UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-35538

The Carlyle Group Inc.

(Exact name of registrant as specified in its charter)

Delaware	45-2832612
(State or other jurisdiction of<br><br>incorporation or organization)	(I.R.S. Employer<br><br>Identification No.)

1001 Pennsylvania Avenue, NW

Washington, DC, 20004-2505

(Address of principal executive offices) (Zip Code)

(202) 729-5626

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CG	The Nasdaq Global Select Market
4.625% Subordinated Notes due 2061 of Carlyle<br><br>Finance L.L.C.	CGABL	The Nasdaq Global Select Market

As of May 2, 2024, there were 359,880,497 shares of common stock of the registrant outstanding.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during

the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for

the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such

files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Unaudited Condensed Consolidated Financial Statements – March 31, 2024 and 2023:
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	5
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31,<br><br>2024 and 2023	6
	Condensed Consolidated Statements of Comprehensive Income forthe Three Months<br><br>Ended March 31, 2024 and 2023	7
	Condensed Consolidated Statements of Changes in Equity forthe Three Months Ended<br><br>March 31, 2024 and 2023	8
	Condensed Consolidated Statements of Cash Flows forthe Three Months Ended March 31,<br><br>2024 and 2023	9
	Notes to the Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	65
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	118
Item 4.	Controls and Procedures	118
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	120
Item 1A.	Risk Factors	120
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	120
Item 3.	Defaults Upon Senior Securities	120
Item 4.	Mine Safety Disclosures	120
Item 5.	Other Information	121
Item 6.	Exhibits	122
SIGNATURES		123

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of

the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements

include, but are not limited to, statements related to our expectations, estimates, beliefs, projections, future plans and strategies,

anticipated events or trends, and similar expressions and statements that are not historical facts, including our expectations

regarding the performance of our business, our financial results, our liquidity and capital resources, contingencies, and our

dividend policy. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,”

“expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,”

“estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements

are subject to various risks, uncertainties, and assumptions. Accordingly, there are or will be important factors that could cause

actual outcomes or results to differ materially from those indicated in these statements including, but not limited to, those

described in this report and under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended

December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 22, 2024, as such factors

may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at

www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary

statements that are included in this Quarterly Report on Form 10-Q and in our other periodic filings with the SEC. We

undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information,

future developments, or otherwise, except as required by applicable law.

Website and Social Media Disclosure

We use our website (www.carlyle.com), our corporate Facebook page (www.facebook.com/onecarlyle), our corporate

X account (@OneCarlyle or www.twitter.com/onecarlyle), our corporate Instagram account (@onecarlyle or

www.instagram.com/onecarlyle), our corporate LinkedIn account (www.linkedin.com/company/the-carlyle-group), our

corporate YouTube channel (www.youtube.com/user/onecarlyle), and our corporate WeChat account (ID: gh_3e34f090ec20) as

channels of distribution of material company information. For example, financial and other material information regarding our

company is routinely posted on and accessible at www.carlyle.com. Accordingly, investors should monitor these channels, in

addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may

automatically receive email alerts and other information about Carlyle when you enroll your email address by visiting the

“Email Alerts” section at http://ir.carlyle.com/email-alerts. The contents of our website and social media channels are not,

however, a part of this Quarterly Report on Form 10-Q and are not incorporated by reference herein.

On January 1, 2020, we completed our conversion from a Delaware limited partnership named The Carlyle Group L.P.

into a Delaware Corporation named The Carlyle Group Inc. (the conversion, together with such restructuring steps and related

transactions, the “Conversion”).

Unless the context suggests otherwise, references in this report to “Carlyle,” the “Company,” “we,” “us” and “our”

refer to The Carlyle Group Inc. and its consolidated subsidiaries. When we refer to our “senior Carlyle professionals,” we are

referring to the partner-level personnel of our firm. References in this report to the ownership of the senior Carlyle

professionals include the ownership of personal planning vehicles of these individuals. When we refer to the “Carlyle Holdings

partnerships” or “Carlyle Holdings,” we are referring to Carlyle Holdings I L.P., Carlyle Holdings II L.P., and Carlyle Holdings

III L.P., which prior to the Conversion were the holding partnerships through which the Company and our senior Carlyle

professionals and other holders of Carlyle Holdings partnership units owned their respective interests in our business.

“Carlyle funds,” “our funds” and “our investment funds” refer to the investment funds and vehicles advised by Carlyle.

“Carry funds” generally refers to closed-end investment vehicles, in which commitments are drawn down over a

specified investment period, and in which the general partner receives a special residual allocation of income from limited

partners, which we refer to as carried interest, in the event that specified investment returns are achieved by the fund.

Disclosures referring to carry funds will also include the impact of certain commitments that do not earn carried interest, but are

either part of or associated with our carry funds. The rate of carried interest, as well as the share of carried interest allocated to

Carlyle, may vary across the carry fund platform. Carry funds generally include the following investment vehicles across our

three business segments:

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•Global Private Equity: Buyout, middle market and growth capital, real estate, infrastructure and natural resources

funds advised by Carlyle, as well as certain energy funds advised by our strategic partner NGP Energy Capital

Management (“NGP”) in which Carlyle is entitled to receive a share of carried interest (“NGP Carry Funds”);

•Global Credit: Opportunistic credit, aircraft finance, and other closed-end credit funds advised by Carlyle; and

•Global Investment Solutions: Funds and vehicles advised by AlpInvest Partners B.V. and its affiliates (“AlpInvest”),

which include primary fund, secondary and portfolio financing, and co-investment strategies

Carry funds specifically exclude certain legacy Abingworth funds in which Carlyle is not entitled to receive a share of

carried interest, collateralized loan obligation vehicles (“CLOs”), our business development companies and associated managed

accounts, as well as capital raised from strategic third-party investors which directly invest in Fortitude (defined below)

alongside a carry fund.

For an explanation of the fund acronyms used throughout this Quarterly Report on Form 10-Q, refer to “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation – Our Global Investment Offerings.”

“Fortitude” refers to FGH Parent, L.P. (“FGH Parent”), the direct parent of Fortitude Group Holdings, LLC

(“Fortitude Holdings”). See Note 4, Investments, to the condensed consolidated financial statements in Part I, Item 1 of this

Quarterly Report on Form 10-Q for more information regarding the Company’s strategic investment in Fortitude.

“Fee-earning assets under management” or “Fee-earning AUM” refers to the assets we manage or advise from which

we derive recurring fund management fees. Our Fee-earning AUM is generally based on one of the following, once fees have

been activated:

(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period has

not expired and for AlpInvest carry funds during the commitment fee period;

(b)the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment

vehicles where the original investment period has expired, as well as one of our business development companies;

(c)the amount of aggregate fee-earning collateral balance of our CLOs and other securitization vehicles, as defined in the

fund indentures (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions) as of the quarterly

cut-off date;

(d)the external investor portion of the net asset value of certain carry funds;

(e)the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement;

(f)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business

development companies and certain carry funds; or

(g)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee

period has expired and certain carry funds where the investment period has expired.

“Assets under management” or “AUM” refers to the assets we manage or advise. Our AUM generally equals the sum

of the following:

(a)the aggregate fair value of our carry funds and related co-investment vehicles, and separately managed accounts, plus

the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle commitments to

those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the terms of their capital

commitments to those funds and vehicles;

(b) the amount of aggregate collateral balance and principal cash or aggregate principal amount of the notes of our CLOs

and other structured products (inclusive of all positions);

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(d)the fair value of Fortitude’s general account assets covered by the strategic advisory services agreement; and

(e) the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that

Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those

vehicles.

We include in our calculation of AUM and Fee-earning AUM certain energy and renewable resources funds that we

jointly advise with Riverstone Holdings L.L.C. (“Riverstone”) and the NGP Carry Funds that are advised by NGP. Our

calculation of AUM also includes third-party capital raised for the investment in Fortitude through a Carlyle-affiliated

investment fund and from strategic investors which directly invests in Fortitude alongside the fund. The total AUM and Fee-

earning AUM related to the strategic advisory services agreement with Fortitude is inclusive of the net asset value of

investments in Carlyle products. These amounts are also reflected in the AUM and Fee-earning AUM of the strategy in which

they are invested.

For most of our carry funds, total AUM includes the fair value of the capital invested, whereas Fee-earning AUM

includes the amount of capital commitments or the remaining amount of invested capital, depending on whether the original

investment period for the fund has expired. As such, Fee-earning AUM may be greater than total AUM when the aggregate fair

value of the remaining investments is less than the cost of those investments.

Our calculations of AUM and Fee-earning AUM may differ from the calculations of other asset managers. As a result,

these measures may not be comparable to similar measures presented by other asset managers. In addition, our calculation of

AUM (but not Fee-earning AUM) includes uncalled commitments to, and the fair value of invested capital in, our investment

funds from Carlyle and our personnel, regardless of whether such commitments or invested capital are subject to management

fees, incentive fees or performance allocations. Our calculations of AUM or Fee-earning AUM are not based on any definition

of AUM or Fee-earning AUM that is set forth in the agreements governing the investment funds that we manage or advise.

“Performance Fee Eligible AUM” represents the AUM of funds for which we are entitled to receive performance

allocations, inclusive of the fair value of investments in those funds (which we refer to as “Performance Fee Eligible Fair

Value”) and their Available Capital. Performance Fee Eligible Fair Value is “Performance Fee-Generating” when the associated

fund has achieved the specified investment returns required under the terms of the fund’s agreement and is accruing

performance revenue as of the quarter-end reporting date. Funds whose performance allocations are treated as fee related

performance allocations are excluded from these metrics.

“Perpetual Capital” refers to the assets we manage or advise which have an indefinite term and for which there is no

immediate requirement to return capital to investors upon the realization of investments made with such capital, except as

required by applicable law. Perpetual Capital may be materially reduced or terminated under certain conditions, including

reductions from changes in valuations and payments to investors, including through elections by investors to redeem their

investments, dividend payments, and other payment obligations, as well as the termination of or failure to renew the respective

investment advisory agreements. Perpetual Capital includes: (a) assets managed under the strategic advisory services agreement

with Fortitude, (b) our Core Plus real estate fund, (c) our business development companies and certain other direct lending

products, (d) our Interval Fund (“CTAC”) and (e) our closed-end tender offer fund Carlyle AlpInvest Private Markets Fund

(“CAPM”).

“Legacy Energy Funds” include Energy III, Energy IV, and Renew II and are managed with Riverstone and its

affiliates. The investment periods for these funds have expired and the remaining investments in each fund are being disposed

of in the ordinary course of business. The impact of these funds is no longer significant to our results of operations.

“Metropolitan” or “MRE” refers to Metropolitan Real Estate Management, LLC, which was included in the Global

Investment Solutions business segment prior to its sale on April 1, 2021.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The Carlyle Group Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

	March 31,<br><br>2024	December 31,<br><br>2023
	(Unaudited)
Assets
Cash and cash equivalents	$1,276.5	$1,440.3
Cash and cash equivalents held at Consolidated Funds	426.0	346.0
Restricted cash	1.4	1.8
Investments, including accrued performance allocations of $5,567.6 and $6,169.9 as of<br><br>March 31, 2024 and December 31, 2023, respectively	9,473.2	9,955.3
Investments of Consolidated Funds	7,458.6	7,253.1
Due from affiliates and other receivables, net	624.1	691.6
Due from affiliates and other receivables of Consolidated Funds, net	204.1	141.0
Fixed assets, net	162.8	161.5
Lease right-of-use assets, net	349.3	332.2
Deposits and other	88.5	70.6
Intangible assets, net	732.8	766.1
Deferred tax assets	52.2	16.5
Total assets	$20,849.5	$21,176.0
Liabilities and equity
Debt obligations	$2,259.0	$2,281.0
Loans payable of Consolidated Funds	6,535.1	6,486.5
Accounts payable, accrued expenses and other liabilities	375.2	333.8
Accrued compensation and benefits	4,173.9	4,922.2
Due to affiliates	203.6	275.9
Deferred revenue	391.1	140.3
Deferred tax liabilities	26.2	45.3
Other liabilities of Consolidated Funds	598.5	374.4
Lease liabilities	502.9	488.1
Accrued giveback obligations	44.0	44.0
Total liabilities	15,109.5	15,391.5
Commitments and contingencies
Common stock, $0.01 par value, 100,000,000,000 shares authorized (359,260,138 and<br><br>361,326,172 shares issued and outstanding as of March 31, 2024 and December 31, 2023,<br><br>respectively)	3.6	3.6
Additional paid-in-capital	3,513.9	3,403.0
Retained earnings	1,868.2	2,082.1
Accumulated other comprehensive loss	(315.0)	(297.3)
Non-controlling interests in consolidated entities	669.3	593.1
Total equity	5,740.0	5,784.5
Total liabilities and equity	$20,849.5	$21,176.0

See accompanying notes.

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The Carlyle Group Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in millions, except share and per share data)

	Three Months Ended<br><br>March 31,
	2024	2023
Revenues
Fund management fees	$523.6	$500.8
Incentive fees	26.2	19.8
Investment income (loss)
Performance allocations	(157.0)	160.8
Principal investment income	73.1	11.7
Total investment income (loss)	(83.9)	172.5
Interest and other income	57.6	44.0
Interest and other income of Consolidated Funds	164.9	121.9
Total revenues	688.4	859.0
Expenses
Compensation and benefits
Cash-based compensation and benefits	221.9	260.2
Equity-based compensation	108.3	54.4
Performance allocations and incentive fee related compensation	(72.8)	105.7
Total compensation and benefits	257.4	420.3
General, administrative and other expenses	147.7	159.2
Interest	30.8	29.7
Interest and other expenses of Consolidated Funds	124.6	93.7
Other non-operating expenses	0.2	0.1
Total expenses	560.7	703.0
Other income (loss)
Net investment income (loss) of Consolidated Funds	(7.0)	3.6
Income before provision for income taxes	120.7	159.6
Provision for income taxes	21.9	34.3
Net income	98.8	125.3
Net income attributable to non-controlling interests in consolidated entities	33.2	24.6
Net income attributable to The Carlyle Group Inc.	$65.6	$100.7
Net income attributable to The Carlyle Group Inc. per common share (see Note 12)
Basic	$0.18	$0.28
Diluted	$0.18	$0.28
Weighted-average common shares
Basic	360,908,247	362,944,260
Diluted	369,343,601	365,357,833

Substantially all revenue is earned from affiliates of the Company. See accompanying notes.

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The Carlyle Group Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(Dollars in millions)

	Three Months Ended<br><br>March 31,
	2024	2023
Net income	$98.8	$125.3
Other comprehensive income (loss)
Foreign currency translation adjustments	(20.7)	19.8
Defined benefit plans
Unrealized income for the period	0.4	0.3
Reclassification adjustment for gain during the period, included in<br><br>cash-based compensation and benefits expense	(0.1)	(0.1)
Other comprehensive income (loss)	(20.4)	20.0
Comprehensive income	78.4	145.3
Comprehensive income attributable to non-controlling interests in<br><br>consolidated entities	30.5	27.6
Comprehensive income attributable to The Carlyle Group Inc.	$47.9	$117.7

See accompanying notes.

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The Carlyle Group Inc.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(Dollars and shares in millions)

	Common<br><br>Shares	Common<br><br>Stock	Additional<br><br>Paid-in-<br><br>Capital	Retained<br><br>Earnings	Accumulated<br><br>Other<br><br>Comprehensive<br><br>Loss	Non-<br><br>controlling<br><br>Interests in<br><br>Consolidated<br><br>Entities	Total<br><br>Equity
Balance at December 31, 2023	361.3	$3.6	$3,403.0	$2,082.1	$(297.3)	$593.1	$5,784.5
Shares repurchased	(2.8)	—	—	(131.2)	—	—	(131.2)
Net shares issued for equity-based awards	0.8	—	—	(19.4)	—	—	(19.4)
Equity-based compensation	—	—	108.7	—	—	—	108.7
Dividend-equivalent rights on certain equity-<br><br>based awards	—	—	2.2	(2.2)	—	—	—
Contributions	—	—	—	—	—	64.7	64.7
Dividends and distributions	—	—	—	(126.7)	—	(19.0)	(145.7)
Net income	—	—	—	65.6	—	33.2	98.8
Currency translation adjustments	—	—	—	—	(18.0)	(2.7)	(20.7)
Defined benefit plans, net	—	—	—	—	0.3	—	0.3
Balance at March 31, 2024	359.3	$3.6	$3,513.9	$1,868.2	$(315.0)	$669.3	$5,740.0	Common<br><br>Shares	Common<br><br>Stock	Additional<br><br>Paid-in-<br><br>Capital	Retained<br><br>Earnings	Accumulated<br><br>Other<br><br>Comprehensive<br><br>Loss	Non-<br><br>controlling<br><br>Interests in<br><br>Consolidated<br><br>Entities	Total<br><br>Equity
---	---	---	---	---	---	---	---
Balance at December 31, 2022	362.3	$3.6	$3,138.5	$3,401.1	$(322.2)	$600.3	$6,821.3
Shares repurchased	(3.0)	—	—	(100.3)	—	—	(100.3)
Shares issued for equity-based awards	2.8	—	—	—	—	—	—
Equity-based compensation	—	—	54.8	—	—	—	54.8
Dividend-equivalent rights on certain equity-<br><br>based awards	—	—	2.2	(2.2)	—	—	—
Contributions	—	—	—	—	—	18.7	18.7
Dividends and distributions	—	—	—	(118.4)	—	(9.9)	(128.3)
Net income	—	—	—	100.7	—	24.6	125.3
Currency translation adjustments	—	—	—	—	16.8	3.0	19.8
Defined benefit plans, net	—	—	—	—	0.2	—	0.2
Balance at March 31, 2023	362.1	$3.6	$3,195.5	$3,280.9	$(305.2)	$636.7	$6,811.5

See accompanying notes.

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The Carlyle Group Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in millions)

	Three Months Ended March 31,
	2024	2023
Cash flows from operating activities
Net income	$98.8	$125.3
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	45.3	44.0
Equity-based compensation	108.3	54.4
Non-cash performance allocations and incentive fees, net	190.9	(36.7)
Non-cash principal investment income	(70.0)	(7.7)
Other non-cash amounts	(2.9)	10.8
Consolidated Funds related:
Realized/unrealized (gain) loss on investments of Consolidated Funds	(82.7)	(145.0)
Realized/unrealized (gain) loss from loans payable of Consolidated Funds	89.7	141.4
Purchases of investments by Consolidated Funds	(1,477.3)	(386.6)
Proceeds from sales and settlements of investments by Consolidated Funds	1,276.3	332.5
Non-cash interest income, net	(6.7)	(3.7)
Change in cash and cash equivalents held at Consolidated Funds	(80.0)	(20.8)
Change in other receivables held at Consolidated Funds	(65.0)	7.1
Change in other liabilities held at Consolidated Funds	227.9	(32.8)
Purchases of investments	(145.1)	(18.5)
Proceeds from the sale of investments	102.1	78.6
Payments of contingent consideration	(1.5)	(68.6)
Changes in deferred taxes, net	(47.1)	(15.1)
Change in due from affiliates and other receivables	6.7	16.9
Change in deposits and other	(19.7)	(33.9)
Change in accounts payable, accrued expenses and other liabilities	41.5	(63.9)
Change in accrued compensation and benefits	(365.6)	(371.9)
Change in due to affiliates	(2.2)	(0.2)
Change in lease right-of-use assets and lease liabilities	(2.2)	(2.8)
Change in deferred revenue	251.6	284.7
Net cash provided by (used in) operating activities	71.1	(112.5)
Cash flows from investing activities
Purchases of corporate treasury investments	—	(101.1)
Proceeds from corporate treasury investments	—	20.1
Purchases of fixed assets, net	(14.2)	(12.9)
Net cash used in investing activities	(14.2)	(93.9)

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	Three Months Ended March 31,
	2024	2023
Cash flows from financing activities
Payments on CLO borrowings	(13.9)	(1.1)
Net borrowings on loans payable of Consolidated Funds	45.3	68.7
Dividends to common stockholders	(126.7)	(118.4)
Payment of deferred consideration for Carlyle Holdings units	(68.8)	(68.8)
Contributions from non-controlling interest holders	64.7	18.7
Distributions to non-controlling interest holders	(19.0)	(9.9)
Common shares repurchased and net share settlement of equity awards	(150.0)	(100.3)
Change in due to/from affiliates financing activities	51.7	74.6
Net cash used in financing activities	(216.7)	(136.5)
Effect of foreign exchange rate changes	(4.4)	8.3
Decrease in cash, cash equivalents and restricted cash	(164.2)	(334.6)
Cash, cash equivalents and restricted cash, beginning of period	1,442.1	1,361.5
Cash, cash equivalents and restricted cash, end of period	$1,277.9	$1,026.9
Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	$1,276.5	$1,010.1
Restricted cash	1.4	16.8
Total cash, cash equivalents and restricted cash, end of period	$1,277.9	$1,026.9
Cash and cash equivalents held at Consolidated Funds	$426.0	$228.8

See accompanying notes.

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1. Organization and Basis of Presentation

Carlyle is one of the world’s largest global investment firms that deploys private capital across its business and conducts

its operations through three reportable segments: Global Private Equity, Global Credit and Global Investment Solutions (see

Note 15, Segment Reporting). In the Global Private Equity segment, Carlyle advises buyout, growth, real estate, infrastructure

and natural resources funds. The primary areas of focus for the Global Credit segment are liquid credit, private credit, real

assets credit, and other credit such as insurance solutions, platform initiatives, and capital markets. The Global Investment

Solutions segment provides investment opportunities and resources for investors and clients through secondary purchases and

financing of existing portfolios, managed co-investment programs and primary fund investments. Carlyle typically serves as the

general partner, investment manager or collateral manager, making day-to-day investment decisions concerning the assets of

these products.

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, Summary of Significant

Accounting Policies. 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

condensed consolidated financial statements (see Note 2, Summary of Significant Accounting Policies).

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, 2023 filed with the U.S. Securities

and Exchange Commission (“SEC”) on February 22, 2024. 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.

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)

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 March 31, 2024, assets and liabilities of the consolidated VIEs reflected in the condensed consolidated balance

sheets were $8.1 billion and $7.1 billion, respectively. As of December 31, 2023, assets and liabilities of the consolidated VIEs

reflected in the consolidated balance sheets were $7.8 billion and $6.9 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.

The Company’s Consolidated Funds are primarily 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 and contingent incentive fees have been eliminated as intercompany

transactions. As of March 31, 2024, the Company held $184.4 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. The Company’s Consolidated Funds also

include certain investment funds in our Global Private Equity segment that are accounted for as consolidated VIEs due to the

Company providing financing to bridge investment purchases. As of March 31, 2024, the Company held $319.9 million of

notes receivable and investments related to these investment funds which represents its maximum risk of loss. The Company’s

Consolidated Funds also include certain funds in our Global Credit and Global Investment Solutions segments that are

accounted for as consolidated VIEs due to the Company having a significant indirect interest in these funds via the Company’s

investment in Fortitude (see Note 4, Investments).

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 credit vehicles and certain AlpInvest vehicles, as well as its strategic investment

in NGP Management Company, L.L.C. (“NGP Management” and, together with its affiliates, “NGP”). Refer to Note 4,

Investments, 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 condensed consolidated balance sheets related to the Company’s variable

interests in these non-consolidated VIEs were as follows:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Investments	$1,111.3	$1,118.4
Accrued performance allocations	544.6	492.3
Management fee receivables	77.4	65.1
Total	$1,733.3	$1,675.8

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

These amounts represent the Company’s maximum exposure to loss related to the unconsolidated VIEs as of March 31,

2024 and December 31, 2023.

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

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, interest expense and

other expenses of the Consolidated Funds, and net investment income (losses) of Consolidated Funds are included in the

Company’s 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 condensed consolidated 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 and incentive fees involve a higher degree of judgment and complexity and

these assumptions and estimates may be significant to the condensed 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.

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 collectability 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”) 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, Investments, 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 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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Fund Management Fees

The Company provides management services to funds in which it holds a general partner interest or to funds or certain

portfolio companies with which it has an investment advisory or investment 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 segment, management fees generally range from 1.0% to 2.0% of

limited partners’ capital commitments during the fund’s commitment period. For closed-end carry funds in the Global Credit

segment, management fees generally range from 1.0% to 2.0% of limited partners’ invested capital. 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. These terms may vary for certain separately managed accounts, longer-dated carry

funds, and other closed-end funds. 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 amount of assets or the aggregate principal amount of the notes in the CLO and are generally due

quarterly in arrears 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, generally five to ten years after issuance, including after the CLO redemption date up until all eligible assets

are disposed of or at such time the collateral manager waives fees at its discretion. Management fees for the business

development companies are due quarterly in arrears at annual rates that range from 1.0% of capital under management to 1.5%

of gross assets, excluding cash and cash equivalents. Management fees for Carlyle Tactical Private Credit (“CTAC”) are due

monthly in arrears at the annual rate of 1.0% of the month-end value of the CTAC’s net assets. Carlyle Aviation Partners’ funds

have varying management fee arrangements depending on the strategy of the particular fund. Under the strategic advisory

services agreement with Fortitude, the Company earns a recurring management fee based on Fortitude’s general account assets,

which adjusts within an agreed range based on Fortitude’s overall profitability and which is due quarterly in arrears. Managed

accounts across the Global Credit segment have varying management fee arrangements depending on the strategy of the

particular account.

Management fees for the Company’s carry fund vehicles in the Global Investment Solutions segment generally range

from 0.25% to 1.5% of the vehicle’s capital commitments during the commitment fee period of the relevant fund. Following the

expiration of the commitment fee period, the management fees generally range from 0.25% to 1.5% on (i) the net invested

capital, (ii) the lower of cost or net asset value of the capital invested, or (iii) the net asset value for unrealized investments.

Management fees for the Global Investment Solutions carry fund vehicles are generally due quarterly in advance and

recognized over the related quarter. The investment adviser to CAPM is entitled to receive a monthly management fee equal to

1.25% on an annualized basis of the fund’s net asset value as of the last day of the month.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 is generally required to offset its fund management fees earned by

a percentage of the transaction and advisory fees earned, which is referred to as the “rebate offset,” which is generally 100%.

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 $23.8 million and $13.4 million for the three months ended March 31, 2024 and 2023, respectively, net of rebate 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 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 condensed

consolidated statements of operations and the expense in general, administrative and other expenses or cash-based

compensation and benefits expenses in the 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 all 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 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% and return of certain fund costs (generally subject to catch-up provisions as set forth in the fund limited

partnership agreement). These terms may vary on longer-dated funds, certain credit funds, and external co-investment vehicles.

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

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 fund’s 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. As of both March 31, 2024 and December 31, 2023, the

Company has accrued $44.0 million for giveback obligations.

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. 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. As it relates to the

Company’s investments in NGP (see Note 4, Investments), 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.

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

condensed consolidated statements of operations. Interest income of the Consolidated Funds was $142.6 million and $109.8

million for the three months ended March 31, 2024 and 2023, respectively, and is included in interest and other income of

Consolidated Funds in the accompanying condensed consolidated statements of operations.

Credit Losses

The Company measures all expected credit losses for financial assets held at the reporting date in accordance with ASC

326, Financial Instruments — Credit Losses, based on historical experience, current conditions, and reasonable and supportable

forecasts. The Company assesses the collection risk characteristics of the outstanding amounts in its due from affiliates balance

into 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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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. 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.

Certain equity-based awards contain dividend-equivalent rights, which are subject to the same terms and conditions,

including with respect to vesting and settlement, that apply to the related award. Dividend-equivalents are accounted for as a

reclassification from retained earnings to additional paid-in capital at the time dividends are declared and do not result in

incremental compensation expense.

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 for awards that vest based on service and/or performance conditions. 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 condensed consolidated statements of operations.

For awards with a market condition (e.g., achievement of certain stock price hurdles) that are forfeited due to the market

condition not being achieved, the related equity-based compensation expense is not reversed.

Performance Allocations and Incentive Fee Related Compensation – A portion of the performance allocations and

incentive fees and certain other interests earned is due to employees and advisors of the Company. These amounts are

accounted for as profit sharing interests in compensation expense in a systematic and rational manner 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. The liability is measured assuming the hypothetical liquidation of the

associated funds’ underlying investments as of the measurement date. Accordingly, upon a reversal of performance allocations

or incentive fee revenue, the related compensation expense, if any, is also reversed. As any vesting requirement is accelerated

upon realization, the service period is not considered substantive when recording the liability based on the hypothetical

liquidation value. As of March 31, 2024 and December 31, 2023, the Company had recorded a liability of $3.9 billion and

$4.3 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 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. In addition, 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

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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. The Company accounts for the valuation allowance assessment on its deferred tax assets and without regard to the

Company’s potential future corporate alternative minimum tax (“CAMT”) status or global minimum tax status under the Pillar

Two Global Anti-Base Erosion (“GloBE”) model rules of the Organization for Economic Co-operation and Development

(“OECD”). Therefore, the Company accounts for CAMT and the global minimum tax in the period as incurred. 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 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. The Company applies the treasury stock method to determine the dilutive

weighted-average common shares outstanding for certain equity-based compensation awards. For certain equity-based

compensation awards that contain performance or market conditions, the number of contingently issuable common shares is

included in diluted earnings per common share based on the number of common shares, if any, that would be issuable under the

terms of the awards if the end of the reporting period were the end of the contingency period, if the result is dilutive.

Fair Value of Financial Instruments

The underlying entities that the Company manages and invests in (and in certain cases, consolidates) are primarily

investment companies which account for their investments at estimated fair value.

The fair value measurement accounting guidance under ASC Topic 820, Fair Value Measurement (“ASC 820”),

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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 type 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 the 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 (including corporate treasury investments) 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.

In the absence of observable market prices, the Company values its investments and its funds’ 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 and debt of operating companies and real

assets, CLO investments and CLO loans payable and fund investments. The valuation technique for each of these investments is

described below:

Investments in Operating Companies and Real Assets – The fair values of private investments in operating companies

and real assets are generally determined by reference to the income approach (including the discounted cash flow

method and the income capitalization method) and the market approach (including the comparable publicly traded

company method and the comparable transaction method). Valuations under these approaches are typically derived by

reference to investment-specific inputs (such as projected cash flows, earnings before interest, taxes, depreciation and

amortization (“EBITDA”), and net operating income) combined with market-based inputs (such as discount rates,

EBITDA multiples and capitalization rates). In many cases, the investment-specific inputs are unaudited at the time

received. Management may also adjust the market-based inputs to account for differences between the subject

investment and the companies, asset or investments used to derive the market-based inputs. 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, capital structure, and other factors as applicable.

The adjustments are then 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

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

milestones which are also taken into account in the valuation assessment. Option pricing models and similar tools may

also be considered but do not currently drive a significant portion of operating company or real asset 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 loan and bond 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. 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.

Generally, the loan and bond assets of the CLOs are not publicly traded and are classified as Level III. The fair values

of the CLO structured asset positions are determined based on both discounted cash flow analyses and third party

quotes. 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 measures the CLO loan payables 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 generally valued as its

proportionate share of the most recent net asset value provided by the third-party general partners of the underlying

fund partnerships, adjusted for subsequent cash flows received from or distributed to the underlying fund partnerships.

The Company also adjusts for any changes in the market prices of public securities held by the underlying fund

partnerships and may also apply a market adjustment to reflect the estimated change in the fair value of the underlying

fund partnerships’ non-public investments from the date of the most recent net asset value provided by the third-party

general partners.

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. These valuations, inputs and preliminary conclusions are reviewed by the fund

management 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 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

are reviewed by external valuation firms. Valuations of the funds’ investments are used in the calculation of accrued

performance allocations, or “carried interest.”

Investments, at Fair Value

Investments include (i) the Company’s ownership interests (typically general partner interests) in the Funds, including the

Company’s investment in Fortitude (which are accounted for as equity method investments), (ii) the Company’s investment in

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NGP (which is accounted for as an equity method investment), (iii) the investments held by the Consolidated Funds (which are

presented at fair value in the Company’s condensed consolidated financial statements), and (iv) certain credit-oriented

investments, including investments in the CLOs and the preferred securities of Carlyle Secured Lending, Inc. (“CSL,” formerly

known as “TCG BDC, Inc.,” the preferred securities of which are referred to as the “BDC Preferred Shares”) (which are

accounted for as trading securities).

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 the Company’s investment in NGP, 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. The Company is subject to credit risk should a financial institution be

unable to fulfil its obligations and if balances held at a financial institution exceed insured limits.

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.

Corporate Treasury Investments

Corporate treasury investments represent investments in U.S. Treasury and government agency obligations, commercial

paper, certificates of deposit, other investment grade securities and other investments with original maturities of greater than

three months when purchased. These investments are accounted for as trading securities in which changes in the fair value of

each investment are recorded through investment income (loss). Any interest earned on debt investments is recorded through

interest and other income.

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 condensed consolidated balance sheets with changes in fair value

recognized in the 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 March 31, 2024, $294.5 million of securities were transferred to counterparties

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

under repurchase agreements and are included within investments in the condensed consolidated balance sheets. Cash received

under repurchase agreements is recognized as a liability within debt obligations in the condensed consolidated balance sheets.

See Note 6, Borrowings, for additional information.

Fixed Assets

Fixed assets consist of furniture, fixtures and equipment, leasehold improvements, computer hardware and software, and

fractional shares in corporate aircraft, 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 ASC 842, Leases, and recognizes a lease liability and right-of-

use (“ROU”) 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. ROU 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 ROU assets and lease liabilities are recognized at lease commencement

based on the present value of lease payments over the lease term. Lease ROU 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 ROU 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 ROU 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.

ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount

of an asset may not be recoverable.

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 eight years, and are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount of the asset may not be recoverable.

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 1 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. Deferred revenue also includes transaction and portfolio advisory fees received by the Company that are

required to offset fund management fees pursuant to the related fund agreements.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 March 31, 2024 and December 31, 2023 were as follows:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Currency translation adjustments	$(310.8)	$(292.8)
Unrealized losses on defined benefit plans	(4.2)	(4.5)
Total	$(315.0)	$(297.3)

Foreign Currency Translation

Non-U.S. dollar denominated assets and liabilities are translated at period-end rates of exchange, and the 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 $0.5 million and $(11.8) million for the

three months ended March 31, 2024 and 2023, respectively, are included in general, administrative and other expenses in the

condensed consolidated statements of operations.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial

Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or

expected to have minimal impact on the Company’s condensed consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity

Securities Subject to Contractual Sale Restrictions. The amendments in this update clarify the guidance in Topic 820 when

measuring the fair value of an equity security subject to contractual sale restrictions and introduce new disclosure requirements

related to such equity securities. The amendments are effective for fiscal years beginning after December 15, 2023, with early

adoption permitted. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated

financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment

Disclosures, which requires, among other things, disclosure of significant segment expense categories and amounts for each

reportable segment on an interim and annual basis. The guidance is effective for fiscal years beginning after December 15,

2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The Company does

not expect the impact of this guidance to be material to its condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosure, which requires disclosure

of disaggregated information about a reporting entity’s effective tax rate reconciliation, using both percentages and reporting

currency amounts for specific standardized categories, as well as disclosure of income taxes paid disaggregated by jurisdiction.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company

does not expect the impact of this guidance to be material to its condensed consolidated financial statements.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

3. Fair Value Measurement

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the

fair value hierarchy levels as disclosed in Note 2, Summary of Significant Accounting Policies, as of March 31, 2024:

(Dollars in millions)	Level I	Level II	Level III	Total
Assets
Investments of Consolidated Funds(1):
Equity securities(2)	$—	$—	$387.3	$387.3
Bonds	—	—	500.4	500.4
Loans	—	—	6,064.9	6,064.9
	—	—	6,952.6	6,952.6
Investments in CLOs and other:
Investments in CLOs	—	—	520.8	520.8
Other investments(3)	38.3	43.1	93.2	174.6
	38.3	43.1	614.0	695.4
Foreign currency forward contracts	—	2.4	—	2.4
Subtotal	$38.3	$45.5	$7,566.6	$7,650.4
Investments measured at net asset value				517.1
Total				$8,167.5
Liabilities
Loans payable of Consolidated Funds(4)(5)	$—	$—	$6,352.3	$6,352.3
Foreign currency forward contracts	—	0.7	—	0.7
Total	$—	$0.7	$6,352.3	$6,353.0

(1)This balance excludes $506.0 million related to investments of Consolidated Funds that are included in investments measured at net

asset value.

(2)This balance includes $332.1 million related to investments that have been bridged by the Company to investment funds and are

accounted for as consolidated VIEs as of March 31, 2024.

(3)The Level III balance excludes $50.3 million related to three corporate investments 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. As a non-recurring fair value measurement, the fair value of these equity securities is

excluded from the tabular Level III rollforward disclosures.

(4)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 interest held by the Company and (ii) the carrying value of any beneficial interests that

represent compensation for services.

(5)Loans payable of Consolidated Funds balance excludes a $182.8 million revolving credit balance.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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, 2023:

(Dollars in millions)	Level I	Level II	Level III	Total
Assets
Investments of Consolidated Funds(1):
Equity securities(2)	$—	$—	$377.6	$377.6
Bonds	—	—	522.5	522.5
Loans	—	—	5,862.1	5,862.1
	—	—	6,762.2	6,762.2
Investments in CLOs and other:
Investments in CLOs	—	—	532.6	532.6
Other investments(3)	38.7	42.8	84.6	166.1
	38.7	42.8	617.2	698.7
Subtotal	$38.7	$42.8	$7,379.4	$7,460.9
Investments measured at net asset value				502.0
Total				$7,962.9
Liabilities
Loans payable of Consolidated Funds(4)(5)	$—	$—	$6,298.6	$6,298.6
Total	$—	$—	$6,298.6	$6,298.6

(1)This balance excludes $490.9 million related to investments of consolidated funds that are included in investments measured at net

asset value.

(2)This balance includes $322.0 million related to investments that have been bridged by the Company to investment funds and are

accounted for as consolidated VIEs as of December 31, 2023.

(3)The Level III balance excludes a $50.4 million related to two corporate investments 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. As a non-recurring fair value measurement, the fair value of these equity securities is

excluded from the tabular Level III rollforward disclosures.

(4)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.

(5)Loans payable of Consolidated Funds balance excludes a $177.9 million revolving credit balance and $10.0 million of senior notes

and subordinated notes.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 March 31, 2024
	Investments of Consolidated Funds
	Equity<br><br>securities	Bonds	Loans	Investments in<br><br>CLOs	Other<br><br>investments	Total
Balance, beginning of period	$377.6	$522.5	$5,862.1	$532.6	$84.6	$7,379.4
Purchases	24.8	46.4	1,397.4	1.0	—	1,469.6
Sales and distributions	(6.1)	(72.8)	(729.5)	(24.0)	(0.9)	(833.3)
Settlements	—	—	(464.7)	—	—	(464.7)
Realized and unrealized gains (losses), net
Included in earnings	(9.0)	15.6	72.8	15.2	9.5	104.1
Included in other comprehensive income	—	(11.3)	(73.2)	(4.0)	—	(88.5)
Balance, end of period	$387.3	$500.4	$6,064.9	$520.8	$93.2	$7,566.6
Changes in unrealized gains (losses) included in earnings<br><br>related to financial assets still held at the reporting date	$(9.0)	$16.4	$60.8	$15.2	$8.6	$92.0
Changes in unrealized gains (losses) included in other<br><br>comprehensive income related to financial assets still held at<br><br>the reporting date	$—	$(10.2)	$(68.9)	$(4.0)	$—	$(83.1)	Financial Assets
---	---	---	---	---	---	---
	Three Months Ended March 31, 2023
	Investments of Consolidated Funds
	Equity<br><br>securities	Bonds	Loans	Investments in<br><br>CLOs	Other<br><br>investments	Total
Balance, beginning of period	$430.6	$594.9	$5,352.9	$526.1	$79.4	$6,983.9
Purchases	5.4	29.8	237.3	—	—	272.5
Sales and distributions	—	(47.0)	(169.7)	(7.9)	(0.9)	(225.5)
Settlements	—	(4.1)	(101.6)	—	—	(105.7)
Realized and unrealized gains (losses), net
Included in earnings	(0.5)	11.4	116.0	19.1	(2.4)	143.6
Included in other comprehensive income	—	8.2	46.8	7.5	—	62.5
Balance, end of period	$435.5	$593.2	$5,481.7	$544.8	$76.1	$7,131.3
Changes in unrealized gains (losses) included in earnings<br><br>related to financial assets still held at the reporting date	$(0.4)	$8.5	$107.3	$19.1	$(3.3)	$131.2
Changes in unrealized gains (losses) included in other<br><br>comprehensive income related to financial assets still held at<br><br>the reporting date	$—	$8.7	$48.6	$7.5	$—	$64.8

Table of Contents

The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Financial Liabilities
	Loans Payable of Consolidated Funds
	Three Months Ended March 31,
	2024	2023
Balance, beginning of period	$6,298.6	$5,491.6
Borrowings	546.7	0.6
Paydowns	(207.7)	(2.1)
Sales	(288.7)	(38.1)
Realized and unrealized (gains) losses, net
Included in earnings	89.4	141.4
Included in other comprehensive income	(86.0)	54.5
Balance, end of period	$6,352.3	$5,647.9
Changes in unrealized (gains) losses included in earnings related to<br><br>financial liabilities still held at the reporting date	$91.1	$142.4
Changes in unrealized (gains) losses included in other comprehensive<br><br>income related to financial liabilities still held at the reporting date	$(87.9)	$54.5

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 the Consolidated Funds are included in net investment gains (losses) of Consolidated Funds in the

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 and non-controlling interests in consolidated entities.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes quantitative information about the Company’s Level III inputs as of March 31, 2024:

	Fair Value at	Unobservable Input(s)	Range<br><br>(Weighted Average)
(Dollars in millions)	March 31, 2024
Assets
Investments of Consolidated Funds:
Equity securities	3.0	Indicative Quotes ($ per share)	0.00 - 203.50 (0.08)
	317.1	Discount Rates	10% - 10% (10%)
		Terminal Growth Rate	0% - 7% (5%)
		EBITDA Multiple	12.7x - 12.7x (12.7x)
		TCF Multiple	25.0x - 25.0x (25.0x)
	44.4	Discount Rates	10% - 10% (10%)
		Terminal Growth Rate	0% - 7% (5%)
		TCF Multiple	25.0x - 25.0x (25.0x)
	15.0	Discount Rates	11% - 11% (11%)
		Terminal Growth Rate	5% - 5% (5%)
		EBITDA Multiple	7.3x - 7.3x (7.3x)
	7.8	N/A	N/A
Bonds	500.4	Indicative Quotes (% of Par)	30 - 108 (93)
Loans	6,040.8	Indicative Quotes (% of Par)	0 - 102 (97)
	10.7	Discount Rates	11% - 21% (20%)
	8.9	Discount Rates	17% - 17% (17%)
		Constant Prepayment Rate	8% - 8% (8%)
		Constant Default Rate	1% - 1% (1%)
	4.5	N/A	N/A
	6,952.6
Investments in CLOs:
Senior secured notes	458.7	Indicative Quotes (% of Par)	75 - 100 (98)
		Discount Margins (Basis<br><br>Points)	110 - 1,613 (267)
		Default Rates	2% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
Subordinated notes and preferred<br><br>shares	61.0	Indicative Quotes (% of Par)	6 - 93 (42)
		Discount Rates	11% - 35% (21%)
		Default Rates	2% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
	0.1	% of Net Book Value	0% - 10% (3%)
	1.0	N/A	N/A
Other investments:
BDC preferred shares	90.1	Market Yields	11% - 11% (11%)
Aviation subordinated notes	3.1	Discount Rates	21% - 21% (21%)
Total	7,566.6
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes	6,153.0	N/A	N/A
Subordinated notes and preferred<br><br>shares	188.0	Indicative Quotes (% of Par)	19 - 94 (56)
		Discount Rates	14% - 30% (19%)
		Default Rates	2% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
	11.3	N/A	N/A
Total	6,352.3

All values are in US Dollars.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

(1)Fair value approximates transaction price that was in close proximity to the reporting date.

(2)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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes quantitative information about the Company’s Level III inputs as of December 31, 2023:

	Fair Value at	Unobservable Input(s)	Range<br><br>(Weighted Average)
(Dollars in millions)	December 31, 2023
Assets
Investments of Consolidated Funds:
Equity securities	3.3	Indicative Quotes ($ per share)	0.00 - 208.38 (0.11)
	322.1	Discount Rates	10% - 11% (10%)
		Terminal Growth Rate	0% - 7% (5%)
		EBITDA Multiple	12.7x - 12.7x (12.7x)
		TCF Multiple	24.3x - 24.3x (24.3x)
	44.4	Discount Rates	10% - 10% (10%)
		Terminal Growth Rate	7% - 7% - (7%)
		TCF Multiple	24.3x - 24.3x (24.3x)
	7.8	N/A	N/A
Bonds	522.5	Indicative Quotes (% of Par)	30 - 105 (90)
Loans	5,829.3	Indicative Quotes (% of Par)	0 - 102 (95)
	11.0	Discount Rates	7% - 16% (15%)
	9.4	Discount Rates	17% - 17% (17%)
		Constant Prepayment Rate	8% - 8% (8%)
		Constant Default Rate	1% - 1% (1%)
		Recovery Rate	0% - 0% (0%)
Other	12.4	N/A	N/A
	6,762.2
Investments in CLOs
Senior secured notes	472.2	Indicative Quotes (% of Par)	72 - 101 (96)
		Discount Margins (Basis<br><br>Points)	139 - 1,600 (319)
		Default Rates	2% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
Subordinated notes and preferred<br><br>shares	59.4	Indicative Quotes (% of Par)	6 - 90 (40)
		Discount Rate	11% - 40% (21%)
		Default Rates	1% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
	1.0	N/A	N/A
Other investments:
BDC preferred shares	81.7	Market Yields	11% - 11% (11%)
Aviation subordinated notes	2.9	Discount Rates	21% - 21% (21%)
Total	7,379.4
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes	6,090.1	N/A	N/A
Subordinated notes and preferred<br><br>shares	190.0	Indicative Quotes (% of Par)	16 - 103 (41)
		Discount Rates	14% - 30% (21%)
		Default Rates	2% - 2% (2%)
		Recovery Rates	60% - 60% (60%)
	18.5	N/A	N/A
Total	6,298.6

All values are in US Dollars.

(1)Fair value approximates transaction price that was in close proximity to the reporting date.

(2)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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 discount rates, default rates, recovery rates and indicative quotes. Significant increases in discount rates or default

rates in isolation would result in a significantly lower fair value measurement. Significant decreases in recovery rates or

indicative quotes in isolation would result in a significantly lower fair value measurement.

4. Investments

Investments consist of the following:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Accrued performance allocations	$5,567.6	$6,169.9
Principal equity method investments, excluding performance allocations	3,145.4	3,024.1
Principal investments in CLOs	520.8	532.6
Other investments	239.4	228.7
Total	$9,473.2	$9,955.3

Accrued Performance Allocations

The components of accrued performance allocations are as follows:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Global Private Equity	$3,547.7	$4,310.7
Global Credit	381.6	323.4
Global Investment Solutions	1,638.3	1,535.8
Total	$5,567.6	$6,169.9

None of the Company’s accrued performance allocations from an individual fund exceeded 10% of total accrued

performance allocations at March 31, 2024 and December 31, 2023.

Accrued performance allocations are shown gross of the Company’s accrued performance allocations and incentive fee

related compensation (see Note 7, Accrued Compensation and Benefits), and accrued giveback obligations, which are

separately presented in the condensed consolidated balance sheets. The components of the accrued giveback obligations are as

follows:

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Global Private Equity	$(18.4)	$(18.4)
Global Credit	(25.6)	(25.6)
Total	$(44.0)	$(44.0)

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 investments

in Fortitude through a Carlyle-affiliated fund (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
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Global Private Equity(1)	$1,781.1	$1,798.3
Global Credit(2)	1,114.8	987.4
Global Investment Solutions	249.5	238.4
Total	$3,145.4	$3,024.1

(1)The balance includes $918.0 million and $916.2 million as of March 31, 2024 and December 31, 2023, respectively, related to the

Company’s equity method investments in NGP.

(2)As of March 31, 2024 and December 31, 2023, the balance includes $709.3 million and $595.4 million, respectively, related to the

Company’s investment in Fortitude.

Investment in Fortitude

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”). Fortitude Holdings owns 100% of the

outstanding common shares of Fortitude Reinsurance Company Ltd., a Bermuda domiciled reinsurer (“Fortitude Re”). The

Company paid $381 million in cash at closing and paid $95 million in additional deferred consideration during the three months

ended March 31, 2024. In May 2020, the initial purchase price was adjusted upward by $99.5 million in accordance with the

purchase agreement as Fortitude Holdings chose not to distribute a planned non-pro rata dividend to AIG, of which the

Company paid $79.6 million in May 2020. The remaining $19.9 million was paid during the three months ended March 31,

2024.

On June 2, 2020, Carlyle FRL, L.P. (“Carlyle FRL”), a Carlyle-affiliated investment fund, and T&D United Capital Co.,

Ltd. (“T&D”), a strategic third-party investor, acquired a 51.6% ownership interest and 25.0% ownership interest, respectively,

in Fortitude Holdings from AIG. At closing, the Company contributed its existing 19.9% interest in Fortitude Holdings to

Carlyle FRL, such that Carlyle FRL held a 71.5% interest in Fortitude Holdings. Taken together, Carlyle FRL and T&D had

96.5% ownership of Fortitude Holdings. In October 2021, Carlyle FRL, T&D and an affiliate of AIG contributed the entirety of

their interest in Fortitude Holdings to FGH Parent, L.P. (“FGH Parent”), a newly-formed entity interposed as the direct parent

of Fortitude Holdings, in exchange for an equivalent ownership interest in FGH Parent. References to “Fortitude” prior to this

restructuring refer to Fortitude Holdings and refer to FGH Parent for subsequent periods.

In March 2022, the Company raised $2.0 billion in third-party equity capital from certain investors in Carlyle FRL and

T&D, and committed $100 million from the Company for additional equity capital in Fortitude. In May 2022, Fortitude called

$1.1 billion of the capital raise, reducing the Company’s indirect ownership of Fortitude from 19.9% to 13.5%. As a result of

the dilution, the Company recorded a reduction in the carrying value of its equity method investment and corresponding loss of

$176.9 million. In May 2023, Fortitude called the remaining $1 billion of the capital commitments and the Company’s indirect

ownership of Fortitude further decreased from 13.5% to 10.5%, resulting in an additional reduction in the carrying value and a

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

corresponding loss of $104.0 million. Effective October 2023, a third-party investor in Carlyle FRL received a distribution in

kind of its interest in FGH Parent held indirectly through the fund, reducing Carlyle FRL’s ownership in FGH Parent to 38.5%.

Following the additional capital contributions in 2022 and 2023, Carlyle FRL and its strategic third-party investors collectively

hold a 97.5% interest in FGH Parent. As of March 31, 2024, the carrying value of the Company’s investment in Carlyle FRL,

which is an investment company that accounts for its investment in Fortitude at fair value, was $709.3 million, relative to equity

invested of $679.6 million.

The Company has an asset management relationship with Fortitude pursuant to which Fortitude committed to allocate

assets in asset management strategies and vehicles of the Company and its affiliates. As of March 31, 2024, Fortitude, its

affiliates and certain Fortitude reinsurance counterparties have committed approximately $17.9 billion of capital to-date to

various Carlyle strategies. On April 1, 2022, the Company entered into a strategic advisory services agreement with certain

subsidiaries of Fortitude through Carlyle Insurance Solutions Management L.L.C. (“CISM”), an investment adviser. Under the

agreement, CISM provides Fortitude with certain services, including business development and growth, transaction origination

and execution, and capital management services in exchange for a recurring management fee based on Fortitude’s general

account assets, which adjusts within an agreed range based on Fortitude’s overall profitability. Third party investors who

participated in the March 2022 capital raise also made a minority investment in CISM, which is reflected as a non-controlling

interest in consolidated entities in the condensed consolidated financial statements.

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 as described below. The Company does

not control NGP and accounts for its investments in NGP under the equity method of accounting, and includes these

investments in the Global Private Equity segment.

The Company’s investments in NGP as of March 31, 2024 and December 31, 2023 are as follows:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Investment in NGP Management	$369.3	$370.5
Investments in NGP general partners - accrued performance allocations	488.4	484.4
Principal investments in NGP funds	60.3	61.3
Total investments in NGP	$918.0	$916.2

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 and NGP XI during the three months ended March 31, 2024 and 2023.

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, as well as expenses associated with the

compensatory elements of the investment. The net investment income (loss) recognized in the Company’s condensed

consolidated statements of operations for the three months ended March 31, 2024 and 2023 were as follows:

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Management fee related revenues from NGP Management	$17.3	$18.1
Expenses related to the investment in NGP Management	(3.2)	(3.4)
Net investment income from NGP Management	$14.1	$14.7

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% (40.0% or 42.75% in the case of certain funds) 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 condensed consolidated statements of operations. The Company recognized $15.3 million and $1.7 million of

net investment earnings (losses) related to these performance allocations for the three months ended March 31, 2024 and 2023,

respectively.

Principal Investments in NGP Funds. The Company also holds principal investments in the NGP Carry Funds. The

Company recognized net investment earnings (losses) related to principal investment income (loss) in its condensed

consolidated statements of operations of $2.0 million and $(0.1) million for the three months ended March 31, 2024 and 2023,

respectively.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Principal Investments in CLOs and Other Investments

Principal investments in CLOs as of March 31, 2024 and December 31, 2023 were $520.8 million and $532.6 million,

respectively, and consisted of investments in CLO senior and subordinated notes. A portion of the Company’s principal

investments in CLOs is collateral to CLO term loans (see Note 6, Borrowings). As of March 31, 2024 and December 31, 2023,

other investments include the Company’s investment in the BDC Preferred Shares at fair value of $90.1 million and

$81.7 million, respectively (see Note 9, Related Party Transactions).

Investment Income (Loss)

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Performance allocations
Realized	$389.7	$179.6
Unrealized	(546.7)	(18.8)
	(157.0)	160.8
Principal investment income (loss) from equity method<br><br>investments (excluding performance allocations)
Realized	53.7	38.5
Unrealized	(6.6)	(30.2)
	47.1	8.3
Principal investment income (loss) from investments in CLOs and<br><br>other investments
Realized	2.2	(1.1)
Unrealized(1)	23.8	4.5
	26.0	3.4
Total	$(83.9)	$172.5

(1)The three months ended March 31, 2023 included investment loss of $13.3 million associated with the remeasurement of a

corporate investment, resulting from observable price changes pursuant to ASC 321, Investments - Equity Securities.

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Global Private Equity	$(363.5)	$(3.8)
Global Credit	65.1	33.4
Global Investment Solutions	141.4	131.2
Total	$(157.0)	$160.8

The following table summarizes the funds that are the primary drivers of performance allocations for the periods

presented and the total revenue recognized, including performance allocations as well as fund management fees and principal

investment income:

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Three Months Ended March 31, 2024
(Dollars in millions)
Global Private Equity	Carlyle Europe Partners V, L.P.	$(171.5)
Global Private Equity	Carlyle Partners VI, L.P.	(86.7)
Global Private Equity	Carlyle Partners VII, L.P.	(73.1)	Three Months Ended March 31, 2023
---	---	---
(Dollars in millions)
Global Private Equity	Carlyle Partners VI, L.P.	$(74.4)

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Global Private Equity	$28.8	$17.8
Global Credit	11.4	(18.9)
Global Investment Solutions	6.9	9.4
Total	$47.1	$8.3

Principal investment income for Global Private Equity includes the Company’s equity income allocation from NGP

performance allocations of $15.3 million and $1.7 million for three months ended March 31, 2024 and 2023, respectively.

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 three months ended March 31, 2024, the Company did not form any new CLOs for which the Company

is the primary beneficiary. Investments in Consolidated Funds as of March 31, 2024 also include $332.1 million related to

investments that have been bridged by the Company to investment funds and are accounted for as consolidated VIEs.

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

period presented.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Interest and Other Income of Consolidated Funds

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Interest income from investments	$142.6	$109.8
Other income	22.3	12.1
Total	$164.9	$121.9

Net Investment Income (Loss) of Consolidated Funds

Net investment income (loss) of Consolidated Funds includes 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 income (loss) of Consolidated Funds are as follows:

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Gains from investments of Consolidated Funds	$82.7	$145.0
Losses from liabilities of CLOs	(89.7)	(141.4)
Total	$(7.0)	$3.6

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Realized losses	$(21.2)	$(17.4)
Net change in unrealized gains	103.9	162.4
Total	$82.7	$145.0

5. Intangible Assets and Goodwill

The following table summarizes the carrying amount of intangible assets as of March 31, 2024 and December 31, 2023:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Acquired contractual rights	$923.3	$924.1
Accumulated amortization	(294.4)	(262.0)
Finite-lived intangible assets, net	628.9	662.1
Goodwill	103.9	104.0
Intangible Assets, net	$732.8	$766.1

As discussed in Note 2, Summary of Significant Accounting Policies, the Company reviews its intangible assets for

impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable,

and considers factors including, but not limited to, expected cash flows from its interest in future management fees and the

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

ability to raise new funds. For both the three months ended March 31, 2024 and 2023, the Company recorded no impairment

losses.

Intangible asset amortization expense was $32.6 million and $32.8 million for the three months ended March 31, 2024

and 2023, respectively, and is included in general, administrative, and other expenses in the condensed consolidated statements

of operations. Certain intangible assets are held by entities of which the functional currency is not the U.S. dollar. Any

corresponding currency translation is recorded in accumulated other comprehensive income (loss).

The following table summarizes the expected amortization expense for 2024 through 2028 and thereafter (Dollars in

millions):

Year ending December 31,
2024 (excluding the three months ended March 31, 2024)	$98.3
2025	131.0
2026	130.9
2027	120.8
2028	113.7
Thereafter	34.2
	$628.9

6. 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:

	March 31, 2024		December 31, 2023
	Borrowing<br><br>Outstanding	Carrying<br><br>Value	Borrowing<br><br>Outstanding	Carrying<br><br>Value
	(Dollars in millions)
CLO Borrowings (See below)	$408.1	$404.2	$431.7	$426.4
3.500% Senior Notes Due 9/19/2029	425.0	422.6	425.0	422.5
5.625% Senior Notes Due 3/30/2043	600.0	600.5	600.0	600.6
5.650% Senior Notes Due 9/15/2048	350.0	346.5	350.0	346.4
4.625% Subordinated Notes Due 5/15/2061	500.0	485.2	500.0	485.1
Total debt obligations	$2,283.1	$2,259.0	$2,306.7	$2,281.0

Senior Credit Facility

As of March 31, 2024, the senior credit facility, which was amended on April 29, 2022, included $1.0 billion in a

revolving credit facility. The Company’s borrowing capacity is subject to the ability of the financial institutions in the banking

syndicate to fulfill their respective obligations under the revolving credit facility. The revolving credit facility is scheduled to

mature on April 29, 2027, 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% per annum, or (b) at SOFR (or

similar benchmark for non-U.S. dollar borrowings) plus a 0.10% adjustment and an applicable margin not to exceed 1.50% per

annum (at March 31, 2024, the interest rate was 6.43%). The Company made no borrowings under the revolving credit facility

during the three months ended March 31, 2024 and there was no balance outstanding at March 31, 2024.

Global Credit Revolving Credit Facility

Certain subsidiaries of the Company are parties to a revolving line of credit, primarily intended to support certain lending

activities within the Global Credit segment. In August 2023, the Global Credit Revolving Credit Facility was amended to

increase the capacity of the existing revolving line of credit from $250 million to $300 million (the “2027 Tranche Revolving

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Loans”) and extend the maturity date to September 2027. This amendment also provides for a new tranche of revolving loans

with a capacity of $200 million maturing in August 2024 (the “2024 Tranche Revolving Loans,” together with the 2027

Tranche Revolving Loans, the “Global Credit Revolving Credit Facility”). The Company’s borrowing capacity is subject to the

ability of the financial institutions in the banking syndicate to fulfill their respective obligations under the credit facility.

Principal amounts outstanding under the facility accrue interest at applicable SOFR or Eurocurrency rates plus an applicable

margin of 2.00% or an alternate base rate plus an applicable margin of 1.00%. The Company made no borrowings under the

credit facility during the three months ended March 31, 2024, and there was no borrowing outstanding under this credit facility

as of March 31, 2024.

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<br><br>Outstanding<br><br>March 31, 2024	Borrowing Outstanding December 31, 2023	Interest Rate as of<br><br>March 31, 2024
February 28, 2017	$34.2	39.9	6.30%	(2)
June 29, 2017	40.7	45.6	6.77%	(4)
December 6, 2017	38.5	41.1	6.97%	(5)
March 15, 2019	1.8	1.8	12.05%	(3)
August 20, 2019	3.9	4.0	8.64%	(3)
September 15, 2020	19.2	19.7	5.53%	(3)
January 8, 2021	20.1	20.6	6.44%	(3)
March 9, 2021	14.8	16.8	5.34%	(3)
March 30, 2021	18.0	18.6	5.65%	(3)
April 21, 2021	3.5	3.6	9.79%	(3)
May 21, 2021	15.1	15.5	5.27%	(3)
June 4, 2021	20.2	20.7	6.22%	(3)
June 10, 2021	1.3	1.3	6.75%	(3)
July 15, 2021	15.1	15.5	6.23%	(3)
July 20, 2021	20.1	20.6	6.25%	(3)
August 4, 2021	16.3	16.7	5.65%	(3)
October 27, 2021	23.4	24.0	6.35%	(3)
November 5, 2021	14.0	14.3	6.03%	(3)
January 6, 2022	20.2	20.7	6.28%	(3)
February 22, 2022	20.3	20.8	6.35%	(3)
July 13, 2022	17.0	17.5	7.26%	(3)
October 25, 2022	17.7	18.1	7.69%	(3)
September 5, 2023	12.7	14.3	5.47%	(3)
	$408.1	431.7

All values are in US Dollars.

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

(2)Incurs interest at EURIBOR plus applicable margins as defined in the agreement.

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

(4)Incurs interest at SOFR plus 1.45%.

(5)Incurs interest at SOFR plus 1.66%.

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 March 31, 2024 and 2023 was $6.8 million and $5.2 million, respectively. The fair value of the

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

outstanding balance of the CLO term loans at March 31, 2024 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 provided a €31.7 million term loan ($34.2 million at March 31, 2024) 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 September 21, 2029 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 (6.30% at March 31, 2024).

Master Credit Agreement - Term Loans

The Company assumed liabilities under master credit agreements previously entered into by CBAM under which a

financial institution provided term loans to CBAM for the purchase of eligible interests in CLOs (see Note 3 to the consolidated

financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023). Term

loans issued under these master credit agreements are 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 generally bear interest at

SOFR plus a weighted average spread over SOFR on the CLO notes, which is due quarterly. As of March 31, 2024, term loans

under these agreements had $79.2 million outstanding. The master credit agreements mature in July 2030 and January 2031,

respectively.

CLO Repurchase Agreements

On February 5, 2019, the Company entered into a master credit facility agreement (the “Carlyle CLO Financing Facility”)

to finance a portion of the risk retention investments in certain European CLOs managed by the Company. Each transaction

entered into under the Carlyle 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 March 31, 2024,

€211.0 million ($227.7 million) was outstanding under the Carlyle CLO Financing Facility. Additional borrowings may be

made on terms agreed upon by the Company and the counterparty subject to the terms and conditions of the Carlyle 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.

The Company assumed liabilities under a master credit facility agreement previously entered into by CBAM (the

“CBAM CLO Financing Facility,” together with the Carlyle CLO Financing Facility, the “CLO Financing Facilities”) to

finance a portion of the risk retention investments in certain European CLOs managed by CBAM (see Note 3 to the

consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31,

2023). 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 CBAM CLO Financing Facility. Each transaction entered into under

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

the CBAM 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 March 31, 2024, €61.9 million

($66.8 million) was outstanding under the CBAM CLO Financing Facility.

Senior Notes

Certain indirect subsidiaries of 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):


		Fair Value (1)<br><br>As of		Three Months Ended<br><br>March 31,
	Aggregate<br><br>Principal<br><br>Amount	March 31,<br><br>2024	December 31, 2023	2024	2023
3.500% Senior Notes Due 9/19/2029 (2)	$425.0	$393.9	401.9	$3.8	$3.8
5.625% Senior Notes Due 3/30/2043 (3)	600.0	588.0	594.6	8.4	8.4
5.650% Senior Notes Due 9/15/2048 (4)	350.0	337.8	336.0	5.0	5.0
				$17.2	$17.2

All values are in US Dollars.

(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 September 2019 at 99.841% 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.

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 3.500% senior notes), plus in each case accrued

and unpaid interest on the principal amounts being redeemed.

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.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

As of March 31, 2024 and December 31, 2023, the fair value of the Subordinated Notes was $390.2 million and

$411.8 million, respectively. Fair value is based on active market quotes and the notes are classified as Level I within the fair

value hierarchy. For both the three months ended March 31, 2024 and 2023, the Company incurred $5.9 million 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 notes. The Company was in compliance with all

financial and non-financial covenants under its various loan agreements as of March 31, 2024.

Loans Payable of Consolidated Funds

Loans payable of Consolidated Funds primarily represent amounts due to holders of debt securities issued by the CLOs.

As of March 31, 2024 and December 31, 2023, the following borrowings were outstanding (Dollars in millions):

	As of March 31, 2024
	Borrowing<br><br>Outstanding	Fair Value		Weighted<br><br>Average<br><br>Remaining<br><br>Maturity in<br><br>Years
Senior secured notes	$6,133.0	6,153.0		8.84
Subordinated notes	220.5	199.3	(4)	8.94
Revolving credit facilities(3)	182.8	182.8		4.74
Total	$6,536.3	6,535.1

All values are in US Dollars.

	As of December 31, 2023
	Borrowing<br><br>Outstanding	Fair Value		Weighted<br><br>Average<br><br>Remaining<br><br>Maturity in<br><br>Years
Senior secured notes(1)	$6,171.9	6,097.9		8.99
Subordinated notes(2)	173.5	210.7	(4)	9.16
Revolving credit facilities(3)	177.9	177.9		5.05
Total	$6,523.3	6,486.5

All values are in US Dollars.

(1)Borrowing Outstanding and Fair Value as of December 31, 2023 includes $7.8 million of senior secured notes that are carried at par

value.

(2)Borrowing Outstanding and Fair Value as of December 31, 2023 includes $2.2 million of subordinated notes that are carried at par

value.

(3)Fair Value as of March 31, 2024 and December 31, 2023 reflects the amortized cost of outstanding revolving credit balances which

approximates fair value.

(4)The subordinated notes 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 March 31, 2024 and December 31, 2023, the fair value of the CLO assets was $7.1 billion and $6.8

billion, respectively.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

7. Accrued Compensation and Benefits

Accrued compensation and benefits consist of the following:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Accrued performance allocations and incentive fee related compensation	$3,939.4	$4,255.8
Accrued bonuses	110.4	498.2
Accrued pension liability	12.4	13.1
Other(1)	111.7	155.1
Total	$4,173.9	$4,922.2

(1)Includes $15.1 million and $44.5 million of realized performance allocations and incentive fee related compensation not yet paid to

participants as of March 31, 2024 and December 31, 2023, respectively.

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

	Three Months Ended March 31,
	2024	2023
(Dollars in millions)
Realized	$266.8	$103.6
Unrealized	(339.6)	2.1
Total	$(72.8)	$105.7

8. Commitments and Contingencies

Capital Commitments

The Company and its unconsolidated affiliates have unfunded commitments totaling $4.2 billion as of March 31, 2024, of

which approximately $3.6 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals. 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

March 31, 2024, the Company had no commitments related to the origination and syndication of loans and securities under the

Carlyle Global Capital Markets platform.

Guaranteed Loans

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 total of net asset value of the

guarantor subsidiaries plus any uncalled capital of the applicable general partner, and was approximately $10.7 million as of

March 31, 2024. 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 $44.0 million at March 31, 2024

was shown as accrued giveback obligations in the condensed consolidated balance sheets, representing the giveback obligation

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

that would need to be paid if the funds were liquidated at their current fair values at March 31, 2024. 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, Summary of Significant Accounting Policies). The Company had

$11.5 million of unbilled receivables from former and current employees and senior Carlyle professionals as of March 31, 2024

related to giveback obligations. Any such receivables are collateralized by investments made by individual senior Carlyle

professionals and employees in Carlyle-sponsored funds. In addition, $148.4 million have been withheld from distributions of

carried interest to senior Carlyle professionals and employees for potential giveback obligations as of March 31, 2024. 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 March 31, 2024, approximately

$20.3 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 $23.7 million.

If, at March 31, 2024, 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

$1.5 billion, on an after-tax basis where applicable, of which approximately $0.6 billion would be the responsibility of current

and former senior Carlyle professionals.

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 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 Authentix Matter

Authentix, Inc. (“Authentix”) was a majority-owned portfolio company in one of the Company’s investment funds,

Carlyle U.S. Growth Fund III, L.P. (“CGF III”). When Authentix was owned by CGF III, two of the Company’s employees

served on Authentix’s board of directors. After a lengthy sale process, Authentix was sold for an aggregate sale price of

$87.5 million. On August 7, 2020, certain of the former minority shareholders in Authentix filed suit in Delaware Chancery

Court, alleging that the Authentix board of directors, CGF III, and the Company breached various fiduciary duties by agreeing

to a sale of Authentix at an inopportune time and at a price that was too low. Plaintiffs seek damages for a portion of the lost

profits from the sale—the difference between the actual sale price and the purported maximum amount for which Authentix

could have sold, multiplied by plaintiff’s ownership percentage. Plaintiffs also seek disgorgement of any profits received by the

Company stemming from the sale. A trial before the Delaware Court of Chancery was completed in early February 2024. A

decision from the court is expected later this year, following post-trial briefing. The former directors of Authentix are covered

by indemnification from Authentix and an Authentix insurance policy. The defendants expect to continue to contest the claims

vigorously.

The Tax Receivable Agreement Matter

The Company came into existence on January 1, 2020, when its predecessor, The Carlyle Group, L.P. (the “PTP”),

converted from a partnership into a corporation (the “Conversion”). On July 29, 2022, an alleged stockholder of the Company,

the City of Pittsburgh Comprehensive Municipal Trust Fund (the “Plaintiff”), filed suit in the Delaware Court of Chancery,

alleging a direct claim against the Company for breach of its certificate of incorporation and a derivative claim on behalf of the

Company against certain current and former officers and directors of the Company. Plaintiff challenges the receipt, by certain

officers of the PTP and certain directors of the general partner of the PTP, of a right to cash payments associated with the

elimination of a tax receivable agreement in connection with the Conversion. Plaintiff is seeking monetary damages, restitution,

and an injunction preventing the Company from making any future cash payments for the elimination of the tax receivable

agreement in connection with the Conversion. By virtue of the derivative nature of the primary claims (i.e., that the claims are

aimed primarily at certain officers and directors), it is remote that the Company itself will pay material damage awards based on

the Plaintiff’s claims, although the Company is expected to incur legal defense fees to the extent not covered by insurance. The

Delaware Court issued a ruling on the defendant’s motion to dismiss on April 24, 2024, dismissing some of the Plaintiff’s

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

claims but allowing most of the claims to proceed to discovery and possibly to trial. The Company intends to contest the direct

claims vigorously, and the officer and director defendants intend to continue contesting the claims vigorously.

SEC Investigation

As part of a sweep investigation of financial services and investment advisory firms, in October 2022, the Company

received from the SEC a request for information related to the preservation of certain types of electronic business

communications (e.g., text messages and messages on WhatsApp, WeChat, and similar applications) as part of the Company’s

books and records. The Company has cooperated with the investigation and in recent weeks has engaged in discussions with the

Enforcement Division about potential resolution. There is no assurance that a settlement will be reached.

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 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 March 31, 2024, the Company had recorded liabilities

aggregating to approximately $45 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 ($19.9 million as of March 31, 2024) 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, and/or result in the impairment of intangible

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

assets and/or goodwill the case of the Company’s acquired businesses. 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 is subject to credit risk should a financial

institution be unable to fulfill its obligations.

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 notes, subordinated notes and

compensatory contingent and other consideration for acquisitions, the carrying amounts reported in the 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 6, Borrowings.

9. Related Party Transactions

Due from Affiliates and Other Receivables, Net

The Company had the following due from affiliates and other receivables at March 31, 2024 and December 31, 2023:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Accrued incentive fees	$23.8	$22.9
Unbilled receivable for giveback obligations from current and former employees	11.5	11.5
Notes receivable and accrued interest from affiliates	39.1	44.2
Management fee receivable, net	272.9	277.8
Reimbursable expenses and other receivables from unconsolidated funds and affiliates, net	276.8	335.2
Total	$624.1	$691.6

Reimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate to

advisory fees receivable and expenses paid on behalf of these entities. These costs generally 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

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

rates ranging up to 7.02% as of March 31, 2024. The accrued and charged interest to the affiliates was not significant for any

period presented.

Notes receivable include loans that the Company has provided to certain unconsolidated funds to meet short-term

obligations to purchase investments. Notes receivable as of March 31, 2024 and December 31, 2023 also include interest-

bearing loans of $23.5 million and $25.0 million, respectively, to certain eligible Carlyle employees, which excludes Section 16

officers and other members of senior management, to finance their investments in certain Carlyle sponsored funds. These

advances accrue interest at the WSJ Prime Rate minus 1.00% floating with a floor rate of 3.50% (7.50% as of March 31, 2024)

and are collateralized by each borrower’s interest in the Carlyle sponsored funds.

These receivables are assessed regularly for collectability. For management fee receivable, amounts determined to be

uncollectible are recorded as a reduction in revenue in the condensed consolidated statements of operations. For all other

receivables, 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 March 31, 2024 and December 31, 2023:

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Due to affiliates of Consolidated Funds	$6.4	$6.3
Due to non-consolidated affiliates	93.4	97.0
Amounts owed under the tax receivable agreement	76.2	79.3
Deferred consideration for Carlyle Holdings units	—	68.4
Other	27.6	24.9
Total	$203.6	$275.9

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 fifth and final annual installment payment

occurred in January 2024. 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

On May 5, 2020, the Company purchased 2,000,000 of the BDC Preferred Shares from CSL in a private placement at a

price of $25 per share. Dividends are payable on a quarterly basis in an initial amount equal to 7.0% per annum payable in cash,

or, at CSL’s option, 9.0% per annual payable in additional BDC Preferred Shares. The BDC Preferred Shares are convertible at

the Company’s option, in whole or in part, into the number of shares of common stock equal to $25 per share plus any

accumulated but unpaid dividends divided by an initial conversion price of $9.50 per share, subject to certain adjustments. With

the approval of its board of directors, CSL has the option to redeem the BDC Preferred Shares, in whole or in part. In such case,

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(Unaudited)

the Company has the right to convert its shares, in whole or in part, prior to the date of redemption. For both the three months

ended March 31, 2024 and 2023, the Company recorded dividend income of $0.9 million. Dividend income from the BDC

Preferred Shares is included in interest and other income in the condensed consolidated statements of operations. The

Company’s investment in the BDC Preferred Shares, which is recorded at fair value, was $90.1 million and $81.7 million as of

March 31, 2024 and December 31, 2023, respectively, and is included in investments, including accrued performance

allocations, in the 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 or performance allocations, however, Carlyle professionals and employees are required to pay their portion of

partnership expenses.

Carried interest income from certain 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.

10. Income Taxes

The Company’s provision for income taxes was $21.9 million and $34.3 million for the three months ended March 31,

2024 and 2023, respectively. The Company’s effective tax rate was approximately 18% and 21% for the three months ended

March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 primarily

comprises the 21% U.S. federal corporate income tax rate and the impact of U.S. state and foreign income taxes and disallowed

executive compensation, partially offset by non-controlling interest and equity-based compensation deductions. As of

March 31, 2024 and December 31, 2023, the Company had federal, state, local and foreign taxes payable of $101.4 million and

$46.9 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities on the

accompanying condensed consolidated balance sheets.

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 March 31, 2024, the Company’s U.S. federal income tax returns for the years 2020

through 2022 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 from 2018 to 2022. Foreign tax returns are generally subject to audit from 2011 to

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 the 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.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA enacted a 15%

CAMT on the “adjusted financial statement income” of certain large corporations, which became effective on January 1, 2023.

The Company does not expect the IRA to have a material impact to its provision for income taxes given that any current year

payments that would be made under CAMT would be permitted to be carried forward and used as credits in future years

resulting in a deferred tax benefit. The Company will continue to monitor as additional guidance is released by U.S. Department

of the Treasury, the IRS, and other standard-setting bodies.

On December 27, 2023, the State of New York issued final regulations that implemented comprehensive franchise tax

reform for corporations, banks, and insurance companies. This did not have a material impact to the Company’s consolidated

financial statements. The Company will continue to monitor as additional guidance is released by the State of New York.

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In October 2021, the OECD introduced a 15% global minimum tax under the Pillar Two GloBE model rules. There are

a number of key provisions under the rules that are being phased in during 2024 and 2025. Several OECD member countries

have enacted the tax legislation based on certain elements of these rules that became effective on January 1, 2024, and

additional countries have drafted or announced an intent to implement legislation. While the Company does not expect Pillar

Two to have a material impact to its provision for income taxes for 2024, the rules remain subject to significant negotiation and

potential change, and the timing and ultimate impact of any such changes on our tax obligations are uncertain. The Company

will continue to monitor as additional countries enact legislation, new parts of the regime come into force or additional

guidance is released by the OECD and other standard-setting bodies.

11. Non-controlling Interests in Consolidated Entities

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

	As of
	March 31,<br><br>2024	December 31,<br><br>2023
	(Dollars in millions)
Non-Carlyle interests in Consolidated Funds	$430.2	$415.3
Non-Carlyle interests in majority-owned subsidiaries	246.3	184.5
Non-controlling interest in carried interest, giveback obligations and cash held for carried<br><br>interest distributions	(7.2)	(6.7)
Non-controlling interests in consolidated entities	$669.3	$593.1

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

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Non-Carlyle interests in Consolidated Funds	$12.7	$17.2
Non-Carlyle interests in majority-owned subsidiaries	20.5	5.5
Non-controlling interest in carried interest, giveback obligations and<br><br>cash held for carried interest distributions	—	1.9
Non-controlling interests in income of consolidated entities	$33.2	$24.6

12. Earnings Per Common Share

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

	Three Months Ended<br><br>March 31, 2024
	Basic	Diluted
Net income attributable to common shares	$65,600,000	$65,600,000
Weighted-average common shares outstanding	360,908,247	369,343,601
Net income per common share	$0.18	$0.18	Three Months Ended<br><br>March 31, 2023
---	---	---
	Basic	Diluted
Net income attributable to common shares	$100,700,000	$100,700,000
Weighted-average common shares outstanding	362,944,260	365,357,833
Net income per common share	$0.28	$0.28

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

	Three Months Ended<br><br>March 31, 2024
	Basic	Diluted
The Carlyle Group Inc. weighted-average common shares outstanding	360,908,247	360,908,247
Unvested restricted stock units	—	6,733,282
Issuable common shares and performance-vesting restricted stock units	—	1,702,072
Weighted-average common shares outstanding	360,908,247	369,343,601	Three Months Ended<br><br>March 31, 2023
---	---	---
	Basic	Diluted
The Carlyle Group Inc. weighted-average common shares outstanding	362,944,260	362,944,260
Unvested restricted stock units	—	1,702,114
Issuable common shares and performance-vesting restricted stock units	—	711,459
Weighted-average common shares outstanding	362,944,260	365,357,833

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 investment in NGP and performance-vesting restricted stock units.

13. Equity

Stock Repurchase Program

Pursuant to a share repurchase program that was publicly announced in February 2021, and subsequently amended in

October 2021 and February 2023, the Board of Directors of the Company authorized the repurchase of up to $500 million in

shares of our common stock, effective as of March 31, 2023. The Board of Directors reset the total repurchase authorization to

$1.4 billion in shares of our common stock, effective as of February 6, 2024, which authorization replaced the Company’s prior

$500 million authorization. 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, including through Rule 10b5-1 plans. The timing

and actual number of shares of common stock repurchased will depend on a variety of factors, including legal requirements and

price, economic, and market conditions. In addition to repurchases of common stock, the repurchase program is used for the

payment of tax withholding amounts upon net share settlement of equity-based awards granted pursuant to our Equity Incentive

Plan or otherwise based on the value of shares withheld that would have otherwise been issued to the award holder. The share

repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. As of

March 31, 2024, $1,256.9 million of repurchase capacity remained under the program, which reflects both common shares

repurchased and shares retired in connection with the net share settlement of equity-based awards. The following table presents

the Company’s shares that have been repurchased or retired as a result of net share settlement of equity-based awards during the

three months ended March 31, 2024 and 2023:

	Three Months Ended<br><br>March 31,
	2024		2023
(Dollars in millions)	Shares	$	Shares	$
Shares repurchased	2,853,602	$130.6	2,998,813	$100.3
Shares retired in connection with the net share settlement of equity-based awards	481,261	19.4	—	—
Total	3,334,863	$150.0	2,998,813	$100.3

The IRA also enacted a 1% excise tax on certain actual and deemed stock repurchases by publicly traded U.S.

corporations effective January 1, 2023. The value of repurchases subject to the tax is reduced by the value of any stock issued

by the corporation during the tax year, including stock issued or provided to the employees of the corporation. The excise tax is

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accounted for in equity as an additional repurchase cost. The excise tax for the three months ended March 31, 2024 was $0.6

million. Excise tax for the three months ended March 31, 2023 was immaterial.

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<br><br>Share	Dividend to Common<br><br>Stockholders
		(Dollars in millions, except per share data)
May 16, 2023	May 23, 2023	$0.35	$126.7
August 15, 2023	August 23, 2023	0.35	126.3
November 21, 2023	November 29, 2023	0.35	126.3
February 23, 2024	March 1, 2024	0.35	126.7
Total 2023 Dividend Year		$1.40	$506.0
May 14, 2024	May 21, 2024	$0.35	$126.0
Total 2024 Dividend Year (through Q1 2024)		$0.35	$126.0

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.

14. Equity-Based Compensation

The Carlyle Group Inc. Amended and Restated 2012 Equity Incentive Plan (the “Equity Incentive Plan,” initially adopted

in May 2012 and as most recently amended and restated on May 30, 2023) 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 shares of common stock. Following the amendment and

restatement of the Equity Incentive Plan on May 30, 2023, a total of 39,800,000 shares of common stock were authorized for

the grant of awards under the Equity Incentive Plan. As of March 31, 2024, there was a total of 10,176,358 shares of the

Company’s common stock remaining available for grant under the Equity Incentive Plan.

A summary of the status of the Company’s non-vested equity-based awards as of March 31, 2024 and a summary of

changes for the three months ended March 31, 2024, are presented below:

Unvested Shares	Performance-<br><br>Vesting<br><br>Restricted<br><br>Stock Units(1)	Weighted-<br><br>Average<br><br>Grant Date<br><br>Fair Value	Restricted<br><br>Stock<br><br>Units	Weighted-<br><br>Average<br><br>Grant Date<br><br>Fair Value	Unvested<br><br>Common<br><br>Shares(2)	Weighted-<br><br>Average<br><br>Grant Date<br><br>Fair Value
Balance, December 31, 2023	4,941,317	$23.19	17,232,330	$34.68	458,929	$37.87
Granted (3)	13,194,168	$26.42	4,968,866	$40.57	247,293	$40.08
Vested (4)	—	$—	1,268,829	$33.07	—	$—
Forfeited	—	$—	307,778	$32.12	—	$—
Balance, March 31, 2024	18,135,485	$25.54	20,624,589	$36.24	706,222	$38.64

(1)Includes restricted stock units granted to certain senior Carlyle professionals, including equity inducement awards granted in connection

with the appointment of the Company’s Chief Executive Officer, which are subject to vesting based on the achievement of stock price

performance conditions over a service period.

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

(3)Includes shares reserved for issuance upon settlement of dividend-equivalent rights carried by certain restricted stock units concurrently

with the settlement of the restricted stock units for shares.

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(Unaudited)

(4)Includes 481,261 shares which were retired in connection with the net share settlement of equity-based awards. The Company paid

$19.4 million of taxes related to the net share settlement of equity-based awards during the three months ended March 31, 2024, which is

included within Financing activities in the condensed consolidated statements of cash flows.

In February 2024, the Company granted 13.2 million restricted stock units to certain senior Carlyle professionals that are

eligible to vest in three tranches based on the achievement of stock price performance conditions over service periods of one,

two and three years. Equity-based compensation expense for each tranche is recognized on a straight-line basis over its

respective service period. These awards had a grant date fair value of approximately $347 million, which was derived using the

Monte Carlo Simulation model.

The Company recorded compensation expense, net of forfeitures, for restricted stock units of $108.3 million and

$54.4 million for the three months ended March 31, 2024 and 2023, respectively, with $20.1 million and $9.7 million of

corresponding deferred tax benefits, respectively. As of March 31, 2024, the total unrecognized equity-based compensation

expense related to unvested restricted stock units was $896.7 million, which is expected to be recognized over a weighted-

average term of 2.2 years.

15. Segment Reporting

Carlyle conducts its operations through three reportable segments:

Global Private Equity – The Global Private Equity segment advises the Company’s buyout, middle market and growth

capital funds, its U.S. and internationally focused real estate funds, and its infrastructure and natural resources funds. The

segment also includes the NGP Carry Funds advised by NGP.

Global Credit – The Global Credit segment advises funds and vehicles that pursue investment strategies including loans

and structured credit, direct lending, opportunistic credit, distressed credit, aircraft financing and servicing, infrastructure

debt, insurance solutions, asset-backed lending, and global capital markets.

Global Investment Solutions – The Global Investment Solutions segment advises global private equity programs and

related co-investment and secondary activities.

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 that affect

period-to-period comparability and are not reflective of the Company’s operational performance. 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, amortization and any impairment charges associated

with acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earn-

outs 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

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(Unaudited)

severance, certain general, administrative and other expenses when the timing of any future payment is uncertain, and non-

recurring items that affect period-to-period comparability and are not reflective of the Company’s operating performance.

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 a component of DE and is used to assess the ability of the

business to cover base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized

performance revenues, realized principal investment income, and net interest (interest income less interest expense). Fee

Related Earnings includes fee related performance revenues and related compensation expense, which is generally 45% of fee

related performance revenues. Fee related performance revenues represent the realized portion of performance revenues that are

measured and received on a recurring basis, are not dependent on realization events, and which have no risk of giveback.

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The following tables present the financial data for the Company’s three reportable segments for the three months ended

March 31, 2024:

	Three Months Ended March 31, 2024
	Global<br><br>Private<br><br>Equity	Global<br><br>Credit	Global<br><br>Investment<br><br>Solutions	Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$304.6	$136.9	$74.1	$515.6
Portfolio advisory and transaction fees, net and other	7.1	19.6	—	26.7
Fee related performance revenues	3.7	24.2	1.2	29.1
Total fund level fee revenues	315.4	180.7	75.3	571.4
Realized performance revenues	373.8	0.6	23.4	397.8
Realized principal investment income	18.9	13.8	1.0	33.7
Interest income	7.6	10.7	1.8	20.1
Total revenues	715.7	205.8	101.5	1,023.0
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	109.3	76.8	28.2	214.3
Realized performance revenues related compensation	234.3	0.3	21.2	255.8
Total compensation and benefits	343.6	77.1	49.4	470.1
General, administrative, and other indirect expenses	38.6	29.6	11.5	79.7
Depreciation and amortization expense	6.4	3.1	1.6	11.1
Interest expense	14.0	13.9	2.9	30.8
Total expenses	402.6	123.7	65.4	591.7
Distributable Earnings	$313.1	$82.1	$36.1	$431.3
(-) Realized Net Performance Revenues	139.5	0.3	2.2	142.0
(-) Realized Principal Investment Income	18.9	13.8	1.0	33.7
(+) Net Interest	6.4	3.2	1.1	10.7
(=) Fee Related Earnings	$161.1	$71.2	$34.0	$266.3
Segment assets as of March 31, 2024	$7,154.6	$3,783.9	$2,339.9	$13,278.4

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The following tables present the financial data for the Company’s three reportable segments for the three months ended

March 31, 2023:

	Three Months Ended March 31, 2023
	Global<br><br>Private<br><br>Equity	Global<br><br>Credit	Global<br><br>Investment<br><br>Solutions	Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$326.9	$122.6	$56.7	$506.2
Portfolio advisory and transaction fees, net and other	5.4	11.0	—	16.4
Fee related performance revenues	9.6	18.4	0.8	28.8
Total fund level fee revenues	341.9	152.0	57.5	551.4
Realized performance revenues	99.0	27.7	38.4	165.1
Realized principal investment income	11.9	9.0	2.9	23.8
Interest income	5.4	7.2	1.3	13.9
Total revenues	458.2	195.9	100.1	754.2
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits	148.7	80.4	31.5	260.6
Realized performance revenues related compensation	46.3	12.7	36.6	95.6
Total compensation and benefits	195.0	93.1	68.1	356.2
General, administrative, and other indirect expenses	57.1	21.7	8.7	87.5
Depreciation and amortization expense	6.7	2.0	1.2	9.9
Interest expense	16.6	10.2	2.2	29.0
Total expenses	275.4	127.0	80.2	482.6
Distributable Earnings	$182.8	$68.9	$19.9	$271.6
(-) Realized Net Performance Revenues	52.7	15.0	1.8	69.5
(-) Realized Principal Investment Income	11.9	9.0	2.9	23.8
(+) Net Interest	11.2	3.0	0.9	15.1
(=) Fee Related Earnings	$129.4	$47.9	$16.1	$193.4

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(Unaudited)

The following tables reconcile the Total Segments to the Company’s Income (Loss) Before Provision for Taxes for the

three months ended March 31, 2024 and 2023, and Total Assets as of March 31, 2024.

	Three Months Ended March 31, 2024
	Total<br><br>Reportable<br><br>Segments	Consolidated<br><br>Funds	Reconciling<br><br>Items		Carlyle<br><br>Consolidated
	(Dollars in millions)
Revenues	$1,023.0	$164.9	$(499.5)	(a)	$688.4
Expenses	$591.7	$139.5	$(170.5)	(b)	$560.7
Other income (loss)	$—	$(7.0)	$—	(c)	$(7.0)
Distributable earnings	$431.3	$18.4	$(329.0)	(d)	$120.7
Total assets	$13,278.4	$8,154.9	$(583.8)	(e)	$20,849.5	Three Months Ended March 31, 2023
---	---	---	---	---	---
	Total<br><br>Reportable<br><br>Segments	Consolidated<br><br>Funds	Reconciling<br><br>Items		Carlyle<br><br>Consolidated
	(Dollars in millions)
Revenues	$754.2	$121.9	$(17.1)	(a)	$859.0
Expenses	$482.6	$97.2	$123.2	(b)	$703.0
Other income (loss)	$—	$3.6	$—	(c)	$3.6
Distributable earnings	$271.6	$28.3	$(140.3)	(d)	$159.6

(a)The Revenues adjustment principally represents unrealized performance revenues, unrealized principal investment

income (loss) (including Fortitude), 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<br><br>March 31,
	2024	2023
(Dollars in millions)
Unrealized performance and fee related performance revenues	$(521.6)	$(20.7)
Unrealized principal investment income (loss)	4.4	(29.0)
Adjustments related to expenses associated with investments in NGP<br><br>Management and its affiliates	(3.2)	(3.4)
Non-controlling interests and other adjustments to present certain costs on<br><br>a net basis	41.5	50.8
Elimination of revenues of Consolidated Funds	(20.6)	(14.8)
	$(499.5)	$(17.1)

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 months ended March 31, 2024 and 2023.

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Three Months Ended<br><br>March 31,
	2024	2023
(Dollars in millions)
Total Reportable Segments - Fund level fee revenues	$571.4	$551.4
Adjustments(1)	(47.8)	(50.6)
Carlyle Consolidated - Fund management fees	$523.6	$500.8

(1)Adjustments represent the reclassification of NGP management fees from principal investment income, the

reclassification of fee related performance revenues from business development companies and other products,

management fees earned from Consolidated Funds 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<br><br>March 31,
	2024	2023
(Dollars in millions)
Unrealized performance and fee related performance revenue<br><br>compensation expense	$(328.4)	$(2.3)
Equity-based compensation	111.0	57.1
Acquisition or disposition-related charges and amortization of intangibles<br><br>and impairment	32.8	28.7
Tax (expense) benefit associated with certain foreign performance<br><br>revenues related compensation	(1.0)	(0.5)
Non-controlling interests and other adjustments to present certain costs on<br><br>a net basis	17.8	40.0
Other adjustments	12.2	3.9
Elimination of expenses of Consolidated Funds	(14.9)	(3.7)
	$(170.5)	$123.2

(c)The Other Income (Loss) adjustment results from the Consolidated Funds that were eliminated in consolidation to

arrive at the Company’s total Other Income (Loss).

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

(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<br><br>March 31,
	2024	2023
(Dollars in millions)
Income (loss) before provision for income taxes	$120.7	$159.6
Adjustments:
Net unrealized performance and fee related performance revenues	193.2	18.4
Unrealized principal investment (income) loss	(4.4)	29.0
Equity-based compensation(1)	111.0	57.1
Acquisition or disposition-related charges, including amortization of intangibles<br><br>and impairment	32.8	28.7
Tax expense associated with certain foreign performance revenues	(1.0)	(0.5)
Net income attributable to non-controlling interests in consolidated entities	(33.2)	(24.6)
Other adjustments	12.2	3.9
Distributable Earnings	$431.3	$271.6
Realized performance revenues, net of related compensation(2)	142.0	69.5
Realized principal investment income(2)	33.7	23.8
Net interest	10.7	15.1
Fee Related Earnings	$266.3	$193.4

(1)Equity-based compensation for the three months ended March 31, 2024 and 2023 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.

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

	Three Months Ended March 31, 2024
	Carlyle<br><br>Consolidated	Adjustments (3)	Total<br><br>Reportable<br><br>Segments
	(Dollars in millions)
Performance revenues	$(157.0)	$554.8	$397.8
Performance revenues related compensation expense	(72.8)	328.6	255.8
Net performance revenues	$(84.2)	$226.2	$142.0
Principal investment income (loss)	$73.1	$(39.4)	$33.7	Three Months Ended March 31, 2023
---	---	---	---
	Carlyle<br><br>Consolidated	Adjustments (3)	Total<br><br>Reportable<br><br>Segments
	(Dollars in millions)
Performance revenues	$160.8	$4.3	$165.1
Performance revenues related compensation expense	105.7	(10.1)	95.6
Net performance revenues	$55.1	$14.4	$69.5
Principal investment income (loss)	$11.7	$12.1	$23.8

(3) 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

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

excluded from the segment results, (iv) the reclassification of NGP performance revenues, which are included in principal

investment income in the U.S. GAAP financial statements, (v) the reclassification of fee related performance revenues, which

are included in fund level fee revenues 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, the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from

the segment results and the exclusion of the principal investment loss from dilution of the indirect investment in Fortitude.

(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.

16. Subsequent Events

In April 2024, the Company’s Board of Directors declared a quarterly dividend of $0.35 per share of common stock to

common stockholders of record at the close of business on May 14, 2024, payable on May 21, 2024.

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

17. Supplemental Financial Information

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the

Company’s financial position as of March 31, 2024 and December 31, 2023 and results of operations for the three months

ended March 31, 2024 and 2023. The supplemental statement of cash flows is presented without effects of the Consolidated

Funds.

	As of March 31, 2024
	Consolidated<br><br>Operating<br><br>Entities	Consolidated<br><br>Funds	Eliminations	Consolidated
	(Dollars in millions)
Assets
Cash and cash equivalents	$1,276.5	$—	$—	$1,276.5
Cash and cash equivalents held at Consolidated Funds	—	426.0	—	426.0
Restricted cash	1.4	—	—	1.4
Investments, including performance allocations of $5,567.6	9,684.7	—	(211.5)	9,473.2
Investments of Consolidated Funds	—	7,520.5	(61.9)	7,458.6
Due from affiliates and other receivables, net	934.5	—	(310.4)	624.1
Due from affiliates and other receivables of Consolidated Funds, net	—	204.1	—	204.1
Fixed assets, net	162.8	—	—	162.8
Lease right-of-use assets, net	349.3	—	—	349.3
Deposits and other	84.2	4.3	—	88.5
Intangible assets, net	732.8	—	—	732.8
Deferred tax assets	52.2	—	—	52.2
Total assets	$13,278.4	$8,154.9	$(583.8)	$20,849.5
Liabilities and equity
Debt obligations	$2,259.0	$—	$—	$2,259.0
Loans payable of Consolidated Funds	—	6,840.0	(304.9)	6,535.1
Accounts payable, accrued expenses and other liabilities	375.2	—	—	375.2
Accrued compensation and benefits	4,173.9	—	—	4,173.9
Due to affiliates	197.2	6.4	—	203.6
Deferred revenue	391.1	—	—	391.1
Deferred tax liabilities	26.2	—	—	26.2
Other liabilities of Consolidated Funds	—	598.5	—	598.5
Lease liabilities	502.9	—	—	502.9
Accrued giveback obligations	44.0	—	—	44.0
Total liabilities	7,969.5	7,444.9	(304.9)	15,109.5
Common stock	3.6	—	—	3.6
Additional paid-in capital	3,513.9	291.4	(291.4)	3,513.9
Retained earnings	1,868.2	—	—	1,868.2
Accumulated other comprehensive loss	(315.9)	(11.6)	12.5	(315.0)
Non-controlling interests in consolidated entities	239.1	430.2	—	669.3
Total equity	5,308.9	710.0	(278.9)	5,740.0
Total liabilities and equity	$13,278.4	$8,154.9	$(583.8)	$20,849.5

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	As of December 31, 2023
	Consolidated<br><br>Operating<br><br>Entities	Consolidated<br><br>Funds	Eliminations	Consolidated
	(Dollars in millions)
Assets
Cash and cash equivalents	$1,440.3	$—	$—	$1,440.3
Cash and cash equivalents held at Consolidated Funds	—	346.0	—	346.0
Restricted cash	1.8	—	—	1.8
Investments, including performance allocations of $6,169.9	10,104.5	—	(149.2)	9,955.3
Investments of Consolidated Funds	—	7,313.9	(60.8)	7,253.1
Due from affiliates and other receivables, net	1,009.2	—	(317.6)	691.6
Due from affiliates and other receivables of Consolidated Funds, net	—	141.0	—	141.0
Fixed assets, net	161.5	—	—	161.5
Lease right-of-use assets, net	332.2	—	—	332.2
Deposits and other	66.0	4.6	—	70.6
Intangible assets, net	766.1	—	—	766.1
Deferred tax assets	16.5	—	—	16.5
Total assets	$13,898.1	$7,805.5	$(527.6)	$21,176.0
Liabilities and equity
Debt obligations	$2,281.0	$—	$—	$2,281.0
Loans payable of Consolidated Funds	—	6,796.4	(309.9)	6,486.5
Accounts payable, accrued expenses and other liabilities	333.8	—	—	333.8
Accrued compensation and benefits	4,922.2	—	—	4,922.2
Due to affiliates	269.6	6.3	—	275.9
Deferred revenue	140.3	—	—	140.3
Deferred tax liabilities	45.3	—	—	45.3
Other liabilities of Consolidated Funds	—	374.4	—	374.4
Lease liabilities	488.1	—	—	488.1
Accrued giveback obligations	44.0	—	—	44.0
Total liabilities	8,524.3	7,177.1	(309.9)	15,391.5
Common stock	3.6	—	—	3.6
Additional paid-in capital	3,403.0	223.8	(223.8)	3,403.0
Retained earnings	2,082.1	—	—	2,082.1
Accumulated other comprehensive loss	(292.7)	(10.7)	6.1	(297.3)
Non-controlling interests in consolidated entities	177.8	415.3	—	593.1
Total equity	5,373.8	628.4	(217.7)	5,784.5
Total liabilities and equity	$13,898.1	$7,805.5	$(527.6)	$21,176.0

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Three Months Ended March 31, 2024
	Consolidated<br><br>Operating<br><br>Entities	Consolidated<br><br>Funds	Eliminations	Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$530.2	$—	$(6.6)	$523.6
Incentive fees	26.2	—	—	26.2
Investment income (loss)
Performance allocations	(155.8)	—	(1.2)	(157.0)
Principal investment income	79.6	—	(6.5)	73.1
Total investment loss	(76.2)	—	(7.7)	(83.9)
Interest and other income	63.9	—	(6.3)	57.6
Interest and other income of Consolidated Funds	—	164.9	—	164.9
Total revenues	544.1	164.9	(20.6)	688.4
Expenses
Compensation and benefits
Cash-based compensation and benefits	221.9	—	—	221.9
Equity-based compensation	108.3	—	—	108.3
Performance allocations and incentive fee related compensation	(72.8)	—	—	(72.8)
Total compensation and benefits	257.4	—	—	257.4
General, administrative and other expenses	147.7	—	—	147.7
Interest	30.8	—	—	30.8
Interest and other expenses of Consolidated Funds	—	139.5	(14.9)	124.6
Other non-operating expenses	0.2	—	—	0.2
Total expenses	436.1	139.5	(14.9)	560.7
Other income (loss)
Net investment loss of Consolidated Funds	—	(7.0)	—	(7.0)
Income before provision for income taxes	108.0	18.4	(5.7)	120.7
Provision for income taxes	21.9	—	—	21.9
Net income	86.1	18.4	(5.7)	98.8
Net income attributable to non-controlling interests in consolidated<br><br>entities	20.5	—	12.7	33.2
Net income attributable to The Carlyle Group Inc.	$65.6	$18.4	$(18.4)	$65.6

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Three Months Ended March 31, 2023
	Consolidated<br><br>Operating<br><br>Entities	Consolidated<br><br>Funds	Eliminations	Consolidated
	(Dollars in millions)
Revenues
Fund management fees	$508.4	$—	$(7.6)	$500.8
Incentive fees	19.9	—	(0.1)	19.8
Investment income
Performance allocations	162.3	—	(1.5)	160.8
Principal investment income	14.7	—	(3.0)	11.7
Total investment income	177.0	—	(4.5)	172.5
Interest and other income	46.6	—	(2.6)	44.0
Interest and other income of Consolidated Funds	—	121.9	—	121.9
Total revenues	751.9	121.9	(14.8)	859.0
Expenses
Compensation and benefits
Cash-based compensation and benefits	260.2	—	—	260.2
Equity-based compensation	54.4	—	—	54.4
Performance allocations and incentive fee related compensation	105.7	—	—	105.7
Total compensation and benefits	420.3	—	—	420.3
General, administrative and other expenses	159.4	—	(0.2)	159.2
Interest	29.7	—	—	29.7
Interest and other expenses of Consolidated Funds	—	97.2	(3.5)	93.7
Other non-operating expenses	0.1	—	—	0.1
Total expenses	609.5	97.2	(3.7)	703.0
Other income (loss)
Net investment income of Consolidated Funds	—	3.6	—	3.6
Income before provision for income taxes	142.4	28.3	(11.1)	159.6
Provision for income taxes	34.3	—	—	34.3
Net income	108.1	28.3	(11.1)	125.3
Net income attributable to non-controlling interests in consolidated<br><br>entities	7.4	—	17.2	24.6
Net income attributable to The Carlyle Group Inc.	$100.7	$28.3	$(28.3)	$100.7

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

	Three Months Ended March 31,
	2024	2023
	(Dollars in millions)
Cash flows from operating activities
Net income	$86.1	$108.1
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	45.3	44.0
Equity-based compensation	108.3	54.4
Non-cash performance allocations and incentive fees	189.6	(38.2)
Non-cash principal investment income	(68.1)	(8.7)
Other non-cash amounts	(2.9)	10.8
Purchases of investments	(215.1)	(19.0)
Proceeds from the sale of investments	108.3	78.9
Payments of contingent consideration	(1.5)	(68.6)
Change in deferred taxes, net	(47.1)	(15.1)
Change in due from affiliates and other receivables	7.9	17.0
Change in deposits and other	(19.7)	(33.9)
Change in accounts payable, accrued expenses and other liabilities	41.5	(63.9)
Change in accrued compensation and benefits	(365.6)	(371.9)
Change in due to affiliates	(2.2)	(0.2)
Change in lease right-of-use asset and lease liability	(2.2)	(2.8)
Change in deferred revenue	251.6	284.7
Net cash provided by operating activities	114.2	(24.4)
Cash flows from investing activities
Purchases of corporate treasury investments	—	(101.1)
Proceeds from corporate treasury investments	—	20.1
Purchases of fixed assets, net	(14.2)	(12.9)
Net cash used in investing activities	(14.2)	(93.9)
Cash flows from financing activities
Payments on CLO borrowings	(13.9)	(1.1)
Proceeds from CLO borrowings, net of financing costs	—	—
Dividends to common stockholders	(126.7)	(118.4)
Payment of deferred consideration for Carlyle Holdings units	(68.8)	(68.8)
Contributions from non-controlling interest holders	62.5	2.0
Distributions to non-controlling interest holders	(19.0)	(8.5)
Common shares repurchased and net share settlement of equity awards	(150.0)	(100.3)
Change in due to/from affiliates financing activities	56.7	73.0
Net cash used in financing activities	(259.2)	(222.1)
Effect of foreign exchange rate changes	(5.0)	5.8
Decrease in cash, cash equivalents and restricted cash	(164.2)	(334.6)
Cash, cash equivalents and restricted cash, beginning of period	1,442.1	1,361.5
Cash, cash equivalents and restricted cash, end of period	$1,277.9	$1,026.9
Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	$1,276.5	$1,010.1
Restricted cash	1.4	16.8
Total cash, cash equivalents and restricted cash, end of period	$1,277.9	$1,026.9
Cash and cash equivalents held at Consolidated Funds	$426.0	$228.8

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The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless context suggests otherwise, references in this report to “Carlyle,” the “Company,” “we,” “us,” and “our”

refer to The Carlyle Group Inc. and its consolidated subsidiaries. The following discussion and analysis should be read in

conjunction with the consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q

and the Annual Report on Form 10-K for the year ended December 31, 2023.

Overview

We are one of the world’s largest global investment firms that deploys private capital across its business and we conduct

our operations through three reportable segments: Global Private Equity, Global Credit, and Global Investment Solutions.

•Global Private Equity — Our Global Private Equity segment advises our buyout, middle market and growth capital funds,

our U.S. and internationally focused real estate funds, and our infrastructure and natural resources funds. The segment

also includes the NGP Carry Funds advised by NGP. As of March 31, 2024, our Global Private Equity segment had $159

billion in AUM and $104 billion in Fee-earning AUM.

•Global Credit — Our Global Credit segment advises funds and vehicles that pursue investment strategies including loans

and structured credit, direct lending, opportunistic credit, distressed credit, aircraft financing and servicing, infrastructure

debt, insurance solutions and global capital markets. As of March 31, 2024, our Global Credit segment had $186 billion in

AUM and $153 billion in Fee-earning AUM.

•Global Investment Solutions — Our Global Investment Solutions segment advises global private equity programs and

related co-investment and secondary activities. As of March 31, 2024, our Global Investment Solutions segment had $80

billion in AUM and $47 billion in Fee-earning AUM.

We earn management fees pursuant to contractual arrangements with the investment funds that we manage and fees for

transaction advisory and oversight services provided to portfolio companies of these funds. We also typically receive a

performance fee from an investment fund, which may be either an incentive fee or a special residual allocation of income,

which we refer to as a performance allocation, or carried interest, in the event that specified investment returns are achieved by

the fund. Under U.S. generally accepted accounting principles (“U.S. GAAP”), we are required to consolidate some of the

investment funds that we advise. However, for segment reporting purposes, we present revenues and expenses on a basis that

deconsolidates these investment funds. Accordingly, our segment revenues primarily consist of fund management fees and

related transaction and portfolio advisory fees and other income, realized performance revenues (consisting of incentive fees

and performance allocations), realized principal investment income, including realized gains on our investments in our funds

and other trading securities, as well as interest income. Our segment expenses primarily consist of cash compensation and

benefits expenses, including salaries, bonuses, and realized performance payment arrangements, and general and administrative

expenses. While our segment expenses include depreciation and interest expense, our segment expenses exclude acquisition and

disposition related charges and amortization of intangibles and impairment. Refer to Note 15, Segment Reporting, to the

condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on the

differences between our financial results reported pursuant to U.S. GAAP and our financial results for segment reporting

purposes.

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Our Global Investment Offerings

The following table provides a breakout of the product offerings and related acronyms included in our total assets under

management of $425 billion as of March 31, 2024 for each of our three global business segments (in billions):

Global Private Equity 1	$159.2	Global Credit	$186.4
Corporate Private Equity	$106.6	Insurance 5	$79.1
U.S. Buyout (CP)	52.2	Liquid Credit	$51.3
Asia Buyout (CAP)	11.8	U.S. CLOs	36.6
Europe Buyout (CEP)	10.7	Europe CLOs	10.8
Carlyle Global Partners (CGP)	6.8	Revolving Credit	2.0
Europe Technology (CETP)	6.3	CLO Investment Products	1.9
Japan Buyout (CJP)	5.7	Private Credit	$25.8
U.S. Growth (CP Growth / CEOF)	3.6	Opportunistic Credit (CCOF / CSP)	16.1
Life Sciences (ABV / ACCD)	2.2	Direct Lending 6	9.7
Asia Growth (CAP Growth / CAGP)	1.2	Real Assets Credit	$17.0
Other 2	6.3	Aviation (SASOF / CALF)	12.2
		Infrastructure (CICF)	4.0
Real Estate	$27.7	Other 7	0.8
U.S. Real Estate (CRP)	16.9	Platform Initiatives	$13.1
Core Plus Real Estate (CPI)	7.6	Credit Strategic Solutions	7.0
International Real Estate (CER)	3.2	Carlyle Tactical Private Credit (CTAC)	3.9
		Other Cross-Platform Credit Products	2.1
Infrastructure & Natural Resources	$24.9	Global Investment Solutions	$79.9
NGP Energy 3	11.0	Secondaries and Portfolio Finance (ASF / ASPF)	$33.1
Infrastructure & Renewable Energy 4	7.6	Co-Investments (ACF)	$21.4
International Energy (CIEP)	6.2	Primary Investments & Other 8	$25.4

Note: All amounts shown represent total assets under management as of March 31, 2024, and totals may not sum due to rounding. In addition,

certain carry funds included herein may not be included in fund performance if they have not made an initial capital call or commenced

investment activity.

(1)Global Private Equity also includes assets under management in funds which we jointly advise with Riverstone Holdings L.L.C. (the

“Legacy Energy funds”). The impact of these funds is no longer significant to our results of operations.

(2)Includes our Financial Services (CGFSP), Sub-Saharan Africa Buyout (CSSAF), South America Buyout (CSABF), Peru Buyout (CPF),

MENA Buyout and Ireland Buyout (CICF) funds, as well as platform accounts which invest across Corporate Private Equity strategies.

(3)NGP Energy funds are advised by NGP Energy Capital Management, LLC, a separately registered investment adviser. We do not serve as

an investment adviser to those funds.

(4)Includes our Infrastructure (CGIOF), Renewable Energy (CRSEF) and Power funds (CPP / CPOCP).

(5)Includes Carlyle FRL, capital raised from strategic third-party investors which directly invest in Fortitude alongside Carlyle FRL, as well

as the fair value of the general account assets covered by the strategic advisory services agreement with Fortitude.

(6)Includes our business development companies (CSL / CARS) and our newly launched evergreen fund (CDLF).

(7)Includes our Energy Credit (CEMOF) and Real Estate Credit (CNLI) funds.

(8)Includes Mezzanine funds and Carlyle AlpInvest Private Markets Fund (CAPM).

Trends Affecting our Business

The global economy showcased resilience in the first quarter of 2024, notwithstanding geopolitical tensions and

persistently high interest rates. The U.S. economy maintained momentum, euro area growth was stable despite ongoing

challenges in energy-intensive industrials and Germany, China’s economy expanded robustly despite uneven underlying growth

across sectors, and both India and Korea experienced accelerated economic activity and consumption. U.S. GDP expanded at a

1.6% annualized rate in the first quarter of 2024; however, this decelerated pace was largely due to declines in net exports and

inventory investment. Underlying domestic demand remained robust, as evidenced by 3.1% annual growth in real final sales to

private domestic purchasers. This growth was driven by robust consumer spending, large corporate technology budgets

(software, data analytics, artificial intelligence (AI), storage, and other digital services), and an ongoing and unprecedented rise

in industrial facilities investment. Our services (experiences) index ended the quarter at its highest ever levels as demand for air

travel, hotel stays, live events, and off-premises dining continued to surge. Higher interest rates make it more difficult to finance

“big ticket” purchases, most notably homes, as well as durable goods like autos, appliances, and renovations. Household debt

service ratios remain low, however, with fixed-rate mortgages saving households over $450 billion annually (equal to over 2%

of total consumption) relative to if these loans were repriced at market rates. This “hedge” allows consumption to grow with

compensation (approximately 4% annually) and naturally biases spending toward entertainment services that do not need to be

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financed. Core and headline inflation finished the quarter up 3.5% and 3.8%, respectively, from a year earlier, continuing to be

driven by services costs. At the November 1st Federal Open Market Committee Meeting, the Federal Reserve signaled that it

was likely at the end of its tightening cycle, as inflationary pressures had begun to become less pronounced; however, as of the

end of the first quarter of 2024, inflation remains above target, the labor market remains strong, and economic growth is steady,

which has driven uncertainty amongst market participants on the timing and magnitude of any potential rate cuts in 2024. The

market is currently pricing with the expectation of two rate cuts in 2024, down from the peak point of optimism when the

market was pricing in seven rate cuts over the year.

In China, official data indicate the economy surpassed expectations in the first quarter, growing at a 6.6% quarter-

over-quarter annualized rate and 5.3% from a year ago. Although Chinese property markets remained weak, with new floor

space sold ending the quarter down 50% cumulatively from 2021 levels, there are positive signs elsewhere. Momentum in

domestic innovation and the industrial sector indicates a strategic redirection of capital, suggesting a methodical approach to

mitigating the immediate risks posed by the property sector. Package throughput volumes increased significantly relative to

year-ago levels during the quarter, retail sales and foot traffic across our portfolio strengthened in March, and the value added

of high-tech manufacturing rose by 7.5% year-over-year, accelerating 2.6% faster than in the fourth quarter of 2023. In Korea,

broad measures of economic activity indicate that domestic demand momentum continued in the first quarter. Similarly, these

measures in India suggest solid growth as well, with a notable rise in discretionary consumption.

Our data indicate modest improvement in Europe’s economy, with our composite measure of gross domestic product

indicating a roughly flat quarter, and a sizeable dispersion between Germany and the rest of the European economy. German

weakness continues to be concentrated in energy-intensive industrials, while lagging capital and intermediate goods exports to

China have also had a material impact. With new energy realities affecting economic activity and inflation declining more

steadily, the European Central Bank has signaled a willingness to diverge from the U.S. Federal Reserve’s approach regarding

the timing of potential rate cuts, with a rate cut as early as June.

Earnings growth estimates in the U.S. for 2024 have been revised downward throughout the quarter yet remain

significantly higher than in 2023, at an anticipated 11% for the year compared to merely 1% the previous year. Earnings are

estimated to have grown by 5% in the first quarter of 2024, compared to the same period a year ago, led by the communication

services, utilities, consumer discretionary, and information technology sectors. The estimated blended net profit margin for the

fourth quarter of 2023 was reported at 11.7%, slightly higher than the 11.6% margin observed a year earlier.

U.S. equity markets continued to perform well in the first quarter of 2024. The Dow Jones, S&P 500, and Nasdaq 100

rose by 5.6%, 10.2%, and 8.5%, respectively. Though the market continued to benefit from AI-driven momentum, the

appreciation was more broadly distributed compared to last year. In 2023, over 60% of the S&P 500’s gain was driven by the

top seven stocks (Apple, Microsoft, NVIDIA, Alphabet, Amazon, Tesla, and Meta); during the first quarter, these stocks have

contributed just over 35%. Meanwhile, global equity markets also demonstrated strength: the MSCI ACWI, EuroStoxx 600, and

Shanghai Composite returned 7.8%, 7.0%, and 2.2%, respectively. However, despite a strong start to the year, there has been a

significant pullback in equity markets during the early weeks of the second quarter.

Our carry fund portfolio had modest 2% appreciation in the first quarter of 2024. Within our Global Private Equity

segment in the first quarter, our infrastructure and natural resources funds appreciated 2%, our real estate funds appreciated 1%,

and our corporate private equity funds were flat. Our Global Credit carry funds (which represent approximately 11% of the total

Global Credit remaining fair value as of March 31, 2024) appreciated 2% in the first quarter. Carry funds in our Global

Investment Solutions segment appreciated 5% in the first quarter.

Strategic M&A lost some momentum, though to a lesser extent than financial sponsor buyside transactions, with strategic

buyers acquiring assets totaling around $760 billion during the first quarter. While this amount was 19% less than in the

previous quarter, it was approximately 40% larger than the same period last year. As a result, global M&A, including

acquisitions by financial sponsors, amounted to around $825 billion in the first quarter of 2024, the second largest quarterly

volume since the second quarter of 2022. While this hint of momentum is encouraging, the increase is from a very low base.

M&A-related issuance, especially buyouts, remains well below levels observed two years ago due to the elevated cost of debt

and the logjam in sponsor exit activity. Although initial public offerings (IPOs) generally play a comparatively less important

role for divestments, especially on the leveraged buyout (LBO) side, the IPO market is usually considered a good indicator of

the state of the exit market. Globally, signals from this indicator have not been particularly encouraging. Excluding special

purpose acquisition companies (SPACs), global proceeds from IPOs totaled $21.3 billion during the first quarter of 2024, a

16% decrease compared to the same period a year ago and the slowest opening period for global IPOs since 2019. Investment

activity in our carry funds was higher in the first quarter of 2024 than the comparable prior year period. We generated $5.9

billion in realized proceeds from our carry funds and invested $5.0 billion into new or follow-on transactions in our carry funds

during the first quarter of 2024, compared to $4.5 billion and $3.8 billion, respectively, during the first quarter of 2023. In six of

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the last eight quarters, realized proceeds from our carry funds were in excess of invested capital, providing net positive

distributions to our investors.

As investor sentiment improved and spreads tightened, leveraged finance markets reopened, resulting in a massive

increase in issuance of leveraged loans and high-yield bonds. Much of this increase has been driven by refinancing borrowers

out of more expensive loans originated in the past two years when private credit was increasingly perceived as “the only game

in town” amid rapidly rising financing costs and liquidity constraints. While LBO activity in the U.S. recovered meaningfully,

this was not enough to offset a decline in buyout volume in Europe and Asia. In the first three months of 2024, LBO volume,

including add-ons, totaled approximately $66 billion, a decline of 42% compared to the previous quarter. Deployment by

venture capital and growth capital funds remained depressed in the first quarter. Startup companies received $71 billion, the

smallest amount since the fourth quarter of 2017.

We priced and closed $0.4 billion in CLO issuance, $1.0 billion in CLO resets and $0.4 billion in CLO refinancing during

the first quarter, reflecting the active start to the year for the CLO market. Our global CLO portfolio continues to experience a

default rate less than the industry average, and we are actively managing our credit positions to maintain balanced risk-adjusted

credit quality. However, while default rates have remained low, we have seen default rates increase in 2023 and into the first

quarter of 2024 as higher financing costs continue to pressure borrower debt-service capacity.

Gross originations in our direct lending strategy totaled $0.8 billion in the first quarter of 2024, a more than 100%

increase over originations in the first quarter of 2023, which was impacted by the slowdown in sponsor M&A activity in 2022

and 2023. Dividend yields on our business development companies and CTAC as of March 31, 2024 were approximately 10%.

We had $5.3 billion in new capital inflows in the first quarter towards our previously announced target of $40 billion of

capital inflows in 2024. The impact of muted realizations on investor liquidity has been exacerbated by an increase in demand

on investor capital as the increased cost of subscription lines commonly used to bridge capital calls has led to borrowing

repayments and restricted use in current investment activity. The impact of net negative distributions to investors, combined

with increasing geopolitical risk and continued global economic uncertainty, has compounded an already challenging

fundraising landscape. While we believe that we will continue to attract a significant amount of capital for our buyout funds, we

have seen, and expect to continue to see, a decline in buyout fund sizes across most geographies, which may result in lower

management fees in Global Private Equity in the future.

The SEC has put forth several rule proposals, and we are evaluating the potential impacts to our business and operations

and those of our portfolio companies. These proposals include, among others, safeguarding of advisory client assets for

registered investment advisers. In March 2024, the SEC adopted final public company climate-related disclosures rules

requiring registrants to disclose, among other things, material climate-related risks; activities to mitigate or adapt to such risks;

information about the registrant’s board of directors’ oversight of climate-related risks and management’s role in managing

material climate-related risks; and information on any climate-related targets or goals that are material to the registrant’s

business, results of operations, or financial condition. In addition, the final rules require disclosure of Scope 1 and/or Scope 2

greenhouse gas emissions on a phased-in basis by certain larger registrants when those emissions are material; the filing of an

attestation report covering the required disclosure of such registrants’ Scope 1 and/or Scope 2 emissions, also on a phased-in

basis; and disclosure of the financial statement effects of severe weather events and other natural conditions including, for

example, costs and losses. On April 4, 2024, the SEC voluntarily stayed implementation of the climate-related disclosure rules,

pending completion of judicial review of consolidated challenges to the rules by the Court of Appeals for the Eighth Circuit.

We are closely evaluating potential impacts to our business of these rule adoptions and various financial, regulatory, and other

proposals put forth by the current Administration and Congress. The potential for policy changes may create regulatory

uncertainty for our investment strategies and our portfolio companies and could adversely affect our profitability and the

profitability of our portfolio companies.

Recent Developments

Dividends

In April 2024, the Company’s Board of Directors declared a quarterly dividend of $0.35 per share to common

stockholders of record at the close of business on May 14, 2024, payable on May 21, 2024.

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Key Financial Measures

Our key financial measures and operating metrics are discussed in the following pages. Additional information regarding

U.S. GAAP measures and our other significant accounting policies can be found in Note 2, Summary of Significant Accounting

Policies, to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Revenues

Revenues primarily consist of Fund management fees, Incentive fees, Investment income (including Performance

allocations, realized and unrealized gains of our investments in our funds and other principal investments), as well as Interest

and other income.

Fund management fees. Fund management fees include management fees and transaction and portfolio advisory fees. We

earn management fees for advisory services we provide to funds in which we hold a general partner interest or to funds or

certain portfolio companies with which we have an investment advisory or investment management agreement. These fees are

largely from either traditional closed-end, long-dated funds, which are highly predictable and stable, or Perpetual Capital

products as defined below. Management fees also include catch-up management fees, which are episodic in nature and

represent management fees charged to fund investors in subsequent closings of a fund which apply to the time period between

the fee initiation date and the subsequent closing date. We also earn management fees on our CLOs and other structured

products.

Transaction and portfolio advisory fees. Transaction and portfolio advisory fees generally include capital markets fees

generated by Carlyle Global Capital Markets in connection with activities related to the underwriting, issuance and placement

of debt and equity securities, and loan syndication for our portfolio companies and third-party clients, which are generally not

subject to rebate offsets as described below with respect to our most recent vintages (but are subject to the rebate offsets set

forth below for older funds). Underwriting fees include gains, losses and fees arising from securities offerings in which we

participate in the underwriter syndicate.

Transaction and portfolio advisory fees also include fees we receive for the transaction and portfolio advisory services we

provide to our portfolio companies. When covered by separate contractual agreements, we recognize transaction and portfolio

advisory fees for these services when the performance obligation has been satisfied and collection is reasonably assured. We are

generally required to offset our fund management fees by the transaction and advisory fees earned, which we refer to as “rebate

offsets.”

The recognition of portfolio advisory fees, transactions fees, and capital markets fees can be volatile as they are primarily

generated by investment activity within our funds, and therefore are impacted by our investment pace.

Incentive fees. Incentive fees consist of performance-based incentive arrangements pursuant to management contracts,

primarily from certain of our Global Credit funds, 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.

Investment income (loss). Investment income (loss) consists of our performance allocations as well as the realized and

unrealized gains and losses resulting from our equity method investments and other principal investments.

Performance allocations consist principally of the performance-based capital allocation from fund limited partners to us,

commonly referred to as carried interest, from certain of our investment funds, which we refer to as the “carry funds.” Carried

interest revenue is recognized by Carlyle upon appreciation of the valuation of our funds’ investments above certain return

hurdles as set forth in each respective partnership agreement and is based on the amount that would be due to us pursuant to the

fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount of carried

interest recognized as performance allocations reflects our share of the fair value 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. As

a result, the performance allocations earned in an applicable reporting period are not indicative of any future period, as fair

values are based on conditions prevalent as of the reporting date. Refer to “—Trends Affecting our Business” for further

discussion.

For any given period, performance allocations revenue on our statement of operations may include reversals of previously

recognized performance allocations due to a decrease in the value of a particular fund that results in a decrease of cumulative

performance allocations earned to date. Since fund return hurdles are cumulative, previously recognized performance

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allocations also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. Additionally,

unrealized performance allocations reverse when performance allocations are realized, and unrealized performance allocations

can be negative if the amount of realized performance allocations exceed total performance allocations generated in the period.

The timing and receipt of realized performance allocations varies with the lifecycle of our carry funds and there is often a

difference between the time we start accruing performance allocations and realization. The timing of performance allocations

realizations from our Global Investment Solutions, Carlyle Aviation, and Abingworth funds is typically later than in our other

carry funds based on the terms of such arrangements.

Under our arrangements with the historical owners and management teams of AlpInvest and Abingworth, the amount of

carried interest to which we are entitled varies. In some cases, we are entitled to 15% of the carried interest in respect of

commitments from the historical owners of AlpInvest for the period between 2011 and 2020. In certain instances, carried

interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands. Additionally, in

connection with the acquisition of Abingworth, we are entitled to 15% of carried interest generated from certain Abingworth

funds.

Realized carried interest may be clawed back or given back to the fund if the fund’s investment values decline below

certain return hurdles, which vary from fund to fund. This amount is known as the “giveback obligation.” In all cases, each

investment fund is considered separately in evaluating carried interest and potential giveback obligations.

Accrued performance allocations and accrued giveback obligations at a point in time assume a hypothetical liquidation of

the funds’ investments at their then current fair values. Each investment fund is considered separately in evaluating carried

interest and potential giveback obligations. These assets and liabilities will continue to fluctuate in accordance with the fair

values of the funds’ investments until they are realized. The Company uses “net accrued performance revenues” to refer to the

aggregation of the accrued performance allocations and incentive fees net of (i) accrued giveback obligations, (ii) accrued

performance allocations and incentive fee related compensation, (iii) performance allocations and incentive fee related tax

obligations, and (iv) accrued performance allocations and incentive fees attributable to non-controlling interests. Net accrued

performance revenues excludes any net accrued performance allocations and incentive fees that have been realized but will be

collected in subsequent periods, as well as net accrued performance revenues which are presented as fee related performance

revenues when realized in our non-GAAP financial measures.

In addition, realized performance allocations may be reversed in future periods to the extent that such amounts become

subject to a giveback obligation. The aggregate amount of giveback obligations realized since Carlyle’s inception totaled

$242.4 million, $160.8 million of which was related to various Legacy Energy Funds. Given that current and former senior

Carlyle professionals and other limited partners of the Carlyle Holdings partnerships are responsible for paying the majority of

the realized giveback obligation, only $72.3 million of the $242.4 million aggregate giveback obligation realized since

inception was attributable to Carlyle. The realization of giveback obligations for the Company’s portion of such obligations

reduces Distributable Earnings in the period realized. Further, each individual who holds equity interests in carried interest

generated by our funds and is a recipient of realized carried interest typically signs a guarantee agreement or partnership

agreement that personally obligates such person to return his/her pro rata share of any amounts of realized carried interest

previously distributed that are later clawed back. Accordingly, carried interest as performance allocation compensation is

subject to return to the Company in the event a giveback obligation is funded. Generally, the actual giveback liability, if any,

does not become due until the end of a fund’s life.

In addition, in our discussion of our non-GAAP results, we use the term “realized net performance revenues” to refer to

realized performance allocations and incentive fees from our funds, net of the portion allocated to our investment professionals,

and other employees and certain tax expenses associated with carried interest attributable to certain partners and employees,

which are reflected as realized performance allocations and incentive fees related compensation expense. See “—Non-GAAP

Financial Measures” and “—Segment Analysis” for the amount of realized net performance revenues recognized each period

and related discussion.

Investment income also represents the realized and unrealized gains and losses on our principal investments, including

our investments in Carlyle funds that are not consolidated, and our strategic investments in NGP as described below, as well as

any interest and other income. Realized principal investment income (loss) is recorded when we redeem all or a portion of our

investment or when we receive or are due cash income, such as dividends or distributions. A realized principal investment loss

is also recorded when an investment is deemed to be worthless. Unrealized principal investment income (loss) results from

changes in the fair value of the underlying investment, as well as the reversal of previously recognized unrealized gains (losses)

at the time an investment is realized.

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We account for our investments in NGP under the equity method of accounting. Our investments in NGP include the

equity interests in NGP Management Company, L.L.C. (“NGP Management”) and the general partners of certain carry funds

advised by NGP. These interests entitle us 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% (40% or 42.75% in the case

of certain funds) of the performance allocations that NGP receives from the NGP Carry Funds. We record investment income

(loss) for our equity income allocation from NGP management fee related revenues and also record our share of any allocated

expenses from NGP Management, expenses associated with the compensatory elements of the strategic investment. We also

record our equity income allocation from NGP performance allocations in principal investment income (loss) from equity

method investments rather than performance allocations in our consolidated statements of operations. We do not control or

manage NGP. Moreover, we do not operate NGP’s business, have representation on NGP’s board or serve as an investment

advisor to any investment fund sponsored by NGP, nor do we direct the operations of any of NGP portfolio companies. While

we have consent rights over certain major actions by NGP outside of the ordinary course of NGP’s business (including, for

example, consent rights over items such as amendments to the organizational documents of the entity in which we are invested,

changes to the management fee streams earned by NGP under its fund agreements, or the incurrence of certain debt by NGP

and other similar items), we have no voting rights or consent rights on any NGP investment committee that selects investments

to be made by NGP funds. For further information regarding our strategic investments in NGP, refer to Note 4, Investments, to

the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Interest and other income. Interest and other income primarily represents reimbursement of certain costs incurred on

behalf of our funds as well as interest income that we earn such as from our cash and money market accounts and other

investments, including CLO senior and subordinated notes.

Interest and other income of Consolidated Funds. Interest and other income of Consolidated Funds primarily represents

the interest earned on CLO assets.

Net investment income (loss) of Consolidated Funds. Net investment income (loss) of Consolidated Funds generally

measures the change in the difference in fair value between the assets and the liabilities of the Consolidated Funds. Income

(loss) indicates that the fair value of the assets of the Consolidated Funds appreciated more (less), or depreciated less (more),

than the fair value of the liabilities of the Consolidated Funds. Income or loss is not necessarily indicative of the investment

performance of the Consolidated Funds and does not impact the management or incentive fees received by Carlyle for its

management of the Consolidated Funds. The portion of the net investment income (losses) of Consolidated Funds attributable

to the limited partner investors is allocated to non-controlling interests. Therefore, income or loss is not expected to have a

material impact on the revenues or profitability of the Company. Moreover, although the assets of the Consolidated Funds are

consolidated onto our balance sheet pursuant to U.S. GAAP, ultimately we do not have recourse to such assets and such

liabilities are generally non-recourse to us. Therefore, income or loss from the Consolidated Funds generally does not impact

the assets available to our common stockholders.

Expenses

Compensation and benefits. Compensation includes salaries, bonuses, equity-based compensation, and performance

payment arrangements. Bonuses are accrued over the service period to which they relate.

We recognize as compensation expense the portion of performance allocations and incentive fees that are due to our

employees, senior Carlyle professionals, advisors, and operating executives in a manner consistent with how we recognize the

performance allocations and incentive fee revenue. These amounts are accounted for as compensation expense in conjunction

with the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued

compensation and benefits liability. Compensation in respect of performance allocations and incentive fees is paid when the

related performance allocations and incentive fees are realized, and not when such performance allocations and incentive fees

are accrued. The funds do not have a uniform allocation of performance allocations and incentive fees to our employees, senior

Carlyle professionals, advisors, and operating executives. However, subsequent to the updates made to our compensation

strategy effective December 31, 2023, we generally allocate a range of 60% to 70% of performance allocations and incentive

fees to our employees. As a result, we expect that the portion of performance allocations and incentive fees paid as

compensation will increase and cash-based compensation and benefits will decrease in 2024 compared to the prior period.

In addition, we have implemented various equity-based compensation arrangements that require senior Carlyle

professionals and other employees to provide services over a service period of generally one year to four years in order to vest

in the applicable equity interests, which under U.S. GAAP will result in compensation charges over current and future periods.

In certain of our equity-based compensation arrangements, vesting is based on the achievement of certain performance targets

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or market conditions (see Note 14, Equity-Based Compensation). Compensation charges associated with all equity-based

compensation grants are excluded from Fee Related Earnings and Distributable Earnings.

We may hire additional individuals and overall compensation levels may correspondingly increase, which could result in

an increase in compensation and benefits expense. As a result of prior acquisitions, we have charges associated with contingent

consideration taking the form of earn-outs and profit participation, some of which are reflected as compensation expense.

General, administrative and other expenses. General, administrative and other expenses include occupancy and

equipment expenses and other expenses, which consist principally of professional fees, including those related to our global

regulatory compliance program, external costs of fundraising, travel and related expenses, communications and information

services, depreciation and amortization (including intangible asset amortization and impairment), bad debt expense, and foreign

currency transactions. We expect that general, administrative and other expenses will vary due to infrequently occurring or

unusual items, such as impairment of intangible assets or lease right-of-use assets and expenses or insurance recoveries

associated with litigation and contingencies. Also, in periods of significant fundraising, to the extent that we use third parties to

assist in our fundraising efforts, our general, administrative and other expenses may increase accordingly. Similarly, our

general, administrative and other expenses may increase as a result of professional and other fees incurred as part of due

diligence related to strategic acquisitions and new product development. Additionally, we anticipate that general, administrative

and other expenses will fluctuate from period to period due to the impact of foreign exchange transactions.

Interest and other expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds consist primarily

of interest expense related primarily to our CLO loans, professional fees and other third-party expenses.

Income taxes. Income taxes are accounted for using the asset and liability method of accounting. Under this method,

deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying

amounts of assets and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred tax

assets and liabilities of a change in tax rates is recognized in income in the period in which the change is enacted. Deferred tax

assets are reduced by a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be

realized.

Non-controlling Interests in Consolidated Entities. Non-controlling interests in consolidated entities represent the

component of equity in consolidated entities not held by us. These interests are adjusted for general partner allocations.

Earnings Per Common Share. We compute 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.

Non-GAAP Financial Measures

Distributable Earnings. Distributable Earnings, or “DE,” is a key performance benchmark used in our industry and is

evaluated regularly by management in making resource deployment and compensation decisions, and in assessing the

performance of our three segments. We also use DE in our budgeting, forecasting, and the overall management of our

segments. We believe that reporting DE is helpful to understanding our business and that investors should review the same

supplemental financial measure that management uses to analyze our segment performance. DE is intended to show the amount

of net realized earnings without the effects of consolidation of the Consolidated Funds. DE is derived from our segment

reported results and is an additional measure 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

interest in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items that affect

period-to-period comparability and are not reflective of the Company’s operational performance. Charges (credits) related to

Carlyle corporate actions and non-recurring items include: charges associated with acquisitions, dispositions, or strategic

investments, changes in the tax receivable agreement liability, amortization and any impairment charges associated with

acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earn-outs and

contingent consideration including gains and losses associated with the estimated fair value of contingent consideration 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, and certain

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general, administrative and other expenses when the timing of any future payment is uncertain, and non-recurring items that

affect period-to-period comparability and are not reflective of the Company’s operating performance. We believe the inclusion

or exclusion of these items provides investors with a meaningful indication of our core operating performance. This measure

supplements and should be considered in addition to and not in lieu of the results of operations discussed further under “—

Consolidated Results of Operations” prepared in accordance with U.S. GAAP.

Fee Related Earnings. Fee Related Earnings, or “FRE,” is a component of DE and is used to assess the ability of the

business to cover base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized

performance revenues, realized principal investment income from investments in Carlyle funds, and net interest (interest

income less interest expense). Fee Related Earnings includes fee related performance revenues and related compensation

expense, which is generally approximately 45% of fee related performance revenues. Fee related performance revenues

represent the realized portion of performance revenues that are measured and received on a recurring basis, are not dependent

on realization events, and which have no risk of giveback.

Operating Metrics

We monitor certain operating metrics that are common to the asset management industry.

Fee-earning Assets under Management. Fee-earning assets under management or Fee-earning AUM refers to the assets

we manage or advise from which we derive recurring fund management fees. Our Fee-earning AUM is generally based on one

of the following, once fees have been activated:

(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period

has not expired and for AlpInvest carry funds during the commitment fee period (see “Fee-earning AUM based on

capital commitments” in the table below for the amount of this component at each period);

(b)the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-

investment vehicles where the original investment period has expired and one of our business development

companies (see “Fee-earning AUM based on invested capital” in the table below for the amount of this component

at each period);

(c)the amount of aggregate fee-earning collateral balance at par of our CLOs and other securitization vehicles, as

defined in the fund indentures (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions)

as of the quarterly cut-off date;

(d)the external investor portion of the net asset value of certain carry funds (see “Fee-earning AUM based on net

asset value” in the table below for the amount of this component at each period);

(e)the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement (see

“Fee-earning AUM based on fair value and other” in the table below);

(f)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our

business development companies and certain carry funds (included in “Fee-earning AUM based on lower of cost

or fair value and other” in the table below); and

(g)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee

period has expired and certain carry funds where the investment period has expired, (included in “Fee-earning

AUM based on lower of cost or fair value and other” in the table below).

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The chart below presents Fee-earning AUM by segment at each period, in billions.

The table below details Fee-earning AUM by its respective components at each period.

	As of March 31,
	2024	2023
Consolidated Results	(Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments	$72,095	$81,854
Fee-earning AUM based on invested capital	68,662	61,233
Fee-earning AUM based on collateral balances, at par	48,072	46,268
Fee-earning AUM based on net asset value	20,137	12,410
Fee-earning AUM based on fair value and other	95,259	69,593
Balance, End of Period(1)	$304,225	$271,358

(1)Ending balances as of March 31, 2024 and 2023 exclude $15.3 billion and $13.4 billion, respectively, of pending Fee-earning AUM for

which fees have not yet been activated.

The table below provides the period to period rollforward of Fee-earning AUM.

	Three Months Ended March 31,
	2024	2023
Consolidated Results	(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period	$307,418	$266,577
Inflows(1)	5,664	6,278
Outflows (including realizations)(2)	(6,311)	(2,853)
Market Activity & Other(3)	(1,347)	685
Foreign Exchange(4)	(1,199)	671
Balance, End of Period	$304,225	$271,358

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2199023255553

(1)Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on

commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are based

on invested capital, the fee-earning collateral balance of new CLO issuances, closed reinsurance transactions at Fortitude, as well as

gross subscriptions in our vehicles for which management fees are based on net asset value. Inflows exclude fundraising amounts during

the period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM. Inflows for the three months

ended March 31, 2023 include $2.4 billion of Fee-earning AUM related to closed reinsurance transactions at Fortitude.

(2)Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair

value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has

expired during the period, reductions for funds that are no longer calling for fees, gross redemptions in our open-end funds, and outflows

from our liquid credit products. Distributions for funds earning management fees based on commitments during the period do not affect

Fee-earning AUM.

(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower

of cost or fair value and net asset value, activity of funds with fees based on gross asset value, and changes in the fair value of Fortitude’s

general account assets covered by the strategic advisory services agreement.

(4)Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Refer to “—Segment Analysis” for a detailed discussion by segment of the activity affecting Fee-earning AUM for each

of the periods presented by segment.

Assets under Management. Assets under management or “AUM” refers to the assets we manage or advise. Our AUM

generally equals the sum of the following:

(a) the aggregate fair value of our carry funds and related co-investment vehicles, and separately managed accounts, plus

the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle commitments to

those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the terms of their capital

commitments to those funds and vehicles;

(b) the amount of aggregate collateral balance and principal cash at par or aggregate principal amount of the notes of our

CLOs and other structured products (inclusive of all positions);

(d)the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement; and

(e) the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that

Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those

vehicles.

Table of Contents

The chart below presents Total AUM by segment at each period, in billions.

We include in our calculation of AUM and Fee-earning AUM the Legacy Energy Funds that we jointly advise with

Riverstone and the NGP Energy Funds that are advised by NGP. Our calculation of AUM also includes third-party capital

raised for the investment in Fortitude through a Carlyle-affiliated investment fund and from strategic investors who directly

invest in Fortitude alongside the fund. The AUM and Fee-earning AUM related to the strategic advisory services agreement

with Fortitude is inclusive of the net asset value of investments in Carlyle products. These amounts are also reflected in the

AUM and Fee-earning AUM of the strategy in which they are invested.