in Carlyle funds or alongside Carlyle funds. In many cases, participation is limited by law to individuals who qualify under applicable legal requirements. These co-investment entities generally do not require senior Carlyle professionals and employees to pay management fees or performance allocations, however, Carlyle professionals and employees are required to pay their portion of partnership expenses.

Carried interest income from the funds can be distributed to senior Carlyle professionals and employees on a current basis, but is subject to repayment by the subsidiary of the Company that acts as general partner of the fund in the event that certain specified return thresholds are not ultimately achieved. The senior Carlyle professionals and certain other investment professionals have personally guaranteed, subject to certain limitations, the obligation of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to a particular individual’s distributions received.

The Company does business with some of its portfolio companies; all such arrangements are on a negotiated basis.

Substantially all revenue is earned from affiliates of Carlyle.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes Following the Conversion on January 1, 2020, all of the income before provision for income taxes attributable to the Company is subject to U.S. federal, state, and local corporate income taxes. Prior to the Conversion, the Company was generally organized as a series of pass through entities pursuant to the United States Internal Revenue Code. As such, the Company was not responsible for the tax liability due on certain income earned during the year. Such income was taxed at the unitholder and non-controlling interest holder level, and any income tax was the responsibility of the unitholders and was paid at that level. The Company’s provision (benefit) for income taxes was $153.9 million and $82.4 million for the three months ended September 30, 2021 and 2020, respectively, and $733.5 million and $54.7 million for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2020, the provision for income taxes reflects a tax benefit of $35.6 million related to the net loss recorded during the period, net of the $90.3 million expense related to Conversion. For additional information regarding the impact of Conversion, refer to Note 11 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s effective tax rate was approximately 22% and 20% for the three months ended September 30, 2021 and 2020, respectively, and 24% and (47)% for the nine months ended September 30, 2021 and 2020, respectively. The effective tax rate for the nine months ended September 30, 2021 is primarily comprised of the 21% U.S. federal corporate income tax rate plus U.S. state and foreign corporate income taxes, partially offset by non-controlling interests and the impact of a discrete tax benefit resulting from the vesting of restricted stock units. The effective tax rate for the nine months ended September 30, 2020 differs from the statutory rate primarily due to the income tax expense resulting from the Conversion offsetting the tax benefit from the net loss recorded in the period. As of September 30, 2021 and December 31, 2020, the Company had federal, state, local and foreign taxes payable of $180.4 million and $62.7 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated balance sheet. In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. With a few exceptions, as of September 30, 2021, the Company’s U.S. federal income tax returns for tax years 2017 through 2020 are open under the normal three-year statute of limitations and therefore subject to examination. State and local tax returns are generally subject to audit for tax years 2015 to 2020. Foreign tax returns are generally subject to audit for tax years 2011 to 2020. Certain of the Company’s affiliates are currently under audit by federal, state and foreign tax authorities. The Company does not believe that the outcome of these audits will require it to record material reserves for uncertain tax positions or that the outcome will have a material impact on the consolidated financial statements. The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Non-controlling Interests in Consolidated Entities

9 Months Ended

Sep. 30, 2021

Noncontrolling Interest [Abstract]

Non-controlling Interests in Consolidated Entities

10. Non-controlling Interests in Consolidated Entities

The components of the Company’s non-controlling interests in consolidated entities are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Non-Carlyle interests in Consolidated Funds	$	26.0	$	1.2
Non-Carlyle interests in majority-owned subsidiaries	236.8		223.3
Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions	11.0		16.5
Non-controlling interests in consolidated entities	$	273.8	$	241.0

The components of the Company’s non-controlling interests in income (loss) of consolidated entities are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Non-Carlyle interests in Consolidated Funds	$	0.7	$	2.8	$	0.9	$	6.2
Non-Carlyle interests in majority-owned subsidiaries	13.2		34.5		46.6		(7.2)
Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions	0.7		(0.1)		10.2		(0.2)



Non-controlling interests in income (loss) of consolidated entities	$	14.6	$	37.2	$	57.7	$	(1.2)

Earnings Per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Common Share

11. Earnings Per Common Share

Basic and diluted net income (loss) per common share are calculated as follows:


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
	Basic		Diluted		Basic		Diluted



Net income attributable to common shares	$	532,800,000	$	532,800,000	$	2,327,100,000	$	2,327,100,000
Weighted-average common shares outstanding	355,954,734		364,740,675		354,903,371		362,471,998
Net income per common share	$	1.50	$	1.46	$	6.56	$	6.42


	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Basic		Diluted		Basic		Diluted



Net loss attributable to common shares	$	295,500,000	$	295,500,000	$	(170,600,000)	$	(170,600,000)
Weighted-average common shares outstanding	351,567,631		358,405,845		349,468,329		349,468,329
Net income (loss) per common share	$	0.84	$	0.82	$	(0.49)	$	(0.49)

The weighted-average common shares outstanding, basic and diluted, are calculated as follows:


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	Basic	Diluted	Basic	Diluted
The Carlyle Group Inc. weighted-average common shares outstanding	355,954,734	355,954,734	354,903,371	354,903,371
Unvested restricted stock units	—	6,716,547	—	5,582,360
Issuable The Carlyle Group Inc. common shares	—	2,069,394	—	1,986,267



Weighted-average common shares outstanding	355,954,734	364,740,675	354,903,371	362,471,998


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
	Basic	Diluted	Basic	Diluted
The Carlyle Group Inc. weighted-average common shares outstanding	351,567,631	351,567,631	349,468,329	349,468,329
Unvested restricted stock units	—	4,589,870	—	—
Issuable The Carlyle Group Inc. common shares	—	2,248,344	—	—


Weighted-average common shares outstanding	351,567,631	358,405,845	349,468,329	349,468,329

The Company applies the treasury stock method to determine the dilutive weighted-average common shares represented by the unvested restricted stock units. Also included in the determination of dilutive weighted-average common shares are issuable common shares associated with the Company’s acquisitions, strategic investment in NGP and performance-vesting restricted stock units. All such awards were antidilutive and excluded from the computation of diluted earnings per share given the net loss attributable to common stockholders for the nine months ended September 30, 2020.

Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Equity

12. Equity

Stock Repurchase Program

In December 2018, the Board of Directors of the Company authorized the repurchase of up to $200.0 million of common units and/or Carlyle Holdings units, which was re-authorized in January 2020 by the Board of Directors with regard to our common stock in connection with the Conversion. In February 2021, the Board of Directors replenished the repurchase program to its limit of $200 million of common stock from its maximum remaining repurchase amount of $139.1 million. Under this repurchase program, shares of common stock may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During the three and nine months ended September 30, 2021, the Company paid an aggregate of $59.5 million and $84.5 million, respectively, to repurchase and retire approximately 1.2 million and 1.9 million shares, respectively, with all of the repurchases done via open market and brokered transactions. As of September 30, 2021, $115.5 million of repurchase capacity remains under the program. In October 2021, the Board of Directors of the Company authorized the repurchase of up to $400.0 million of common stock, which will replace the authorization provided in February 2021 effective January 1, 2022.

Dividends

The table below presents information regarding the quarterly dividends on the common shares, which were made at the sole discretion of the Board of Directors of the Company.


Dividend Record Date	Dividend Payment Date	Dividend per Common Share		Dividend to Common Stockholders
		(Dollars in millions, except per share data)
May 12, 2020	May 19, 2020	$	0.25	$	87.2
August 11, 2020	August 18, 2020	0.25		88.3
November 10, 2020	November 17, 2020	0.25		88.4
February 16, 2021	February 23, 2021	0.25		88.7
Total 2020 Dividend Year		$	1.00	$	352.6

May 11, 2021	May 19, 2021	$	0.25	$	88.7
August 10, 2021	August 17, 2021	0.25		89.3
November 9, 2021	November 17, 2021	0.25		89.2

Total 2021 Dividend Year (through Q3 2021)		$	0.75	$	267.2

The Board of Directors will take into account general economic and business conditions, as well as the Company’s strategic plans and prospects, business and investment opportunities, financial condition and obligations, legal, tax and regulatory restrictions, other constraints on the payment of dividends by the Company to its common stockholders or by subsidiaries to the Company, and other such factors as the Board of Directors may deem relevant. In addition, the terms of the Company’s credit facility provide certain limits on the Company’s ability to pay dividends.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI http://asc.fasb.org/topic&trid=2208762

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Equity-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

13. Equity-Based Compensation

In May 2012, Carlyle Group Management L.L.C., the general partner of the Partnership, adopted the Equity Incentive Plan. The Equity Incentive Plan, which was amended on January 1, 2020 in connection with the Conversion to reflect shares of the Company’s common stock, is a source of equity-based awards permitting the Company to grant to Carlyle employees, directors and consultants non-qualified options, share appreciation rights, common shares, restricted stock units and other awards based on the Company’s common shares. The total number of the Company’s common shares which were initially available for grant under the Equity Incentive Plan was 30,450,000. Prior to June 1, 2021, the Equity Incentive Plan contained a provision which automatically increased the number of the Company’s common shares available for grant based on a pre-determined formula; this increase occurred annually on January 1. As of January 1, 2021, pursuant to the formula, the total number of the Company’s common shares available for grant under the Equity Incentive Plan was 35,352,057. On June 1, 2021, the shareholders of the Company approved an amended and restated Equity Incentive Plan that removed the provision providing for the automatic increase and reset the total number of shares of common stock available for grant to 16,000,000 for awards granted under the plan after June 1, 2021. As of September 30, 2021, the total number of the Company’s common shares available for grant under the amended and restated Equity Incentive Plan was 15,699,405.

A summary of the status of the Company’s non-vested equity-based awards as of September 30, 2021 and a summary of changes for the nine months ended September 30, 2021, are presented below:




Unvested Shares	Restricted Stock Units	Weighted- Average Grant Date Fair Value		Unvested Common Shares (1)	Weighted- Average Grant Date Fair Value
Balance, December 31, 2020	8,523,082	$	21.70	748,344	$	25.39
Granted	10,922,834	$	31.31	291,396	$	32.93
Vested	4,465,651	$	22.99	404,310	$	24.73
Forfeited	126,093	$	24.38	—	$	—
Balance, September 30, 2021	14,854,172	$	30.31	635,430	$	29.27

(1) Includes common shares issued in connection with the Company’s strategic investment in NGP.

During the nine months ended September 30, 2021, the Company granted 7.0 million long-term, strategic restricted stock units to certain senior professionals, the majority of which are subject to vesting based on the achievement of annual performance targets over four years. Compensation cost will be recognized over the requisite service period if it is probable that the performance condition will be satisfied.

The Company recorded compensation expense for restricted stock units, net of forfeitures, of $42.5 million and $18.7 million for the three months ended September 30, 2021 and 2020, respectively, with $8.4 million and $4.5 million of corresponding deferred tax benefits, respectively. The Company recorded compensation expense, net of forfeitures, for restricted stock units of $122.0 million and $78.3 million for the nine months ended September 30, 2021 and 2020, respectively, with $25.6 million and $19.5 million of corresponding deferred tax benefits, respectively. As of September 30, 2021, the total unrecognized equity-based compensation expense related to unvested restricted stock units was $329.4 million, which is expected to be recognized over a weighted-average term of 2.3 years.

Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

14. Segment Reporting

Carlyle conducts its operations through three reportable segments:

Global Private Equity – The Global Private Equity segment is comprised of the Company’s operations that advise a diverse group of funds that invest in buyout, middle market and growth capital, real estate and natural resources transactions.

Global Credit – The Global Credit segment advises a group of funds that pursue investment opportunities across various types of credit, including loans and structured credit, direct lending, opportunistic credit, energy credit, distressed credit, aircraft financing and servicing, and capital solutions.

Global Investment Solutions – The Global Investment Solutions segment advises global private equity fund of funds programs and related co-investment and secondary activities through AlpInvest. This segment also included Metropolitan Real Estate (“MRE”), a global manager of real estate fund of funds and related co-investment and secondary activities, prior to its sale on April 1, 2021.

The Company’s reportable business segments are differentiated by their various investment focuses and strategies. Overhead costs are generally allocated based on cash-based compensation and benefits expense for each segment. The Company’s earnings from its investment in NGP are presented in the respective operating captions within the Global Private Equity segment.

Distributable Earnings. Distributable Earnings, or “DE,” is a key performance benchmark used in the Company’s industry and is evaluated regularly by management in making resource deployment and compensation decisions and in assessing performance of the Company’s three reportable segments. Management also uses DE in budgeting, forecasting, and the overall management of the Company’s segments. Management believes that reporting DE is helpful to understanding the Company’s business and that investors should review the same supplemental financial measure that management uses to analyze the Company’s segment performance. DE is intended to show the amount of net realized earnings without the effects of the consolidation of the Consolidated Funds. DE is derived from the Company’s segment reported results and is used to assess performance.

Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it includes certain tax expenses associated with certain foreign performance revenues (comprised of performance allocations and incentive fees), and does not include unrealized performance allocations and related compensation expense, unrealized principal investment income, equity-based compensation expense, net income (loss) attributable to non-Carlyle interests in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items. Charges (credits) related to Carlyle corporate actions and non-recurring items include: charges (credits) associated with acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earnouts and contingent consideration including gains and losses associated with the estimated fair value of contingent considerations issued in conjunction with acquisitions or strategic investments, impairment charges associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract terminations and employee severance. Management believes the inclusion or exclusion of these items provides investors with a meaningful indication of the Company’s core operating performance.

Fee Related Earnings. Fee Related Earnings, or “FRE,” is used to assess the ability of the business to cover direct base compensation and operating expenses from total fee revenues. FRE differs from income (loss) before provision for income

taxes computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts DE to exclude net realized performance revenues, realized principal investment income, net interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain.

The following tables present the financial data for the Company’s three reportable segments for the three and nine months ended September 30, 2021:


	Three Months Ended September 30, 2021
	Global Private Equity		Global Credit		Global Investment Solutions		Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	265.1	$	92.5	$	59.3	$	416.9
Portfolio advisory and transaction fees, net and other	7.3		15.9		—		23.2
Total fund level fee revenues	272.4		108.4		59.3		440.1
Realized performance revenues	962.9		2.1		45.9		1,010.9
Realized principal investment income	61.6		7.4		2.3		71.3
Interest income	0.2		1.3		—		1.5
Total revenues	1,297.1		119.2		107.5		1,523.8
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	133.6		58.7		25.7		218.0
Realized performance revenues related compensation	434.5		1.0		41.9		477.4
Total compensation and benefits	568.1		59.7		67.6		695.4
General, administrative, and other indirect expenses	38.4		14.7		6.9		60.0
Depreciation and amortization expense	7.1		2.3		1.3		10.7
Interest expense	17.4		6.8		2.9		27.1
Total expenses	631.0		83.5		78.7		793.2
Distributable Earnings	$	666.1	$	35.7	$	28.8	$	730.6
(-) Realized Net Performance Revenues	528.4		1.1		4.0		533.5
(-) Realized Principal Investment Income	61.6		7.4		2.3		71.3
(+) Net Interest	17.2		5.5		2.9		25.6
(=) Fee Related Earnings	93.3		32.7		25.4		151.4


	Nine Months Ended September 30, 2021
	Global Private Equity		Global Credit		Global Investment Solutions		Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	788.7	$	258.6	$	171.6	$	1,218.9
Portfolio advisory and transaction fees, net and other	24.1		34.1		0.3		58.5
Total fund level fee revenues	812.8		292.7		171.9		1,277.4
Realized performance revenues	1,525.9		2.2		105.2		1,633.3
Realized principal investment income	109.3		23.1		6.7		139.1
Interest income	0.9		4.5		0.1		5.5
Total revenues	2,448.9		322.5		283.9		3,055.3
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	396.3		168.0		83.3		647.6
Realized performance revenues related compensation	688.3		1.0		97.1		786.4
Total compensation and benefits	1,084.6		169.0		180.4		1,434.0
General, administrative, and other indirect expenses	116.2		39.5		21.5		177.2
Depreciation and amortization expense	19.3		6.2		3.5		29.0
Interest expense	46.9		19.4		7.9		74.2
Total expenses	1,267.0		234.1		213.3		1,714.4
Distributable Earnings	$	1,181.9	$	88.4	$	70.6	$	1,340.9
(-) Realized Net Performance Revenues	837.6		1.2		8.1		846.9
(-) Realized Principal Investment Income	109.3		23.1		6.7		139.1
(+) Net Interest	46.0		14.9		7.8		68.7
(=) Fee Related Earnings	281.0		79.0		63.6		423.6
Segment assets as of September 30, 2021	$	10,146.4	$	2,169.7	$	1,874.6	$	14,190.7

The following tables present the financial data for the Company’s three reportable segments for the three and nine months ended September 30, 2020:


	Three Months Ended September 30, 2020
	Global Private Equity		Global Credit		Global Investment Solutions		Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	248.1	$	86.2	$	54.8	$	389.1
Portfolio advisory and transaction fees, net and other	3.5		1.6		—		5.1
Total fund level fee revenues	251.6		87.8		54.8		394.2
Realized performance revenues	70.5		—		16.3		86.8
Realized principal investment income	7.5		4.5		0.8		12.8
Interest income	0.3		2.3		0.1		2.7
Total revenues	329.9		94.6		72.0		496.5
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	122.5		52.5		30.3		205.3
Realized performance revenues related compensation	32.9		—		14.0		46.9
Total compensation and benefits	155.4		52.5		44.3		252.2
General, administrative, and other indirect expenses	40.4		12.0		9.6		62.0
Depreciation and amortization expense	5.3		1.8		1.1		8.2
Interest expense	13.7		6.3		2.3		22.3
Total expenses	214.8		72.6		57.3		344.7
Distributable Earnings	$	115.1	$	22.0	$	14.7	$	151.8
(-) Realized Net Performance Revenues	37.6		—		2.3		39.9
(-) Realized Principal Investment Income	7.5		4.5		0.8		12.8
(+) Net Interest	13.4		4.0		2.2		19.6
(=) Fee Related Earnings	$	83.4	$	21.5	$	13.8	$	118.7


	Nine Months Ended September 30, 2020
	Global Private Equity		Global Credit		Global Investment Solutions		Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	779.3	$	237.5	$	140.2	$	1,157.0
Portfolio advisory and transaction fees, net and other	10.8		19.4		—		30.2
Total fund level fee revenues	790.1		256.9		140.2		1,187.2
Realized performance revenues	251.7		26.5		132.4		410.6
Realized principal investment income	34.0		14.9		1.9		50.8
Interest income	2.6		8.0		0.6		11.2
Total revenues	1,078.4		306.3		275.1		1,659.8
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	382.8		156.1		80.3		619.2
Realized performance revenues related compensation	114.4		12.2		125.0		251.6
Total compensation and benefits	497.2		168.3		205.3		870.8
General, administrative, and other indirect expenses	115.2		30.7		22.5		168.4
Depreciation and amortization expense	16.2		5.2		3.4		24.8
Interest expense	43.4		20.2		7.0		70.6
Total expenses	672.0		224.4		238.2		1,134.6
Distributable Earnings	$	406.4	$	81.9	$	36.9	$	525.2
(-) Realized Net Performance Revenues	137.3		14.3		7.4		159.0
(-) Realized Principal Investment Income	34.0		14.9		1.9		50.8
(+) Net Interest	40.8		12.2		6.4		59.4
(=) Fee Related Earnings	$	275.9	$	64.9	$	34.0	$	374.8

The following tables reconcile the Total Segments to the Company’s Income (Loss) Before Provision for Taxes for the three months ended September 30, 2021 and 2020.


	Three Months Ended September 30, 2021
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated

	(Dollars in millions)
Revenues	$	1,523.8	$	62.1	$	53.6	(a)	$	1,639.5
Expenses	$	793.2	$	51.9	$	93.0	(b)	$	938.1
Other income	$	—	$	(0.1)	$	—	(c)	$	(0.1)
Distributable earnings	$	730.6	$	10.1	$	(39.4)	(d)	$	701.3


	Three Months Ended September 30, 2020
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated

	(Dollars in millions)
Revenues	$	496.5	$	56.3	$	481.8	(a)	$	1,034.6
Expenses	$	344.7	$	47.9	$	250.8	(b)	$	643.4
Other income	$	—	$	23.9	$	—	(c)	$	23.9
Distributable earnings	$	151.8	$	32.3	$	231.0	(d)	$	415.1

The following tables reconcile the Total Segments to the Company’s Income (Loss) Before Provision for Taxes for the nine months ended September 30, 2021 and 2020, and Total Assets as of September 30, 2021.


	Nine Months Ended September 30, 2021
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated

	(Dollars in millions)
Revenues	$	3,055.3	$	185.3	$	3,542.4	(a)	$	6,783.0
Expenses	$	1,714.4	$	162.6	$	1,797.3	(b)	$	3,674.3
Other income (loss)	$	—	$	9.6	$	—	(c)	$	9.6
Distributable earnings	$	1,340.9	$	32.3	$	1,745.1	(d)	$	3,118.3
Total assets	$	14,190.7	$	6,778.2	$	(180.2)	(e)	$	20,788.7


	Nine Months Ended September 30, 2020
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated

	(Dollars in millions)
Revenues	$	1,659.8	$	164.5	$	(404.4)	(a)	$	1,419.9
Expenses	$	1,134.6	$	148.8	$	214.7	(b)	$	1,498.1
Other income (loss)	$	—	$	(38.9)	$	—	(c)	$	(38.9)
Distributable earnings	$	525.2	$	(23.2)	$	(619.1)	(d)	$	(117.1)

(a)The Revenues adjustment principally represents unrealized performance revenues, unrealized principal investment income (loss) (including Fortitude Re), revenues earned from the Consolidated Funds which were eliminated in consolidation to arrive at the Company’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 reimbursement of certain costs incurred on behalf of Carlyle funds on a net basis, and the inclusion of tax expenses associated with certain foreign performance revenues, as detailed below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Unrealized performance revenues	$	(29.8)	$	387.6	$	3,212.7	$	315.7
Unrealized principal investment income (loss)	70.4		81.0		280.5		(643.2)
Adjusted unrealized principal investment income (loss) from investment in Fortitude Re	—		—		—		(104.4)
Adjustments related to expenses associated with investments in NGP Management and its affiliates	(3.6)		(4.0)		(10.2)		(11.8)
Tax expense associated with certain performance revenues	0.1		(0.1)		0.3		—
Non-Carlyle economic interests in acquired businesses and other adjustments to present certain costs on a net basis	33.2		57.6		119.6		36.7
Elimination of revenues of Consolidated Funds	(16.7)		(40.3)		(60.5)		2.6
	$	53.6	$	481.8	$	3,542.4	$	(404.4)

The following table reconciles the total segments fund level fee revenue to the most directly comparable U.S. GAAP measure, the Company’s consolidated fund management fees, for the three and nine months ended September 30, 2021 and 2020.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Total Reportable Segments - Fund level fee revenues	$	440.1	$	394.2	$	1,277.4	$	1,187.2
Adjustments (1)	(32.6)		(30.4)		(94.5)		(95.7)
Carlyle Consolidated - Fund management fees	$	407.5	$	363.8	$	1,182.9	$	1,091.5

(1) Adjustments represent the reclassification of NGP management fees from principal investment income, the reclassification of certain incentive fees from business development companies and other credit products, management fees earned from consolidated CLOs which were eliminated in consolidation to arrive at the Company’s fund management fees, and the reclassification of certain amounts included in portfolio advisory fees, net and other in the segment results that are included in interest and other income in the U.S. GAAP results.

(b)The Expenses adjustment represents the elimination of intercompany expenses of the Consolidated Funds payable to the Company, the inclusion of equity-based compensation, certain tax expenses associated with realized performance revenues related compensation, and unrealized performance revenues related compensation, adjustments related to expenses associated with the investment in NGP Management that are included in operating captions, adjustments to reflect the reimbursement of certain costs incurred on behalf of Carlyle funds on a net basis, changes in the tax receivable agreement liability, and charges and credits associated with Carlyle corporate actions and non-recurring items, as detailed below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Unrealized performance revenues related compensation	$	15.0	$	207.2	$	1,567.1	$	76.8
Equity-based compensation	44.3		21.1		129.5		87.4
Acquisition or disposition-related charges (credits) and amortization of intangibles	24.4		18.5		54.7		28.6

Tax expense associated with certain foreign performance revenues related compensation	(2.5)		(7.8)		(12.1)		4.1
Non-Carlyle economic interests in acquired businesses and other adjustments to present certain costs on a net basis	15.9		19.2		53.2		32.4
Right-of-use asset impairment	—		—		26.8		—

Other adjustments including severance and C-Corp. conversion costs in 2020	3.2		3.4		7.2		12.2
Elimination of expenses of Consolidated Funds	(7.3)		(10.8)		(29.1)		(26.8)
	$	93.0	$	250.8	$	1,797.3	$	214.7

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

(d)The following table is a reconciliation of Income (Loss) Before Provision for Income Taxes to Distributable Earnings and to Fee Related Earnings:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Income (loss) before provision for income taxes	$	701.3	$	415.1	$	3,118.3	$	(117.1)
Adjustments:
Net unrealized performance revenues	44.8		(180.3)		(1,645.6)		(238.8)
Unrealized principal investment (income) loss (1)	(70.4)		(81.0)		(280.5)		643.2
Adjusted unrealized principal investment (income) loss from investment in Fortitude Re (2)	—		—		—		104.4
Equity-based compensation (3)	44.3		21.1		129.5		87.4
Acquisition or disposition-related charges (credits), including amortization of intangibles	24.4		18.5		54.7		28.6

Tax (expense) benefit associated with certain foreign performance revenues	(2.4)		(7.8)		(11.8)		4.1
Net (income) loss attributable to non-controlling interests in consolidated entities	(14.6)		(37.2)		(57.7)		1.2
Right-of-use asset impairment	—		—		26.8		—

Other adjustments including severance and C-Corp. conversion costs in 2020	3.2		3.4		7.2		12.2
Distributable Earnings	$	730.6	$	151.8	$	1,340.9	$	525.2
Realized performance revenues, net of related compensation (4)	533.5		39.9		846.9		159.0
Realized principal investment income (4)	71.3		12.8		139.1		50.8
Net interest	25.6		19.6		68.7		59.4
Fee Related Earnings	$	151.4	$	118.7	$	423.6	$	374.8

(1)Adjustments to unrealized principal investment income (loss) during the nine months ended September 30, 2020 are inclusive of $211.8 million of unrealized gains, resulting from changes in the fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude Re’s U.S. GAAP financial statements prior to the contribution of the Company’s investment in Fortitude Holdings to Carlyle FRL on June 2, 2020. At the time of the contribution of the Company’s investment to Carlyle FRL, the Company began accounting for its investment under the equity method based on its net asset value in the fund, which is an investment company that accounts for its investment in Fortitude Holdings at fair value.

(2)Adjusted unrealized principal investment income (loss) from the investment in Fortitude Re represents 19.9% of Fortitude Holdings’ estimated net income (loss), excluding the unrealized gains (losses) related to embedded derivatives, prior to the contribution of the Company’s investment in Fortitude Holdings to Carlyle FRL on June 2, 2020.

(3)Equity-based compensation for the three and nine months ended September 30, 2021 and 2020 includes amounts that are presented in principal investment income and general, administrative and other expenses in the Company’s U.S. GAAP statement of operations.

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


	Three Months Ended September 30, 2021
	Carlyle Consolidated		Adjustments (3)		Total Reportable Segments
	(Dollars in millions)
Performance revenues	$	974.5	$	36.4	$	1,010.9
Performance revenues related compensation expense	495.2		(17.8)		477.4
Net performance revenues	$	479.3	$	54.2	$	533.5

Principal investment income (loss)	$	160.4	$	(89.1)	$	71.3

	Nine Months Ended September 30, 2021
	Carlyle Consolidated		Adjustments (5)		Total Reportable Segments
	(Dollars in millions)
Performance revenues	$	4,841.3	$	(3,208.0)	$	1,633.3
Performance revenues related compensation expense	2,355.8		(1,569.4)		786.4
Net performance revenues	$	2,485.5	$	(1,638.6)	$	846.9

Principal investment income (loss)	$	477.2	$	(338.1)	$	139.1


	Three Months Ended September 30, 2020
	Carlyle Consolidated		Adjustments (3)		Total Reportable Segments
	(Dollars in millions)
Performance revenues	$	477.4	$	(390.6)	$	86.8
Performance revenues related compensation expense	250.6		(203.7)		46.9
Net performance revenues	$	226.8	$	(186.9)	$	39.9

Principal investment income (loss)	$	106.7	$	(93.9)	$	12.8

	Nine Months Ended September 30, 2020
	Carlyle Consolidated		Adjustments (3)		Total Reportable Segments
	(Dollars in millions)
Performance revenues	$	731.6	$	(321.0)	$	410.6
Performance revenues related compensation expense	343.7		(92.1)		251.6
Net performance revenues	$	387.9	$	(228.9)	$	159.0

Principal investment income (loss)	$	(659.2)	$	710.0	$	50.8

(5) Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net of related compensation expense and unrealized principal investment income, which are excluded from the segment results, (ii) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were

included in the segment results, (iii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the segment results, (iv) the reclassification of NGP performance revenues, which are included in principal investment income in U.S. GAAP financial statements, (v) the reclassification of certain incentive fees from business development companies, which are included in fund management fees in the segment results, and (vi) the reclassification of tax expenses associated with certain foreign performance revenues. Adjustments to principal 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, and the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from the segment results.

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

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2021
Subsequent Events [Abstract]
Subsequent Events	15. Subsequent Events 3.875% Senior Notes Redemption On October 22, 2021, the Company announced its intention to redeem the remaining 3.875% Senior Notes in whole at the make-whole redemption price as set forth in the notes, which is expected to be completed in November 2021. Dividends In October 2021, the Company’s Board of Directors declared a quarterly dividend of $0.25 per share of common stock to common stockholders of record at the close of business on November 9, 2021, payable on November 17, 2021. Share Repurchase Program In October 2021, the Board of Directors of the Company authorized the repurchase of up to $400.0 million of common stock, which will replace the authorization provided in February 2021 effective January 1, 2022.

Supplemental Financial Information

9 Months Ended

Sep. 30, 2021

Condensed Financial Information Disclosure [Abstract]

Supplemental Financial Information

16. Supplemental Financial Information

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company’s financial position as of September 30, 2021 and December 31, 2020 and results of operations for the three and nine months ended September 30, 2021 and 2020. The supplemental statement of cash flows is presented without effects of the Consolidated Funds.


	As of September 30, 2021
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Assets
Cash and cash equivalents	$	2,399.0	$	—	$	—	$	2,399.0
Cash and cash equivalents held at Consolidated Funds	—		134.8		—		134.8
Restricted cash	6.9		—		—		6.9



Investments, including performance allocations of $8,100.3 million	10,852.5		—		(174.0)		10,678.5
Investments of Consolidated Funds	—		6,469.7		—		6,469.7
Due from affiliates and other receivables, net	299.6		—		(6.2)		293.4
Due from affiliates and other receivables of Consolidated Funds, net	—		173.7		—		173.7

Fixed assets, net	139.2		—		—		139.2
Lease right-of-use assets, net	364.4		—		—		364.4
Deposits and other	72.4		—		—		72.4

Intangible assets, net	36.9		—		—		36.9
Deferred tax assets	19.8		—		—		19.8
Total assets	$	14,190.7	$	6,778.2	$	(180.2)	$	20,788.7
Liabilities and equity
Debt obligations	$	2,370.7	$	—	$	—	$	2,370.7
Loans payable of Consolidated Funds	—		5,955.1		—		5,955.1

Accounts payable, accrued expenses and other liabilities	374.5		—		—		374.5
Accrued compensation and benefits	4,710.2		—		—		4,710.2
Due to affiliates	391.2		0.1		(0.1)		391.2
Deferred revenue	334.0		—		—		334.0
Deferred tax liabilities	433.4		—		—		433.4
Other liabilities of Consolidated Funds	—		619.5		—		619.5

Lease liabilities	542.4		—		—		542.4
Accrued giveback obligations	24.7		—		—		24.7

Total liabilities	9,181.1		6,574.7		(0.1)		15,755.7

Common stock	3.6		—		—		3.6
Additional paid-in capital	2,671.7		179.6		(179.6)		2,671.7
Retained earnings	2,324.1		—		—		2,324.1
Accumulated other comprehensive loss	(237.6)		(2.1)		(0.5)		(240.2)

Non-controlling interests in consolidated entities	247.8		26.0		—		273.8

Total equity	5,009.6		203.5		(180.1)		5,033.0
Total liabilities and equity	$	14,190.7	$	6,778.2	$	(180.2)	$	20,788.7


	As of December 31, 2020
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Assets
Cash and cash equivalents	$	987.6	$	—	$	—	$	987.6
Cash and cash equivalents held at Consolidated Funds	—		148.6		—		148.6
Restricted cash	2.0		—		—		2.0



Investments, including performance allocations of $4,968.6 million	7,551.7		—		(170.8)		7,380.9
Investments of Consolidated Funds	—		6,056.9		—		6,056.9
Due from affiliates and other receivables, net	278.9		—		(6.4)		272.5
Due from affiliates and other receivables of Consolidated Funds, net	—		89.1		—		89.1

Fixed assets, net	149.2		—		—		149.2
Lease right-of-use assets, net	361.1		—		—		361.1
Deposits and other	51.7		—		—		51.7

Intangible assets, net	48.7		—		—		48.7
Deferred tax assets	96.5		—		—		96.5
Total assets	$	9,527.4	$	6,294.6	$	(177.2)	$	15,644.8
Liabilities and equity
Debt obligations	$	1,970.9	$	—	$	—	$	1,970.9
Loans payable of Consolidated Funds	—		5,563.0		—		5,563.0

Accounts payable, accrued expenses and other liabilities	286.3		—		—		286.3
Accrued compensation and benefits	3,222.6		—		—		3,222.6
Due to affiliates	436.7		—		—		436.7
Deferred revenue	89.0		—		—		89.0
Deferred tax liabilities	57.8		—		—		57.8
Other liabilities of Consolidated Funds	—		556.1		—		556.1

Lease liabilities	513.5		—		—		513.5
Accrued giveback obligations	18.7		—		—		18.7
Total liabilities	6,595.5		6,119.1		—		12,714.6

Common stock	3.5		—		—		3.5
Additional paid-in capital	2,546.2		167.6		(167.6)		2,546.2
Retained earnings	348.2		—		—		348.2
Accumulated other comprehensive income (loss)	(205.8)		6.7		(9.6)		(208.7)

Non-controlling interests in consolidated entities	239.8		1.2		—		241.0

Total equity	2,931.9		175.5		(177.2)		2,930.2
Total liabilities and equity	$	9,527.4	$	6,294.6	$	(177.2)	$	15,644.8


	Three Months Ended September 30, 2021
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$	414.3	$	—	$	(6.8)	$	407.5
Incentive fees	13.1		—		—		13.1



Investment income
Performance allocations	974.5		—		—		974.5


Principal investment income	165.2		—		(4.8)		160.4


Total investment income	1,139.7		—		(4.8)		1,134.9
Interest and other income	27.0		—		(5.1)		21.9
Interest and other income of Consolidated Funds	—		62.1		—		62.1

Total revenues	1,594.1		62.1		(16.7)		1,639.5
Expenses
Compensation and benefits
Cash-based compensation and benefits	224.9		—		—		224.9
Equity-based compensation	42.4		—		—		42.4
Performance allocations and incentive fee related compensation	495.2		—		—		495.2


Total compensation and benefits	762.5		—		—		762.5
General, administrative and other expenses	99.6		—		—		99.6
Interest	27.9		—		—		27.9
Interest and other expenses of Consolidated Funds	—		51.9		(7.3)		44.6

Other non-operating income	3.5		—		—		3.5
Total expenses	893.5		51.9		(7.3)		938.1
Other income
Net investment loss of Consolidated Funds	—		(0.1)		—		(0.1)
Income before provision for income taxes	700.6		10.1		(9.4)		701.3
Provision for income taxes	153.9		—		—		153.9
Net income	546.7		10.1		(9.4)		547.4
Net income attributable to non-controlling interests in consolidated entities	13.9		—		0.7		14.6


Net income attributable to The Carlyle Group Inc.	$	532.8	$	10.1	$	(10.1)	$	532.8


	Nine Months Ended September 30, 2021
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$	1,201.5	$	—	$	(18.6)	$	1,182.9
Incentive fees	33.0		—		—		33.0



Investment income
Performance allocations	4,841.3		—		—		4,841.3


Principal investment income	503.1		—		(25.9)		477.2


Total investment income	5,344.4		—		(25.9)		5,318.5
Interest and other income	79.3		—		(16.0)		63.3
Interest and other income of Consolidated Funds	—		185.3		—		185.3

Total revenues	6,658.2		185.3		(60.5)		6,783.0
Expenses
Compensation and benefits
Cash-based compensation and benefits	685.2		—		—		685.2
Equity-based compensation	122.0		—		—		122.0
Performance allocations and incentive fee related compensation	2,355.8		—		—		2,355.8


Total compensation and benefits	3,163.0		—		—		3,163.0
General, administrative and other expenses	300.4		—		—		300.4
Interest	76.4		—		—		76.4
Interest and other expenses of Consolidated Funds	—		162.6		(29.1)		133.5

Other non-operating income	1.0		—		—		1.0
Total expenses	3,540.8		162.6		(29.1)		3,674.3
Other income
Net investment gain of Consolidated Funds	—		9.6		—		9.6
Income before provision for income taxes	3,117.4		32.3		(31.4)		3,118.3
Provision for income taxes	733.5		—		—		733.5
Net income	2,383.9		32.3		(31.4)		2,384.8
Net income attributable to non-controlling interests in consolidated entities	56.8		—		0.9		57.7


Net income attributable to The Carlyle Group Inc.	$	2,327.1	$	32.3	$	(32.3)	$	2,327.1


	Three months ended September 30, 2020
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$	370.0	$	—	$	(6.2)	$	363.8
Incentive fees	9.1		—		—		9.1



Investment income
Performance allocations	477.4		—		—		477.4


Principal investment income	138.2		—		(31.5)		106.7


Total investment income	615.6		—		(31.5)		584.1
Interest and other income	23.9		—		(2.6)		21.3
Interest and other income of Consolidated Funds	—		56.3		—		56.3

Total revenues	1,018.6		56.3		(40.3)		1,034.6
Expenses
Compensation and benefits
Cash-based compensation and benefits	222.2		—		—		222.2
Equity-based compensation	18.7		—		—		18.7
Performance allocations and incentive fee related compensation	250.6		—		—		250.6


Total compensation and benefits	491.5		—		—		491.5
General, administrative and other expenses	91.2		—		(0.1)		91.1
Interest	23.0		—		—		23.0
Interest and other expenses of Consolidated Funds	—		47.9		(10.7)		37.2

Other non-operating expenses	0.6		—		—		0.6
Total expenses	606.3		47.9		(10.8)		643.4
Other income
Net investment income of Consolidated Funds	—		23.9		—		23.9
Income before provision for income taxes	412.3		32.3		(29.5)		415.1
Provision for income taxes	82.4		—		—		82.4
Net income	329.9		32.3		(29.5)		332.7
Net income attributable to non-controlling interests in consolidated entities	34.4		—		2.8		37.2
Net income attributable to The Carlyle Group Inc.	295.5		32.3		(32.3)		295.5


	Nine Months Ended September 30, 2020
	Consolidated Operating Entities		Consolidated Funds		Eliminations		Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$	1,108.5	$	—	$	(17.0)	$	1,091.5
Incentive fees	27.0		—		—		27.0



Investment income (loss)
Performance allocations	731.6		—		—		731.6


Principal investment income (loss)	(688.0)		—		28.8		(659.2)


Total investment income	43.6		—		28.8		72.4
Interest and other income	73.7		—		(9.2)		64.5
Interest and other income of Consolidated Funds	—		164.5		—		164.5

Total revenues	1,252.8		164.5		2.6		1,419.9
Expenses
Compensation and benefits
Cash-based compensation and benefits	639.0		—		—		639.0
Equity-based compensation	78.3		—		—		78.3
Performance allocations and incentive fee related compensation	343.7		—		—		343.7


Total compensation and benefits	1,061.0		—		—		1,061.0
General, administrative and other expenses	241.0		—		(0.1)		240.9
Interest	72.8		—		—		72.8
Interest and other expenses of Consolidated Funds	—		148.8		(26.7)		122.1

Other non-operating expenses	1.3		—		—		1.3
Total expenses	1,376.1		148.8		(26.8)		1,498.1
Other loss
Net investment losses of Consolidated Funds	—		(38.9)		—		(38.9)
Loss before provision for income taxes	(123.3)		(23.2)		29.4		(117.1)
Provision for income taxes	54.7		—		—		54.7
Net loss	(178.0)		(23.2)		29.4		(171.8)
Net loss attributable to non-controlling interests in consolidated entities	(7.4)		—		6.2		(1.2)
Net loss attributable to The Carlyle Group Inc.	(170.6)		(23.2)		23.2		(170.6)


	Nine Months Ended September 30,
	2021		2020
	(Dollars in millions)
Cash flows from operating activities
Net income (loss)	$	2,383.9	$	(178.0)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	40.5		38.9
Right-of-use asset impairment, net of broker fees	24.8		—
Equity-based compensation	122.0		78.3

Non-cash performance allocations and incentive fees	(1,662.3)		(239.6)
Non-cash principal investment (income) loss	(470.7)		694.8
Other non-cash amounts	20.7		(3.5)
Purchases of investments	(250.9)		(330.2)
Proceeds from the sale of investments	559.1		258.3
Payments of contingent consideration	(50.0)		—


Change in deferred taxes, net	449.1		4.7
Change in due from affiliates and other receivables	(21.1)		(8.7)

Change in deposits and other	(23.3)		(1.3)

Change in accounts payable, accrued expenses and other liabilities	90.9		(57.5)
Change in accrued compensation and benefits	17.3		73.0
Change in due to affiliates	1.4		(31.5)

Change in lease right-of-use asset and lease liability	5.9		(6.7)
Change in deferred revenue	247.6		200.3
Net cash provided by operating activities	1,484.9		491.3
Cash flows from investing activities

Purchases of fixed assets, net	(27.0)		(37.3)
Proceeds from sale of MRE, net of cash sold	5.9		—
Proceeds from sale of Brazil management entity, net of cash sold	3.3		—
Net cash used in investing activities	(17.8)		(37.3)
Cash flows from financing activities

Borrowings under credit facilities	70.0		287.1
Repayments under credit facilities	—		(300.6)
Issuance of 4.625% subordinated notes due 2061, net of financing costs	484.1		—





Payments on debt obligations	(231.5)		(2.7)
Proceeds from debt obligations, net of financing costs	87.5		20.5

Payments of contingent consideration	(0.1)		(0.3)

Dividends to common stockholders	(266.7)		(262.9)


Payment of deferred consideration for Carlyle Holdings units	(68.8)		(68.8)
Contributions from non-controlling interest holders	13.1		24.2
Distributions to non-controlling interest holders	(56.3)		(52.5)

Common shares repurchased	(84.5)		(26.4)
Change in due to/from affiliates financing activities	21.8		40.9
Net cash used in financing activities	(31.4)		(341.5)
Effect of foreign exchange rate changes	(19.4)		(1.7)
Increase in cash, cash equivalents and restricted cash	1,416.3		110.8
Cash, cash equivalents and restricted cash, beginning of period	989.6		828.0
Cash, cash equivalents and restricted cash, end of period	$	2,405.9	$	938.8

Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	$	2,399.0	$	938.4
Restricted cash	6.9		0.4
Total cash, cash equivalents and restricted cash, end of period	$	2,405.9	$	938.8

Cash and cash equivalents held at Consolidated Funds	$	134.8	$	377.8

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2021
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The Company consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of variable interest entities (“VIEs”). The Company evaluates (1) whether it holds a variable interest in an entity, (2) whether the entity is a VIE, and (3) whether the Company’s involvement would make it the primary beneficiary. In evaluating whether the Company holds a variable interest, fees (including management fees, incentive fees and performance allocations) that are customary and commensurate with the level of services provided, and where the Company 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 Company considers all economic interests, including indirect interests, to determine if a fee is considered a variable interest. For those entities where the Company holds a variable interest, the Company determines whether each of these entities qualifies as a VIE and, if so, whether or not the Company 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. For entities that are determined to be VIEs, the Company 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 Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. As of September 30, 2021, assets and liabilities of the consolidated VIEs reflected in the unaudited condensed consolidated balance sheets were $6.8 billion and $6.6 billion, respectively. Except to the extent of the consolidated assets of the VIEs, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company. Substantially all of the Company’s Consolidated Funds are CLOs, which are VIEs that issue loans payable that are backed by diversified collateral asset portfolios consisting primarily of loans or structured debt. In exchange for managing the collateral for the CLOs, the Company earns investment management fees, including in some cases subordinated management fees and contingent incentive fees. In cases where the Company consolidates the CLOs (primarily because of a retained interest that is significant to the CLO), those management fees have been eliminated as intercompany transactions. As of September 30, 2021, the Company held $172.8 million of investments in these CLOs which represents its maximum risk of loss. The Company’s investments in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Investors in the CLOs have no recourse against the Company for any losses sustained in the CLO structure. Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting interest entity model, the Company consolidates those entities it controls through a majority voting interest. All significant inter-entity transactions and balances of entities consolidated have been eliminated.
Investments in Unconsolidated Variable Interest Entities	Investments in Unconsolidated Variable Interest Entities The Company holds variable interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary, including its investments in certain Global Investment Solutions carry funds, certain CLOs and its strategic investment in NGP Management Company, L.L.C. (“NGP Management” and, together with its affiliates, “NGP”). Refer to Note 4 for information on the strategic investment in NGP. The Company’s involvement with such entities is in the form of direct or indirect equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by the Company relating to its variable interests in these unconsolidated entities.
Basis of Accounting	Basis of Accounting The accompanying financial statements are prepared in accordance with U.S. GAAP. Management has determined that the Company’s Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the unrealized gains and/or losses in an investment’s fair value are recognized on a current basis in the statements of operations. Additionally, the Funds do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). In the preparation of these unaudited condensed consolidated financial statements, the Company has retained the specialized accounting for the Funds. All of the investments held and notes issued by the Consolidated Funds are presented at their estimated fair values in the Company’s condensed consolidated balance sheets. Interest and other income of the Consolidated Funds as well as interest expense and other expenses of the Consolidated Funds are included in the Company’s unaudited condensed consolidated statements of operations.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance allocations involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements and the resulting impact on performance allocations and incentive fees. Actual results could differ from these estimates and such differences could be material.
Business Combinations	Business Combinations The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations that are elements of consideration transferred are recognized as of the acquisition date as part of the fair value transferred in exchange for the acquired business. Acquisition-related costs incurred in connection with a business combination are expensed as incurred.
Revenue Recognition and Deferred Revenue	Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. ASC 606 includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, which includes assessing the collectibility of the consideration to which it will be entitled in exchange for the goods or services transferred to the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. The Company accounts for performance allocations that represent a performance-based capital allocation from fund limited partners to the Company (commonly known as “carried interest”, which comprises substantially all of the Company’s previously reported performance fee revenues) as earnings from financial assets within the scope of ASC 323, Investments - Equity Method and Joint Ventures, and therefore are not in the scope of ASC 606. In accordance with ASC 323, the Company records equity method income (losses) as a component of investment income based on the change in its proportionate claim on net assets of the investment fund, including performance allocations, assuming the investment fund was liquidated as of each reporting date pursuant to each fund’s governing agreements. See Note 4 for additional information on the components of investments and investment income. Performance fees that do not meet the definition of performance-based capital allocations are in the scope of ASC 606 and are included in incentive fees in the unaudited condensed consolidated statements of operations. The calculation of unrealized performance revenues utilizes investment valuations of the funds’ underlying investments, which are derived using the policies, methodologies and templates prepared by the Company’s valuation group, as described in Note 3, Fair Value Measurement. While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts. The customer determination impacts the Company’s analysis of the accounting for contract costs. Also, the recovery of certain costs incurred on behalf of Carlyle funds, primarily travel and entertainment costs, are presented gross in the unaudited condensed consolidated statements of operations, as the Company controls the inputs to its investment management performance obligation. Fund Management Fees The Company provides management services to funds in which it holds a general partner interest or has a management agreement. The Company considers the performance obligations in its contracts with its funds to be the promise to provide (or to arrange for third parties to provide) investment management services related to the management, policies and operations of the funds. As it relates to the Company’s performance obligation to provide investment management services, the Company typically satisfies this performance obligation over time as the services are rendered, since the funds simultaneously receive and consume the benefits provided as the Company performs the service. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the funds. Management fees earned from each investment management contract over the contract life represent variable consideration because the consideration the Company is entitled to varies based on fluctuations in the basis for the management fee, for example fund net asset value (“NAV”) or assets under management (“AUM”). Given that the management fee basis is susceptible to market factors outside of the Company’s influence, management fees are constrained and, therefore, estimates of future period management fees are generally not included in the transaction price. Revenue recognized for the investment management services provided is generally the amount determined at the end of the period because that is when the uncertainty for that period is resolved. For closed-end carry funds in the Global Private Equity and Global Credit segments, management fees generally range from 1.0% to 2.0% of commitments during the fund’s investment period based on limited partners’ capital commitments to the funds. Following the expiration or termination of the investment period, management fees generally are based on the lower of cost or fair value of invested capital and the rate charged may also be reduced to between 0.5% and 2.0%. For certain separately managed accounts, longer-dated carry funds, and other closed-end funds, management fees generally range from 0.2% to 1.0% based on contributions for unrealized investments, the current value of the investment, or adjusted book value. The Company will receive management fees during a specified period of time, which is generally ten years from the initial closing date, or, in some instances, from the final closing date, but such termination date may be earlier in certain limited circumstances or later if extended for successive one-year periods, typically up to a maximum of two years. Depending upon the contracted terms of investment advisory or investment management and related agreements, these fees are generally called semi-annually in advance and are recognized as earned over the subsequent six month period. For certain longer-dated carry funds and certain other closed-end funds, management fees are called quarterly over the life of the funds. Within the Global Credit segment, for CLOs and other structured products, management fees generally range from 0.4% to 0.5% based on the total par amounts of assets or the aggregate principal amount of the notes in the CLO and are due quarterly based on the terms and recognized over the respective period. Management fees for the CLOs and other structured products are governed by indentures and collateral management agreements. The Company will receive management fees for the CLOs until redemption of the securities issued by the CLOs, which is generally five to ten years after issuance. Management fees for the business development companies are due quarterly in arrears at annual rates that range from 1.25% of invested capital to 1.5% of gross assets, excluding cash and cash equivalents. Management fees for the Company’s carry fund vehicles in the Global Investment Solutions segment generally range from 0.25% to 1.0% of the vehicle’s capital commitments during the commitment fee period of the relevant fund or the weighted-average investment period of the underlying funds. Following the expiration of the commitment fee period or weighted-average investment period of such funds, the management fees generally range from 0.25% to 1.0% on (i) the lower of cost or fair value of the capital invested, (ii) the net asset value for unrealized investments, or (iii) the contributions for unrealized investments; however, certain separately managed accounts earn management fees at all times on contributions for unrealized investments or on the initial commitment amount. Management fees for the Global Investment Solutions carry fund vehicles are generally due quarterly and recognized over the related quarter. As of September 30, 2021 and December 31, 2020, management fee receivables, net of allowances for credit losses, were $135.5 million and $102.7 million, respectively, and are included in due from affiliates and other receivables, net, in the unaudited condensed consolidated balance sheets. The Company also provides transaction advisory and portfolio advisory services to the portfolio companies, and where covered by separate contractual agreements, recognizes fees for these services when the performance obligation has been satisfied and collection is reasonably assured. The Company also recognizes underwriting fees from the Company’s loan syndication and capital markets business, Carlyle Global Capital Markets. Fund management fees include transaction and portfolio advisory fees, as well as capital markets fees, of $21.9 million and $3.9 million for the three months ended September 30, 2021 and 2020, respectively, and $54.3 million and $25.5 million for the nine months ended September 30, 2021 and 2020, respectively, net of any offsets as defined in the respective partnership agreements. Fund management fees exclude the reimbursement of any partnership expenses paid by the Company on behalf of the Carlyle funds pursuant to the limited partnership agreements, including amounts related to the pursuit of actual, proposed, or unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of investments, and other fund administrative expenses. For the professional fees that the Company arranges for the investment funds, the Company concluded that the nature of its promise is to arrange for the services to be provided and it does not control the services provided by third parties before they are transferred to the customer. Therefore, the Company concluded it is acting in the capacity of an agent. Accordingly, the reimbursement for these professional fees paid on behalf of the investment funds is presented on a net basis in general, administrative and other expenses in the unaudited condensed consolidated statements of operations. The Company also incurs certain costs, primarily employee travel and entertainment costs, employee compensation and systems costs, for which it receives reimbursement from the investment funds in connection with its performance obligation to provide investment and management services. For reimbursable travel, compensation and systems costs, the Company concluded it controls the services provided by its employees and the resources used to develop applicable systems before they are transferred to the customer and therefore is a principal. Accordingly, the reimbursement for these costs incurred by the Company to manage the fund limited partnerships are presented on a gross basis in interest and other income in the unaudited condensed consolidated statements of operations and the expense in general, administrative and other expenses or cash-based compensation and benefits expenses in the unaudited condensed consolidated statements of operations. Incentive Fees In connection with management contracts from certain of its Global Credit funds, the Company is also entitled to receive performance-based incentive fees when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, incentive fees are recognized when the performance benchmark has been achieved. Incentive fees are variable consideration because they are contingent upon the investment vehicle achieving stipulated investment return hurdles. Investment returns are highly susceptible to market factors outside of the Company’s influence. Accordingly, incentive fees are constrained until the uncertainty is resolved. Estimates of future period incentive fees are generally not included in the transaction price because these estimates are constrained. The transaction price for incentive fees is generally the amount determined at the end of each accounting period to which they relate because that is when the uncertainty for that period is resolved, as these fees are not subject to clawback. Investment Income (Loss), including Performance Allocations Investment income (loss) represents the unrealized and realized gains and losses resulting from the Company’s equity method investments, including any associated general partner performance allocations, and other principal investments, including CLOs. General partner performance allocations consist of the allocation of profits from certain of the funds to which the Company is entitled (commonly known as carried interest). For closed-end carry funds in the Global Private Equity and Global Credit segments, the Company is generally entitled to a 20% allocation (or 10% to 20% on certain longer-dated carry funds, certain credit funds, and external co-investment vehicles, up to 25% on certain Global Private Equity funds in the event performance benchmarks are achieved, or approximately 2% to 12.5% for most of the Global Investment Solutions segment carry fund vehicles) of the net realized income or gain as a carried interest after returning the invested capital, the allocation of preferred returns of generally 7% to 9% (or 4% to 7% for certain longer-dated carry funds) and return of certain fund costs (generally subject to catch-up provisions as set forth in the fund limited partnership agreement). Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in each respective partnership agreement. The Company recognizes revenues attributable to performance allocations based upon the amount that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized as investment income for performance allocations reflects the Company’s share of the gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Because of the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material. Carried interest is ultimately realized when: (i) an underlying investment is profitably disposed of, (ii) certain costs borne by the limited partner investors have been reimbursed, (iii) the fund’s cumulative returns are in excess of the preferred return and (iv) the Company has decided to collect carry rather than return additional capital to limited partner investors. Realized carried interest may be required to be returned by the Company in future periods if the funds’ investment values decline below certain levels. When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized performance allocations are reversed. In all cases, each fund is considered separately in this regard, and for a given fund, performance allocations can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments at their then-current fair values, previously recognized and distributed carried interest would be required to be returned, a liability is established for the potential giveback obligation. Principal investment income (loss) is realized when the Company redeems all or a portion of its investment or when the Company receives or is due cash income, such as dividends or distributions. Principal investment income (loss) also includes the Company’s allocation of earnings from its investment in Fortitude Re through June 2, 2020 (see Note 4). As it relates to the Company’s investments in NGP (see Note 4), principal investment income includes the related amortization of the basis difference between the Company’s carrying value of its investment and the Company’s share of underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by the Company to employees of its equity method investee. Unrealized principal investment income (loss) results from the Company’s proportionate share of the investee’s unrealized earnings, including changes in the fair value of the underlying investment, as well as the reversal of unrealized gain (loss) at the time an investment is realized. Interest Income Interest income is recognized when earned. For debt securities representing non-investment grade beneficial interests in securitizations, the effective yield is determined based on the estimated cash flows of the security. Changes in the effective yield of these securities due to changes in estimated cash flows are recognized on a prospective basis as adjustments to interest income in future periods. Interest income earned by the Company is included in interest and other income in the accompanying unaudited condensed consolidated statements of operations. Interest income of the Consolidated Funds was $56.9 million and $50.8 million for the three months ended September 30, 2021 and 2020, respectively, and $170.4 million and $155.0 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in interest and other income of Consolidated Funds in the accompanying unaudited condensed consolidated statements of operations. Deferred Revenue Deferred revenue represents management fees and other revenue received prior to the balance sheet date, which has not yet been earned. The increase in the deferred revenue balance for the nine months ended September 30, 2021 was primarily driven by cash payments received in advance of the Company satisfying its performance obligations, partially offset by revenues that were included in the deferred revenue balance at the beginning of the period.
Credit Losses	Credit Losses Under ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), the Company measures all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. As part of its adoption process, the Company assessed the collection risk characteristics of the outstanding amounts in its due from affiliates balance to define the following pools of receivables: •Reimbursable fund expenses receivables, •Management fee receivables, •Incentive fee receivables, •Transaction fee receivables, •Portfolio fee receivables, and •Notes receivable. The Company generally utilizes either historical credit loss information or discounted cash flows to calculate expected credit losses for each pool. The Company’s receivables are predominantly with its investment funds, which have low risk of credit loss based on the Company’s historical experience. Historical credit loss data may be adjusted for current conditions and reasonable and supportable forecasts, including the Company’s expectation of near-term realization based on the liquidity of the affiliated investment funds.
Compensation and Benefits	Compensation and Benefits Cash-based Compensation and Benefits – Cash-based compensation and benefits includes salaries, bonuses (discretionary awards and guaranteed amounts), performance payment arrangements and benefits paid and payable to Carlyle employees. Bonuses are accrued over the service period to which they relate. Equity-Based Compensation – Compensation expense relating to the issuance of equity-based awards is measured at fair value on the grant date. The compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. The compensation expense for awards that do not require future service is recognized immediately. Cash settled equity-based awards are classified as liabilities and are re-measured at the end of each reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable that the performance conditions will be achieved; in certain instances, such compensation expense may be recognized prior to the grant date of the award. The compensation expense for awards that contain market conditions is based on a grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized over the requisite service period on a straight-line basis. Equity-based awards issued to non-employees are generally recognized as general, administrative and other expenses, except to the extent they are recognized as part of the Company’s equity method earnings because they are issued to employees of equity method investees. The Company recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. Furthermore, the Company recognizes all excess tax benefits and deficiencies as income tax benefit or expense in the unaudited condensed consolidated statements of operations. Performance Allocations and Incentive Fee Related Compensation – A portion of the performance allocations and incentive fees earned is due to employees and advisors of the Company. These amounts are accounted for as compensation expense in conjunction with the recognition of the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued compensation and benefits liability. Accordingly, upon a reversal of performance allocations or incentive fee revenue, the related compensation expense, if any, is also reversed. In October 2021, the Company commenced a program under which, at the Company’s discretion, up to 20% of realized performance allocation related compensation over a threshold amount may be distributed in fully vested newly issued shares of the Company’s common stock. These shares will be accounted for as performance allocations and incentive fee related compensation and will not result in incremental compensation expense. As of September 30, 2021 and December 31, 2020, the Company had recorded a liability of $4.1 billion and $2.5 billion, respectively, related to the portion of accrued performance allocations and incentive fees due to employees and advisors, respectively, which was included in accrued compensation and benefits in the accompanying unaudited condensed consolidated balance sheets.
Income Taxes	Income Taxes The Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and thus is subject to U.S. federal, state and local corporate income taxes. Tax positions taken by the Company are subject to periodic audit by U.S. federal, state, local and foreign taxing authorities. The interim provision for income taxes is calculated using the discrete effective tax rate method as allowed by ASC 740, Accounting for Income Taxes. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement reporting and the tax basis of assets and liabilities using enacted tax rates in effect for the period in which the difference is expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change in the provision for income taxes. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carry forwards. A valuation allowance is recorded on the Company’s gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of the Company’s deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established, which is included in accounts payable, accrued expenses and other liabilities in the unaudited condensed consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. If recognized, the entire amount of unrecognized tax positions would be recorded as a reduction in the provision for income taxes.
Non-controlling Interests	Non-controlling Interests Non-controlling interests in consolidated entities represent the component of equity in consolidated entities held by third-party investors. These interests are adjusted for general partner allocations which occur during the reporting period. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests. Transaction costs incurred in connection with such changes in ownership of a subsidiary are recorded as a direct charge to equity.
Earnings Per Common Share	Earnings Per Common ShareThe Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share is calculated by dividing net income (loss) attributable to the common shares of the Company by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.
Investments, at Fair Value	Investments, at Fair Value Investments include (i) the Company’s ownership interests (typically general partner interests) in the Funds, (ii) strategic investments made by the Company (both of which are accounted for as equity method investments), (iii) the investments held by the Consolidated Funds (which are presented at fair value in the Company’s unaudited condensed consolidated financial statements), and (iv) certain credit-oriented investments, including investments in the CLOs and the preferred securities of TCG BDC, Inc. (the “BDC Preferred Shares”) (which are accounted for as trading securities). The valuation procedures utilized for investments of the Funds vary depending on the nature of the investment. The fair value of investments in publicly-traded securities is based on the closing price of the security with adjustments to reflect appropriate discounts if the securities are subject to restrictions. The fair value of non-equity securities or other investments, which may include instruments that are not listed on an exchange, considers, among other factors, external pricing sources, such as dealer quotes or independent pricing services, recent trading activity or other information that, in the opinion of the Company, may not have been reflected in pricing obtained from external sources. When valuing private securities or assets without readily determinable market prices, the Company gives consideration to operating results, financial condition, economic and/or market events, recent sales prices and other pertinent information. These valuation procedures may vary by investment, but include such techniques as comparable public market valuation, comparable acquisition valuation and discounted cash flow analysis. Because of the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material. Furthermore, there is no assurance that, upon liquidation, the Company will realize the values presented herein. Upon the sale of a security or other investment, the realized net gain or loss is computed on a weighted average cost basis, with the exception of the investments held by the CLOs, which compute the realized net gain or loss on a first in, first out basis. Securities transactions are recorded on a trade date basis.
Equity Method Investments	Equity Method Investments The Company accounts for all investments in which it has or is otherwise presumed to have significant influence, including investments in the unconsolidated Funds and strategic investments, using the equity method of accounting. The carrying value of equity method investments is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee (including performance allocations) allocated based on the respective partnership agreement, less distributions received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
Cash and Cash Equivalents	Cash and Cash EquivalentsCash and cash equivalents include cash held at banks and cash held for distributions, including investments with original maturities of less than three months when purchased.
Cash and Cash Equivalents Held at Consolidated Funds	Cash and Cash Equivalents Held at Consolidated Funds Cash and cash equivalents held at Consolidated Funds consists of cash and cash equivalents held by the Consolidated Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Company.
Restricted Cash	Restricted CashRestricted cash primarily represents cash held by the Company’s foreign subsidiaries due to certain government regulatory capital requirements as well as certain amounts held on behalf of Carlyle funds.
Derivative Instruments	Derivative InstrumentsThe Company uses derivative instruments primarily to reduce its exposure to changes in foreign currency exchange rates. Derivative instruments are recognized at fair value in the unaudited condensed consolidated balance sheets with changes in fair value recognized in the unaudited condensed consolidated statements of operations for all derivatives not designated as hedging instruments.
Securities Sold Under Agreements to Repurchase	Securities Sold Under Agreements to Repurchase As it relates to certain European CLOs sponsored by the Company, securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. As of September 30, 2021, $148.8 million of securities were transferred to counterparties under repurchase agreements and are included within investments in the unaudited condensed consolidated balance sheets. Cash received under repurchase agreements is recognized as a liability within debt obligations in the unaudited condensed consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expense in the unaudited condensed consolidated statements of operations.
Fixed Assets	Fixed Assets Fixed assets consist of furniture, fixtures and equipment, leasehold improvements, and computer hardware and software and are stated at cost, less accumulated depreciation and amortization. Depreciation is recognized on a straight-line method over the assets’ estimated useful lives, which for leasehold improvements are the lesser of the lease terms or the life of the asset, and three to seven years for other fixed assets. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Leases	Leases The Company accounts for its leases in accordance with ASU 2016-2, Leases (Topic 842), and recognizes a lease liability and right-of-use asset in the condensed consolidated balance sheet for contracts that it determines are leases or contain a lease. The Company’s leases primarily consist of operating leases for office space in various countries around the world. The Company also has operating leases for office equipment and vehicles, which are not significant. The Company does not separate non-lease components from lease components for its office space and equipment operating leases and instead accounts for each separate lease component and its associated non-lease component as a single lease component. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.
Intangible Assets and Goodwill	Intangible Assets and Goodwill The Company’s intangible assets consist of acquired contractual rights to earn future fee income, including management and advisory fees, customer relationships, and acquired trademarks. Finite-lived intangible assets are amortized over their estimated useful lives, which range from four to ten years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Intangible asset amortization expense was $1.8 million and $3.7 million during the three months ended September 30, 2021 and 2020, respectively, and $8.4 million and $10.9 million during the nine months ended September 30, 2021 and 2020, respectively, and is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations. Goodwill represents the excess of cost over the identifiable net assets of businesses acquired and is recorded in the functional currency of the acquired entity. Goodwill is recognized as an asset and is reviewed for impairment annually as of October 1st and between annual tests when events and circumstances indicate that impairment may have occurred.
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss)The Company’s accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments and gains and losses on defined benefit plans sponsored by AlpInvest.
Foreign Currency Translation	Foreign Currency Translation Non-U.S. dollar denominated assets and liabilities are translated at period-end rates of exchange, and the unaudited condensed consolidated statements of operations are translated at rates of exchange in effect throughout the period. Foreign currency gains (losses) resulting from transactions outside of the functional currency of an entity of $(9.9) million and $(2.6) million for the three months ended September 30, 2021 and 2020, respectively, and $(11.8) million and $18.9 million for the nine months ended September 30, 2021 and 2020, respectively, are included in general, administrative and other expenses in the unaudited condensed consolidated statements of operations.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted as of January 1, 2021 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12, among other changes, (i) removes certain exceptions to the general principles in Topic 740, (ii) provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and (iii) provides guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The guidance was adopted by the Company on January 1, 2021 and the impact was not material.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Assets recognized in consolidated balance sheets related to non-consolidated VIEs

The assets recognized in the Company’s consolidated balance sheets related to the Company’s variable interests in these non-consolidated VIEs were as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)

Investments	$	882.7	$	988.6
Accrued performance revenues	330.0		177.1
Management fee receivables	27.9		26.5
Total	$	1,240.6	$	1,192.2

Components of accumulated other comprehensive income (loss)

The components of accumulated other comprehensive income (loss) as of September 30, 2021 and December 31, 2020 were as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)

Currency translation adjustments	$	(216.8)	$	(181.4)
Unrealized losses on defined benefit plans	(23.4)		(27.3)

Total	$	(240.2)	$	(208.7)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Summary of assets and liabilities measured at fair value on recurring basis

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of September 30, 2021:


(Dollars in millions)	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Funds:
Equity securities	$	—	$	—	$	18.9	$	18.9
Bonds	—		—		581.1		581.1
Loans	—		—		5,852.9		5,852.9



	—		—		6,452.9		6,452.9

Investments in CLOs and other(1)	1.4		45.6		423.4		470.4








Subtotal	$	1.4	$	45.6	$	6,876.3	$	6,923.3
Investments measured at net asset value(2)							33.9
Total							$	6,957.2
Liabilities
Loans payable of Consolidated Funds(3)	$	—	$	—	$	5,938.3	$	5,938.3




Foreign currency forward contracts	—		0.2		—		0.2
Total	$	—	$	0.2	$	5,938.3	$	5,938.5

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2020:


(Dollars in millions)	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Funds:
Equity securities	$	—	$	—	$	9.4	$	9.4
Bonds	—		—		550.4		550.4
Loans	—		—		5,497.1		5,497.1



	—		—		6,056.9		6,056.9

Investments in CLOs and other	—		—		570.8		570.8






Foreign currency forward contracts	—		0.7		—		0.7
Subtotal	$	—	$	0.7	$	6,627.7	$	6,628.4
Investments measured at net asset value(1)							16.4
Total							$	6,644.8
Liabilities
Loans payable of Consolidated Funds(2)	$	—	$	—	$	5,563.0	$	5,563.0



Foreign currency forward contracts	—		0.4		—		0.4
Total	$	—	$	0.4	$	5,563.0	$	5,563.4

(1)Balance represents Fund Investments that the Company reports based on the most recent available information which typically has a lag of up to 90 days.

Changes in Level III financial assets measured at fair value

The changes in financial instruments measured at fair value for which the Company has used Level III inputs to determine fair value are as follows (Dollars in millions):


	Financial Assets
	Three Months Ended September 30, 2021
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other			Total
Balance, beginning of period	$	18.3	$	542.0	$	5,543.6	$	431.5		$	6,535.4
Consolidation of funds (1)	3.3		—		490.4		(3.0)			490.7


Purchases	0.1		108.1		1,058.4		9.6			1,176.2
Sales and distributions	(1.2)		(44.0)		(781.0)		(14.9)			(841.1)
Settlements	—		(0.2)		(378.4)		—			(378.6)
Realized and unrealized gains (losses), net
Included in earnings	(1.3)		(11.3)		13.3		6.9			7.6
Included in other comprehensive income	(0.3)		(13.5)		(93.4)		(6.7)			(113.9)
Balance, end of period	$	18.9	$	581.1	$	5,852.9	$	423.4		$	6,876.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	(1.9)	$	1.5	$	(4.2)	$	7.3		$	2.7
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	(0.3)	$	(13.7)	$	(92.3)	$	(6.7)		$	(113.0)

	Financial Assets
	Nine Months Ended September 30, 2021
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other (2)		Total
Balance, beginning of period	$	9.4	$	550.4	$	5,497.1	$	570.8		$	6,627.7
Deconsolidation/consolidation of funds (1)	5.7		—		314.2		23.1			343.0


Purchases	0.6		472.0		3,375.3		71.7			3,919.6
Sales and distributions	(3.5)		(405.2)		(2,199.0)		(254.9)			(2,862.6)
Settlements	—		(3.8)		(1,020.2)		—			(1,024.0)
Realized and unrealized gains (losses), net
Included in earnings	7.3		(1.3)		103.1		16.5			125.6
Included in other comprehensive income	(0.6)		(31.0)		(217.6)		(3.8)			(253.0)
Balance, end of period	$	18.9	$	581.1	$	5,852.9	$	423.4		$	6,876.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	5.2	$	7.7	$	61.1	$	16.3		$	90.3
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	(0.4)	$	(22.0)	$	(185.3)	$	(3.8)		$	(211.5)


	Financial Assets
	Three Months Ended September 30, 2020
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other		Total
Balance, beginning of period	$	108.8	$	438.4	$	4,034.0	$	530.5	$	5,111.7



Purchases	0.4		68.6		933.7		23.8		1,026.5
Sales and distributions	(33.5)		(98.6)		(261.7)		(8.1)		(401.9)
Settlements	—		—		(89.0)		—		(89.0)
Realized and unrealized gains (losses), net
Included in earnings	4.0		34.9		126.0		32.2		197.1
Included in other comprehensive income	—		18.6		130.2		9.1		157.9
Balance, end of period	$	79.7	$	461.9	$	4,873.2	$	587.5	$	6,002.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	4.0	$	31.1	$	108.0	$	32.2	$	175.3
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	—	$	14.5	$	119.9	$	9.1	$	143.5

	Financial Assets
	Nine Months Ended September 30, 2020
	Investments of Consolidated Funds
	Equity securities		Bonds		Loans		Investments in CLOs and other		Total
Balance, beginning of period	$	19.4	$	574.1	$	4,413.8	$	496.2	$	5,503.5



Purchases	87.8		209.5		1,751.8		147.5		2,196.6
Sales and distributions	(33.7)		(313.5)		(941.4)		(64.4)		(1,353.0)
Settlements	—		—		(282.8)		—		(282.8)
Realized and unrealized gains (losses), net
Included in earnings	6.2		(26.1)		(204.1)		12.8		(211.2)
Included in other comprehensive income	—		17.9		135.9		(4.6)		149.2
Balance, end of period	$	79.7	$	461.9	$	4,873.2	$	587.5	$	6,002.3
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date	$	6.1	$	(22.7)	$	(193.2)	$	12.8	$	(197.0)
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date	$	—	$	14.6	$	110.3	$	(4.6)	$	120.3

Changes in Level III financial liabilities measured at fair value


	Financial Liabilities
	Loans Payable of Consolidated Funds
	Three Months Ended September 30,
	2021		2020
Balance, beginning of period	$	5,373.9	$	4,412.0
Consolidation of funds	480.0		—
Borrowings	1,133.0		745.2
Paydowns	(712.0)		(1.3)
Sales	(237.5)		(260.4)
Realized and unrealized (gains) losses, net
Included in earnings	(2.4)		139.1
Included in other comprehensive income	(96.7)		147.1
Balance, end of period	$	5,938.3	$	5,181.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date	$	3.7	$	139.1
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date	$	(127.0)	$	147.1

	Financial Liabilities
	Loans Payable of Consolidated Funds
	Nine Months Ended September 30,
	2021		2020
Balance, beginning of period	$	5,563.0	$	4,685.2
Deconsolidation/consolidation of funds	360.8		—
Borrowings	1,966.6		1,886.9
Paydowns	(1,303.0)		(1,092.0)
Sales	(515.2)		(260.4)
Realized and unrealized (gains) losses, net
Included in earnings	90.7		(188.5)
Included in other comprehensive income	(224.6)		150.5
Balance, end of period	$	5,938.3	$	5,181.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date	$	98.1	$	(203.4)
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date	$	(281.4)	$	158.9

Summary of quantitative information about Level III inputs

The following table summarizes quantitative information about the Company’s Level III inputs as of September 30, 2021:


	Fair Value at		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
(Dollars in millions)	September 30, 2021
Assets
Investments of Consolidated Funds:
Equity securities	$	18.9	Consensus Pricing	Indicative Quotes ($ per share)	0.00 - 74.50 (0.66)

Bonds	581.1		Consensus Pricing	Indicative Quotes (% of Par)	94 - 109 (100)
Loans	5,834.3		Consensus Pricing	Indicative Quotes (% of Par)	37 - 109 (99)
	18.6		Discounted Cash Flow	Discount Rates	3% - 8% (6%)




	6,452.9
Investments in CLOs and other:
Senior secured notes	274.9		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	84 - 101 (99)
				Discount Margins (Basis Points)	50 - 1,330 (256)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)
Subordinated notes and preferred shares	69.8		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	43 - 88 (72)
				Discount Rates	10% - 25% (17%)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)

BDC preferred shares	71.8		Discounted Cash Flow	Discount Rates	7% - 7% (7%)
Aviation subordinated notes	6.9		Discounted Cash Flow	Discount Rates	16% - 16% (16%)

Total	$	6,876.3
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes	$	5,700.1	Other (1)	N/A	N/A

Subordinated notes and preferred shares	238.2		Consensus Pricing with Discounted Cash Flow	Indicative Quotes (% of Par)	42 - 77 (56)
				Discount Rates	15% - 25% (20%)
				Default Rates	1% - 2% (1%)
				Recovery Rates	50% - 70% (60%)




Total	$	5,938.3

The following table summarizes quantitative information about the Company’s Level III inputs as of December 31, 2020:

Fair Value at

Valuation Technique(s)

Unobservable Input(s)

Range
(Weighted Average)

(Dollars in millions)

December 31, 2020

Assets

Investments of Consolidated Funds:

Equity securities

9.4

Consensus Pricing

Indicative Quotes ($ per share)

0.00 - 40.00 (0.57)

Bonds

550.4

Consensus Pricing

Indicative Quotes (% of Par)

85 - 108 (98)

Loans

5,497.1

Consensus Pricing

Indicative Quotes (% of Par)

15 - 108 (97)

6,056.9

Investments in CLOs and other

Senior secured notes

437.0

Discounted Cash Flow with Consensus Pricing

Discount Margins (Basis Points)

85 - 1,725 (227)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

71 - 100 (98)

Subordinated notes and preferred shares

52.5

Discounted Cash Flow with Consensus Pricing

Discount Rate

16% - 30% (23%)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

31 - 90 (46)

BDC preferred shares

60.0

Discounted Cash Flow

Discount Rates

7% - 7% (7%)

Aviation subordinated notes

7.2

Discounted Cash Flow

Discount Rates

20% - 20% (20%)

Loans

14.1

Consensus Pricing

Indicative Quotes (% of Par)

98 - 100 (100)

Total

6,627.7

Liabilities

Loans payable of Consolidated Funds:

Senior secured notes

5,358.9

Other (1)

N/A

Subordinated notes and preferred shares

204.1

Discounted Cash Flow with Consensus Pricing

Discount Rates

16% - 30% (22%)

Default Rates

1% - 2% (1%)

Recovery Rates

50% - 70% (60%)

Indicative Quotes (% of Par)

30 - 91 (50)

Total

5,563.0

Investments (Tables)

9 Months Ended

Sep. 30, 2021

Investments [Abstract]

Schedule of investments

Investments consist of the following:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Accrued performance allocations	$	8,100.3	$	4,968.6
Principal equity method investments, excluding performance allocations	2,039.3		1,810.8
Principal investments in CLOs and other	538.9		601.5
Total	$	10,678.5	$	7,380.9

Components of accrued performance fees

The components of accrued performance allocations are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	6,485.7	$	3,926.1

Global Credit	262.8		132.3
Global Investment Solutions (1)	1,351.8		910.2
Total	$	8,100.3	$	4,968.6

Components of accrued giveback obligations

The components of the accrued giveback obligations are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	(18.4)	$	(18.4)

Global Credit	(6.3)		(0.3)
Total	$	(24.7)	$	(18.7)

Schedule of equity method investments

Principal investments are related to the following segments:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Global Private Equity	$	1,220.2	$	1,082.1

Global Credit	749.1		671.9
Global Investment Solutions	70.0		56.8
Total	$	2,039.3	$	1,810.8

The Company’s investments in NGP as of September 30, 2021 and December 31, 2020 are as follows:


	As of
	September 30, 2021		December 31, 2020
	(Dollars in millions)
Investment in NGP Management	$	372.5	$	373.5
Investments in NGP general partners - accrued performance allocations	2.9		—
Principal investments in NGP funds	62.3		51.4
Total investments in NGP	$	437.7	$	424.9

Carlyle’s income (loss) from its principal equity method investments consists of:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Global Private Equity	$	63.8	$	40.7	$	272.9	$	60.7

Global Credit (1)	47.5		33.9		120.6		(709.9)
Global Investment Solutions	6.9		1.1		21.4		(1.8)
Total	$	118.2	$	75.7	$	414.9	$	(651.0)

Schedule of net investment income (loss)

The net investment income (loss) recognized in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Management fee-related revenues from NGP Management	$	18.2	$	18.6	$	54.9	$	56.8
Expenses related to the investment in NGP Management	(2.9)		(2.9)		(8.1)		(8.6)
Amortization of basis differences from the investment in NGP Management	(0.7)		(1.1)		(2.1)		(3.2)
Net investment income from NGP Management	$	14.6	$	14.6	$	44.7	$	45.0

Components of investment income (loss)

The components of investment income (loss) are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Performance allocations
Realized	$	1,018.1	$	86.8	$	1,645.6	$	415.7
Unrealized	(43.6)		390.6		3,195.7		315.9
	974.5		477.4		4,841.3		731.6
Principal investment income (loss) from equity method investments (excluding performance allocations)
Realized	87.7		26.9		175.5		105.3
Unrealized	30.5		48.8		239.4		(756.3)
	118.2		75.7		414.9		(651.0)
Principal investment income (loss) from investments in CLOs and other investments
Realized	4.4		0.3		3.9		0.5
Unrealized (1)	37.8		30.7		58.4		(8.7)
	42.2		31.0		62.3		(8.2)



Total	$	1,134.9	$	584.1	$	5,318.5	$	72.4

Performance allocations included in revenues

The performance allocations included in revenues are derived from the following segments:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Global Private Equity	$	777.8	$	336.6	$	4,142.5	$	726.0

Global Credit	27.4		16.3		124.6		(24.0)
Global Investment Solutions	169.3		124.5		574.2		29.6
Total	$	974.5	$	477.4	$	4,841.3	$	731.6

Components of interest and other income of consolidated funds

The components of interest and other income of Consolidated Funds are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Interest income from investments	$	56.9	$	50.8	$	170.4	$	155.0
Other income	5.2		5.5		14.9		9.5
Total	$	62.1	$	56.3	$	185.3	$	164.5

Components of net investment gains (losses) of consolidated funds

The components of net investment gains (losses) of Consolidated Funds are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Gains (losses) from investments of Consolidated Funds	$	(2.5)	$	163.1	$	100.3	$	(219.2)
Gains (losses) from liabilities of CLOs	2.4		(139.2)		(90.7)		180.3

Total	$	(0.1)	$	23.9	$	9.6	$	(38.9)

Schedule of realized and unrealized gains (losses) earned from investments of consolidated funds

The following table presents realized and unrealized gains (losses) earned from investments of the Consolidated Funds:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars in millions)
Realized gains (losses)	$	(10.7)	$	(9.6)	$	6.5	$	(49.9)
Net change in unrealized gains (losses)	8.2		172.7		93.8		(169.3)
Total	$	(2.5)	$	163.1	$	100.3	$	(219.2)

Borrowings (Tables)

9 Months Ended

Sep. 30, 2021

Debt Instrument [Line Items]

Schedule of debt obligations

The Company borrows and enters into credit agreements for its general operating and investment purposes. The Company’s debt obligations consist of the following:


	September 30, 2021				December 31, 2020
	Borrowing Outstanding		Carrying Value		Borrowing Outstanding		Carrying Value
	(Dollars in millions)

Global Credit Revolving Credit Facility	$	70.0	$	70.0	$	—	$	—
CLO Borrowings (See below)	203.0		198.7		356.1		353.6
3.875% Senior Notes Due 2/01/2023	250.0		249.7		250.0		249.5
5.625% Senior Notes Due 3/30/2043	600.0		600.6		600.0		600.7
5.650% Senior Notes Due 9/15/2048	350.0		346.1		350.0		346.0
3.500% Senior Notes Due 9/19/2029	425.0		421.4		425.0		421.1
4.625% Subordinated Notes Due 5/15/2061	500.0		484.2		—		—
Total debt obligations	$	2,398.0	$	2,370.7	$	1,981.1	$	1,970.9

Summary of loans payable of consolidated funds

As of September 30, 2021 and December 31, 2020, the following borrowings were outstanding, which includes preferred shares classified as liabilities (Dollars in millions):


	As of September 30, 2021
	Borrowing Outstanding		Fair Value		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years
Senior secured notes	$	5,697.8	$	5,700.1	1.72	%		10.46
Subordinated notes, preferred shares and other	312.5		238.2		N/A		(1)	10.67

Total	$	6,010.3	$	5,938.3


	As of December 31, 2020
	Borrowing Outstanding		Fair Value		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years
Senior secured notes	$	5,442.2	$	5,358.9	1.74	%		10.36
Subordinated notes, preferred shares and other	164.2		204.1		N/A		(1)	10.49

Total	$	5,606.4	$	5,563.0

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

CLO Borrowings

Debt Instrument [Line Items]

Schedule of debt obligations

The Company’s outstanding CLO borrowings consist of the following (Dollars in millions):


Formation Date	Borrowing Outstanding September 30, 2021		Borrowing Outstanding December 31, 2020		Maturity Date (1)	Interest Rate as of September 30, 2021

February 28, 2017	$	54.2	$	79.9	November 17, 2031	2.35%	(2)
April 19, 2017	—		22.7		April 22, 2031	N/A	(3) (14)
June 28, 2017	—		22.9		July 22, 2031	N/A	(4) (14)
August 2, 2017	—		22.7		July 23, 2029	N/A	(5) (14)
August 2, 2017	—		21.3		August 3, 2022	N/A	(6)
August 14, 2017	—		22.4		August 15, 2030	N/A	(7) (14)
November 30, 2017	—		22.7		January 16, 2030	N/A	(8)(14)(15)
December 6, 2017	—		19.0		October 16, 2030	N/A	(9)(14)(15)
December 7, 2017	—		20.8		January 19, 2029	N/A	(10)(14)(15)
January 30, 2018	—		19.2		January 23, 2030	N/A	(11)(14)(15)
March 1, 2018	—		15.2		January 16, 2031	N/A	(12)(14)(15)
March 15, 2019	1.9		22.6		March 15, 2032	8.11%	(13)
August 20, 2019	4.2		22.9		August 15, 2032	4.74%	(13)
September 15, 2020	20.6		21.8		April 15, 2033	1.59%	(13)
January 8, 2021	21.6		—		January 15, 2034	2.49%	(13)
March 9, 2021	20.7		—		August 15, 2030	1.37%	(13)
March 30, 2021	19.4		—		March 15, 2032	1.71%	(13)
April 21, 2021	3.7		—		April 15, 2033	5.85%	(13)
May 21, 2021	16.2		—		November 17, 2031	1.36%	(13)
June 4, 2021	21.6		—		January 16, 2034	2.28%	(13)
June 10, 2021	1.4		—		November 17, 2031	2.85%	(13)
August 4, 2021	17.5		—		August 15, 2032	1.98%	(13)
	$	203.0	$	356.1