UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
(Mark One)
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBERJune 30, 20172021
OR
 
¨☐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 L.P.Inc.
(Exact name of registrant as specified in its charter)
Delaware
45-2832612
Delaware
45-2832612
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
1001 Pennsylvania Avenue, NW
Washington, D.C.,DC, 20004-2505
(Address of principal executive offices) (Zip Code)

(202) 729-5626
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockCGThe Nasdaq Global Select Market
4.625% Subordinated Notes due 2061 of Carlyle Finance L.L.C.CGABLThe Nasdaq Global Select Market
As of July 28, 2021, there were 354,462,148 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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☐
Large accelerated filerýAccelerated filer¨
Non-accelerated filer
¨ (Do not check if a smaller reporting company)
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 ý
The number of the registrant’s common units representing limited partner interests outstanding as of October 27, 2017 was 97,805,907.
☒



TABLE OF CONTENTS
 
Page
Page
PART I – FINANCIAL INFORMATION
Item 1.
5
Unaudited Condensed Consolidated Financial Statements – SeptemberJune 30, 20172021 and 2016:2020:
Condensed Consolidated Balance Sheets as of September 30, 2017June 30, 2021 and December 31, 20162020
5
Condensed Consolidated Statements of Operations for the Three Months and Nine Six Months Ended September 30, 2017June 30, 2021 and 20162020
6
Condensed Consolidated Statements of Comprehensive Income for the Three Months and NineSix Months Ended SeptemberJune 30, 20172021 and 20162020
7
Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2021 and 2020
8
Condensed Consolidated Statements of Cash Flows for the Ninethe Six Months Ended SeptemberJune 30, 20172021 and 20162020
810
Notes to the Condensed Consolidated Financial Statements
911
Item 2.
6968
Item 3.
151124
Item 4.
151125
Item 1.
152126
Item 1A.
152126
Item 2.
152126
Item 3.
152126
Item 4.
152126
Item 5.
152126
Item 6.
152127
155128
 





1

Forward-Looking Statements
This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, contingencies, our distributiondividend policy, and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements including, but not limited to, those described under the sectionsections entitled “Risk Factors” in this report and in our Annual Report on Form 10-K for the year ended December 31, 20162020 filed with the United States Securities and Exchange Commission (“SEC”) on February 16, 2017,11, 2021, 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 report 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 (https://www.facebook.com/onecarlyle/) and, our corporate Twitter account (@OneCarlyle)(@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) and our corporate YouTube channel (www.youtube.com/user/onecarlyle) 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 Alert Subscription” section at http://ir.carlyle.com/alerts.cfm?.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. Pursuant to the Conversion, at the specified effective time on January 1, 2020, each common unit of The Carlyle Group L.P. outstanding immediately prior to the effective time converted into one share of common stock of The Carlyle Group Inc. and each special voting unit and general partner unit was canceled for no consideration. In addition, holders of the partnership units in Carlyle Holdings I L.P., Carlyle Holdings II L.P., and Carlyle Holdings III L.P. exchanged such units for an equivalent number of shares of common stock and certain other restructuring steps occurred (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 (i) prior to the consummation of the Conversion to The Carlyle Group L.P. and its consolidated subsidiaries and (ii) from and after the consummation of the Conversion to The Carlyle Group Inc. and its consolidated subsidiaries. When weReferences to our common stock or shares in periods prior to the Conversion refer to the “partnerscommon units of The Carlyle Group L.P.,” we are referring specifically to the common unitholders and our general partner and any others who may from time to time be partners of that specific Delaware limited partnership. 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    “Carlyle funds,” “our funds” and “our investment funds” refer to the investment funds and vehicles advised by Carlyle.

“Carry    “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 which do not earn carried interest, but


2

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 fourthree business segments:
Corporate
•Global Private Equity: Buyout, &middle market and growth funds advised by Carlyle
Real Assets: Realcapital, real estate, power, infrastructure and energynatural resources funds advised by Carlyle, as well as thosecertain 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 Market Strategies:Credit: Distressed credit, energy credit, opportunistic credit, corporate mezzanine funds, aircraft financing and energy credit funds, as well as certainservicing, and other closed-end credit funds advised by Carlyle
•Investment Solutions: Funds and vehicles advised by AlpInvest Partners B.V. (“AlpInvest”) and Metropolitan Real Estate Equity Management, LLC (“Metropolitan), which include primary fund, secondary and co-investment strategies 

Carry funds specifically exclude thosecertain funds advised by NGP Energy Capital Management in which Carlyle is not entitled to receive a share of carried interest (or “NGP management fee funds”Predecessor Funds”), collateralized loan obligation vehicles (CLOs)(“CLOs”), business development companies and our former hedge fund platform.direct lending managed accounts, as well as capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.


For an explanation of the fund acronyms used throughout this Quarterly Report, refer to “Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operation -– Our Family of Funds.”
“Fee-earning    “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, for AlpInvest carry funds during the commitment fee period and for Metropolitan carry funds during the weighted-average investment period of the underlying funds;
(b)the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment vehicles where the original investment period has expired and Metropolitan carry funds after the expiration of the weighted-average investment period of the underlying funds;
(c)the amount of aggregate fee-earning collateral balance at par of our collateralized loan obligations (“CLOs”), as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date for each CLO;
(d)the external investor portion of the net asset value of our hedge fund and fund of hedge funds vehicles (pre redemptions and subscriptions), as well as certain carry funds;
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents of our business development companies and certain carry funds; or
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired.
“Assets(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period has not expired, for AlpInvest carry funds during the commitment fee period;
(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 (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date;
(d)the external investor portion of the net asset value of our open-ended funds (pre-redemptions and subscriptions), as well as certain carry funds;
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds; or
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired.
    “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 the capital invested inour carry funds and related co-investment vehicles, NGP Predecessor Funds and NGP management fee fundsseparately 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);
(c)the net asset value (pre-redemptions and subscriptions) of our long/short credit, emerging markets, multi-product macroeconomic, fund of hedge funds vehicles, mutual fund and other hedge funds; and
(d)the gross assets (including assets acquired with leverage) of our business development companies.
(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);
(c)     the net asset value (pre-redemptions and subscriptions) of our open-ended funds; and
(d)     the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.
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”), the NGP Predecessor Funds and certain NGP management fee funds and carry fundsCarry Funds (collectively, the “NGP Energy Funds”) that are advised by NGP.NGP, as well as capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.


3

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 alternative asset managers. As a result, these measures may not be comparable to similar measures presented by other alternative 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 fees.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.


“Vermillion”Metropolitan” refers to our commodities advisor and business advised by Carlyle Commodity Management L.L.C., which was formerly known as Vermillion Asset Management until August 2015. 

Changes to Disclosure and Presentation of Key Performance Metrics
Investment funds and vehicles advised by AlpInvest Partners B.V. and Metropolitan Real Estate Equity Management, LLC, which comprise ourwas included in the Investment Solutions business segment are now included in our "carry funds" definition. Accordingly, they are now included in our Invested Capital, Realized Proceeds and Fund Appreciation metrics. We have recast metrics for 2016, including supplemental key metrics information availableprior to its sale on our website at ir.carlyle.com under “Key Metrics”. In addition, we have also adjusted the methodology for recognition of Invested Capital to an investment timing basis, rather than the timing of cash flows to and from our fund investors, to better reflect capital deployed by our funds during a given period.April 1, 2021.




4

PART I – FINANCIAL INFORMATION
 
Item 1.         Financial Statements
The Carlyle Group L.P.Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
September 30,
2017		 December 31,
2016		June 30,
2021		December 31,
2020
(Unaudited)   (Unaudited)
Assets   Assets
Cash and cash equivalents$1,355.7
 $670.9
Cash and cash equivalents$1,586.2 $987.6 
Cash and cash equivalents held at Consolidated Funds195.4
 761.5
Cash and cash equivalents held at Consolidated Funds187.5 148.6 
Restricted cash9.6
 13.1
Restricted cash31.0 2.0 
Corporate treasury investments117.4
 190.2
Accrued performance fees3,498.6
 2,481.1
Investments1,480.9
 1,107.0
Investments, including accrued performance allocations of $8,145.9 million and $4,968.6 million as of June 30, 2021 and December 31, 2020, respectivelyInvestments, including accrued performance allocations of $8,145.9 million and $4,968.6 million as of June 30, 2021 and December 31, 2020, respectively10,642.3 7,380.9 
Investments of Consolidated Funds4,235.8
 3,893.7
Investments of Consolidated Funds6,123.4 6,056.9 
Due from affiliates and other receivables, net268.8
 227.2
Due from affiliates and other receivables, net276.0 272.5 
Due from affiliates and other receivables of Consolidated Funds, net64.3
 29.5
Due from affiliates and other receivables of Consolidated Funds, net189.0 89.1 
Receivables and inventory of a real estate VIE—
 145.4
Fixed assets, net100.1
 106.1
Fixed assets, net142.0 149.2 
Lease right-of-use assets, netLease right-of-use assets, net336.6 361.1 
Deposits and other58.5
 39.4
Deposits and other76.9 51.7 
Other assets of a real estate VIE—
 31.5
Intangible assets, net38.0
 42.0
Intangible assets, net38.9 48.7 
Deferred tax assets263.5
 234.4
Deferred tax assets19.4 96.5 
Total assets$11,686.6
 $9,973.0
Total assets$19,649.2 $15,644.8 
Liabilities and partners’ capital   
Liabilities and equityLiabilities and equity
Debt obligations$1,515.6
 $1,265.2
Debt obligations$2,307.5 $1,970.9 
Loans payable of Consolidated Funds3,794.8
 3,866.3
Loans payable of Consolidated Funds5,393.1 5,563.0 
Loans payable of a real estate VIE at fair value (principal amount of $144.4 million as of December 31, 2016)—
 79.4
Accounts payable, accrued expenses and other liabilities308.9
 369.8
Accounts payable, accrued expenses and other liabilities309.8 286.3 
Accrued compensation and benefits2,175.1
 1,661.8
Accrued compensation and benefits4,566.7 3,222.6 
Due to affiliates264.3
 223.6
Due to affiliates402.1 436.7 
Deferred revenue236.0
 54.0
Deferred revenue123.1 89.0 
Deferred tax liabilities77.1
 76.6
Deferred tax liabilities466.5 57.8 
Other liabilities of Consolidated Funds475.4
 637.0
Other liabilities of Consolidated Funds923.6 556.1 
Other liabilities of a real estate VIE—
 124.5
Lease liabilitiesLease liabilities513.8 513.5 
Accrued giveback obligations67.6
 160.8
Accrued giveback obligations21.0 18.7 
Total liabilities8,914.8
 8,519.0
Total liabilities15,027.2 12,714.6 
Commitments and contingencies

 

Commitments and contingencies00
Series A preferred units (16,000,000 units issued and outstanding as of September 30, 2017)387.6
 —
Partners’ capital (common units 97,805,907 and 84,610,951 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively)660.4
 403.1
Common stock, $0.01 par value, 100,000,000,000 shares authorized (354,462,149 and 353,520,576 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)Common stock, $0.01 par value, 100,000,000,000 shares authorized (354,462,149 and 353,520,576 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)3.5 3.5 
Additional paid-in-capitalAdditional paid-in-capital2,621.7 2,546.2 
Retained earningsRetained earnings1,940.1 348.2 
Accumulated other comprehensive loss(69.4) (95.2)Accumulated other comprehensive loss(228.3)(208.7)
Non-controlling interests in consolidated entities374.7
 277.8
Non-controlling interests in consolidated entities285.0 241.0 
Non-controlling interests in Carlyle Holdings1,418.5
 868.3
Total partners’ capital2,771.8
 1,454.0
Total liabilities and partners’ capital$11,686.6
 $9,973.0
Total equityTotal equity4,622.0 2,930.2 
Total liabilities and equityTotal liabilities and equity$19,649.2 $15,644.8 
See accompanying notes.



5

The Carlyle Group L.P.Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except unitshare and per unitshare data)
 Three Months Ended September 30,
Nine Months Ended
September 30,
 2017
2016
2017
2016
Revenues       
Fund management fees$262.5
 $255.1
 $747.6
 $817.1
Performance fees       
Realized411.8
 383.4
 852.7
 905.1
Unrealized(126.2) (168.7) 658.1
 (334.3)
Total performance fees285.6
 214.7
 1,510.8
 570.8
Investment income       
Realized15.5
 40.7
 42.0
 92.2
Unrealized21.7
 29.8
 100.5
 34.0
Total investment income37.2
 70.5
 142.5
 126.2
Interest and other income9.9
 5.3
 25.9
 15.0
Interest and other income of Consolidated Funds44.7
 43.0
 132.6
 107.8
Revenue of a real estate VIE—
 18.7
 109.0
 61.5
Total revenues639.9
 607.3
 2,668.4
 1,698.4
Expenses       
Compensation and benefits       
Base compensation174.1
 154.3
 471.1
 470.5
Equity-based compensation81.0
 81.4
 241.8
 265.8
Performance fee related       
Realized189.4
 189.0
 401.9
 423.0
Unrealized(51.8) (78.1) 309.9
 (146.1)
Total compensation and benefits392.7
 346.6
 1,424.7
 1,013.2
General, administrative and other expenses(18.7) 188.9
 170.9
 362.6
Interest16.9
 15.6
 48.4
 46.3
Interest and other expenses of Consolidated Funds37.2
 32.3
 160.9
 87.3
Interest and other expenses of a real estate VIE and loss on deconsolidation64.5
 82.1
 202.5
 157.9
Other non-operating (income) expenses—
 (3.7) 0.1
 0.8
Total expenses492.6
 661.8
 2,007.5
 1,668.1
Other income       
Net investment gains of Consolidated Funds18.6
 4.8
 76.4
 3.1
Income (loss) before provision for income taxes165.9
 (49.7) 737.3
 33.4
Provision (benefit) for income taxes(1.3) 1.0
 17.7
 32.7
Net income (loss)167.2
 (50.7) 719.6
 0.7
Net income (loss) attributable to non-controlling interests in consolidated entities27.6
 (29.1) 47.4
 (29.8)
Net income (loss) attributable to Carlyle Holdings139.6
 (21.6) 672.2
 30.5
Net income (loss) attributable to non-controlling interests in Carlyle Holdings95.0
 (22.4) 487.0
 15.2
Net income attributable to The Carlyle Group L.P.$44.6
 $0.8
 $185.2
 $15.3
Net income attributable to The Carlyle Group L.P. per common unit (see Note 13)       
Basic$0.47
 $0.01
 $2.06
 $0.19
Diluted$0.43
 $(0.02) $1.90
 $0.08
Weighted-average common units       
Basic95,198,102
 83,602,503
 89,815,112
 82,062,633
Diluted334,392,424
 312,534,968
 97,538,190
 306,981,103
Distributions declared per common unit$0.42
 $0.63
 $0.68
 $1.18
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
Revenues
Fund management fees$394.4 $371.8 $775.4 $727.7 
Incentive fees10.4 9.0 19.9 17.9 
Investment income (loss)
Performance allocations2,080.7 1,191.8 3,866.8 254.2 
Principal investment income (loss)137.7 (512.6)316.8 (765.9)
Total investment income (loss)2,218.4 679.2 4,183.6 (511.7)
Interest and other income21.0 15.8 41.4 43.2 
Interest and other income of Consolidated Funds62.1 55.2 123.2 108.2 
Total revenues2,706.3 1,131.0 5,143.5 385.3 
Expenses
Compensation and benefits
Cash-based compensation and benefits231.8 212.5 460.3 416.8 
Equity-based compensation47.2 30.5 79.6 59.6 
Performance allocations and incentive fee related compensation994.0 535.6 1,860.6 93.1 
Total compensation and benefits1,273.0 778.6 2,400.5 569.5 
General, administrative and other expenses109.1 80.2 200.8 149.8 
Interest25.5 25.9 48.5 49.8 
Interest and other expenses of Consolidated Funds46.5 39.3 88.9 84.9 
Other non-operating expenses (income)(3.1)0.5 (2.5)0.7 
Total expenses1,451.0 924.5 2,736.2 854.7 
Other income (loss)
Net investment income (loss) of Consolidated Funds(2.6)50.3 9.7 (62.8)
Income (loss) before provision for income taxes1,252.7 256.8 2,417.0 (532.2)
Provision (benefit) for income taxes306.2 52.3 579.6 (27.7)
Net income (loss)946.5 204.5 1,837.4 (504.5)
Net income (loss) attributable to non-controlling interests in consolidated entities21.5 58.6 43.1 (38.4)
Net income (loss) attributable to The Carlyle Group Inc.$925.0 $145.9 $1,794.3 $(466.1)
Net income (loss) attributable to The Carlyle Group Inc. per common share (see Note 11)
Basic$2.61 $0.42 $5.06 $(1.34)
Diluted$2.55 $0.41 $4.97 $(1.34)
Weighted-average common shares
Basic354,506,335 348,574,528 354,368,976 348,407,144 
Diluted362,151,588 357,268,275 361,328,946 348,407,144 
Substantially all revenue is earned from affiliates of the Partnership.Company. See accompanying notes.



6

The Carlyle Group L.P.Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(Dollars in millions)
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income (loss)$167.2
 $(50.7) $719.6
 $0.7
Other comprehensive income (loss)       
Foreign currency translation adjustments38.4
 5.9
 87.8
 (11.3)
Cash flow hedges       
Reclassification adjustment for loss included in interest expense—
 0.6
 —
 1.8
Defined benefit plans       
Unrealized gain (loss) for the period(0.3) 0.4
 (1.3) 0.9
Less: reclassification adjustment for loss during the period, included in base compensation expense0.3
 0.1
 0.9
 0.1
Other comprehensive income (loss)38.4
—
7.0
—
87.4
—
(8.5)
Comprehensive income (loss)205.6
 (43.7) 807.0
 (7.8)
Comprehensive (income) loss attributable to non-controlling interests in consolidated entities(38.6) 46.2
 (68.5) 71.0
Comprehensive income attributable to redeemable non-controlling interests in consolidated entities—
 (0.2) —
 (0.1)
Comprehensive income attributable to Carlyle Holdings167.0
 2.3
 738.5
 63.1
Comprehensive (income) loss attributable to non-controlling interests in Carlyle Holdings(114.3) 4.7
 (534.5) (39.2)
Comprehensive income attributable to The Carlyle Group L.P.$52.7
 $7.0
 $204.0
 $23.9
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
Net income (loss)$946.5 $204.5 $1,837.4 $(504.5)
Other comprehensive income (loss)
Foreign currency translation adjustments4.7 12.2 (23.2)(10.7)
Unrealized losses on Fortitude Re available-for-sale securities0 (12.3)0 (20.0)
Defined benefit plans
Unrealized gain (loss) for the period0.6 1.4 1.9 (1.8)
Less: reclassification adjustment for gain during the period, included in cash-based compensation and benefits expense0.6 0.5 1.1 0.9 
Other comprehensive income (loss)5.9 1.8 (20.2)(31.6)
Comprehensive income (loss)952.4 206.3 1,817.2 (536.1)
Comprehensive income (loss) attributable to non-controlling interests in consolidated entities21.7 58.5 42.5 (51.2)
Comprehensive income (loss) attributable to The Carlyle Group Inc.$930.7 $147.8 $1,774.7 $(484.9)
See accompanying notes.




7

The Carlyle Group Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
(Dollars and shares in millions)

Common SharesCommon StockAdditional Paid-in-CapitalRetained EarningsAccumulated
Other
Comprehensive
Income (Loss)		Non-
controlling
Interests in
Consolidated
Entities		Total
Equity
Balance at March 31, 2021354.5 $3.5 $2,573.7 $1,118.8 $(234.0)$250.2 $3,712.2 
Shares repurchased(0.3)— — (15.0)— — (15.0)
Equity-based compensation— — 48.0 — — — 48.0 
Shares issued for equity-based awards0.3 — — — — — — 
Contributions— — — — — 40.7 40.7 
Distributions— — — (88.7)— (27.6)(116.3)
Net income— — — 925.0 — 21.5 946.5 
Currency translation adjustments— — — — 4.5 0.2 4.7 
Defined benefit plans, net— — — — 1.2 — 1.2 
Balance at June 30, 2021354.5 $3.5 $2,621.7 $1,940.1 $(228.3)$285.0 $4,622.0 
Common SharesCommon StockAdditional Paid-in-CapitalRetained EarningsAccumulated
Other
Comprehensive
Income (Loss)		Non-
controlling
Interests in
Consolidated
Entities		Total
Equity
Balance at December 31, 2020353.5 $3.5 $2,546.2 $348.2 $(208.7)$241.0 $2,930.2 
Shares repurchased(0.6)— — (25.0)— — (25.0)
Equity-based compensation— — 75.5 — — — 75.5 
Shares issued for equity-based awards1.6 — — — — — — 
Contributions— — — — — 44.4 44.4 
Distributions— — — (177.4)— (42.9)(220.3)
Net income— — — 1,794.3 — 43.1 1,837.4 
Currency translation adjustments— — — — (22.6)(0.6)(23.2)
Defined benefit plans, net— — — — 3.0 — 3.0 
Balance at June 30, 2021354.5 $3.5 $2,621.7 $1,940.1 $(228.3)$285.0 $4,622.0 



8

The Carlyle Group Inc.
Condensed Consolidated Statements of Changes in Equity
(Continued) (Unaudited)
(Dollars and shares in millions)

Common
Units		Common
 Shares		Partners’
Capital		Common
Stock		Additional
Paid-in-
Capital		Retained
Earnings
(Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Non-
controlling
Interests in
Consolidated
Entities		Non-
controlling
Interests in
Carlyle
Holdings		Total
Equity
Balance at March 31, 20200 348.4 $0 $3.5 $2,569.0 $(612.0)$(95.1)$203.7 $0 $2,069.1 
Reclassification resulting from Conversion - Non-controlling Interest in Carlyle Holdings— — — — 165.7 — (165.7)— — — 
Equity-based compensation— — — — 32.3 — — — — 32.3 
Shares issued for equity-based awards— 0.3 — — — — — — — — 
Contributions— — — — — — — 9.8 — 9.8 
Distributions— — — — (87.2)— — (10.9)— (98.1)
Net income— — — — — 145.9 — 58.6 — 204.5 
Deconsolidation of Consolidated Entities— — — — — — — (76.7)— (76.7)
Currency translation adjustments— — — — — — 12.3 (0.1)— 12.2 
Unrealized loss on Fortitude Re available-for-sale securities— — — — — — (12.3)— — (12.3)
Defined benefit plans, net— — — — — — 1.9 — — 1.9 
Balance at June 30, 20200 348.7 $0 $3.5 $2,679.8 $(466.1)$(258.9)$184.4 $0 $2,142.7 
Common
Units		Common
 Shares		Partners’
Capital		Common
Stock		Additional
Paid-in-
Capital		Retained
Earnings
(Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Non-
controlling
Interests in
Consolidated
Entities		Non-
controlling
Interests in
Carlyle
Holdings		Total
Equity
Balance at December 31, 2019117.8 0 $703.8 $0 $0 $0 $(85.2)$333.5 $2,017.5 $2,969.6 
Reclassification resulting from Conversion - Partners' Capital(117.8)117.8 (703.8)1.2 702.6 — — — — — 
Reclassification resulting from Conversion - Non-controlling Interest in Carlyle Holdings— 229.4 — 2.3 2,180.9 — (165.7)— (2,017.5)— 
Shares repurchased— (1.1)— — (26.4)— — — — (26.4)
Tax effects resulting from Conversion— — — — (64.4)— 10.8 — — (53.6)
Equity-based compensation— — — — 61.7 — — — — 61.7 
Shares issued for equity-based awards— 2.6 — — — — — — — — 
Contributions— — — — — — — 14.0 — 14.0 
Distributions— — — — (174.6)— — (35.2)— (209.8)
Net loss— — — — — (466.1)— (38.4)— (504.5)
Deconsolidation of Consolidated Entities— — — — — — — (76.7)— (76.7)
Currency translation adjustments— — — — — — 2.1 (12.8)— (10.7)
Unrealized loss on Fortitude Re available-for-sale securities— — — — — — (20.0)— — (20.0)
Defined benefit plans, net— — — — — — (0.9)— — (0.9)
Balance at June 30, 20200 348.7 $0 $3.5 $2,679.8 $(466.1)$(258.9)$184.4 $0 $2,142.7 

See accompanying notes.


9
The Carlyle Group L.P.Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in millions)



Nine Months Ended September 30, Six Months Ended June 30,
2017 2016 20212020
Cash flows from operating activities   Cash flows from operating activities
Net income$719.6
 $0.7
Adjustments to reconcile net income to net cash flows from operating activities:   
Net income (loss)Net income (loss)$1,837.4 $(504.5)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization30.9
 52.6
Depreciation and amortization26.8 26.0 
Right-of-use asset impairment, net of broker feesRight-of-use asset impairment, net of broker fees24.8 0 
Equity-based compensation241.8
 265.8
Equity-based compensation79.6 59.6 
Non-cash performance fees(561.5) 108.0
Non-cash performance allocations and incentive feesNon-cash performance allocations and incentive fees(1,703.9)28.7 
Non-cash principal investment (income) lossNon-cash principal investment (income) loss(303.8)769.3 
Other non-cash amounts(4.2) (19.2)Other non-cash amounts5.5 (10.7)
Consolidated Funds related:   Consolidated Funds related:
Realized/unrealized gain on investments of Consolidated Funds(27.1) (45.0)
Realized/unrealized (gain) loss on investments of Consolidated FundsRealized/unrealized (gain) loss on investments of Consolidated Funds(102.8)382.3 
Realized/unrealized (gain) loss from loans payable of Consolidated Funds(49.3) 43.8
Realized/unrealized (gain) loss from loans payable of Consolidated Funds93.1 (319.5)
Purchases of investments by Consolidated Funds(2,129.7) (1,707.8)Purchases of investments by Consolidated Funds(2,700.4)(1,046.4)
Proceeds from sale and settlements of investments by Consolidated Funds2,135.6
 873.9
Proceeds from sale and settlements of investments by Consolidated Funds2,426.9 1,088.6 
Non-cash interest income, net(4.3) (3.6)Non-cash interest income, net(6.7)(2.8)
Change in cash and cash equivalents held at Consolidated Funds566.1
 622.5
Change in cash and cash equivalents held at Consolidated Funds(8.3)21.8 
Change in other receivables held at Consolidated Funds(30.9) (4.8)Change in other receivables held at Consolidated Funds(99.5)(68.0)
Change in other liabilities held at Consolidated Funds(208.5) (178.9)Change in other liabilities held at Consolidated Funds365.1 (113.2)
Investment income(138.9) (124.2)
Other non-cash amounts of Consolidated FundsOther non-cash amounts of Consolidated Funds0 0.3 
Purchases of investments(412.4) (218.6)Purchases of investments(103.4)(244.2)
Proceeds from the sale of investments297.7
 219.7
Proceeds from the sale of investments398.2 166.2 
Payments of contingent consideration(22.5) (82.6)Payments of contingent consideration(49.9)0 
Deconsolidation of Claren Road (see Note 9)(23.3) —
Deconsolidation of Urbplan (see Note 15)14.0
 —
Changes in deferred taxes, net(8.7) 3.7
Changes in deferred taxes, net481.9 (61.6)
Change in due from affiliates and other receivables(78.2) 2.8
Change in due from affiliates and other receivables(14.9)(18.8)
Change in receivables and inventory of a real estate VIE(14.5) 45.1
Change in deposits and other(7.1) 5.0
Change in deposits and other(26.6)(4.8)
Change in other assets of a real estate VIE1.6
 33.1
Change in accounts payable, accrued expenses and other liabilities1.9
 71.8
Change in accounts payable, accrued expenses and other liabilities25.4 (46.5)
Change in accrued compensation and benefits42.2
 32.4
Change in accrued compensation and benefits(113.9)(125.4)
Change in due to affiliates15.0
 (22.4)Change in due to affiliates24.5 (28.2)
Change in other liabilities of a real estate VIE47.9
 (1.2)
Change in lease right-of-use assets and lease liabilitiesChange in lease right-of-use assets and lease liabilities4.6 (5.9)
Change in deferred revenue178.6
 154.9
Change in deferred revenue35.6 (19.2)
Net cash provided by operating activities571.8
 127.5
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities595.3 (76.9)
Cash flows from investing activities   Cash flows from investing activities
Change in restricted cash3.6
 1.8
Purchases of fixed assets, net(26.0) (13.3)Purchases of fixed assets, net(17.6)(23.7)
Proceeds from sale of MRE, net of cash soldProceeds from sale of MRE, net of cash sold5.9 0 
Net cash used in investing activities(22.4) (11.5)Net cash used in investing activities(11.7)(23.7)
Cash flows from financing activities   Cash flows from financing activities
Proceeds from issuance of preferred units, net of offering costs and expenses387.6
 —
Borrowings under credit facility250.0
 —
Repayments under credit facility(250.0) —
Borrowings under credit facilitiesBorrowings under credit facilities0 263.8 
Repayments under credit facilitiesRepayments under credit facilities0 (295.6)
Issuance of 4.625% subordinated notes due 2061, net of financing costsIssuance of 4.625% subordinated notes due 2061, net of financing costs484.2 0 
Payments on debt obligations(15.0) —
Payments on debt obligations(229.4)(1.5)
Proceeds from debt obligations202.6
 20.6
Net payments on loans payable of a real estate VIE(14.3) (27.3)
Net (payments) borrowings on loans payable of Consolidated Funds(312.7) 339.7
Proceeds from debt obligations, net of financing costsProceeds from debt obligations, net of financing costs87.7 0 
Net borrowings (payments) on loans payable of Consolidated FundsNet borrowings (payments) on loans payable of Consolidated Funds(15.9)134.6 
Payments of contingent consideration(0.4) (3.3)Payments of contingent consideration0 (0.3)
Distributions to common unitholders(63.0) (98.5)
Distributions to non-controlling interest holders in Carlyle Holdings(163.1) (300.9)
Dividends to common stockholdersDividends to common stockholders(177.4)(174.6)
Payment of deferred consideration for Carlyle Holdings unitsPayment of deferred consideration for Carlyle Holdings units(68.8)(68.8)
Contributions from non-controlling interest holders87.7
 75.3
Contributions from non-controlling interest holders44.4 14.0 
Distributions to non-controlling interest holders(74.0) (87.3)Distributions to non-controlling interest holders(42.9)(35.2)
Common units repurchased(0.2) (53.6)
Common shares repurchasedCommon shares repurchased(25.0)(26.4)
Change in due to/from affiliates financing activities38.5
 62.0
Change in due to/from affiliates financing activities12.8 30.0 
Net cash provided by (used in) financing activities73.7
 (73.3)Net cash provided by (used in) financing activities69.7 (160.0)
Effect of foreign exchange rate changes61.7
 9.1
Effect of foreign exchange rate changes(25.7)(8.4)
Increase in cash and cash equivalents684.8
 51.8
Cash and cash equivalents, beginning of period670.9
 991.5
Cash and cash equivalents, end of period$1,355.7
 $1,043.3
Increase (decrease) in cash, cash equivalents and restricted cashIncrease (decrease) in cash, cash equivalents and restricted cash627.6 (269.0)
Cash, cash equivalents and restricted cash, beginning of periodCash, cash equivalents and restricted cash, beginning of period989.6 828.0 
Cash, cash equivalents and restricted cash, end of periodCash, cash equivalents and restricted cash, end of period$1,617.2 $559.0 
Supplemental non-cash disclosures   Supplemental non-cash disclosures
Net increase in partners’ capital and accumulated other comprehensive income related to reallocation of ownership interest in Carlyle Holdings$23.8
 $12.4
Tax effects from the conversion to a Corporation recorded in equityTax effects from the conversion to a Corporation recorded in equity$0 $53.6 
Net asset impact of deconsolidation of Consolidated Funds$—
 $(7,170.2)Net asset impact of deconsolidation of Consolidated Funds$(34.4)$0 
Tax effect from acquisition of Carlyle Holdings partnership units:   
Deferred tax asset$24.3
 $2.5
Tax receivable agreement liability$21.1
 $2.2
Total partners’ capital$3.2
 $0.3
Reconciliation of cash, cash equivalents and restricted cash, end of period:Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalentsCash and cash equivalents$1,586.2 $554.5 
Restricted cashRestricted cash31.0 4.5 
Total cash, cash equivalents and restricted cash, end of periodTotal cash, cash equivalents and restricted cash, end of period$1,617.2 $559.0 
Cash and cash equivalents held at Consolidated FundsCash and cash equivalents held at Consolidated Funds$187.5 $98.0 
See accompanying notes.




10
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)




1. Organization and Basis of Presentation
Effective on January 1, 2020, The Carlyle Group L.P., together with converted from a Delaware limited partnership to a Delaware corporation named The Carlyle Group Inc. (the “Conversion”). As a result of the Conversion, each common unit was converted into a share of common stock. Under the laws of its incorporation, The Carlyle Group Inc. is deemed to be the same entity as The Carlyle Group L.P. (the “Partnership”). Unless the context suggests otherwise, references to “Carlyle” or the “Company,” refer to (i) The Carlyle Group Inc. and its consolidated subsidiaries following the Conversion and (ii) The Carlyle Group L.P. and its consolidated subsidiaries prior to the Conversion.
Prior to the Conversion, the Company recorded significant non-controlling interests in Carlyle Holdings I L.P., Carlyle Holdings II L.P. and Carlyle Holdings III L.P. (collectively, “Carlyle Holdings”), the holdings partnerships through which the Company and senior Carlyle professionals and other holders of Carlyle Holdings partnership units owned their respective interests in the business. In the Conversion, the limited partners of the Carlyle Holdings partnerships exchanged their Carlyle Holdings partnership units for an equivalent number of shares of common stock of The Carlyle Group Inc. As a result, in periods following the Conversion, the consolidated balance sheet and statement of operations of The Carlyle Group Inc. does not reflect any non-controlling interests in Carlyle Holdings, and net income (loss) attributable to Carlyle Holdings refers to the net income (loss) of The Carlyle Group Inc. and its consolidated subsidiaries, net of non-controlling interests in consolidated entities.
Carlyle is one of the world’s largest global alternative asset managementinvestment firms that originates, structures, and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, growth capital financings, real estate opportunities, bank loans, high-yield debt, distressed assets, mezzanine debt, and other investment opportunities. The Carlyle Group L.P. is a Delaware limited partnership formed on July 18, 2011, which is managed and operated by its general partner, Carlyle Group Management L.L.C., which is in turn wholly-owned and controlled by Carlyle’s founders and other senior Carlyle professionals. Except as otherwise indicated by the context, references to the “Partnership” or “Carlyle” refer to The Carlyle Group L.P., together with its consolidated subsidiaries.
Carlyle provides investment management services to, and has transactions with, various private equity funds, real estate funds, private credit funds, collateralized loan obligations (“CLOs”), and other investment products sponsored by the PartnershipCompany for the investment of client assets in the normal course of business. Carlyle typically serves as the general partner, investment manager or collateral manager, making day-to-day investment decisions concerning the assets of these products. Carlyle operates its business through four3 reportable segments: CorporateGlobal Private Equity, Real Assets, Global Market Strategies,Credit, and Investment Solutions (see Note 16)14).
Basis of Presentation
The accompanying financial statements include the accounts of the PartnershipCompany and its consolidated subsidiaries. In addition, certain Carlyle-affiliated funds, related co-investment entities and certain CLOs managed by the PartnershipCompany (collectively the “Consolidated Funds”) and a real estate development company have been consolidated in the accompanying financial statements pursuant to accounting principles generally accepted in the United States (“U.S. GAAP”), as described in Note 2. The accounts of the real estate development company have been deconsolidated as of September 30, 2017 (see Note 15). 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 Partnership.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).
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 Partnership’sCompany’s Annual Report on Form 10-K for the year ended December 31, 20162020 filed with the Securities and Exchange Commission (“SEC”). The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The PartnershipCompany consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of variable interest entities (“VIEs”). On January 1, 2016, the Partnership adopted ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which provides a revised consolidation model for all reporting entities to use in evaluating whether to consolidate certain types of legal entities.
The PartnershipCompany evaluates (1) whether it holds a variable interest in an entity, (2) whether the entity is a VIE, and (3)whether the Partnership'sCompany’s involvement would make it the primary beneficiary. In evaluating whether the PartnershipCompany holds a variable interest, fees (including management fees, incentive fees and performance fees)allocations) that are customary and commensurate with the level of services provided, and where the PartnershipCompany does not hold other economic interests in the entity


11
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not considered variable interests. The PartnershipCompany considers all economic interests, including indirect interests, to determine if a fee is considered a variable interest.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


For those entities where the PartnershipCompany holds a variable interest, the PartnershipCompany determines whether each of these entities qualifies as a VIE and, if so, whether or not the PartnershipCompany 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'parties’ equity interests should be aggregated, and (d) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity.
For entities that are determined to be VIEs, the PartnershipCompany 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 PartnershipCompany is the primary beneficiary, the PartnershipCompany evaluates its economic interests in the entity held either directly or indirectly by the Partnership.Company.
As of SeptemberJune 30, 2017,2021, assets and liabilities of the consolidated VIEs reflected in the unaudited condensed consolidated balance sheets were $4.5$6.5 billion and $4.3$6.3 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 Partnership.Company.
Substantially all of ourthe Company’s Consolidated Funds are CLOs, which are VIEs that issue loans payable that are backed by diversified collateral asset portfolios consisting primarily of loans or structured debt. In exchange for managing the collateral for the CLOs, the PartnershipCompany earns investment management fees, including in some cases subordinated management fees and contingent incentive fees. In cases where the PartnershipCompany consolidates the CLOs (primarily because of a retained interest that is significant to the CLO), those management fees have been eliminated as intercompany transactions. As of SeptemberJune 30, 2017,2021, the PartnershipCompany held $191.6$160.6 million of investments in these consolidated CLOs which represents its maximum risk of loss. The Partnership’sCompany’s investments in these CLOs are generally subordinated to other interests in the entities and entitle the PartnershipCompany 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 PartnershipCompany for any losses sustained in the CLO structure.
Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting interest entity model, the PartnershipCompany 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 PartnershipCompany holds variable interests in certain VIEs that are not consolidated because the PartnershipCompany is not the primary beneficiary, including its investments in certain Investment Solutions carry funds, certain CLOs and its strategic investment in NGP Management Company, L.L.C. (“NGP Management” and, together with its affiliates, “NGP”). Refer to Note 54 for information on the strategic investment in NGP. The Partnership’sCompany’s involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by the PartnershipCompany relating to its variable interests in these unconsolidated entities. The assets recognized in the Partnership’s unaudited condensed consolidated balance sheets related to the Partnership’s variable interests in these non-consolidated VIEs and the Partnership’s maximum exposure to loss relating to unconsolidated VIEs were as follows:



12
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Investments$828.5
 $664.2
Due from affiliates, net—
 1.8
Maximum Exposure to Loss$828.5
 $666.0
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Additionally, as of September 30, 2017, the Partnership had $51.9 million and $12.8 millionThe assets recognized in the condensedCompany’s consolidated balance sheetsheets related to accrued carry and management fee receivables, respectively,the Company’s variable interests in these non-consolidated VIEs were as follows:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Investments$874.0 $988.6 
Accrued performance revenues287.9 177.1 
Management fee receivables26.5 26.5 
Total$1,188.4 $1,192.2 
These amounts represent the Company’s maximum exposure to loss related to the unconsolidated VIEs.VIEs as of June 30, 2021 and December 31, 2020.
Basis of Accounting
The accompanying financial statements are prepared in accordance with U.S. GAAP. Management has determined that the Partnership’sCompany’s Funds are investment companies under U.S. GAAP for the purposes of financial reporting. U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the unrealized gains and/or losses in an investment’s fair value are recognized on a current basis in the statements of operations. Additionally, the Funds do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). In the preparation of these unaudited condensed consolidated financial statements, the PartnershipCompany 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 Partnership’sCompany’s condensed consolidated balance sheets. Interest and other income of the Consolidated Funds as well as interest expense and other expenses of the Consolidated Funds are included in the Partnership’sCompany’s unaudited condensed consolidated statements of operations.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Partnership’sCompany’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance feesallocations involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements and the resulting impact on performance allocations and incentive fees. Actual results could differ from these estimates and such differences could be material.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations that are elements of consideration transferred are recognized as of the acquisition date as part of the fair value transferred in exchange for the acquired business. Acquisition-related costs incurred in connection with a business combination are expensed as incurred.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. ASC 606 includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, which includes assessing the collectibility of the consideration to which it will be entitled in exchange for the goods or services transferred to the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation.


13
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

The Company accounts for performance allocations that represent a performance-based capital allocation from fund limited partners to the Company (commonly known as “carried interest”, which comprises substantially all of the Company’s previously reported performance fee revenues) as earnings from financial assets within the scope of ASC 323, Investments - Equity Method and Joint Ventures, and therefore are not in the scope of ASC 606. In accordance with ASC 323, the Company records equity method income (losses) as a component of investment income based on the change in its proportionate claim on net assets of the investment fund, including performance allocations, assuming the investment fund was liquidated as of each reporting date pursuant to each fund’s governing agreements. See Note 4 for additional information on the components of investments and investment income. Performance fees that do not meet the definition of performance-based capital allocations are in the scope of ASC 606 and are included in incentive fees in the unaudited condensed consolidated statements of operations. The calculation of unrealized performance revenues utilizes investment valuations of the funds’ underlying investments, which are derived using the policies, methodologies and templates prepared by the Company’s valuation group, as described in Note 3, Fair Value Measurement.
While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts. The customer determination impacts the Company’s analysis of the accounting for contract costs. Also, the recovery of certain costs incurred on behalf of Carlyle funds, primarily travel and entertainment costs, are presented gross in the unaudited condensed consolidated statements of operations, as the Company controls the inputs to its investment management performance obligation.
Fund Management Fees
The PartnershipCompany provides management services to funds in which it holds a general partner interest or has a management agreement. The Company considers the performance obligations in its contracts with its funds to be the promise to provide (or to arrange for third parties to provide) investment management services related to the management, policies and operations of the funds.
As it relates to the Company’s performance obligation to provide investment management services, the Company typically satisfies this performance obligation over time as the services are rendered, since the funds simultaneously receive and consume the benefits provided as the Company performs the service. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the funds. Management fees earned from each investment management contract over the contract life represent variable consideration because the consideration the Company is entitled to varies based on fluctuations in the basis for the management fee, for example fund net asset value (“NAV”) or assets under management (“AUM”). Given that the management fee basis is susceptible to market factors outside of the Company’s influence, management fees are constrained and, therefore, estimates of future period management fees are generally not included in the transaction price. Revenue recognized for the investment management services provided is generally the amount determined at the end of the period because that is when the uncertainty for that period is resolved.
For closed-end carry funds in the CorporateGlobal Private Equity Real Assets and Global Market StrategiesCredit segments, management fees generally range from 1.0% to 2.0% of commitments during the fund'sfund’s investment period based on limited partners'partners’ capital commitments to the funds. Following the expiration or termination of the investment period, management fees generally are based on the lower of cost or fair value of invested capital and the rate charged may also be reduced to between 0.6%0.5% and 2.0%. For certain separately managed accounts, and longer-dated carry funds, with expected terms greater than ten years,and other closed-end funds, management fees generally range from 0.2% to 1.0% based on contributions for unrealized investments, or the current value of the investment.investment, or adjusted book value. The PartnershipCompany 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 Market StrategiesCredit segment, for CLOs and other structured products, management fees generally range from 0.3%0.4% to 0.6%0.5% based on the total par amounts of assets or the aggregate principal amount of the notes in the CLO and are due quarterly or semi-annually 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 PartnershipCompany will receive management fees for the CLOs until redemption of the securities issued by the CLOs, which is generally five to ten years after issuance. Management fees for the business development companies are due quarterly in arrears at annual rates that range from 0.25%1.25% of invested capital to 1.0%1.5% of gross assets, excluding cash and cash equivalents.


14
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Management fees for the Partnership's private equity and real estateCompany’s carry fund vehicles in the Investment Solutions segment generally range from 0.25% to 1.0% of the vehicle’s capital commitments during the commitment fee period of the relevant fund or the weighted-average investment period of the underlying funds. Following the expiration of the commitment fee period or weighted-average investment period of such funds, the management fees generally range from 0.25% to 1.0% ofon (i) the lower of cost or fair value of the capital invested, (ii) the net asset value for unrealized investments, or (iii) the contributions for unrealized investments; however, certain separately managed accounts earn management fees at all times on contributions for unrealized investments.investments or on the initial commitment amount. Management fees for the Investment Solutions carry fund vehicles are generally due quarterly and recognized over the related quarter.
As of June 30, 2021 and December 31, 2020, management fee receivables, net of allowances for credit losses, were $124.7 million and $102.7 million, respectively, and are included in due from affiliates and other receivables, net, in the unaudited condensed consolidated balance sheets.
The PartnershipCompany 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 serviceperformance obligation has been providedsatisfied and collection is reasonably assured. The Company also recognizes underwriting fees from the Company’s loan syndication and capital markets business, Carlyle Global Capital Markets. Fund management fees includesinclude transaction and portfolio advisory fees, as well as capital markets fees, of $10.2$14.4 million and $5.2$17.2 million for the three months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, and $28.0$32.4 million and $37.1$21.6 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, net of any offsets as defined in the respective partnership agreements.
Fund management fees exclude the reimbursement of any partnership expenses paid by the PartnershipCompany on behalf of the Carlyle funds pursuant to the limited partnership agreements, including amounts related to the pursuit of actual, proposed, or unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of investments, and other fund administrative expenses. For the professional fees that the Company arranges for the investment funds, the Company concluded that the nature of its promise is to arrange for the services to be provided and it does not control the services provided by third parties before they are transferred to the customer. Therefore, the Company concluded it is acting in the capacity of an agent. Accordingly, the reimbursement for these professional fees paid on behalf of the investment funds is presented on a net basis in general, administrative and other expenses in the unaudited condensed consolidated statements of operations.
PerformanceThe Company also incurs certain costs, primarily employee travel and entertainment costs, employee compensation and systems costs, for which it receives reimbursement from the investment funds in connection with its performance obligation to provide investment and management services. For reimbursable travel, compensation and systems costs, the Company concluded it controls the services provided by its employees and the resources used to develop applicable systems before they are transferred to the customer and therefore is a principal. Accordingly, the reimbursement for these costs incurred by the Company to manage the fund limited partnerships are presented on a gross basis in interest and other income in the unaudited condensed consolidated statements of operations and the expense in general, administrative and other expenses or cash-based compensation and benefits expenses in the unaudited condensed consolidated statements of operations.
Incentive Fees
In connection with management contracts from certain of its Global Credit funds, the Company is also entitled to receive performance-based incentive fees when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, incentive fees are recognized when the performance benchmark has been achieved. Incentive fees are variable consideration because they are contingent upon the investment vehicle achieving stipulated investment return hurdles. Investment returns are highly susceptible to market factors outside of the Company’s influence. Accordingly, incentive fees are constrained until the uncertainty is resolved. Estimates of future period incentive fees are generally not included in the transaction price because these estimates are constrained. The transaction price for incentive fees is generally the amount determined at the end of each accounting period to which they relate because that is when the uncertainty for that period is resolved, as these fees are not subject to clawback.
Investment Income (Loss), including Performance feesAllocations
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 principally of the allocation of profits from certain of the funds to which the PartnershipCompany is entitled (commonly known as carried interest).


15
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

For closed-end carry funds in the CorporateGlobal Private Equity Real Assets and Global Market StrategiesCredit segments, the PartnershipCompany is generally entitled to a 20% allocation (or 10% to 20% on certain longer-dated carry funds, certain credit funds, and external co-investment vehicles, up to 25% on certain Global Private Equity funds in the event performance benchmarks are achieved, or approximately 2% to 10% in the majority12.5% for most of the Investment Solutions segment carry fund vehicles) of the net realized income or gain as a carried interest after returning the invested capital, the allocation of preferred returns of generally 7% to 9% (or 4% to 7% for certain longer-dated carry funds) and return of certain fund costs (generally subject to catch-up provisions as set forth in the fund limited partnership agreement). Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in each respective partnership agreement. The PartnershipCompany recognizes revenues attributable to performance feesallocations based upon the amount that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that date. Accordingly, the amount recognized as investment income for performance feesallocations reflects the Partnership’sCompany’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 PartnershipCompany 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 PartnershipCompany in future periods if the funds’ investment values decline below certain levels. When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized performance feesallocations are reversed. In all cases, each fund is considered separately in this regard, and for a given fund, performance feesallocations 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 September 30, 2017 and December 31, 2016,
Principal investment income (loss) is realized when the Partnership has recognized $67.6 million and $160.8 million, respectively, for giveback obligations.
The Partnership is also entitled to receive performance fees pursuant to management contracts from certainCompany redeems all or a portion of its Global Market Strategies fundsinvestment or when the return on assets under management exceeds certain benchmark returnsCompany receives or other performance targets. Inis due cash income, such arrangements, performance fees are recognized whenas dividends or distributions. Principal investment income (loss) also includes the performance benchmark has been achieved, and are includedCompany’s allocation of earnings from its investment in performance fees in the accompanying unaudited condensed consolidated statements of operations.
The Carlyle Group L.P.

NotesFortitude Re through June 2, 2020 (see Note 4). As it relates to the Condensed Consolidated Financial Statements
(Unaudited)


Investment Income (Loss)
Investment income (loss) represents the unrealized and realized gains and losses resulting from the Partnership’s equity methodCompany’s investments and otherin NGP (see Note 4), principal investments, including CLOs. Equity method investment income (loss) includes the related amortization of the basis difference between the Partnership’sCompany’s carrying value of its investment and the Partnership’sCompany’s share of underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by the PartnershipCompany to employees of its equity method investee, as it relates to its investments in NGP (see Note 5). Investment income (loss) is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives or is due cash income, such as dividends or distributions.investee. Unrealized principal investment income (loss) results from the Company’s proportionate share of the investee’s unrealized earnings, including changes in the fair value of the underlying investment, as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest Income
Interest income is recognized when earned. For debt securities representing non-investment grade beneficial interests in securitizations, the effective yield is determined based on the estimated cash flows of the security. Changes in the effective yield of these securities due to changes in estimated cash flows are recognized on a prospective basis as adjustments to interest income in future periods. Interest income earned by the PartnershipCompany is included in interest and other income in the accompanying unaudited condensed consolidated statements of operations. Interest income of the Consolidated Funds was $41.8$56.6 million and $40.0$53.1 million for the three months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, and $124.1$113.5 million and $101.6$104.2 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, and is included in interest and other income of Consolidated Funds in the accompanying unaudited condensed consolidated statements of operations.
Credit Losses
Under ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), the Company measures all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. As part of its adoption process, the Company assessed the collection risk characteristics of the outstanding amounts in its due from affiliates balance to define the following pools of receivables:
•Reimbursable fund expenses receivables,
•Management fee receivables,
•Incentive fee receivables,
•Transaction fee receivables,
•Portfolio fee receivables, and
•Notes receivable.


16
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

The Company generally utilizes either historical credit loss information or discounted cash flows to calculate expected credit losses for each pool. The Company’s receivables are predominantly with its investment funds, which have low risk of credit loss based on the Company’s historical experience. Historical credit loss data may be adjusted for current conditions and reasonable and supportable forecasts, including the Company’s expectation of near-term realization based on the liquidity of the affiliated investment funds.
Compensation and Benefits
BaseCash-based Compensation and Benefits – BaseCash-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 to Carlyle employees is measured at fair value on the grant date. The compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. The compensation expense for awards that do not require future service is recognized immediately. Cash settled equity-based awards are classified as liabilities and are re-measured at the end of each reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable that the performance conditions will be achieved; in certain instances, such compensation expense may be recognized prior to the grant date of the award. The compensation expense for awards that contain market conditions is based on a grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized over the requisite service period on a straight-line basis.
Equity-based awards issued to non-employees are generally recognized as general, administrative and other expenses, except to the extent they are recognized as part of ourthe Company’s equity method earnings because they are issued to employees of our equity method investees.
The grant-date fair value of equity-based awards granted to Carlyle’s non-employee directors is expensed on a straight-line basis over the vesting period. The cost of services received in exchange for an equity-based award issued to non-employees who are not directors is measured at each vesting date, and is not measured based on the grant-date fair value of the award unless the award is vested at the grant date. Equity-based awards that require the satisfaction of future service criteria are recognized over the relevant service period based on the fair value of the award on each reporting date and adjusted for the actual fair value of the award at each vesting date. Accordingly, the measured value of the award will not be finalized until the vesting date.
On January 1, 2017, the Partnership adopted ASU 2016-9, Compensation - Stock Compensation (Topic 718). In accordance with ASU 2016-9, the Partnership elected to recognizeCompany recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. Furthermore, the Partnership is required to recognize prospectivelyCompany recognizes all excess tax benefits and deficiencies as income tax benefit or expense in the statementunaudited condensed consolidated statements of operations.
Performance Allocations and Incentive Fee Related Compensation – A portion of the performance allocations and incentive fees earned is due to employees and advisors of the Partnership.Company. These amounts are accounted for as compensation expense in conjunction with the recognition of the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued compensation and benefits liability. Accordingly, upon a reversal of performance allocations or incentive fee revenue, the related compensation expense, if any, is also reversed. As of SeptemberJune 30, 20172021 and December 31, 2016,2020, the PartnershipCompany had recorded a liability of $1.8$4.0 billion and $1.3$2.5 billion, respectively, related to
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


the portion of accrued performance allocations and incentive fees due to employees and advisors, respectively, which was included in accrued compensation and benefits in the accompanying unaudited condensed consolidated financial statements.balance sheets.
Income Taxes
Certain of the wholly-owned subsidiaries of the PartnershipThe Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and the Carlyle Holdings partnerships arethus is subject to U.S. federal, state, local and foreign corporate income taxes at the entity level and the related tax provision attributable to the Partnership’s share of this income is reflected in the unaudited condensed consolidated financial statements. Based on applicable federal, foreign, state and local tax laws, the Partnership records a provision forcorporate income taxes for certain entities.taxes. Tax positions taken by the PartnershipCompany are subject to periodic audit by U.S. federal, state, local and foreign taxing authorities.
The interim provision for income taxes is calculated using the discrete effective tax rate method as allowed by ASC 740, Accounting for Income Taxes. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis.
The PartnershipCompany accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement reporting and the tax basis of assets and liabilities using enacted tax rates in effect for the period in which the difference is expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change in the provision for income taxes. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carry forwards. A valuation allowance is recorded on the Partnership’sCompany’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 Partnership’sCompany’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


17
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

earnings. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries.
Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The PartnershipCompany 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 PartnershipCompany determines that uncertainties in tax positions exist, a liability is established, which is included in accounts payable, accrued expenses and other liabilities in the unaudited condensed consolidated financial statements. The PartnershipCompany 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.
Tax Receivable Agreement
Exchanges of Carlyle Holdings partnership units for the Partnership’s common units that are executed by the limited partners of the Carlyle Holdings partnerships result in transfers of and increases in the tax basis of the tangible and intangible assets of Carlyle Holdings, primarily attributable to a portion of the goodwill inherent in the business. These transfers and increases in tax basis will increase (for tax purposes) depreciation and amortization and therefore reduce the amount of tax that certain of the Partnership’s subsidiaries, including Carlyle Holdings I GP Inc., which are referred to as the “corporate taxpayers,” would otherwise be required to pay in the future. This increase in tax basis may also decrease gain (or increase loss) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The Partnership has entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships whereby the corporate taxpayers have 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 or foreign or franchise tax that the corporate taxpayers realize as a result of these increases in tax basis and, in limited cases, transfers or prior increases in tax basis. The corporate taxpayers expect to benefit from the remaining 15% of cash tax savings, if any, in income tax they realize. Payments under the tax receivable agreement will be based on the tax reporting positions that the Partnership will determine. The corporate taxpayers will not be reimbursed for any payments previously made under the tax receivable agreement if a tax basis increase is successfully challenged by the Internal Revenue Service.
The Partnership records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange. To the extent that the Partnership estimates that the corporate taxpayers will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, its expectation of future earnings, the Partnership will reduce the deferred tax asset with a valuation allowance and will assess the probability that the related liability owed under the tax receivable agreement will be paid. The Partnership records 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the tax receivable agreement, which is included in due to affiliates
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


in the accompanying condensed consolidated financial statements. The remaining 15% of the estimated realizable tax benefit is initially recorded as an increase to the Partnership’s partners’ capital.

All of the effects to the deferred tax asset of changes in any of the Partnership’s estimates after the tax year of the exchange will be reflected in the provision for income taxes. Similarly, the effect of subsequent changes in the enacted tax rates will be reflected 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 and by subscriptions and redemptions in hedge funds 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 partners’ capital.
Non-controlling interests in Carlyle Holdings relate to the ownership interests of the other limited partners of the Carlyle Holdings partnerships. The Partnership, through wholly-owned subsidiaries, is the sole general partner of Carlyle Holdings.  Accordingly, the Partnership consolidates Carlyle Holdings into its consolidated financial statements, and the other ownership interests in Carlyle Holdings are reflected as non-controlling interests in the Partnership’s unaudited condensed consolidated financial statements. Any change to the Partnership’s ownership interest in Carlyle Holdings while it retains the controlling financial interest in Carlyle Holdings is accounted for as a transaction within partners’ capital as a reallocation of ownership interests in Carlyle Holdings.equity.
Earnings Per Common UnitShare
The PartnershipCompany computes earnings per common unitshare in accordance with ASC 260, Earnings Per Share (“ASC 260”).Share. Basic earnings per common unitshare is calculated by dividing net income (loss) attributable to the common unitsshares of the PartnershipCompany by the weighted-average number of common unitsshares outstanding for the period. Diluted earnings per common unitshare reflects the assumed conversion of all dilutive securities. Net income (loss) attributable to the common units excludes net income (loss) and dividends attributable to any participating securities under the two-class method of ASC 260.
Investments
Investments include (i) the Partnership’sCompany’s ownership interests (typically general partner interests) in the Funds, (ii) strategic investments made by the PartnershipCompany (both of which are accounted for as equity method investments), (iii) the investments held by the Consolidated Funds (which are presented at fair value in the Partnership’sCompany’s unaudited condensed consolidated financial statements), and (iv) certain credit-oriented investments, including investments in the CLOs and certain credit-oriented investmentsthe preferred securities of TCG BDC, Inc. (the “BDC Preferred Shares”) (which are accounted for as trading securities).
The valuation procedures utilized for investments of the Funds vary depending on the nature of the investment. The fair value of investments in publicly-traded securities is based on the closing price of the security with adjustments to reflect appropriate discounts if the securities are subject to restrictions.
The fair value of non-equity securities or other investments, which may include instruments that are not listed on an exchange, considers, among other factors, external pricing sources, such as dealer quotes or independent pricing services, recent trading activity or other information that, in the opinion of the Partnership,Company, may not have been reflected in pricing obtained from external sources.
When valuing private securities or assets without readily determinable market prices, the PartnershipCompany gives consideration to operating results, financial condition, economic and/or market events, recent sales prices and other pertinent information. These valuation procedures may vary by investment, but include such techniques as comparable public market valuation, comparable acquisition valuation and discounted cash flow analysis. Because of the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material. Furthermore, there is no assurance that, upon liquidation, the PartnershipCompany will realize the values presented herein.
Upon the sale of a security or other investment, the realized net gain or loss is computed on a weighted average cost basis, with the exception of the investments held by the CLOs, which compute the realized net gain or loss on a first in, first out basis. Securities transactions are recorded on a trade date basis.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Principal Equity Method Investments
The PartnershipCompany accounts for all investments in which it has or is otherwise presumed to have significant influence, including investments in the unconsolidated Funds and strategic investments, using the equity method of accounting. The carrying value of equity method investments is determined based on amounts invested by the Partnership,Company, adjusted for the equity


18
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

in earnings or losses of the investee (including performance allocations) allocated based on the respective partnership agreement, less distributions received. The PartnershipCompany 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 temporary investments with original maturities of less than three months when purchased.
Cash and Cash Equivalents Held at Consolidated Funds
Cash and cash equivalents held at Consolidated Funds consists of cash and cash equivalents held by the Consolidated Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Partnership.Company.
Restricted Cash
Restricted cash primarily represents cash held by the Partnership’sCompany’s foreign subsidiaries due to certain government regulatory capital requirements.
Corporate Treasury Investments
Corporate treasury investments represent investments in U.S. Treasury and government agency obligations, commercial paper, certificatesrequirements as well as certain amounts held on behalf 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.Carlyle funds.
Derivative Instruments
The PartnershipCompany uses derivative instruments primarily to reduce its exposure to changes in foreign currency exchange rates. Derivative instruments are recognized at fair value in the unaudited condensed consolidated balance sheets with changes in fair value recognized in the unaudited condensed consolidated statements of operations for all derivatives not designated as hedging instruments.
Securities Sold Under Agreements to Repurchase
As it relates to certain European CLOs sponsored by the Company, securities sold under agreements to repurchase (“repurchase agreements”) are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. As of June 30, 2021, $152.4 million of securities were transferred to counterparties under repurchase agreements and are included within investments in the unaudited condensed consolidated balance sheets. Cash received under repurchase agreements is recognized as a liability within debt obligations in the unaudited condensed consolidated balance sheets. Interest expense is recognized on an effective yield basis and is included within interest expense in the unaudited condensed consolidated statements of operations. See Note 5 for additional information.
Fixed Assets
Fixed assets consist of furniture, fixtures and equipment, leasehold improvements, and computer hardware and software and are stated at cost, less accumulated depreciation and amortization. Depreciation is recognized on a straight-line method over the assets’ estimated useful lives, which for leasehold improvements are the lesser of the lease terms or the life of the asset, and three to seven years for other fixed assets. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Leases
The Company accounts for its leases in accordance with ASU 2016-2, Leases (Topic 842), and recognizes a lease liability and right-of-use asset in the condensed consolidated balance sheet for contracts that it determines are leases or contain a lease. The Company’s leases primarily consist of operating leases for office space in various countries around the world. The Company also has operating leases for office equipment and vehicles, which are not significant. The Company does not separate non-lease components from lease components for its office space and equipment operating leases and instead accounts for each separate lease component and its associated non-lease component as a single lease component. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those


19
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.
Intangible Assets and Goodwill
The Partnership’sCompany’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 fivefour to ten years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Intangible asset amortization expense was $3.3 million and $3.6 million during the three months ended June 30, 2021 and 2020, respectively, and $6.6 million and $7.2 million during the six months ended June 30, 2021 and 2020, respectively, and is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.
Goodwill represents the excess of cost over the identifiable net assets of businesses acquired and is recorded in the functional currency of the acquired entity. Goodwill is recognized as an asset and is reviewed for impairment annually as of October 1st and between annual tests when events and circumstances indicate that impairment may have occurred.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Deferred Revenue
Deferred revenue represents management fees and other revenue received prior to the balance sheet date, which has not yet been earned.
The increase in the deferred revenue balance for the six months ended June 30, 2021 was primarily driven by cash payments received in advance of the Company satisfying its performance obligations, partially offset by revenues that were included in the deferred revenue balance at the beginning of the period.
Accumulated Other Comprehensive Income (Loss)
The Partnership’sCompany’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 SeptemberJune 30, 20172021 and December 31, 20162020 were as follows:
As of
As of June 30, 2021December 31, 2020
September 30, 2017 December 31, 2016 (Dollars in millions)
(Dollars in millions)
Currency translation adjustments$(65.4) $(91.7)Currency translation adjustments$(204.0)$(181.4)
Unrealized losses on defined benefit plans(4.0) (3.5)Unrealized losses on defined benefit plans(24.3)(27.3)
Total$(69.4) $(95.2)Total$(228.3)$(208.7)
Foreign Currency Translation
Non-U.S. dollar denominated assets and liabilities are translated at period-end rates of exchange, and the unaudited condensed consolidated statements of operations are translated at rates of exchange in effect throughout the period. Foreign currency (gains) lossesgains (losses) resulting from transactions outside of the functional currency of an entity of $0.7$4.2 million and $7.9$4.3 million for the three months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, and $2.2$(1.9) million and $30.8$21.5 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, are included in general, administrative and other expenses in the unaudited condensed consolidated statements of operations.


20
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Recent Accounting Pronouncements

Recently Issued Accounting Standards Adopted as of January 1, 2021
In August 2017,December 2019, the FASB issued ASU 2017-12, Derivatives and Hedging2019-12, Income Taxes (Topic 815) - Targeted Improvements to740): Simplifying the Accounting for Hedging ActivitiesIncome Taxes. ASU 2017-12,2019-12, among other things, permits hedge accounting for risk componentschanges, (i) removes certain exceptions to the general principles in hedging relationshipsTopic 740, (ii) provides a policy election to now involve nonfinancial risk componentsnot allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and requires an entity(iii) provides guidance to present the earnings effectevaluate whether a step-up in tax basis of the hedging instrument in the same income statement line itemgoodwill relates to a business combination in which the earnings effect of the hedge item is reported.book goodwill was recognized or a separate transaction. The guidance is effective forwas adopted by the PartnershipCompany on January 1, 20192021 and requires cash flow hedges and net investment hedges existing at the date of adoption to apply a cumulative effect adjustment to eliminate the measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of partners’ capital as of the beginning of the fiscal year that an entity adopts the guidance. The amended presentation and disclosure guidance is required only prospectively. Early adoption is permitted. While the Partnership is still assessing the guidance in ASU 2017-12, it does not expect the impact of this guidance to be material.
In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805) - Clarifying the Definition of a Business. ASU 2017-01 changes the criteria for determining whether a group of assets acquired is a business. Specifically, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets acquired would not be considered a business. The guidance is effective for the Partnership on January 1, 2018 and is required to be applied prospectively, however, early adoption is permitted. This guidance will impact the Partnership's analysis of the accounting for any future acquisitions occurring after the date of adoption.

In January 2017, the FASB issued ASU 2017-4, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies an entity’s annual goodwill test for impairment by eliminating the requirement to calculate the implied fair value of goodwill, and instead an entity should compare the fair value of a reporting unit with its carrying amount. The impairment charge will then be the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity would still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective for the Partnership on January 1, 2020 and requires the guidance to be applied using a prospective transition method. Early adoption is permitted. The Partnership does not expect the impact of this guidance to be material.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)



In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash. ASU 2016-18 clarifies the presentation of restricted cash in the statement of cash flows by requiring the amounts described as restricted cash be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. If cash and cash equivalents and restricted cash are presented separately on the statement of financial position, a reconciliation of these separate line items to the total cash amount included in the statement of cash flows will be required either in the footnotes or on the face of the statement of cash flows. The guidance is effective for the Partnership on January 1, 2018 and ASU 2016-18 requires the guidance to be applied using a retrospective transition method. Early adoption is permitted; however, the Partnership expects to reflect this change in presentation of restricted cash in its first quarter 2018 condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the classification of several discrete cash flow issues, including the treatment of cash distributions from equity method investments. The guidance is effective for the Partnership on January 1, 2018 and ASU 2016-15 requires the guidance to be applied using a retrospective transition method. Early adoption is permitted, provided that all of the amendments for all of the topics are adopted in the same period. The Partnership is currently assessing the potential impact of this guidance to its consolidated statements of cash flows.
In June 2016, the FASB issued ASU 2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326). ASU 2016-13    requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Currently, GAAP requires an "incurred loss" methodology that delays recognition until it is probable a loss has been incurred. Under the new standard, the allowance for credit losses must be deducted from the amortized cost of the financial asset to present the net amount expected to be collected. The income statement will reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This provision of the guidance requires a modified retrospective transition method and will result in a cumulative-effect adjustment in retained earnings upon adoption. This guidance is effective for the Partnership on January 1, 2020 and early adoption is permitted. The Partnership is currently assessing the potential impact of this guidance.

In March 2016, the FASB issued ASU 2016-9, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-9 changes certain aspects of accounting for share-based payments to employees. ASU 2016-9 requires the income tax effects of awards to be recognized through the income statement when the awards vest or are settled. Previously, an entity was required to determine for each award whether the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes resulted in either an excess tax benefit or a tax deficiency. Excess tax benefits were recognized in partners’ capital, while tax deficiencies were recognized as an offset to accumulated excess tax benefits or in the income statement. Under ASU 2016-9, all excess tax benefits and tax deficiencies are required to be recognized as income tax benefit or expense in the income statement. This provision of the guidance is required to be applied prospectively. Additionally, ASU 2016-9 allows an employer to withhold employee shares upon vest up to maximum statutory tax rates without causing an award to be classified as a liability. This provision of the guidance requires a modified retrospective transition method. Finally, the previous equity-based compensation guidance required cost to be measured based on the number of awards that are expected to vest. Under ASU 2016-9, an accounting policy election can be made to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This guidance was effective for the Partnership on January 1, 2017. The Partnership adopted this guidance on that date by recording an adjustment for the cumulative effect of adoption in partners' capital on January 1, 2017. The impact of the adjustment was not material to total partners' capital.material.

In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842). ASU 2016-2 requires lessees to recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and a lease liability. The lease liability will be measured at the present value of lease payments and the right-of-use asset will be based on the lease liability value, subject to adjustments. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. This guidance is effective for the Partnership on January 1, 2019 and ASU 2016-2 requires the guidance to be applied using a modified retrospective method. Early adoption is permitted. The Partnership is currently assessing the potential impact of this guidance, however, the Partnership's total assets and total liabilities on its consolidated balance sheet will increase upon adoption of this guidance.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”) in May 2014 and subsequently issued several amendments to the standard. ASU 2014-9, and related amendments, provide comprehensive guidance for recognizing revenue from contracts with customers. Entities will be able to recognize revenue when the entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a 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 guidance in ASU 2014-9, and the related amendments, is effective for the Partnership beginning on January 1, 2018, and the Partnership plans to adopt this guidance on that date.
Upon adoption of ASU 2014-9, performance fees that represent a performance-based capital allocation from fund limited partners to the Partnership (commonly known as “carried interest”, which comprised over 80% of the Partnership's performance fee revenues for each of the years ended December 31, 2016, 2015 and 2014) will be accounted for as earnings from financial assets within the scope of ASC 323, Investments - Equity Method and Joint Ventures, and therefore will not be in the scope of ASU 2014-9. In accordance with ASC 323, the Partnership will record equity method income (losses) as a component of investment income based on the change in our proportionate claim on net assets of the investment fund, including performance-based capital allocations, assuming the investment fund was liquidated as of each reporting date pursuant to each fund's governing agreements. The Partnership will apply this change in accounting on a full retrospective basis. This change in accounting will result in a reclassification from performance fee revenues to investment income (losses).

The Partnership is currently in the process of implementing ASU 2014-9 and its related amendments. The Partnership does not expect significant changes to our historical pattern of recognizing revenue for management fees and performance fees (both for arrangements within the scope of ASC 323 and arrangements within the scope of ASU 2014-9). Additionally, while the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the Partnership expects that the customer will generally be the investment fund for our significant management and advisory contracts. The Partnership is still, however, evaluating its method of adoption for ASU 2014-9 and how ASU 2014-9 and its related amendments will impact principal versus agent considerations, which would affect whether certain transactions are reported gross or net in the consolidated statement of operations.

3. Fair Value Measurement
The fair value measurement accounting guidance establishes a hierarchalhierarchical disclosure framework which ranks the observability of market price inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:
Level I – inputs to the valuation methodology are quoted prices available in active markets for identical instruments as of the reporting date. The typetypes of financial instruments included in Level Ithis category include unrestricted securities, includingsuch as equities and derivatives, listed in active markets. The PartnershipCompany does not adjust the quoted price for these instruments, even in situations where the PartnershipCompany 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 typetypes of financial instruments in this category includesinclude 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. FinancialThe types of financial instruments that are included 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.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


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 Partnership’sCompany’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
In certain cases, debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments.


21
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

The following table summarizes the Partnership’sCompany’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of SeptemberJune 30, 2017:2021:
(Dollars in millions)Level I Level II Level III Total(Dollars in millions)Level ILevel IILevel IIITotal
Assets       Assets
Investments of Consolidated Funds:       Investments of Consolidated Funds:
Equity securities$—
 $—
 $26.8
 $26.8
Equity securities$0 $0 $18.3 $18.3 
Bonds—
 —
 347.0
 347.0
Bonds0 0 542.0 542.0 
Loans—
 —
 3,861.7
 3,861.7
Loans0 0 5,543.6 5,543.6 
Other—
 —
 0.3
 0.3
0 0 6,103.9 6,103.9 
—
 —
 4,235.8
 4,235.8
Investments in CLOs and other—
 —
 322.7
 322.7
Investments in CLOs and other1.4 45.5 431.5 478.4 
Corporate treasury investments       
Bonds—
 87.6
 —
 87.6
Commercial paper and other—
 29.8
 —
 29.8
—
 117.4
 —
 117.4
Foreign currency forward contracts—
 0.3
 —
 0.3
Foreign currency forward contracts0 3.7 0 3.7 
SubtotalSubtotal$1.4 $49.2 $6,535.4 $6,586.0 
Investments measured at net asset value(1)
Investments measured at net asset value(1)
37.1 
Total$—
 $117.7
 $4,558.5
 $4,676.2
Total$6,623.1 
Liabilities       Liabilities
Loans payable of Consolidated Funds(1)
$—
 $—
 $3,794.8
 $3,794.8
Contingent consideration(2)
—
 —
 1.3
 1.3
Foreign currency forward contracts—
 3.9
 —
 3.9
Loans payable of Consolidated Funds(2)
Loans payable of Consolidated Funds(2)
$0 $0 $5,373.9 $5,373.9 
Total$—
 $3.9
 $3,796.1
 $3,800.0
Total$0 $0 $5,373.9 $5,373.9 
 
(1)Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.
(2)Related to contingent consideration associated with the Partnership's acquisitions, excluding employment-based contingent consideration.
The Carlyle Group L.P.(1)Balance represents Fund Investments that the Company reports based on the most recent available information which typically has a lag of up to 90 days, of which $19.5 million relates to investments of consolidated funds.

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



The following table summarizes the Partnership’sCompany’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2016:2020:
(Dollars in millions)Level ILevel IILevel IIITotal
Assets
Investments of Consolidated Funds:
Equity securities$0 $0 $9.4 $9.4 
Bonds0 0 550.4 550.4 
Loans0 0 5,497.1 5,497.1 
0 0 6,056.9 6,056.9 
Investments in CLOs and other0 0 570.8 570.8 
Foreign currency forward contracts0 0.7 0 0.7 
Subtotal$0 $0.7 $6,627.7 $6,628.4 
Investments measured at net asset value(1)
16.4 
Total$6,644.8 
Liabilities
Loans payable of Consolidated Funds(2)
$0 $0 $5,563.0 $5,563.0 
Foreign currency forward contracts0 0.4 0 0.4 
Total$0 $0.4 $5,563.0 $5,563.4 
(1)Balance represents Fund Investments that the Company reports based on the most recent available information which typically has a lag of up to 90 days.
(2)Senior and subordinated notes issued by CLO vehicles are valued based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Company and (ii) the carrying value of any beneficial interests that represent compensation for services.
 


22
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

(Dollars in millions)Level I Level II Level III Total
Assets       
Investments of Consolidated Funds:       
Equity securities$—
 $—
 $10.3
 $10.3
Bonds—
 —
 396.4
 396.4
Loans—
 —
 3,485.6
 3,485.6
Other—
 —
 1.4
 1.4
 —
 —
 3,893.7
 3,893.7
Investments in CLOs and other—
 —
 152.6
 152.6
Corporate treasury investments       
Bonds—
 91.3
 —
 91.3
Commercial paper and other—
 98.9
 —
 98.9
 —
 190.2
 —
 190.2
Foreign currency forward contracts—
 2.5
 —
 2.5
Total$—
 $192.7
 $4,046.3
 $4,239.0
Liabilities       
Loans payable of Consolidated Funds(1)
$—
 $—
 $3,866.3
 $3,866.3
Contingent consideration(2)
—
 —
 1.5
 1.5
Loans payable of a real estate VIE—
 —
 79.4
 79.4
Foreign currency forward contracts—
 10.0
 —
 10.0
Total$—
 $10.0
 $3,947.2
 $3,957.2
(1)Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.
(2)Related to contingent consideration associated with the Partnership's acquisitions, excluding employment-based contingent consideration.
There were no transfers from Level II to Level I during the nine months ended September 30, 2017 and 2016.

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 Partnership’sCompany’s valuation group, which is a team made up of dedicated valuation professionals reporting to the Partnership’sCompany’s chief accounting officer. The valuation group is responsible for maintaining the Partnership’sCompany’s valuation policy and related guidance, templates and systems that are designed to be consistent with the guidance found in ASC 820, Fair Value Measurement. These valuations, inputs and preliminary conclusions are reviewed by the fund accounting teams. The valuations are then reviewed and approved by the respective fund valuation subcommittees, which are comprised ofinclude 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 is comprisedincludes the Company’s co-chairmen of the Partnership’s co-chiefboard, chairman emeritus, chief executive officers, president and chief operating officer, chief risk officer, chief financial officer, chief accounting officer, deputy chief investment officers for Corporate Private Equity,and the business segment heads, and observed by the chief compliance officer, the director of internal audit, the Company’s audit committee and the Partnership’s audit committee.others. Additionally, each quarter a sample of valuations is reviewed by external valuation firms. Valuations of the funds’ investments are used in the calculation of accrued performance allocations, or “carried interest”.
In the absence of observable market prices, the PartnershipCompany values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist. Management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involvesinvolve 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
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


investments in the equity of operating companies and real estate properties, and certain debt positions. The valuation technique for each of these investments is described below:
Private Equity and Real Estate Investments – The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies or sales of comparable assets, and other measures which, in many cases, are unaudited at the time received. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rate (“cap rate”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (e.g., applying a key performance metric of the investment such as EBITDA or net operating income to a relevant valuation multiple or cap rate observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar models. Adjustments to observable valuation measures are frequently made upon the initial investment to calibrate the initial investment valuation to industry observable inputs. Such adjustments are made to align the investment to observable industry inputs for differences in size, profitability, projected growth rates, geography and capital structure if applicable. The adjustments are reviewed with each subsequent valuation to assess how the investment has evolved relative to the observable inputs. Additionally, the investment may be subject to certain specific risks and/or development milestones which are also taken into account in the valuation assessment. Option pricing models and similar tools do not currently drive a significant portion of private equity or real estate valuations and are used primarily to value warrants, derivatives, certain restrictions and other atypical investment instruments.
Credit-Oriented Investments – The fair values of credit-oriented investments (including corporate treasury investments) are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments. Specifically, for investments in distressed debt and corporate loans and bonds, the fair values are generally determined by valuations of comparable investments. In some instances, the PartnershipCompany may utilize other valuation techniques, including the discounted cash flow method.

CLO Investments and CLO Loans Payable – The PartnershipCompany measures the financial liabilities of its consolidated CLOs based on the fair value of the financial assets of its consolidated CLOs, as the PartnershipCompany 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 Partnership corroborates quotations from pricing services either with other available pricing data or with its own models. Generally, the loan and bond assets of the CLOs are not activelypublicly traded and are classified as Level III. TheSimilar to the CLO assets, the fair values of the CLO structured asset positions are primarily determined based on bothrelevant pricing services or, in certain instances, discounted cash flow analyses and third party quotes.analyses. Those analyses consider the position size, liquidity, current financial condition of the CLOs, the third party financing environment, reinvestment rates, recovery lags, discount rates and default forecasts and are compared to broker quotations from market makers and third party dealers. The Company performs certain procedures to ensure the


23
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

reliability of the quotations from pricing services for its CLO assets and CLO structured asset positions, which generally includes corroborating prices with a discounted cash flow analysis.
The PartnershipCompany measures the CLO loan payablesloans payable held by third party beneficial interest holders on the basis of the fair value of the financial assets of the CLO and the beneficial interests held by the Partnership.Company. The PartnershipCompany continues to measure the CLO loans payable that it holds at fair value based on bothrelevant pricing services or discounted cash flow analyses, and third-party quotes, as described above.
Loans Payable of a Real Estate VIE – Prior to September 30, 2017, the Partnership elected the fair value option to measure the loans payable of a real estate VIE at fair value. The fair values of the loans are primarily based on discounted cash flows analyses, which consider the liquidity and current financial condition of the real estate VIE. These loans are classified as Level III.
Fund Investments – The Partnership’sCompany’s primary and secondary investments in external funds are valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days. The terms of the investments generally preclude the ability to redeem the investment. Distributions from these investments will be received as the underlying assets in the funds are liquidated, the timing of which cannot be readily determined.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The changes in financial instruments measured at fair value for which the PartnershipCompany has used Level III inputs to determine fair value are as follows (Dollars in millions):
Financial Assets
Three Months Ended June 30, 2021
 Investments of Consolidated Funds  
 Equity
securities		BondsLoansInvestments in CLOs and otherTotal
Balance, beginning of period$9.5 $525.2 $5,271.0 $538.5 $6,344.2 
Deconsolidation/consolidation of funds (1)
2.4 0 (176.2)26.1 (147.7)
Purchases0.4 212.9 1,561.6 33.1 1,808.0 
Sales and distributions(1.7)(205.8)(741.8)(170.0)(1,119.3)
Settlements0 0 (403.5)0 (403.5)
Realized and unrealized gains (losses), net
Included in earnings7.7 5.6 2.6 4.2 20.1 
Included in other comprehensive income0 4.1 29.9 (0.4)33.6 
Balance, end of period$18.3 $542.0 $5,543.6 $431.5 $6,535.4 
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$6.7 $4.5 $8.7 $3.9 $23.8 
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date$0 $1.5 $8.8 $(0.4)$9.9 
Financial Assets
Six Months Ended June 30, 2021
 Investments of Consolidated Funds  
 Equity
securities		BondsLoans
Investments in CLOs and other (2)
Total
Balance, beginning of period$9.4 $550.4 $5,497.1 $570.8 $6,627.7 
Deconsolidation/consolidation of funds (1)
2.4 0 (176.2)26.1 (147.7)
Purchases0.5 363.9 2,316.9 62.1 2,743.4 
Sales and distributions(2.3)(361.2)(1,418.0)(240.0)(2,021.5)
Settlements0 (3.6)(641.8)0 (645.4)
Realized and unrealized gains (losses), net
Included in earnings8.6 10.0 89.8 9.6 118.0 
Included in other comprehensive income(0.3)(17.5)(124.2)2.9 (139.1)
Balance, end of period$18.3 $542.0 $5,543.6 $431.5 $6,535.4 
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$21.7 $7.0 $72.7 $9.0 $110.4 
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date$(0.5)$(13.0)$(119.3)$2.9 $(129.9)



24
 Financial Assets
 Three Months Ended September 30, 2017
 Investments of Consolidated Funds    
 Equity
securities		 Bonds Loans Other Investments in CLOs and other Total
Balance, beginning of period$9.7
 $395.9
 $3,500.1
 $2.0
 $222.9
 $4,130.6
Purchases0.1
 15.5
 599.3
 —
 114.0
 728.9
Sales and distributions—
 (71.2) (98.3) (3.1) (20.5) (193.1)
Settlements—
 —
 (216.3) —
 —
 (216.3)
Realized and unrealized gains (losses), net           
Included in earnings16.8
 (7.4) (9.6) 1.3
 0.4
 1.5
Included in other comprehensive income0.2
 14.2
 86.5
 0.1
 5.9
 106.9
Balance, end of period$26.8
 $347.0
 $3,861.7
 $0.3
 $322.7
 $4,558.5
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date
$16.8
 $(5.6) $0.8
 $0.1
 $1.3
 $13.4
            
 Financial Assets
 Nine Months Ended September 30, 2017
 Investments of Consolidated Funds    
 Equity
securities		 Bonds Loans Other Investments in CLOs and other Total
Balance, beginning of period$10.3
 $396.4
 $3,485.6
 $1.4
 $152.6
 $4,046.3
Purchases0.1
 132.3
 1,997.4
 —
 174.8
 2,304.6
Sales and distributions(1.6) (227.5) (1,101.8) (3.0) (23.6) (1,357.5)
Settlements—
 —
 (801.7) —
 —
 (801.7)
Realized and unrealized gains (losses), net           
Included in earnings17.1
 (1.7) 16.3
 1.7
 6.5
 39.9
Included in other comprehensive income0.9
 47.5
 265.9
 0.2
 12.4
 326.9
Balance, end of period$26.8
 $347.0
 $3,861.7
 $0.3
 $322.7
 $4,558.5
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$22.1
 $0.8
 $22.5
 $0.1
 $7.4
 $52.9

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



(1) As a result of the consolidation of 1 CLO during the three and six months ended June 30, 2021, the investment that the Company held in that CLO is now eliminated in consolidation and no longer included in investments in CLOs and other. As a result of the deconsolidation of 1 CLO during the three and six months ended June 30, 2021, the investments that the Company held in those CLOs are no longer eliminated in consolidation and are now included in investments in CLOs and other.
(2) The beginning balance of Investments in CLOs and other has been revised to reflect the exclusion of Fund Investments measured at fair value using the NAV per share practical expedient from the fair value hierarchy.
 Financial Assets
 Three Months Ended September 30, 2016
 Investments of Consolidated Funds    
 Equity
securities		 Bonds Loans Other Investments in CLOs and other Total
Balance, beginning of period$11.9
 $407.8
 $2,933.1
 $0.1
 $152.7
 $3,505.6
Purchases—
 45.3
 352.0
 —
 1.0
 398.3
Sales and distributions0.1
 (66.3) (122.0) —
 (2.2) (190.4)
Settlements—
 —
 (220.7) —
 —
 (220.7)
Realized and unrealized gains (losses), net           
Included in earnings(1.5) 4.1
 18.4
 1.6
 8.7
 31.3
Included in other comprehensive income—
 5.5
 21.5
 —
 (2.9) 24.1
Balance, end of period$10.5
 $396.4
 $2,982.3
 $1.7
 $157.3
 $3,548.2
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$(1.3) $3.5
 $15.7
 $0.3
 $8.4
 $26.6


Financial AssetsFinancial Assets
Nine Months Ended September 30, 2016Three Months Ended June 30, 2020
Investments of Consolidated Funds      Investments of Consolidated Funds
Equity
securities		 Bonds Loans 
Partnership
and LLC 
interests(2)
 Other Investments in CLOs and other Restricted securities of Consolidated Funds TotalEquity
securities		BondsLoansInvestments in CLOs and otherTotal
Balance, beginning of period$575.3
 $1,180.9
 $15,686.7
 $59.6
 $5.0
 $1.4
 $8.7
 $17,517.6
Balance, beginning of period$91.2 $423.9 $3,950.2 $396.4 $4,861.7 
Deconsolidation of funds(1)
(562.1) (890.7) (13,506.9) (74.3) (5.0) 123.8
 (8.7) (14,923.9)
Purchases11.1
 194.3
 1,490.0
 12.4
 —
 25.9
 —
 1,733.7
Purchases8.1 90.3 140.5 105.6 344.5 
Sales and distributions(5.1) (103.6) (249.9) —
 —
 (6.4) —
 (365.0)Sales and distributions(0.2)(147.8)(522.8)(12.4)(683.2)
Settlements—
 —
 (516.9) —
 —
 —
 —
 (516.9)Settlements0 0 (90.6)0 (90.6)
Realized and unrealized gains (losses), net               Realized and unrealized gains (losses), net
Included in earnings(9.0) 5.9
 42.3
 2.3
 1.7
 26.9
 —
 70.1
Included in earnings9.7 60.2 470.9 42.0 582.8 
Included in other comprehensive income0.3
 9.6
 37.0
 —
 —
 (14.3) —
 32.6
Included in other comprehensive income0 11.8 85.8 (1.1)96.5 
Balance, end of period$10.5
 $396.4
 $2,982.3
 $—
 $1.7
 $157.3
 $—
 $3,548.2
Balance, end of period$108.8 $438.4 $4,034.0 $530.5 $5,111.7 
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$(7.0) $5.1
 $36.6
 $—
 $1.8
 $26.9
 $—
 $63.4
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$9.2 $1.3 $1.2 $42.0 $53.7 
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting dateChanges in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date$0 $8.9 $71.9 $(1.1)$79.7 
Financial Assets
Six Months Ended June 30, 2020
Investments of Consolidated Funds  
Equity
securities		BondsLoansInvestments in CLOs and otherTotal
Balance, beginning of periodBalance, beginning of period$19.4 $574.1 $4,413.8 $496.2 $5,503.5 
PurchasesPurchases87.4 140.9 818.1 123.7 1,170.1 
Sales and distributionsSales and distributions(0.2)(214.9)(679.7)(56.3)(951.1)
SettlementsSettlements0 0 (193.8)0 (193.8)
Realized and unrealized gains (losses), netRealized and unrealized gains (losses), net
Included in earningsIncluded in earnings2.2 (61.0)(330.1)(19.4)(408.3)
Included in other comprehensive incomeIncluded in other comprehensive income0 (0.7)5.7 (13.7)(8.7)
Balance, end of periodBalance, end of period$108.8 $438.4 $4,034.0 $530.5 $5,111.7 
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting dateChanges in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date$2.2 $(55.1)$(308.9)$(19.4)$(381.2)
Changes in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting dateChanges in unrealized gains (losses) included in other comprehensive income related to financial assets still held at the reporting date$0 $(2.1)$(0.7)$(13.7)$(16.5)
 
(1)As a result of the adoption of ASU 2015-2 and the deconsolidation of certain CLOs on January 1, 2016, $123.8 million of investments that the Partnership held in those CLOs are no longer eliminated in consolidation and are now included in investments in CLOs and other for the nine months ended September 30, 2016.
(2)As a result of the retrospective adoption of ASU 2015-7, the beginning balance of Partnership and LLC interests that are measured at fair value using the NAV per share practical expedient have been revised to reflect their exclusion from the fair value hierarchy.




25
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Financial Liabilities
Loans Payable of Consolidated Funds
Three Months Ended June 30,
 20212020
Balance, beginning of period$5,440.7 $4,090.8 
Deconsolidation of funds(119.2)0 
Borrowings728.2 103.3 
Paydowns(446.6)(361.7)
Sales(277.7)0 
Realized and unrealized (gains) losses, net
Included in earnings16.1 489.0 
Included in other comprehensive income32.4 90.6 
Balance, end of period$5,373.9 $4,412.0 
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$26.6 $(4.8)
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date$18.1 $84.6 
Financial Liabilities
Loans Payable of Consolidated Funds
 Six Months Ended June 30,
 20212020
Balance, beginning of period$5,563.0 $4,685.2 
Deconsolidation of funds(119.2)0 
Borrowings833.6 1,141.7 
Paydowns(591.0)(1,090.7)
Sales(277.7)0 
Realized and unrealized (gains) losses, net
Included in earnings93.1 (327.6)
Included in other comprehensive income(127.9)3.4 
Balance, end of period$5,373.9 $4,412.0 
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$106.8 $(371.5)
Changes in unrealized (gains) losses included in other comprehensive income related to financial liabilities still held at the reporting date$(142.3)$5.0 
 Financial Liabilities
 Three Months Ended September 30, 2017
 Loans Payable
of Consolidated
Funds		 Contingent
Consideration		 Loans Payable of
a real estate VIE		 Total
Balance, beginning of period$3,721.2
 $1.3
 $72.6
 $3,795.1
Paydowns(2.3) —
 —
 (2.3)
Deconsolidation of a real estate VIE—
 —
 (72.6) (72.6)
Realized and unrealized (gains) losses, net       
Included in earnings(21.1) —
 —
 (21.1)
Included in other comprehensive income97.0
 —
 —
 97.0
Balance, end of period$3,794.8
 $1.3
 $—
 $3,796.1
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$(24.1) $—
 $—
 $(24.1)
        
        
 Financial Liabilities
 Nine Months Ended September 30, 2017
 Loans Payable
of Consolidated
Funds		 Contingent
Consideration		 Loans Payable of
a real estate VIE		 Total
Balance, beginning of period$3,866.3
 $1.5
 $79.4
 $3,947.2
Borrowings1,569.0
 —
 —
 1,569.0
Paydowns(1,881.7) (0.4) (14.3) (1,896.4)
Deconsolidation of a real estate VIE—
 —
 (72.6) (72.6)
Realized and unrealized (gains) losses, net       
Included in earnings(49.4) 0.1
 3.3
 (46.0)
Included in other comprehensive income290.6
 0.1
 4.2
 294.9
Balance, end of period$3,794.8
 $1.3
 $—
 $3,796.1
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$(53.6) $0.1
 $—
 $(53.5)


The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


 Financial Liabilities
 Three Months Ended September 30, 2016
 Loans Payable
of Consolidated
Funds		 Derivative
Instruments of
Consolidated
Funds		 Contingent
Consideration		 Loans Payable of a real estate VIE Total
Balance, beginning of period$3,284.7
 $0.3
 $25.0
 $81.7
 $3,391.7
Initial consolidation of funds—
 —
 —
 —
 —
Borrowings26.4
 —
 —
 —
 26.4
Paydowns(99.0) —
 (10.0) (10.4) (119.4)
Sales—
 (1.7) —
 —
 (1.7)
Realized and unrealized (gains) losses, net         
Included in earnings15.8
 1.4
 (3.7) 7.1
 20.6
Included in other comprehensive income25.5
 —
 0.1
 10.5
 36.1
Balance, end of period$3,253.4
 $—
 $11.4
 $88.9
 $3,353.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$19.5
 $—
 $0.1
 $7.1
 $26.7
          
          
 Financial Liabilities
 Nine Months Ended September 30, 2016
 Loans Payable
of Consolidated
Funds		 Derivative
Instruments of
Consolidated
Funds		 Contingent
Consideration		 Loans Payable of a real estate VIE Total
Balance, beginning of period$17,046.7
 $29.1
 $20.8
 $75.4
 $17,172.0
Initial consolidation /
deconsolidation of funds		(14,221.3) (29.0) —
 —
 (14,250.3)
Borrowings671.1
 —
 —
 —
 671.1
Paydowns(331.4) —
 (10.3) (27.3) (369.0)
Sales—
 (1.7) —
 —
 (1.7)
Realized and unrealized (gains) losses, net         
Included in earnings43.8
 1.6
 0.8
 20.9
 67.1
Included in other comprehensive income44.5
 —
 0.1
 19.9
 64.5
Balance, end of period$3,253.4
 $—
 $11.4
 $88.9
 $3,353.7
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date$36.6
 $—
 $0.5
 $20.9
 $58.0

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 and derivative instruments of the CLOsConsolidated Funds are included in net investment gains (losses) of Consolidated Funds in the unaudited condensed consolidated statements of operations.

Realized and unrealized gains and losses included in earnings for Level III contingent consideration liabilities are included in other non-operating expense (income), and such gains and losses for loans payable of a real estate VIE are included in interest and other expenses of a real estate VIE in the condensed consolidated statement of operations.

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


26
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



The following table summarizes quantitative information about the Partnership’sCompany’s Level III inputs as of SeptemberJune 30, 2017:2021:
 Fair Value at Valuation Technique(s) Unobservable Input(s) Range
(Weighted Average)
(Dollars in millions)September 30, 2017   
Assets       
Investments of Consolidated Funds:       
Equity securities$24.9
 Discounted Cash Flow Discount Rates 6% - 10% (6%)
     Exit Cap Rate 7% - 10% (7%)
 1.9
 Consensus Pricing Indicative Quotes ($ per share) 28 - 28 (28)
        
Bonds347.0
 Consensus Pricing Indicative Quotes (% of Par) 65 - 110 (99)
Loans3,861.7
 Consensus Pricing Indicative Quotes (% of Par) 49 - 102 (100)
Other0.3
 Counterparty Pricing Indicative Quotes
(% of Notional Amount)		 11 - 11 (11)
 4,235.8
      
Investments in CLOs and other:       
Senior secured notes275.8
 Discounted Cash Flow with Consensus Pricing Discount Rates 1% - 9% (3%)
     Default Rates 1% - 3% (2%)
     Recovery Rates 50% - 70% (60%)
     Indicative Quotes (% of Par) 95 - 102 (100)
Subordinated notes and preferred shares44.0
 Discounted Cash Flow with Consensus Pricing Discount Rates 8% - 10% (9%)
     Default Rates 1% - 3% (2%)
     Recovery Rates 50% - 70% (60%)
     Indicative Quotes (% of Par) 71 - 97 (87)
Other2.9
 Comparable Multiple LTM EBITDA Multiple 6.3x - 6.3x (6.3x)
Total$4,558.5
      
Liabilities       
Loans payable of Consolidated Funds:       
Senior secured notes (1)
$3,621.3
 Other N/A N/A
Subordinated notes and preferred shares (1)
27.3
 Other N/A N/A
 146.2
 Discounted Cash Flow with Consensus Pricing Discount Rates 8% - 10% (9%)
     Default Rates  1% - 3% (2%)
     Recovery Rates  50% - 70% (60%)
     Indicative Quotes (% of Par) 79 - 94 (86)
Contingent consideration(2)
1.3
 Other N/A N/A
Total$3,796.1
      
(1)Beginning on January 1, 2016, CLO loan payables held by third party beneficial interest holders are measured on the basis of the fair value of the financial assets of the CLO and the beneficial interests held by the Partnership.Fair Value atValuation Technique(s)Unobservable Input(s)Range
(Weighted Average)
(Dollars in millions)June 30, 2021
(2)AssetsRelates to contingent consideration associated
Investments of Consolidated Funds:
Equity securities$18.3Consensus PricingIndicative Quotes ($ per share)0.00 - 75.00 (1.22)
Bonds542.0Consensus PricingIndicative Quotes (% of Par)86 - 110 (100)
Loans5,531.6Consensus PricingIndicative Quotes (% of Par)37 - 126 (98)
12.0Consensus Pricing with the Partnership's acquisitions.Discounted Cash FlowIndicative Quotes (% of Par)98 - 99 (98)
Discount Rates8% - 8% (8%)
6,103.9
Investments in CLOs and other:
Senior secured notes286.1Consensus Pricing with Discounted Cash FlowIndicative Quotes (% of Par)84 - 101 (99)
Discount Margins (Basis Points)50 - 1,380 (247)
Default Rates1% - 2% (1%)
Recovery Rates50% - 70% (60%)
Subordinated notes and preferred shares67.0Consensus Pricing with Discounted Cash FlowIndicative Quotes (% of Par)28 - 94 (52)
Discount Rates10% - 25% (17%)
Default Rates1% - 2% (1%)
Recovery Rates50% - 70% (60%)
BDC preferred shares71.7Discounted Cash FlowDiscount Rates6% - 6% (6%)
Aviation subordinated notes6.7Discounted Cash FlowDiscount Rates18% - 18% (18%)
Total$6,535.4
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes$5,179.3
Other (1)
N/AN/A
Subordinated notes and preferred shares194.6Consensus Pricing with Discounted Cash FlowIndicative Quotes (% of Par)42 - 78 (56)
Discount Rates15% - 25% (18%)
Default Rates1% - 2% (1%)
Recovery Rates 50% - 70% (60%)
Total$5,373.9



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








27
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



The following table summarizes quantitative information about the Partnership’sCompany’s Level III inputs as of December 31, 2016:2020:
 Fair Value at Valuation Technique(s) Unobservable Input(s) Range
(Weighted Average)
(Dollars in millions)December 31, 2016   
Assets       
Investments of Consolidated Funds:       
Equity securities$9.6
 Discounted Cash Flow Discount Rates 9% - 10% (9%)
     Exit Cap Rate 7% - 9% (7%)
 0.7
 Consensus Pricing Indicative Quotes ($ per share) 10 - 10 (10)
       
Bonds396.4
 Consensus Pricing Indicative Quotes (% of Par) 74 - 108 (99)
Loans3,485.6
 Consensus Pricing Indicative Quotes (% of Par) 31 - 102 (99)
Other1.4
 Counterparty Pricing Indicative Quotes
(% of Notional Amount)		 6 - 8 (7)
 3,893.7
     
Investments in CLOs and other      
Senior secured notes115.9
 Discounted Cash Flow with Consensus Pricing Discount Rate 1% - 11% (2%)
     Default Rates 1% - 3% (2%)
     Recovery Rates 50% - 74% (71%)
     Indicative Quotes (% of Par) 82 - 102 (99)
Subordinated notes and preferred shares35.4
 Discounted Cash Flow with Consensus Pricing Discount Rate 9% - 14% (12%)
     Default Rates 1% - 10% (2%)
     Recovery Rates 50% - 74% (64%)
     Indicative Quotes (% of Par) 2 - 101 (96)
Other1.3
 Comparable Multiple LTM EBITDA Multiple 5.7 x - 5.7x (5.7x)
Total$4,046.3
     
Liabilities      
Loans payable of Consolidated Funds:      
Senior secured notes(1)
$3,672.5
 Other N/A N/A
Subordinated notes and preferred shares(1)
26.9
 Other N/A N/A
 166.9
 Discounted Cash Flow with Consensus Pricing Discount Rates 9% - 14% (12%)
     Default Rates 1% - 3% (2%)
     Recovery Rates 50% - 74% (66%)
     Indicative Quotes (% of Par) 7 - 90 (68)
Loans payable of a real estate VIE79.4
 Discounted Cash Flow Discount to Expected Payment 10% - 55% (37%)
     Discount Rate 20% - 30% (23%)
Contingent consideration(2)
1.5
 Other N/A N/A
Total$3,947.2
      
(1)Beginning on January 1, 2016, CLO loan payables held by third party beneficial interest holders are measured on the basis of the fair value of the financial assets of the CLOs and the beneficial interests held by the Partnership.Fair Value atValuation Technique(s)Unobservable Input(s)Range
(Weighted Average)
(Dollars in millions)December 31, 2020
(2)AssetsRelates to contingent consideration associated
Investments of Consolidated Funds:
Equity securities$9.4 Consensus PricingIndicative Quotes ($ per share)0.00 - 40.00 (0.57)
Bonds550.4 Consensus PricingIndicative Quotes (% of Par)85 - 108 (98)
Loans5,497.1 Consensus PricingIndicative Quotes (% of Par)15 - 108 (97)
6,056.9 
Investments in CLOs and other
Senior secured notes437.0 Discounted Cash Flow with the Partnership's acquisitions.Consensus PricingDiscount Margins (Basis Points)85 - 1,725 (227)
Default Rates1% - 2% (1%)
Recovery Rates50% - 70% (60%)
Indicative Quotes (% of Par)71 - 100 (98)
Subordinated notes and preferred shares52.5 Discounted Cash Flow with Consensus PricingDiscount Rate16% - 30% (23%)
Default Rates1% - 2% (1%)
Recovery Rates50% - 70% (60%)
Indicative Quotes (% of Par)31 - 90 (46)
BDC preferred shares60.0 Discounted Cash FlowDiscount Rates7% - 7% (7%)
Aviation subordinated notes7.2 Discounted Cash FlowDiscount Rates20% - 20% (20%)
Loans14.1 Consensus PricingIndicative Quotes (% of Par)98 - 100 (100)
Total$6,627.7 
Liabilities
Loans payable of Consolidated Funds:
Senior secured notes$5,358.9 
Other (1)
N/AN/A
Subordinated notes and preferred shares204.1 Discounted Cash Flow with Consensus PricingDiscount Rates16% - 30% (22%)
Default Rates1% - 2% (1%)
Recovery Rates50% - 70% (60%)
Indicative Quotes (% of Par)30 - 91 (50)
Total$5,563.0 


(1) Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Company and (ii) the carrying value of any beneficial interests that represent compensation for services.
The significant unobservable inputs used in the fair value measurement of the Partnership’s investments in equity securities include EBITDA multiples, indicative quotes, discount rates and exit cap rates. Significant decreases in EBITDA multiples or indicative quotes in isolation would result in a significantly lower fair value measurement. Significant increases in discount rates or exit cap rates in isolation would result in a significantly lower fair value measurement.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The significant unobservable inputs used in the fair value measurement of the Partnership’s investments in bonds and loansCompany’s consolidated funds are market yields and indicative quotes. Significant increases in market yields in isolation would result in a significantly lower fair value measurement. 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 Partnership’sCompany’s investments in CLOs and other investments include EBITDA multiples,indicative quotes, discount margins, discount rates, default rates, and recovery rates and indicative quotes.rates. Significant decreases in EBITDA multiples,indicative quotes or recovery rates or indicative quotes 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 Partnership’sCompany’s loans payable of Consolidated Funds are indicative quotes, discount rates, default rates, and recovery rates and indicative quotes.rates. Significant increases in discount rates or default rates in isolation would result in a significantly lower fair value measurement, while a significant increasemeasurement. Significant decreases in indicative quotes or recovery rates or indicative quotes in isolation would result in a significantly higherlower fair value.value measurement.



28
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

4. Investments
Investments consist of the following:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Accrued performance allocations$8,145.9 $4,968.6 
Principal equity method investments, excluding performance allocations1,979.2 1,810.8 
Principal investments in CLOs and other517.2 601.5 
Total$10,642.3 $7,380.9 

Accrued Performance FeesAllocations
The components of accrued performance feesallocations are as follows:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Global Private Equity$6,679.7 $3,926.1 
Global Credit231.9 132.3 
Investment Solutions (1)
1,234.3 910.2 
Total$8,145.9 $4,968.6 
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Corporate Private Equity$2,130.9
 $1,375.4
Real Assets624.3
 483.4
Global Market Strategies84.9
 68.6
Investment Solutions658.5
 553.7
Total$3,498.6
 $2,481.1
(1) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.
Approximately 31%35% and 41% of accrued performance feesallocations at SeptemberJune 30, 20172021 and December 31, 2020, respectively, are related to Carlyle Partners V, L.P. and Carlyle Partners VI, L.P., two1 of the Partnership's Corporate Private Equity funds.
Approximately 27% of accrued performance fees at December 31, 2016, are related to Carlyle Partners V, L.P. and Carlyle Asia Partners III, L.P., two of the Partnership’s CorporateCompany’s Global Private Equity funds.
Accrued performance feesallocations are shown gross of the Partnership’sCompany’s accrued performance allocations and incentive fee-related compensation (see Note 8)6), and accrued giveback obligations, which are separately presented in the unaudited condensed consolidated balance sheets. The components of the accrued giveback obligations are as follows:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Global Private Equity$(18.4)$(18.4)
Global Credit(2.6)(0.3)
Total$(21.0)$(18.7)




29
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Corporate Private Equity$(9.8) $(3.9)
Real Assets(57.8) (156.9)
Total$(67.6) $(160.8)
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Principal Equity Method Investments, Excluding Performance FeesAllocations
The Company’s principal equity method investments (excluding performance fees includedallocations) include its fund investments in revenuesGlobal Private Equity, Global Credit, and Investment Solutions typically as general partner interests, and its strategic investments in Fortitude Re (included within Global Credit) and NGP (included within Global Private Equity), which are derived from the following segments:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Corporate Private Equity$159.6
 $186.5
 $1,147.4
 $283.0
Real Assets74.5
 (19.1) 214.0
 198.6
Global Market Strategies17.2
 17.8
 50.8
 26.8
Investment Solutions34.3
 29.5
 98.6
 62.4
Total$285.6
 $214.7
 $1,510.8
 $570.8
Approximately 39%, or $110.4 million, of performance fees for the three months ended September 30, 2017not consolidated. Principal investments are related to the following funds alongsegments:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Global Private Equity$1,219.2 $1,082.1 
Global Credit695.8 671.9 
Investment Solutions64.2 56.8 
Total$1,979.2 $1,810.8 
Strategic Investment in Fortitude Re (f/k/a DSA Re)
On November 13, 2018, the Company acquired a 19.9% interest in Fortitude Group Holdings, LLC (“Fortitude Holdings”), a wholly owned subsidiary of American International Group, Inc. (“AIG”) (“the Minority Transaction”), pursuant to a Membership Interest Purchase Agreement by and among the Company, AIG and Fortitude Holdings, dated as of July 31, 2018 (the “2018 MIPA”). Fortitude Holdings owns 100% of the outstanding common shares of Fortitude Reinsurance Company Ltd., a Bermuda domiciled reinsurer (“Fortitude Re”, f/k/a “DSA Re”) established to reinsure a portfolio of AIG’s legacy life, annuity and property and casualty liabilities.
The Company paid $381 million in cash at closing of the Minority Transaction (the “Initial Purchase Price”) and expects to pay up to $95 million in additional deferred consideration following December 31, 2023. In May 2020, the Initial Purchase Price was adjusted upward by $99.5 million in accordance with total revenue recognized (total revenue includes performance fees, fund management fees, and investment income):
•Carlyle Partners V, L.P. (Corporate Private Equity segment) - $39.7 million,
•Carlyle Partners VI, L.P. (Corporate Private Equity segment) - $120.5 million,
•Carlyle U.S. Equity Opportunities Fund, L.P. (Corporate Private Equity segment) - $(31.6) million, and
•Carlyle International Energy Partners, L.P. (Real Assets segment) - $47.6 million.
Approximately 65%, or $979.9the 2018 MIPA as Fortitude Holdings chose not to distribute a planned non-pro rata dividend to AIG prior to May 13, 2020. The Company paid $79.6 million of performance feessuch adjustment in May 2020 and will pay the remaining $19.9 million following December 31, 2023.
On June 2, 2020, Carlyle FRL, L.P. (“Carlyle FRL”), a Carlyle-affiliated investment fund, acquired a 51.6% ownership interest in Fortitude Holdings from AIG (the “Control Transaction”) and T&D United Capital Co., Ltd. (“T&D”), a subsidiary of T&D Holdings, Inc., purchased a 25.0% ownership interest as a strategic third-party investor pursuant to a Membership Interest Purchase Agreement by and among the Company, AIG, Carlyle FRL, and T&D, dated as of November 25, 2019 (the “2019 MIPA”). At closing, the Company contributed its existing 19.9% interest in Fortitude Holdings to Carlyle FRL, such that Carlyle FRL holds a 71.5% interest in Fortitude Holdings. Taken together, Carlyle FRL and T&D have 96.5% ownership of Fortitude Holdings. AIG initially agreed to a post-closing purchase price adjustment in the event of certain adverse reserve developments in the Fortitude Re property and casualty insurance business. Effective June 30, 2021, Fortitude Re and AIG entered into an agreement resulting in the termination of any obligations of AIG to Fortitude Re related to such adverse reserve development.
The Company has a strategic asset management relationship with Fortitude Holdings pursuant to which Fortitude Holdings committed to allocate assets in asset management strategies and vehicles of the Company and its affiliates. If Fortitude Holdings fails to allocate an agreed upon amount of assets to the Company’s asset management strategies and vehicles within 30 to 36 months of the closing of the Minority Transaction, the Company may be entitled to certain payments from Fortitude Holdings based on the commitment shortfall and assumed customary rates. As of June 30, 2021, Fortitude Holdings and AIG have committed approximately $4.9 billion of capital to-date to various Carlyle strategies.
Prior to the Control Transaction, the Company’s investment was accounted for under the nine months ended September 30, 2017equity method of accounting by recognizing its pro rata share of Fortitude Holdings’ U.S. GAAP earnings, which is included in principal investment income in the unaudited condensed consolidated statements of operations. These amounts are inclusive of unrealized gains (losses) related to the following funds along with total revenue recognized (total revenue includes performance fees, fund management fees, and investment income):
•Carlyle Partners V, L.P. (Corporate Private Equity segment) - $301.0 million,
•Carlyle Partners VI, L.P. (Corporate Private Equity segment) - $615.0 million, and
•Carlyle Asia Partners IV, L.P. (Corporate Private Equity segment) - $271.3 million.
Approximately 50%, or $107.9 million,change in fair value of performance fees for the three months ended September 30, 2016 areembedded derivatives related to the following funds along with total revenue recognized (total revenue includes performance fees, fund management fees, and investment income):
•Carlyle Partners VI, L.P. (Corporate Private Equity segment) - $208.9 million,
•Carlyle Asia Partners III, L.P. (Corporate Private Equity segment) - $(20.8) million, and
•Carlyle Realty Partners V, L.P. (Real Assets segment) - $(50.9) million.
Approximately 59%, or $338.2 million, of performance fees for the nine months ended September 30, 2016 are relatedcertain reinsurance contracts included in Fortitude Re’s U.S. GAAP financial statements. Modified coinsurance is subject to the following funds along with total revenue recognized (total revenue includes performance fees, fund management fees,general accounting principles for hedging, specifically the guidance originally issued as Derivatives Implementation Group Issue No. B36: Embedded Derivatives: Modified Coinsurance Agreements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments (“DIG B36”). As of December 31, 2019, the Company’s investment income):
•Carlyle Partners V, L.P. (Corporate Private Equity segment) - $129.7 million,

•Carlyle Partners VI, L.P. (Corporate Private Equity segment) - $317.3 million, and
•Carlyle Realty Partners VII, L.P. (Real Assets segment) - $111.2 million.30


The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



in Fortitude Holdings was $1,200.9 million, which reflected $628.2 million of cumulative unrealized gains related to the change in the fair value of embedded derivatives.
5. Investments
Investments consistAt the time the Company contributed its existing 19.9% stake in Fortitude Holdings to Carlyle FRL, the Company’s investment became an ownership interest in the fund. Accordingly, the Company began accounting for its investment under the equity method based on its net asset value in Carlyle FRL, which is an investment company that accounts for its investment in Fortitude Holdings at fair value. The contribution of the following:
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Equity method investments, excluding accrued performance fees$1,157.7
 $950.9
Investments in CLOs and other323.2
 156.1
Total investments$1,480.9
 $1,107.0
Company’s 19.9% interest to Carlyle FRL resulted in a loss in principal investment income (loss) of $620.7 million in the three months ended June 30, 2020. As of June 30, 2021, the Company’s investment in Carlyle FRL was $613.3 million, relative to its cost of $465.3 million. Following the contribution, the Company no longer records its pro rata share of the U.S. GAAP earnings of Fortitude Holdings. Refer to Note 4 in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 for summarized financial information of Fortitude Holdings for the three and six months ended June 30, 2020, given the significance of the results of Fortitude Holdings relative to the Company’s results prior to the contribution of its interest to Carlyle FRL.
Strategic Investment in NGP
In December 2012, the Partnership entered into an agreement with ECM Capital, L.P. (“ECM”) and Barclays Natural Resource Investments, a division of Barclays Bank PLC (“BNRI”), to make an investmentThe Company has equity interests in NGP Management Company, L.L.C. (“NGP Management”), the general partners of certain carry funds advised by NGP, and together withprincipal investments in certain NGP funds. The Company accounts for its affiliates, “NGP”), an Irving, Texas-based energy investor. The agreement was amended in March 2017 to further align the interests of the Partnership and NGP. The Partnership’s equity interestsinvestments in NGP Managementunder the equity method of accounting, and includes these investments in the Global Private Equity segment. These interests entitle the PartnershipCompany to an allocation of income equal to 55.0% of the management fee-related revenues of the NGP entities that serveManagement which serves as the advisorsinvestment advisor to certain private equityNGP funds as well as 47.5% of the performance allocations received by certain current and future NGP fund general partners.
The Company’s investments in NGP as of June 30, 2021 and December 31, 2020 are as follows:
As of
June 30, 2021December 31, 2020
(Dollars in millions)
Investment in NGP Management$373.8 $373.5 
Investments in NGP general partners - accrued performance allocations1.1 0 
Principal investments in NGP funds60.5 51.4 
Total investments in NGP$435.4 $424.9 

Investment in NGP Management. The Company’s equity interests in the general partners of certain future carry funds advised by NGP thatManagement entitle the PartnershipCompany to an allocation of income equal to 47.5%55.0% of the carried interest received by such fund general partners.

In consideration for these interests, the Partnership paid an aggregate of $504.6 million in cash to ECM and BNRI, and issued 996,572 Carlyle Holdings partnership units to ECM that vest ratably through 2017. In January 2016, the Partnership also paid contingent consideration to BNRI of $183.0 million, of which $63.0 million was paid in cash and $120.0 million was paid by a six year promissory note issued by the Partnership (see Note 7). The transaction also included contingent consideration payable to ECM comprised of up to $45.0 million in cash (of which $22.5 million was paid in March 2017 with the balance payable in January 2018), together with an additional $15.0 million in cash, which is payable in January 2018, and 597,944 Carlyle Holdings partnership units that were issued in December 2012 and substantially vested upon the amendment in March 2017. The Partnership has also agreed to issue common units on each of February 1, 2018, 2019, and 2020, with a value of $10.0 million per year to an affiliatemanagement 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 subsequent0.5% to 2020, to issue common units on an annual basis with a value not to exceed $10.0 million per year2.0% based on a prescribed formula, which will vest over a 42-monththe lower of cost or fair market value of invested capital following the expiration or termination of the investment period. The Partnership has the right to purchase the remaining equity interests inManagement fee-related revenues from NGP Management in specific remote situations designed to protectare primarily driven by NGP XII, NGP XI and NGP X during the Partnership's interest.three and six months ended June 30, 2021 and 2020.
The Partnership accounts for its investments in NGP under the equity method of accounting. The Partnership recorded its investments in NGP initially at cost, excluding any elements in the transaction that were deemed to be compensatory arrangements to NGP personnel. The Carlyle Holdings partnership units issued in the transaction and the deferred restricted common units (which were granted in 2012 to certain NGP personnel) were deemed to be compensatory arrangements; these elements are recognized as an expense under applicable U.S. GAAP.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The PartnershipCompany records investment income (loss) for its equity income allocation from NGP management fees and performance fees,fee-related revenues and also records its share of any allocated expenses from NGP Management, expenses associated with the compensatory elements of the transaction,strategic investment, and the amortization of the basis differences related to the definitive-liveddefinite-lived identifiable intangible assets of NGP Management. The net investment earningsincome (loss) recognized in the Partnership’sCompany’s unaudited condensed consolidated statements of operations for the three and ninesix months ended SeptemberJune 30, 20172021 and 20162020 were as follows:



31
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Management fees$21.3
 $20.9
 $58.9
 $62.1
Performance fees7.4
 37.9
 62.7
 47.6
Investment income1.6
 6.4
 7.8
 10.8
Expenses(10.6) (4.1) (46.2) (10.7)
Amortization of basis differences(2.1) (13.8) (6.4) (41.4)
Net investment income$17.6
 $47.3
 $76.8
 $68.4

 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Management fee-related revenues from NGP Management$18.4 $19.4 $36.7 $38.2 
Expenses related to the investment in NGP Management(2.3)(2.9)(5.2)(5.7)
Amortization of basis differences from the investment in NGP Management(0.7)(1.0)(1.4)(2.1)
Net investment income from NGP Management$15.4 $15.5 $30.1 $30.4 
The difference between the Partnership’sCompany’s remaining carrying value of its investment and its share of the underlying net assets of the investee was $23.4$2.8 million and $29.8$4.2 million as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively; these differences are amortized over a period of 10 years from the initial investment date. In addition, netThe Company assesses the remaining carrying value of its equity method investment for impairment whenever events or circumstances indicate that the carrying value may not be recoverable, and considers factors including, but not limited to, expected cash flows from its interest in future management fees and NGP’s ability to raise new funds.
Investment in the General Partners of NGP Carry Funds. The Company’s investment in the general partners of the NGP Carry Funds entitle it to 47.5% of the performance allocations received by certain current and future NGP fund general partners. The Company records its equity income allocation from NGP performance allocations in principal investment income for the nine months ended September 30, 2017 includes $27.7 million of accelerated expenses (that the Partnership otherwise would have incurred in the fourth quarter of 2017) as a result of the March 2017 amendment to acknowledge that the performance conditions related to the contingently issuable Carlyle Holdings partnership units had substantially been met ahead of the measurement date.
Equity Method Investments
The Partnership’s(loss) from equity method investments includerather than performance allocations in its fundunaudited condensed consolidated statements of operations. The Company recognized $1.1 million of net investment earnings related to these performance allocations for both the three and six months ended June 30, 2021. There were 0 net investment earnings (losses) related to these performance allocation for the three and six months ended June 30, 2020.
Principal Investments in NGP Funds. The Company also holds principal investments in Corporate Private Equity, Real Assets, Global Market Strategies,the NGP Carry Funds. The Company recognized net investment earnings (losses) of $5.7 million and Investment Solutions, typically as general partner interests,$1.3 million for the three months ended June 30, 2021 and its strategic2020, respectively, and $11.7 million and $(14.9) million for the six months ended June 30, 2021 and 2020, respectively, related to these investments in NGP (included within Real Assets),and which are not consolidated. Investments are related to the following segments:
included in principal investment income in its unaudited condensed consolidated statements of operations.


32
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Corporate Private Equity$370.3
 $282.4
Real Assets729.7
 622.8
Global Market Strategies19.7
 20.1
Investment Solutions38.0
 25.6
Total$1,157.7
 $950.9
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Principal Investments in CLOs and Other Investments
Principal investments in CLOs and other investments as of June 30, 2021 and December 31, 2020 were $517.2 million and $601.5 million, respectively, and primarily consisted of investments in CLO senior and subordinated notes. A portion of these investments is collateral to CLO term loans (see Note 5). As of June 30, 2021 and December 31, 2020, principal investments in CLOs and other investments also included the Company’s investment in the BDC Preferred Shares at fair value of $71.7 million and $60.0 million, respectively (see Note 8).
Investment Income (Loss)
The components of investment income (loss) are as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Performance allocations
Realized$456.6 $155.1 $627.5 $328.9 
Unrealized1,624.1 1,036.7 3,239.3 (74.7)
2,080.7 1,191.8 3,866.8 254.2 
Principal investment income (loss) from equity method investments (excluding performance allocations)
Realized46.6 47.8 87.8 78.4 
Unrealized85.3 (593.4)208.9 (805.1)
131.9 (545.6)296.7 (726.7)
Principal investment income (loss) from investments in CLOs and other investments
Realized0.4 0 (0.5)0.2 
Unrealized5.4 33.0 20.6 (39.4)
5.8 33.0 20.1 (39.2)
Total$2,218.4 $679.2 $4,183.6 $(511.7)
The performance allocations included in revenues are derived from the following segments:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Global Private Equity$1,798.2 $1,198.7 $3,364.7 $389.4 
Global Credit76.2 22.7 97.2 (40.3)
Investment Solutions206.3 (29.6)404.9 (94.9)
Total$2,080.7 $1,191.8 $3,866.8 $254.2 
Approximately 36%, or $740.6 million, of performance allocations for the three months ended June 30, 2021 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):
•Carlyle Partners VI, L.P. (Global Private Equity segment) - $573.8 million, and
•Carlyle US Equity Opportunities Fund II, L.P. (Global Private Equity segment) - $222.0 million.
Approximately 40%, or $1,545.8 million, of performance allocations for the six months ended June 30, 2021 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):
•Carlyle Partners VI, L.P. (Global Private Equity segment) - $1,150.2 million, and


33
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Income from equity investments$35.9
 $65.9
 $140.2
 $116.3
Income from investments in CLOs and other investments1.3
 4.6
 2.3
 9.6
Other investment income—
 —
 —
 0.3
Total$37.2
 $70.5
 $142.5
 $126.2
•Carlyle Europe Partners IV, L.P. (Global Private Equity segment) - $509.0 million.
Performance allocations for the three and six months ended June 30, 2020 are primarily related to Carlyle Partners VI, L.P. (Global Private Equity segment) with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income) of $1,184.1 million and $631.7 million for the three and six months ended June 30, 2020, respectively.
In addition to Carlyle Partners VI, L.P., performance allocations of $(127.7) million for the six months ended June 30, 2020 are related to the following funds along with total revenue recognized (total revenue includes performance allocations, fund management fees, and principal investment income):
•Carlyle Asia Partners IV, L.P. (Global Private Equity segment) - $211.1 million,
•Carlyle Europe Technology Partners III, L.P. (Global Private Equity segment) - $39.8 million,
•Carlyle Asia Partners V, L.P. (Global Private Equity segment) - $13.6 million,
•AlpInvest Co- & Secondary Investments 2006-2008 (Investment Solutions segment) - $(30.2) million,
•Carlyle Europe Partners III, L.P. (Global Private Equity segment) - $(31.3) million,
•Carlyle US Equity Opportunities Fund, L.P. (Global Private Equity segment) - $(44.8) million,
•Carlyle Partners V, L.P. (Global Private Equity segment) - $(58.4) million, and
•Carlyle International Energy Partners I, L.P. (Global Private Equity segment) - $(152.0) million.
Carlyle’s income (loss) from its principal equity method investments is included inconsists of:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Global Private Equity$103.5 $70.0 $209.1 $20.0 
Global Credit19.5 (613.2)73.1 (743.8)
Investment Solutions8.9 (2.4)14.5 (2.9)
Total$131.9 $(545.6)$296.7 $(726.7)

The principal investment income (loss) in Global Credit for the condensed consolidated statements of operationsthree and consists of:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Corporate Private Equity$8.8
 $13.5
 $38.4
 $32.0
Real Assets24.1
 52.5
 95.7
 89.9
Global Market Strategies—
 (0.5) 0.6
 (5.5)
Investment Solutions3.0
 0.4
 5.5
 (0.1)
Total$35.9
 $65.9
 $140.2
 $116.3
Investments in CLOs and Other Investments
Investments in CLOs and other investments as of Septembersix months ended June 30, 2017 and December 31, 2016 primarily consisted of $323.22021 includes $13.4 million and $156.1$58.9 million, respectively, of investmentsfrom the Company’s equity method investment in CLO seniorFortitude Holdings. The principal investment income (loss) in Global Credit for the three and subordinated notes, derivative instruments,six months ended June 30, 2020 includes $(620.7) million and corporate mezzanine securities and bonds.$(732.6) million, respectively, from the Company’s equity method investment in Fortitude Holdings.


Investments of Consolidated Funds
The PartnershipCompany consolidates the financial positions and results of operations of certain CLOs in which it is the primary beneficiary. During the ninesix months ended SeptemberJune 30, 2017,2021, the Partnership formed five CLOsCompany consolidated 1 new CLO for which the PartnershipCompany is the primary beneficiary of one of those CLOs. As of September 30, 2017, the total assets of this CLO included in the Partnership's condensed consolidated financial statements were approximately $522.7 million.beneficiary.
There were no individual investments with a fair value greater than five5 percent of the Partnership’sCompany’s total assets for any period presented.


34
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 September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2017 2016 2017 2016 2021202020212020
(Dollars in millions) (Dollars in millions)
Interest income from investments$41.8
 $40.0
 $124.1
 $101.6
Interest income from investments$56.6 $53.1 $113.5 $104.2 
Other income2.9
 3.0
 8.5
 6.2
Other income5.5 2.1 9.7 4.0 
Total$44.7
 $43.0
 $132.6
 $107.8
Total$62.1 $55.2 $123.2 $108.2 
    
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Net Investment Gains (Losses) of Consolidated Funds
Net investment gains (losses) of Consolidated Funds include net realized gains (losses) from sales of investments and unrealized gains (losses) resulting from changes in fair value of the Consolidated Funds’ investments. The components of net investment gains (losses) of Consolidated Funds are as follows: 
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2017 2016 2017 2016 2021202020212020
(Dollars in millions) (Dollars in millions)
Gains (losses) from investments of Consolidated Funds$(2.5) $18.6
 $27.1
 $45.0
Gains (losses) from investments of Consolidated Funds$13.5 $550.4 $102.8 $(382.3)
Gains (losses) from liabilities of CLOs21.1
 (15.9) 49.3
 (43.8)Gains (losses) from liabilities of CLOs(16.1)(500.1)(93.1)319.5 
Gains on other assets of CLOs—
 2.1
 —
 1.9
Total$18.6
 $4.8
 $76.4
 $3.1
Total$(2.6)$50.3 $9.7 $(62.8)
The following table presents realized and unrealized gains (losses) earned from investments of the Consolidated Funds:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Realized gains (losses)$12.5 $(39.8)$17.2 $(40.3)
Net change in unrealized gains (losses)1.0 590.2 85.6 (342.0)
Total$13.5 $550.4 $102.8 $(382.3)

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Realized losses$(3.3) $—
 $(9.1) $(9.6)
Net change in unrealized gains0.8
 18.6
 36.2
 54.6
Total$(2.5) $18.6
 $27.1
 $45.0
6. Intangible Assets and Goodwill
The following table summarizes the carrying amount of intangible assets as of September 30, 2017 and December 31, 2016:
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Acquired contractual rights(1)
$80.3
 $74.1
Acquired trademarks(1)
1.2
 1.0
Accumulated amortization(54.5) (43.2)
Finite-lived intangible assets, net27.0
 31.9
Goodwill(1)
11.0
 10.1
Intangible assets, net$38.0
 $42.0
(1) Changes in the carrying amount of acquired contractual rights, acquired trademarks, and goodwill are due to foreign currency translation.
As of September 30, 2017, all of the remaining finite-lived intangible assets, net, and goodwill are associated with the Partnership's Investment Solutions segment.

As discussed in Note 2, the Partnership reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. No impairment losses were recorded during the nine months ended September 30, 2017 and 2016.
Intangible asset amortization expense was $2.6 million and $11.1 million during the three months ended September 30, 2017 and 2016, respectively, and $7.6 million and $30.4 million during the nine months ended September 30, 2017 and 2016, respectively, and is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The following table summarizes the expected amortization expense for October 1, 2017 through December 31, 2021 (Dollars in millions):
2017$2.6
20189.6
20195.9
20205.9
20213.0
 $27.0


7.5. Borrowings
The PartnershipCompany borrows and enters into credit agreements for its general operating and investment purposes. The Partnership’sCompany’s debt obligations consist of the following (Dollars in millions):following:
 June 30, 2021December 31, 2020
 Borrowing
Outstanding		Carrying
Value		Borrowing
Outstanding		Carrying
Value
(Dollars in millions)
CLO Borrowings (See below)
$210.0 $205.6 $356.1 $353.6 
3.875% Senior Notes Due 2/01/2023250.0 249.6 250.0 249.5 
5.625% Senior Notes Due 3/30/2043600.0 600.6 600.0 600.7 
5.650% Senior Notes Due 9/15/2048350.0 346.1 350.0 346.0 
3.500% Senior Notes Due 9/19/2029425.0 421.4 425.0 421.1 
4.625% Subordinated Notes Due 5/15/2061500.0 484.2 0 0 
Total debt obligations$2,335.0 $2,307.5 $1,981.1 $1,970.9 
 


35
 September 30, 2017 December 31, 2016
 Borrowing
Outstanding		 Carrying
Value		 Borrowing
Outstanding		 Carrying
Value
Senior Credit Facility Term Loan Due 5/05/2020$25.0
 $24.8
 $25.0
 $24.7
CLO Term Loans  (See below)
229.9
 229.9
 33.8
 33.8
3.875% Senior Notes Due 2/01/2023500.0
 497.5
 500.0
 497.2
5.625% Senior Notes Due 3/30/2043600.0
 600.7
 600.0
 600.7
Promissory Note Due 1/01/2022108.8
 108.8
 108.8
 108.8
Promissory Notes Due 7/15/201953.9
 53.9
 —
 —
Total debt obligations$1,517.6
 $1,515.6
 $1,267.6
 $1,265.2
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Senior Credit Facility
As of SeptemberJune 30, 2017,2021, the senior credit facility included $25.0 million in a term loan and $750.0$775.0 million in a revolving credit facility. As of September 30, 2017, the term loan andThe revolving credit facility wereis scheduled to mature on May 5, 2020. PrincipalFebruary 11, 2024, and principal amounts outstanding under the term loan and 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 0.75%0.50%, or (b) at LIBOR plus an applicable margin not to exceed 1.75%1.50% (at SeptemberJune 30, 2017,2021, the interest rate was 2.49%1.35%). There was no amount outstanding under the revolving credit facility at September 30, 2017. Interest expenseThe Company made 0 borrowings under the senior credit facility was not significant forduring the three and ninesix months ended SeptemberJune 30, 20172021 and 2016. The fair valuethere were 0 amounts outstanding at June 30, 2021.
Global Credit Revolving Credit Facility
On December 17, 2018, certain subsidiaries of the Company established a $250.0 million revolving line of credit, primarily intended to support certain lending activities within the Global Credit segment. The credit facility includes a $125.0 million line of credit with a one-year term, which was amended in December 2020 to extend its maturity to December 2021, and a $125.0 million line of credit with a three-year term. Principal amounts outstanding balancesunder the facility accrue interest, at the option of the term loan and revolvingborrowers, either (a) at an alternate base rate plus an applicable margin not to exceed 1.00%, or (b) at the Eurocurrency rate plus an applicable margin, not to exceed 2.00%. The Company made 0 borrowings under the credit facility at Septemberduring the three and six months ended June 30, 20172021, and December 31, 2016 approximated par value based on current market rates for similar debt instruments and are classifiedthere were 0 amounts outstanding as Level III within the fair value hierarchy.
On April 6, 2017, the Partnership borrowed $250.0 million against the $750.0 million revolving credit facility. This amount was repaid in full onof June 2, 2017.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


30, 2021.
CLO Term Loans

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

Formation DateBorrowing Outstanding June 30, 2021Borrowing Outstanding December 31, 2020Maturity Date (1)Interest Rate as of June 30, 2021
February 28, 2017$57.6 $79.9 November 17, 20312.34%(2)
April 19, 20170 22.7 April 22, 2031N/A(3) (14)
June 28, 20170 22.9 July 22, 2031N/A(4) (14)
August 2, 20170 22.7 July 23, 2029N/A(5) (14)
August 2, 20170 21.3 August 3, 2022N/A(6)
August 14, 20170 22.4 August 15, 2030N/A(7) (14)
November 30, 20170 22.7 January 16, 2030N/A(8)(14)(15)
December 6, 20170 19.0 October 16, 2030N/A(9)(14)(15)
December 7, 20170 20.8 January 19, 2029N/A(10)(14)(15)
January 30, 20180 19.2 January 23, 2030N/A(11)(14)(15)
March 1, 20180 15.2 January 16, 2031N/A(12)(14)(15)
March 15, 20191.9 22.6 March 15, 20328.11%(13)
August 20, 201922.2 22.9 August 15, 20322.52%(13)
September 15, 202021.1 21.8 April 15, 20331.59%(13)
January 8, 202122.2 0 January 15, 20342.49%(13)
March 9, 202121.1 0 August 15, 20301.37%(13)
March 30, 202119.9 0 March 15, 20321.71%(13)
April 21, 20213.8 0 April 15, 20335.85%(13)
May 21, 202116.6 0 November 17, 20311.36%(13)
June 4, 202122.2 0 January 16, 20342.28%(13)
June 10, 20211.4 0 November 17, 20312.85%(13)
$210.0 $356.1 
Formation Date Borrowing Outstanding
September 30, 2017		  Borrowing Outstanding
December 31, 2016		  Maturity Date (1) Interest Rate as of
September 30, 2017		 
October 3, 2013 $—
(2) $13.2
(2) September 28, 2018 NA(3)
June 7, 2016 20.6
  20.6
  July 15, 2027 3.10%(4)
February 28, 2017 73.0
  —
  September 21, 2029 2.33%(5)
April 19, 2017 22.8
  —
  April 22, 2031 3.24%(6) (12)
June 28, 2017 23.1
  —
  July 22, 2031 3.25%(7) (12)
July 20, 2017 24.4
  —
  April 21, 2027 2.84%(8) (12)
August 2, 2017 22.8
  —
  July 23, 2029 3.10%(9) (12)
August 2, 2017 20.6
  —
  August 3, 2022 1.75%(10)
August 14, 2017 22.6
  —
  August 15, 2030 3.16%(11) (12)
  $229.9
  $33.8
      


(1)    Maturity date is earlier of date indicated or the date that the CLO is dissolved.
(2)     Outstanding borrowing of €48.6 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.


36
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

(3)    Incurs interest at LIBOR plus 1.932%. This term loan was fully repaid in April 2021.
(4)     Incurs interest at LIBOR plus 1.923%. This term loan was fully repaid in April 2021.
(5)    Incurred interest at LIBOR plus 1.808%. This term loan was fully repaid in February 2021.
(6)    Original borrowing of €12.6 million.€17.4 million; incurred interest at EURIBOR plus 1.75% and had full recourse to the Company. This term loan was fully repaid in March 2021.
(3) Note paid off(7)    Incurred interest at LIBOR plus 1.848%. This term loan was fully repaid in March 2021.
(8)    Incurs interest at LIBOR plus 1.731%. This term loan was fully repaid in April 2021.
(9)    Incurred interest at LIBOR plus 1.647%. This term loan was fully repaid in May 2021.
(10)    Incurred interest at LIBOR plus 1.365%. This term loan was fully repaid in May 2021.
(11)    Incurred interest at LIBOR plus 1.624%. This term loan was fully repaid in April 2021.
(12)    Incurred interest at LIBOR plus 1.552%. This term loan was fully repaid in May 2021.
(13) Incurs interest at the third quarteraverage effective interest rate of 2017.each class of purchased securities plus 0.50% spread percentage.
(4)Incurs interest at the weighted average rate of the underlying senior notes. Interest income on the underlying collateral approximated the amount of interest expense and was not significant for the three and nine months ended September 30, 2017 and 2016.
(5)Original borrowing of €61.8 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.
(6)Incurs interest at LIBOR plus 1.932%.
(7)Incurs interest at LIBOR plus 1.923%.
(8)Incurs interest at LIBOR plus 1.536%.
(9)Incurs interest at LIBOR plus 1.808%.
(10)Original borrowing of €17.4 million; incurs interest at LIBOR plus 1.75% and has full recourse to the Partnership.
(11)Incurs interest at LIBOR plus 1.848%.
(12)Term loan issued under master credit agreement.

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

The CLO term loans are secured by the Partnership'sCompany’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 on these term loans was not significant for the three and nine months ended SeptemberJune 30, 20172021 and 2016.2020 was $1.2 million and $2.2 million, respectively. Interest expense for the six months ended June 30, 2021 and 2020 was $3.2 million and $4.7 million, respectively. The fair value of the outstanding balance of the CLO term loans at SeptemberJune 30, 20172021 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 PartnershipCompany entered into a financing agreement with several financial institutions under which these financial institutions have provided a €61.8€48.6 million term loan ($73.057.6 million at SeptemberJune 30, 2017)2021) to the Partnership.Company. This term loan is secured by the Partnership’sCompany’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, 2029November 17, 2031 or the date that the certain European CLO retained notes have been redeemed. The PartnershipCompany may prepay the term loan in whole or in part at any time after the third anniversary of the date of issuance without penalty. Prepayment of the term loan within the first three years will incur a penalty based on the prepayment amount. Interest on this term loan accrues at EURIBOR plus applicable margins (2.33%(2.34% at SeptemberJune 30, 2017)2021).


The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Master Credit Agreement - Term Loans

In January 2017, the PartnershipCompany entered into a master credit agreement with a financial institution under which the financial institution expects to provideprovided term loans to the PartnershipCompany for the purchase of eligible interests in CLOs. This agreement will terminate in January 2020. Any term loan to beTerm loans issued under this master credit agreement will bewere secured by the Partnership’sCompany’s investment in the respective CLO as well as any senior management fee and subordinated management fee payable by each CLO. Any term loan will bearTerm loans bore interest at LIBOR plus a weighted average spread over LIBOR on the CLO notes and an applicable margin. Interestmargin, which was due quarterly. CLO Indentures for the respective CLO borrowings entered on November 30, 2017 and after provided for an alternative rate framework determined at the Company’s discretion upon a trigger event of LIBOR. This agreement terminated in January 2020. As of June 30, 2021, all outstanding CLO term loans under this agreement have been fully repaid.
CLO Repurchase Agreements
On February 5, 2019, the Company entered into a master credit facility agreement (the “CLO Financing Facility”) to finance a portion of the risk retention investments in certain European CLOs managed by the Company. The maximum facility amount is €100.0 million, but may be expanded on such terms agreed upon by the Company and the counterparty subject to the terms and conditions of the CLO Financing Facility. Each transaction entered into under the CLO Financing Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been sold plus a spread to be due quarterly.agreed upon by the parties. As of June 30, 2021, €128.6 million was outstanding under the CLO Financing Facility.
3.875% 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


37
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to the counterparty if the securities sold are in default. Upon termination of a transaction, the Company will repurchase the previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may be terminated at any time upon certain defaults or circumstances agreed upon by the parties.
The repurchase agreements may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities pledged as collateral.
Senior Notes
InCertain indirect subsidiaries of the the Company have issued long term borrowings in the form of senior notes, on which interest is payable semi-annually in arrears. The following table provides information regarding these senior notes (Dollars in millions):
Interest Expense
Fair Value (1)
As of
Three Months Ended
June 30,		Six Months Ended
June 30,
Aggregate Principal AmountJune 30, 2021December 31, 20202021202020212020
3.875% Senior Notes Due 2/1/2023 (2)
$250.0 $266.2 $270.0 $2.5 $2.5 $5.0 $5.0 
5.625% Senior Notes Due 3/30/2043 (3)
600.0 811.7 782.6 8.4 8.4 16.9 16.9 
5.650% Senior Notes Due 9/15/2048 (4)
350.0 479.9 469.3 5.0 5.0 9.9 9.9 
3.500% Senior Notes Due 9/19/2029 (5)
425.0 462.7 476.6 3.8 3.8 7.6 7.6 
$19.7 $19.7 $39.4 $39.4 
(1) Including accrued interest. Fair value is based on indicative quotes and the notes are classified as Level II within the fair value hierarchy.
(2) Issued in January 2013 an indirect finance subsidiaryat 99.966% of the Partnership issued $500.0par.
(3) Issued $400.0 million in aggregate principal amountat 99.583% of 3.875%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 due February 1, 2023previously issued.
(4) Issued in September 2018 at 99.966%99.914% of par. Interest is payable semi-annually on February 1 and August 1, beginning August 1, 2013. This subsidiary
(5) Issued in September 2019 at 99.841% of par.
The issuers may redeem the senior notes, in whole at any time or in part from time to time, at a price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on any notes being redeemed discounted to the redemption date on a semi-annualsemiannual basis at the Treasury rateRate plus 3040 basis points (30 basis points in the case of the 3.875% and 3.500% senior notes), plus in each case accrued and unpaid interest on the principal amounts being redeemedredeemed.


38
The Carlyle Group Inc.

Notes to the redemption date.Condensed Consolidated Financial Statements

(Unaudited)
Interest expense on the notes was $5.0 million for both the three months ended September 30, 2017 and 2016, and $14.9 million for both the nine months ended September 30, 2017 and 2016. At September 30, 2017 and December 31, 2016, the fair value of the notes, including accrued interest, was approximately $520.8 million and $512.8 million, respectively, based on indicative quotes. The notes are classified as Level II within the fair value hierarchy.
5.625% SeniorSubordinated Notes
In March 2013, anAn indirect finance subsidiary of the PartnershipCompany issued $400.0$500.0 million in aggregate principal amount of 5.625% senior notes4.625% Subordinated Notes due March 30, 2043 at 99.583% of par. Interest2061 (the “Subordinated Notes”), on which interest is payable semi-annuallyquarterly accruing from May 11, 2021, and which will mature on March 30May 15, 2061. The Subordinated Notes are unsecured and September 30, beginning September 30, 2013. Thissubordinated 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 redeembe redeemed at the senior notesissuer’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 greaterdate of 100%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 of the notes being redeemed and 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 semi-annual basis at the Treasury rate plus 40 basis points plus accrued and unpaid interest onto, but excluding, the principal amounts beingdate 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 date.
In March 2014, an indirect finance subsidiaryprice equal to 102% of the Partnership issued $200.0 million of 5.625% Senior Notes due March 30, 2043 at 104.315% of par. These notes were issued as additional 5.625% Senior Notes and are treated as a single class with the already outstanding $400.0 million aggregatetheir principal amount plus any accrued and unpaid interest to, but excluding, the date of these senior notes.redemption.
Interest expense on the notes was $8.4 million for both the three months ended SeptemberAs of June 30, 2017 and 2016 and $25.3 million for both the nine months ended September 30, 2017 and 2016. At September 30, 2017 and December 31, 2016,2021, the fair value of the notes, including accrued interest,Subordinated Notes was approximately $688.7 million and $603.1 million, respectively,$508.8 million. Fair value is based on indicative quotes. Theactive market quotes and the notes are classified as Level III within the fair value hierarchy.
Promissory Notes
Promissory Note Due January 1, 2022
On January 1, 2016, For the Partnership issued a $120.0period from May 11, 2021 through June 30, 2021, the Company incurred $3.3 million promissory note to BNRI as a result of a contingent consideration arrangement entered into in 2012 between the Partnership and BNRI as part of the Partnership's strategic investment in NGP (see Note 5). Interest on the promissory note accrues at the three month LIBOR plus 2.50% (3.83% at September 30, 2017). The Partnership may prepay the promissory note in whole or in part at any time without penalty. The promissory note is scheduled to mature on January 1, 2022. Interestinterest expense on the promissory note was not significant for the three and nine months ended September 30, 2017 and 2016. The fair value of the outstanding balance of the promissory note at September 30, 2017 and December 31, 2016 approximated par value based on current market rates for similar debt instruments and is classified as Level III within the fair value hierarchy.

The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


In December 2016, the Partnership repurchased $11.2 million of the promissory note for a purchase price of approximately $9.0 million. Approximately $108.8 million of the promissory note is outstanding at September 30, 2017 and December 31, 2016.

Promissory Notes Due July 15, 2019

In June 2017, as part of the settlement with investors in two commodities investment vehicles managed by an affiliate of the Partnership (disclosed in Note 9), the Partnership issued a series of promissory notes, aggregating to $53.9 million, to the investors of these commodities investment vehicles. Interest on these promissory notes accrues at the three month LIBOR plus 2% (3.33% at September 30, 2017). The Partnership may prepay these promissory notes in whole or in part at any time without penalty. These promissory notes are scheduled to mature on July 15, 2019. Interest expense on these promissory notes was not significant for the three and nine months ended September 30, 2017. The fair value of the outstanding balance of these promissory notes at September 30, 2017 approximated par value based on current market rates for similar debt instruments and is classified as Level III within the fair value hierarchy.Subordinated Notes.
Debt Covenants
The PartnershipCompany 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 PartnershipCompany is also subject to various non-financial covenants under its loan agreements and the indentures governing its senior and subordinated notes. The PartnershipCompany was in compliance with all financial and non-financial covenants under its various loan agreements as of SeptemberJune 30, 2017.2021.
Loans Payable of Consolidated Funds
Loans payable of Consolidated Funds primarily represent amounts due to holders of debt securities issued by the CLOs. Several of the CLOs issued preferred shares representing the most subordinated interest, however these tranches are mandatorily redeemable upon the maturity dates of the senior secured loans payable, and as a result have been classified as liabilities and are included in loans payable of Consolidated Funds in the unaudited condensed consolidated balance sheets.


39
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

As of SeptemberJune 30, 20172021 and December 31, 2016,2020, the following borrowings were outstanding, which includes preferred shares classified as liabilities (Dollars in millions):
As of September 30, 2017 As of June 30, 2021
Borrowing
Outstanding		 Fair Value Weighted
Average
Interest Rate		   Weighted
Average
Remaining
Maturity in
Years		 Borrowing
Outstanding		Fair ValueWeighted
Average
Interest Rate		 Weighted
Average
Remaining
Maturity in
Years
Senior secured notes$3,631.2
 $3,621.3
 2.24% 11.49Senior secured notes$5,177.0 $5,179.3 1.68 %10.42
Subordinated notes, preferred shares and other174.8
 173.5
 N/A
 (a) 9.79Subordinated notes, preferred shares and other219.8 194.6 N/A(1)10.62
Total$3,806.0
 $3,794.8
   Total$5,396.8 $5,373.9 
 
As of December 31, 2016 As of December 31, 2020
Borrowing
Outstanding		 Fair Value Weighted
Average
Interest Rate		   Weighted
Average
Remaining
Maturity in
Years		 Borrowing
Outstanding		Fair ValueWeighted
Average
Interest Rate		 Weighted
Average
Remaining
Maturity in
Years
Senior secured notes$3,681.0
 $3,672.5
 2.45% 10.22Senior secured notes$5,442.2 $5,358.9 1.74 %10.36
Subordinated notes, preferred shares and other195.6
 193.8
 N/A
 (a) 9.26Subordinated notes, preferred shares and other164.2 204.1 N/A(1)10.49
Total$3,876.6
 $3,866.3
   Total$5,606.4 $5,563.0 
 
(a)The subordinated notes and preferred shares do not have contractual interest rates, but instead receive distributions from the excess cash flows of the CLOs.
(1)The Carlyle Group L.P.

Notes tosubordinated notes and preferred shares do not have contractual interest rates, but instead receive distributions from the Condensed Consolidated Financial Statements
(Unaudited)


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 SeptemberJune 30, 20172021 and December 31, 2016,2020, the fair value of the CLO assets was $4.5$6.5 billion and $4.7$6.3 billion, respectively.

8.6. Accrued Compensation and Benefits
Accrued compensation and benefits consist of the following:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Accrued performance allocations and incentive fee related compensation$4,043.8 $2,534.4 
Accrued bonuses267.0 469.6 
Employment-based contingent cash consideration24.3 50.6 
Other231.6 168.0 
Total$4,566.7 $3,222.6 
The following table presents realized and unrealized performance allocations and incentive fee related compensation:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Realized$218.6 $82.8 $311.3 $195.7 
Unrealized775.4 452.8 1,549.3 (102.6)
Total$994.0 $535.6 $1,860.6 $93.1 


40
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Accrued performance fee-related compensation$1,803.9
 $1,307.4
Accrued bonuses261.2
 177.2
Other110.0
 177.2
Total$2,175.1
 $1,661.8
The Carlyle Group Inc.

9.Notes to the Condensed Consolidated Financial Statements
(Unaudited)

7. Commitments and Contingencies
Capital Commitments
The PartnershipCompany and its unconsolidated affiliates have unfunded commitments to entities within the following segments as of SeptemberJune 30, 20172021 (Dollars in millions):
 Unfunded
Commitments
Corporate Private Equity$1,190.1
Real Assets900.6
Global Market Strategies573.9
Investment Solutions165.5
Total$2,830.1
Unfunded
Commitments
Global Private Equity$2,701.4 
Global Credit346.6 
Investment Solutions301.2 
Total$3,349.2 
Of the $2.8$3.3 billion of unfunded commitments, approximately $2.5$2.8 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Partnership.Company. In addition to these unfunded commitments, the PartnershipCompany 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 June 30, 2021, certain subsidiaries of the Company had $64.0 million in unfunded commitments related to the origination and syndication of loans and securities under the Carlyle Global Capital Markets platform. In July 2021, a subsidiary of the Company entered into a contractual commitment to underwrite approximately $500 million in debt related to a transaction which is expected to close during the fourth quarter of this year.
Guaranteed Loans
On August 4, 2001,September 3, 2019, the PartnershipCompany entered into an agreement with a financial institution pursuant to which the PartnershipCompany is the guarantor on a credit facility forloans made to eligible employees investing in Carlyle sponsored funds. This credit facility renews onfunds (the “Program”). The Program has an annual basis, allowing for annual incremental borrowings up to an aggregateinitial period of $11.3 million,one year, renewed annually, and accrues interest at either the lowerWSJ Prime Rate minus 1.00% floating or the 12MAT Index plus 2.00% floating, in either case with a floor rate of 3.50% (versus actual rates of 2.25% and 2.10%, respectively, as of June 30, 2021). The aggregate Program limit of all loans is $100.0 million, and is collateralized by each borrower’s interest in the prime rate, as defined, or three-month LIBOR plus 3%, reset quarterly (4.30% weighted-average rate at September 30, 2017).Carlyle sponsored funds. As of SeptemberJune 30, 2017 and December 31, 2016,2021, approximately $11.3$15.5 million and $9.6 million, respectively, werewas outstanding under the credit facilityProgram and payable by the employees. The amountCompany has not funded byany amounts under the Partnership under this guarantee as of September 30, 2017 was not material. The Partnershipto date, and believes the likelihood of any material funding under this guarantee to be remote. The fair value of thisthe guarantee is not significant to the consolidated financial statements. The Program replaced a similar agreement with another financial institution, the remaining amount outstanding and guaranteed under which was immaterial as of June 30, 2021.
From time to time, the Company or its subsidiaries may enter into agreements to guarantee certain obligations of the investment funds related to, for example, credit facilities or equity commitments. Certain consolidated subsidiaries of the Company are the guarantors of revolving credit facilities for certain funds in the Investment Solutions segment. The guarantee is limited to the lesser of the total amount drawn under the credit facilities or the net asset value of the guarantor subsidiaries, which was approximately $4.4 million as of June 30, 2021. The outstanding balances are secured by uncalled capital commitments from the underlying funds and the Company believes the likelihood of any material funding under this guarantee to be remote.
In June 2021, the Company entered into agreements with financial institutions pursuant to which it provided the guarantee for revolving credit facilities of an investment fund that is actively fundraising in Global Private Equity segment. The maximum aggregate amount available under the facilities is $2.0 billion. These facilities expire upon the earlier of six months or at such time that the investment fund enters into a subscription credit facility with a maximum capacity of at least $2.0 billion. The Company has not funded any amounts under this guarantee to date, and believes the likelihood of any material funding to be remote.
Contingent Obligations (Giveback)
A liability for potential repayment of previously received performance feesallocations of $67.6$21.0 million at SeptemberJune 30, 2017,2021 is shown as accrued giveback obligations in the unaudited condensed consolidated balance sheets, representing the giveback obligation that


41
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



obligation that would need to be paid if the funds were liquidated at their current fair values at SeptemberJune 30, 2017.2021. However, the ultimate giveback obligation, if any, generally is not paid until the end of a fund’s life or earlier if the giveback becomes fixed and early payment is agreed upon by the fund'sfund’s partners (see Note 2). The PartnershipCompany has recorded $3.4 million and $5.6 million of0 unbilled receivables from former and current employees and senior Carlyle professionals as of SeptemberJune 30, 2017 and2021 or December 31, 2016, respectively,2020 related to giveback obligations, which are included in due from affiliates and otherobligations. Any such receivables net in the accompanying condensed consolidated balance sheets. The receivables arewould be collateralized by investments made by individual senior Carlyle professionals and employees in Carlyle-sponsored funds. In addition, $254.4$147.8 million and $356.9$175.9 million have been withheld from distributions of carried interest to senior Carlyle professionals and employees for potential giveback obligations as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively. Such amounts are held on behalf of the respective current and former Carlyle employees to satisfy any givebacks they may owe and are held by entities not included in the accompanying condensed consolidated balance sheets. Current and former senior Carlyle professionals and employees are personally responsible for their giveback obligations. As of SeptemberJune 30, 2017,2021, approximately $38.3$9.9 million of the Partnership'sCompany’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 Carlyle Holdingsthe Company is $29.3$11.1 million.
If, at SeptemberJune 30, 2017,2021, all of the investments held by the Partnership’sCompany’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 $0.8$0.7 billion, on an after-tax basis where applicable.applicable, of which approximately $0.3 billion would be the responsibility of current and former senior Carlyle professionals.
Leases
The PartnershipCompany’s leases primarily consist of operating leases for office space in various countries around the world, and maintainsincluding its headquarters in Washington, D.C., where it leases The Company relocated one of its primaryNew York City offices in December 2020 to new office space under ain Midtown New York. These leases have remaining lease terms of one year to 15 years, some of which include options to extend for up to five years and some of which include an option to terminate the leases within one year. The Company also has operating leases for office equipment and vehicles, which are not significant.
In July 2021, the Company entered into an amended non-cancelable lease agreement for additional office space at its Midtown New York location expiring on July 31, 2026. Office leasesSeptember 30, 2036. The estimated amount of annual lease cost associated with this additional office space is $2.7 million.
The Company assesses its lease right-of-use assets for impairment consistent with its impairment assessment of other long-lived assets. In connection with the April 1, 2021 sale of Metropolitan Real Estate, the Company entered into a sublease agreement for a portion of its existing office space in other locations expire in various years from 2017 through 2032. These leases are accounted for as operating leases. Rent expense was approximately $15.2 million and $13.9 million forNew York during the three months ended SeptemberJune 30, 2017 and 2016, respectively, and $43.42021. As a result of the sublease transaction, the Company recorded a lease impairment charge of $26.8 million and $41.3 million forduring the ninethree months ended SeptemberJune 30, 2017 and 2016, respectively, and2021, which was the excess of the carrying value of the associated lease right-of-use asset over its estimated fair value. The Company estimated the fair value using discounted cash flows from the estimated net sublease rental income. The impairment charge is included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.
The following table summarizes the Company’s lease cost, cash flows and other supplemental information related to its operating leases (Dollars in millions):
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Operating lease cost$13.5 $11.9 $27.5 $23.7 
Sublease income(0.5)(0.6)(1.2)(1.2)
Total operating lease cost$13.0 $11.3 $26.3 $22.5 
Cash paid for amounts included in the measurement of operating lease liabilities$11.4 $13.9 $22.7 $28.8 
Weighted-average remaining lease term12.2 years9.5 years
Weighted-average discount rate4.2 %5.3 %


42
The future minimum commitments forCarlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Maturities of lease liabilities related to operating leases arewere as follows (Dollars in millions):
2017$12.6
201848.1
201947.9
202047.4
202143.0
Thereafter334.6
 $533.6
The Partnership records contractual escalating minimum lease payments on a straight-line basis over the term of the lease. Deferred rent payable under the leases was $60.7 million and $60.3 million as of September 30, 2017 and December 31, 2016, respectively, and is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets.
Year ending December 31,
2021 (excluding the six months ended June 30, 2021)$27.8 
202263.4 
202357.9 
202454.5 
202552.3 
Thereafter397.9 
Total lease payments$653.8 
Less imputed interest(140.0)
Total lease liabilities$513.8 
Legal Matters
In the ordinary course of business, the PartnershipCompany is a party to litigation, investigations, inquiries, employment-related matters, disputes and other potential claims. Certain of these matters are described below. The PartnershipCompany 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 PartnershipCompany does not believe it is probable that the outcome of any existing litigation, investigations, disputes or other potential claims will materially affect the PartnershipCompany or these financial statements in excess of amounts accrued. The PartnershipCompany believes that the claims asserted against the Partnership in the pending litigation matters described below are without merit and intends to vigorously contest such allegations.merit.
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Along with many other companies and individuals in the financial sector, the PartnershipCompany and Carlyle Mezzanine Partners, L.P. (“CMP”) are named as defendants in Foy v. Austin Capital, a case filed in June 2009 in state court in New Mexico, which purports to be a qui tam suit on behalf of the State of New Mexico under the state Fraud Against Taxpayers Act (“FATA”). The suit alleges that investment decisions by New Mexico public investment funds were improperly influenced by campaign contributions and payments to politically connected placement agents. The plaintiffs seek, among other things, actual damages for lost income, rescission of the investment transactions described in the complaint and disgorgement of all fees received. In September 2017, the Court dismissed the lawsuit.lawsuit and the plaintiffs then filed an appeal seeking to reverse that decision. In June 2020, the Court of Appeals affirmed the decision dismissing the case. On June 24, 2020, plaintiffs filed a motion for rehearing with the Court of Appeals. On June 30, 2020, the Court of Appeals denied that motion. Plaintiffs filed an appeal to the New Mexico Supreme Court. On October 4, 2017,9, 2020, the qui tam plaintiffsappealed that ruling. The Attorney General may also pursue its own recovery fromNew Mexico Supreme Court denied Foy’s petition for certiorari. On October 27, 2020, Foy filed two motions for rehearing with the New Mexico Supreme Court. On May 26, 2021, certain other defendants in the action.actions filed in the New Mexico Supreme Court a motion to dismiss due to the deaths of the two qui tam plaintiffs.
Carlyle Capital Corporation Limited (“CCC”) was a fund sponsored by the PartnershipCompany that invested in AAA-rated residential mortgage backed securities on a highly leveraged basis. In March of 2008, amidst turmoil throughout the mortgage markets and money markets, CCCIt filed for insolvency protection in Guernsey.Guernsey in 2008 during the financial crisis. The Guernsey liquidators who took control of CCC in March 2008 filed a suit on July 7, 2010pursued litigation against the Partnership,Company, certain of its affiliates and the former directors of CCC (collectively, the “Carlyle Defendants”) in the Royal Court of Guernsey seeking more than $1.0 billion in damages in a case styled Guernsey. The Carlyle Capital Corporation Limited v. Conway et al. On September 4, 2017, the Royal Court of Guernsey ruled that the Partnership and Directors of CCC acted reasonably and appropriatelyDefendants prevailed in the managementlitigation and governancealso prevailed in the liquidator’s appeal of CCC and that none of the Partnership, its affiliates or former directors of CCC had any liability. The liquidators have asked for additional time until December 5, 2017 to decide whether or not to appeal the trial court decision. On April 21, 2020, the parties executed a definitive settlement agreement to end further appeals. The liquidators paid the Company approximately £24.2 million to reimburse legal fees and expenses to defend the claims, and the Company recognized $29.9 million as a reduction to general, administrative and other expenses in the accompanying unaudited condensed consolidated statements of operations during the six months ended June 30, 2020.
The PartnershipCompany 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 PartnershipCompany 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 PartnershipCompany or its personnel. For example, among various other requests for information, the SEC has requested information about: (i) the Partnership's historical practices relating to the acceleration of monitoring fees received from certain of the Partnership's funds' portfolio companies, and (ii) the Partnership's relationship with a third-party investment adviser to a registered investment company that has invested in various investment funds sponsored by the Partnership. The Partnership is cooperating fully with the SEC's inquiries.

During the year, the Partnership entered into settlement and purchase agreements with investors in a hedge fund and two structured finance vehicles managed by Vermillion related to investments of approximately $400 million in petroleum commodities that the Partnership believes were misappropriated by third parties outside the U.S.  In total, the Partnership paid $265 million ($165 million of which was paid in the nine months ended September 30, 2017 with the remaining $100 million paid in 2016) to fully resolve all claims related to these matters and issued promissory notes in the aggregate amount of $54 million to repurchase the investors' interests in the two structured finance vehicles. In connection with these settlements, the Partnership also acquired certain rights to receive a portion of any proceeds obtained from marine cargo insurance policies and other efforts to pursue reimbursement for the misappropriation of petroleum. In the three and nine months ended September 30, 2017, the Partnership has recognized $74 million and $177 million, respectively, net of related recovery costs, in general liability insurance proceeds related to these settlements.
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 Partnership’sCompany’s unaudited condensed consolidated financial statements. However, given the potentially large and/or indeterminate amounts of damages sought in certain of these matters


43
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

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 Partnership'sCompany’s financial results in any particular period.
The PartnershipCompany 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 SeptemberJune 30, 2017,2021, the PartnershipCompany had recorded liabilities aggregating to approximately $35 million for litigation-related contingencies, regulatory examinations and inquiries, and other matters. The PartnershipCompany 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'smanagement’s best judgment after consultation with counsel. There is no assurance that the Partnership'sCompany’s accruals for loss
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


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 PartnershipCompany has recorded.

Transaction with Claren Road

On December 12, 2016, the Partnership signed an agreement with the founders of Claren Road Asset Management, LLC and its subsidiaries (collectively, “Claren Road”) to transfer all of the Partnership's 63% ownership interest in Claren Road to its founders. As a result of the transaction, the Partnership was also relieved of all of its obligations under the 2010 acquisition agreement, including any potential future obligations thereunder. This transaction closed on January 31, 2017. The Partnership recorded additional base compensation expense of approximately $25.0 million in the year ended December 31, 2016 associated with the transfer of the interests to Claren Road in addition to the disposition of approximately $4.4 million of intangible assets and approximately $10.8 million of potential future obligations. The remaining income before provision for income taxes for the year ended December 31, 2016 was not material. The impact of this transaction on our results for the three and nine months ended September 30, 2017 was not material. Claren Road was part of the Partnership's Global Market Strategies segment.

Indemnifications
In the normal course of business, the PartnershipCompany and its subsidiaries enter into contracts that contain a variety of representations and warranties and provide general indemnifications. The Partnership’sCompany’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the PartnershipCompany that have not yet occurred. However, based on experience, the PartnershipCompany believes the risk of material loss 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 Partnership’sCompany’s investments and profitability. The funds managed by the Company may also experience a slowdown in the deployment of capital, which could adversely affect the Company’s ability to raise capital for new or successor funds and could also impact the management fees the Company earns on its carry funds and managed accounts. Such events are beyond the Partnership’sCompany’s control, and the likelihood that they may occur and the effect on the PartnershipCompany 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 PartnershipCompany 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 PartnershipCompany or an unrelated fund or portfolio company). Non-U.S. investments are subject to the same risks associated with the Partnership’sCompany’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 PartnershipCompany encounters credit risk. Credit risk is the risk of default by a counterparty in the Partnership’sCompany’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 PartnershipCompany considers cash, cash equivalents, securities, receivables, principal equity method investments, accounts payable, accrued expenses, other liabilities, loans, senior notes, assets and liabilities of Consolidated Funds and contingent and other consideration for acquisitions to be its financial instruments. Except for the senior and subordinated notes, the carrying amounts reported in the
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


unaudited condensed consolidated balance sheets for these financial instruments equal or closely approximate their fair values. The fair value of the senior and subordinated notes is disclosed in Note 7.5.

10.
44
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

8. Related Party Transactions
Due from Affiliates and Other Receivables, Net
The PartnershipCompany had the following due from affiliates and other receivables at SeptemberJune 30, 20172021 and December 31, 2016:2020:
As of
As of June 30, 2021December 31, 2020
September 30, 2017 December 31, 2016 (Dollars in millions)
Accrued incentive feesAccrued incentive fees$10.4 $9.5 
(Dollars in millions)
Unbilled receivable for giveback obligations from current and former employees$3.4
 $5.6
Notes receivable and accrued interest from affiliates16.8
 37.6
Notes receivable and accrued interest from affiliates9.7 17.9 
Other receivables from unconsolidated funds and affiliates, net248.6
 184.0
Management fee, reimbursable expenses and other receivables from unconsolidated funds and affiliates, netManagement fee, reimbursable expenses and other receivables from unconsolidated funds and affiliates, net255.9 245.1 
Total$268.8
 $227.2
Total$276.0 $272.5 
Notes receivable represent loans that the PartnershipCompany has provided to certain unconsolidated funds to meet short-term obligations to purchase investments. OtherReimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate to management fees receivable from limited partners, advisory fees receivable and expenses paid on behalf of these entities. These costs represent costs related to the pursuit of actual or proposed investments, professional fees and expenses associated with the acquisition, holding and disposition of the investments. The affiliates are obligated at the discretion of the PartnershipCompany to reimburse the expenses. Based on management’s determination, the PartnershipCompany accrues and charges interest on amounts due from affiliate accounts at interest rates ranging up to 6.79%6.90% as of SeptemberJune 30, 2017.2021. The accrued and charged interest to the affiliates was not significant for any period presented.
These receivables are assessed regularly for collectability and amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the condensed consolidated statements of operations. A corresponding allowance for doubtful accounts is recorded and such amounts were not significant for any period presented.
Due to Affiliates
The PartnershipCompany had the following due to affiliates balances at SeptemberJune 30, 20172021 and December 31, 2016:2020:
As of
As of June 30, 2021December 31, 2020
September 30, 2017 December 31, 2016 (Dollars in millions)
(Dollars in millions)
Due to affiliates of Consolidated Funds$0.2
 $0.2
Due to non-consolidated affiliates54.2
 29.7
Due to non-consolidated affiliates$76.0 $49.2 
Performance-based contingent cash consideration related to acquisitions34.3
 36.1
Deferred consideration for Carlyle Holdings unitsDeferred consideration for Carlyle Holdings units199.4 266.7 
Amounts owed under the tax receivable agreement155.9
 137.8
Amounts owed under the tax receivable agreement98.0 98.0 
Other19.7
 19.8
Other28.7 22.8 
Total$264.3
 $223.6
Total$402.1 $436.7 
The PartnershipCompany has recorded obligations for amounts due to certain of its affiliates. The PartnershipCompany periodically offsets expenses it has paid on behalf of its affiliates against these obligations. The amount owed under the tax receivable agreement is related primarily
Deferred consideration for Carlyle Holdings units relates to the acquisition byremaining obligation to the Partnershipholders of Carlyle Holdings partnership units in June 2015 and March 2014, respectively, the exchange in May 2012 by CalPERS of itswho will receive cash payments aggregating to $1.50 per Carlyle Holdings partnership unit exchanged in connection with the Conversion, payable in five annual installments of $0.30. The first and second annual installment payments occurred in January 2020 and January 2021, respectively. The obligation was initially recorded at fair value, net of a discount of $11.3 million and measured using Level III inputs in the fair value hierarchy.
In connection with the Company’s initial public offering, the Company entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships whereby certain subsidiaries of the Partnership agreed to pay to the limited partners of the Carlyle Holdings partnerships involved in any exchange transaction 85% of the amount of cash tax savings, if any, in U.S. federal, state and local income tax realized as a result of increases in tax basis resulting from exchanges of Carlyle Holdings Partnership units for Partnership common units as well as certain unit exchanges by senior Carlyle professionals which began in the second quarter of 2017 (see Note 14).

The Carlyle Group L.P.



45
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Other Related Party Transactions
In the normal course of business, the PartnershipCompany has made use of aircraft owned by entities controlled by senior Carlyle professionals. The senior Carlyle professionals paid for their purchases of aircraft and bear all operating, personnel and maintenance costs associated with their operation for personal use. Payment by the PartnershipCompany for the business use of these aircraft by senior Carlyle professionals and other employees which is made at market rates totaledthroughout the year based on budgeted business usage. When actual business use exceeds budgeted aircraft use, the Company makes additional payments to the aircraft owner and/or the aircraft management company, as appropriate. Similarly, when the aggregate amount paid for budgeted aircraft use exceeds the calculated costs of actual business use, or results in rates which exceed market aircraft charter rates, we receive reimbursement of such excess payments from the aircraft owner and/or the aircraft management company, as appropriate. These adjustments are calculated annually and payments or reimbursements are generally made after year-end. During the three and six months ended June 30, 2021, the Company received net reimbursements of $2.0 million and $1.7 million, respectively. During the three and six months ended June 30, 2020, the Company made payments totaling $1.5 million for the three months ended September 30, 2017 and 2016, respectively, and $3.9$3.4 million, and $3.7 million for the nine months ended September 30, 2017 and 2016, respectively. TheseThe accrual of aircraft fees areis included in general, administrative, and other expenses in the unaudited condensed consolidated statements of operations.
On May 5, 2020, the Company purchased 2,000,000 shares of cumulative convertible preferred stock from TCG BDC in a private placement at a price of $25 per share (the “BDC Preferred Shares”). Dividends are payable on a quarterly basis in an initial amount equal to 7.0% per annum payable in cash, or, at TCG BDC’s option, 9.0% per annual payable in additional shares of BDC Preferred Stock. The Company recorded $0.9 million and $1.8 million during the three and six months ended June 30, 2021, respectively, and $0.5 million for both the three and six months ended June 30, 2020, for the cash dividends declared by TCG BDC, which is included in interest and other income in the unaudited condensed consolidated statements of operations. The Company’s investment in the BDC Preferred Shares, which is recorded at fair value, is $71.7 million as of June 30, 2021 and included in investments, including accrued performance allocations, in the unaudited condensed consolidated balance sheets.
Senior Carlyle professionals and employees are permitted to participate in co-investment entities that invest in Carlyle funds or alongside Carlyle funds. In many cases, participation is limited by law to individuals who qualify under applicable legal requirements. These co-investment entities generally do not require senior Carlyle professionals and employees to pay management fees or performance fees,allocations, however, Carlyle professionals and employees are required to pay their portion of partnership expenses.
Carried interest income from the funds can be distributed to senior Carlyle professionals and employees on a current basis, but is subject to repayment by the subsidiary of the PartnershipCompany 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 PartnershipCompany 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.


11.9. Income Taxes
The PartnershipFollowing the Conversion on January 1, 2020, all of the income before provision for income taxes attributable to the Company is subject to U.S. federal, state, and local corporate income taxes. Prior to the Conversion, the Company was generally organized as a series of pass through entities pursuant to the United States Internal Revenue Code. As such, the Partnership isCompany was not responsible for the tax liability due on certain income earned during the year. Such income iswas taxed at the unitholder and non-controlling interest holder level, and any income tax iswas the responsibility of the unitholders and iswas paid at that level. For
The Company’s provision (benefit) for income taxes on income earned for which the Partnership is responsible for the tax liability, the Partnership’s income tax expense (benefit) was $(1.3)$306.2 million and $1.0$52.3 million for the three months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, and $17.7$579.6 million and $32.7$(27.7) million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively. During the six months ended June 30, 2020, the provision for income taxes reflects a tax benefit of $118.0 million related to the net loss recorded during the period, net of the $90.3 million expense related to Conversion. For additional information regarding the impact of Conversion, refer to Note 11 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s effective tax rate was approximately 24% and 20% for the three months ended June 30, 2021 and 2020, respectively, and 24% and 5% for the six months ended June 30, 2021 and 2020, respectively. The effective tax rate for the six months ended June 30, 2021 is primarily comprised of the 21% U.S. federal corporate income tax rate plus U.S. state and foreign corporate income taxes, partially offset by non-controlling interests. The effective tax rate for the six


46
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

months ended June 30, 2020 differs from the statutory rate primarily due to the income tax expense resulting from the Conversion offsetting the tax benefit from the net loss recorded in the period. As of June 30, 2021 and December 31, 2020, the Company had federal, state, local and foreign taxes payable of $100.9 million and $62.7 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated balance sheet.
In the normal course of business, the PartnershipCompany is subject to examination by federal and certain state, local and foreign tax regulators. With a few exceptions, as of SeptemberJune 30, 2017,2021, the Partnership’sCompany’s U.S. federal income tax returns for thetax years 20142017 through 20162019 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 2012for tax years 2015 to 2016.2019. Foreign tax returns are generally subject to audit from 2009for tax years 2011 to 2016.2019. Certain of the Partnership’sCompany’s affiliates are currently under audit by federal, state and foreign tax authorities. Currently, the Internal Revenue Service is examining the tax returns of certain subsidiaries for the 2013, 2014, and 2015 years.
The PartnershipCompany does not believe that the outcome of these audits will require it to record material reserves for uncertain tax positions or that the outcome will have a material impact on the consolidated financial statements. The PartnershipCompany 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.

The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


12.10. Non-controlling Interests in Consolidated Entities
The components of the Partnership’sCompany’s non-controlling interests in consolidated entities are as follows:
 As of
 June 30, 2021December 31, 2020
 (Dollars in millions)
Non-Carlyle interests in Consolidated Funds$18.4 $1.2 
Non-Carlyle interests in majority-owned subsidiaries244.6 223.3 
Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions22.0 16.5 
Non-controlling interests in consolidated entities$285.0 $241.0 
 As of
 September 30, 2017 December 31, 2016
 (Dollars in millions)
Non-Carlyle interests in Consolidated Funds$23.5
 $13.5
Non-Carlyle interests in majority-owned subsidiaries349.0
 331.7
Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions2.2
 (67.4)
Non-controlling interests in consolidated entities$374.7
 $277.8
The components of the Partnership’sCompany’s non-controlling interests in income (loss) of consolidated entities are as follows:
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended
June 30,		Six Months Ended
June 30,
2017 2016 2017 2016 2021202020212020
(Dollars in millions) (Dollars in millions)
Non-Carlyle interests in Consolidated Funds$8.2
 $(1.2) $8.1
 $0.2
Non-Carlyle interests in Consolidated Funds$0.3 $10.8 $0.2 $3.4 
Non-Carlyle interests in majority-owned subsidiaries11.0
 (24.7) 22.5
 (21.6)Non-Carlyle interests in majority-owned subsidiaries14.3 47.3 33.4 (41.7)
Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions8.4
 (3.4) 16.8
 (8.5)Non-controlling interest in carried interest, giveback obligations and cash held for carried interest distributions6.9 0.5 9.5 (0.1)
Net income (loss) attributable to other non-controlling interests in consolidated entities27.6
 (29.3) 47.4
 (29.9)
Net loss attributable to redeemable non-controlling interests in consolidated entities—
 0.2
 —
 0.1
Non-controlling interests in income (loss) of consolidated entities$27.6
 $(29.1) $47.4
 $(29.8)Non-controlling interests in income (loss) of consolidated entities$21.5 $58.6 $43.1 $(38.4)
 

13.11. Earnings Per Common UnitShare
Basic and diluted net income (loss) per common unitshare are calculated as follows:
 Three Months Ended
June 30, 2021		Six Months Ended
June 30, 2021
 BasicDilutedBasicDiluted
Net income attributable to common shares$925,000,000 $925,000,000 $1,794,300,000 $1,794,300,000 
Weighted-average common shares outstanding354,506,335 362,151,588 354,368,976 361,328,946 
Net income per common share$2.61 $2.55 $5.06 $4.97 


47
 Three Months Ended September 30, 2017 Nine Months Ended 
 September 30, 2017
 Basic Diluted Basic Diluted
Net income attributable to The Carlyle Group L.P.$44,600,000
 $44,600,000
 $185,200,000
 $185,200,000
Incremental net income from assumed exchange of Carlyle Holdings partnership units—
 97,800,000
 —
 —
Net income attributable to common units$44,600,000
 $142,400,000
 $185,200,000
 $185,200,000
Weighted-average common units outstanding95,198,102
 334,392,424
 89,815,112
 97,538,190
Net income per common unit$0.47
 $0.43
 $2.06
 $1.90
        
 Three Months Ended September 30, 2016 Nine Months Ended 
 September 30, 2016
 Basic Diluted Basic Diluted
Net income attributable to The Carlyle Group L.P.$800,000
 $800,000
 $15,300,000
 $15,300,000
Incremental net income (loss) from assumed exchange of Carlyle Holdings partnership units—
 (5,700,000) —
 8,100,000
Net income (loss) attributable to common units$800,000
 $(4,900,000) $15,300,000
 $23,400,000
Weighted-average common units outstanding83,602,503
 312,534,968
 82,062,633
 306,981,103
Net income (loss) per common unit$0.01
 $(0.02) $0.19
 $0.08
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Three Months Ended
June 30, 2020		Six Months Ended
June 30, 2020
BasicDilutedBasicDiluted
Net loss attributable to common shares$145,900,000 $145,900,000 $(466,100,000)$(466,100,000)
Weighted-average common shares outstanding348,574,528 357,268,275 348,407,144 348,407,144 
Net income (loss) per common share$0.42 $0.41 $(1.34)$(1.34)

The weighted-average common unitsshares outstanding, basic and diluted, are calculated as follows:
 Three Months Ended
June 30, 2021		Six Months Ended
June 30, 2021
 BasicDilutedBasicDiluted
The Carlyle Group Inc. weighted-average common shares outstanding354,506,335 354,506,335 354,368,976 354,368,976 
Unvested restricted stock units0 5,607,545 0 5,015,266 
Issuable The Carlyle Group Inc. common shares0 2,037,708 0 1,944,704 
Weighted-average common shares outstanding354,506,335 362,151,588 354,368,976 361,328,946 
 Three Months Ended September 30, 2017 Nine Months Ended 
 September 30, 2017
 Basic Diluted Basic Diluted
The Carlyle Group L.P. weighted-average common units outstanding95,198,102
 95,198,102
 89,815,112
 89,815,112
Unvested deferred restricted common units—
 7,756,460
 —
 7,125,134
Issuable Carlyle Holdings Partnership units—
 597,944
 —
 597,944
Weighted-average vested Carlyle Holdings Partnership units—
 228,839,164
 —
 —
Unvested Carlyle Holdings Partnership units—
 2,000,754
 —
 —
Weighted-average common units outstanding95,198,102
 334,392,424
 89,815,112
 97,538,190
        
 Three Months Ended September 30, 2016 Nine Months Ended 
 September 30, 2016
 Basic Diluted Basic Diluted
The Carlyle Group L.P. weighted-average common units outstanding83,602,503
 83,602,503
 82,062,633
 82,062,633
Unvested deferred restricted common units—
 3,569,302
 —
 3,181,825
Weighted-average vested Carlyle Holdings Partnership units—
 224,826,988
 —
 221,377,938
Unvested Carlyle Holdings Partnership units—
 536,175
 —
 358,707
Weighted-average common units outstanding83,602,503
 312,534,968
 82,062,633
 306,981,103
Three Months Ended
June 30, 2020		Six Months Ended
June 30, 2020
BasicDilutedBasicDiluted
The Carlyle Group Inc. weighted-average common shares outstanding348,574,528 348,574,528 348,407,144 348,407,144 
Unvested restricted stock units0 6,106,056 0 0 
Issuable The Carlyle Group Inc. common shares0 2,587,691 0 0 
Weighted-average common shares outstanding348,574,528 357,268,275 348,407,144 348,407,144 
The Carlyle Group L.P. weighted-average common units outstanding includes vested deferred restricted common units and common units associated with acquisitions that have been earned for which issuance of the related common units is deferred until future periods.
The PartnershipCompany applies the treasury stock method to determine the dilutive weighted-average common unitsshares represented by the unvested deferred restricted commonstock units. Also included in the determination of dilutive weighted-average common unitsshares are issuable Carlyle Holdings partnership unitscommon shares associated with the Partnership'sCompany’s acquisitions, strategic investmentsinvestment in NGP.
The Partnership applies the “if-converted” method to the vested Carlyle Holdings partnership units to determine the dilutive weighted-average common units outstanding. The Partnership applies the treasuryNGP and performance-vesting restricted stock method to the unvested Carlyle Holdings partnership units and the “if-converted” method on the resulting number of additional Carlyle Holdings partnership units to determine the dilutive weighted-average common units represented by the unvested Carlyle Holdings partnership units.
In computing the dilutive effect that the exchange of Carlyle Holdings partnership units would have on earnings per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Carlyle Holdings (including any tax impact). Based on these calculations, 228,839,164 of vested Carlyle Holdings partnership units and 2,000,754 of unvested Carlyle Holdings partnership units for the three months ended September 30, 2017 were dilutive. As a result, net income of non-controlling interests in Carlyle Holdings associated with the assumed exchange of $97.8 million for the three months ended September 30, 2017 has been included in net income attributable to The Carlyle Group L.P. for purposes of the dilutive earnings per common unit calculation. Further, 227,315,486 of vested Carlyle Holdings partnership units and 1,963,185 of unvested Carlyle Holdings partnership units for the nine months ended September 30, 2017 All such awards were antidilutive and therefore have been excluded.
Further, based on these calculations, 224,826,988 and 221,377,938 of vested Carlyle Holdings partnership units and 536,175 and 358,707 of unvested Carlyle Holdings partnership units for the three and nine months ended September 30, 2016 were dilutive. As a result, a net (loss) income of non-controlling interests in Carlyle Holdings associated with the assumed exchange of $(5.7) million and $8.1 million for the three and nine months ended September 30, 2016 have been included in net income attributable to The Carlyle Group L.P. for purposes of the dilutive earnings per common unit calculation.
On August 1, 2013, as part of acquiring the remaining 40% equity interests in AlpInvest, the Partnership issued 914,087 common units that are subject to vesting conditions. As of September 30, 2017, 7,782 common units remain unvested. The common units participate immediately in any Partnership distributions. Under ASC 260, these common units are considered
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


participating securities and are required to be included inexcluded from the computation of diluted earnings per common unit pursuant to the two-class method.

14. Equity and Equity-Based Compensation

Preferred Unit Issuance
On September 13, 2017, the Partnership issued 16,000,000 of 5.875% Series A Preferred Units (the “Preferred Units”) for gross proceeds of $400.0 million, or $387.6 million, net of issuance costs and expenses. The Partnership plans to useshare given the net proceeds fromloss attributable to common stockholders for the sale of the Preferred Units for general corporate purposes, including to fund investments.six months ended June 30, 2020.


Distributions on the Preferred Units will be payable quarterly on March 15, June 15, September 15, and
12. Equity
Stock Repurchase Program
In December 15 of each year, beginning on December 15, 2017, when, as and if declared by2018, the Board of Directors of the general partner of the Partnership, at a rate per annum of 5.875%. Distributions on the Preferred Units are discretionary and non-cumulative.

Subject to certain exceptions, unless distributions have been declared and paid or declared and set apart for payment on the Preferred Units for a quarterly distribution period, during the remainder of that distribution period, the Partnership may not repurchase any common units or any other units that are junior in rank to the Preferred Units and the Partnership may not declare or pay or set apart payment for distributions on any common or junior units for the remainder of that distribution period, other than (i) distributions of tax distribution amounts received from Carlyle Holdings in accordance with the terms of the partnership agreements of the Carlyle Holdings partnerships as in effect on the date the Preferred Units were first issued, (ii) the net unit settlement of equity-based awards granted under The Carlyle Group L.P. 2012 Equity Incentive Plan (the “Equity Incentive Plan”) (or any successor or any similar plan) in order to satisfy associated tax obligations, or (iii) distributions paid in junior units or options, warrants or rights to subscribe for or purchase other units or with proceeds from the substantially concurrent sale of junior units. These restrictions are not applicable during the period from original issue date to, but excluding, December 15, 2017.

The Preferred Units may be redeemed at the Partnership’s option, in whole or in part, at any time on or after September 15, 2022 at a price of $25.00 per Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. Holders of the Preferred Units have no right to require the redemption of the Preferred Units and there is no maturity date.

If a change of control event or tax redemption event occurs prior to September 15, 2022, the Partnership may, at its option, redeem the Preferred Units, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such change in control event or such tax redemption event, as applicable, at a price of $25.25 per Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. If (i) a change of control event occurs (whether before, on or after September 15, 2022) and (ii) the Partnership does not give notice prior to the 31st day following the change in control event to redeem all the outstanding Preferred Units, the distribution rate per annum on the Preferred Units will increase by 5.00%, beginning on the 31st day following such change in control event.

If a rating agency event occurs prior to September 15, 2022, the Partnership may, at its option, redeem the Preferred Units, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such rating agency event, as applicable, at a price of $25.50 per Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions.

The Preferred Units are not convertible into common units or any other class or series of interests or any other security. Holders of the Preferred Units will generally have no voting rights and have none of the voting rights given to holders of the Partnership’s common units, except as otherwise provided in the Partnership's limited partnership agreement.

Unit Repurchase Program
In February 2016, the Board of Directors of the general partner of the PartnershipCompany authorized the repurchase of up to $200$200.0 million of common units and/or Carlyle Holdings units.units, inclusive of amounts under the February 2016 repurchase program described below. As part of the Conversion, in January 2020 the Board of Directors re-authorized the December 2018 repurchase program. In February 2021, the Board of Directors replenished the repurchase program to its limit of $200 million of common stock from its maximum remaining repurchase amount of $139.1 million. Under this unit repurchase program, unitsshares of common stock may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The Partnership expects that the majority of repurchases under this program will be done via open market transactions. No units will be repurchased from the Partnership's executive officers under this program. The timing and actual number of shares of common units and/or Carlyle Holdings
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


unitsstock repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This unit repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During the ninethree and six months ended SeptemberJune 30, 2017,2021, the PartnershipCompany paid an aggregate of $0.2$15.0 million and $25.0 million, respectively, to repurchase and retire 14,190 unitsapproximately 0.3 million and 0.6 million shares, respectively, with all of the repurchases done via open market and brokered transactions. ThereAs of June 30, 2021, $175.0 million of repurchase capacity remains under the program.


48
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Dividends
The table below presents information regarding the quarterly dividends on the common shares, which were no unit repurchases formade at the three months ended September 30, 2017. Since inceptionsole discretion of this program, the Partnership has paid an aggregateBoard of $59.1 millionDirectors of the Company.
Dividend Record DateDividend Payment DateDividend per Common ShareDividend to Common Stockholders
(Dollars in millions, except per share data)
May 12, 2020May 19, 2020$0.25 $87.2 
August 11, 2020August 18, 20200.25 88.3 
November 10, 2020November 17, 20200.25 88.4 
February 16, 2021February 23, 20210.25 88.7 
Total 2020 Dividend Year$1.00 $352.6 
May 11, 2021May 19, 2021$0.25 $88.7 
August 10, 2021August 17, 20210.25 89.3 
Total 2021 Dividend Year (through Q2 2021)$0.50 $178.0 
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 repurchaseits common stockholders or by subsidiaries to the Company, and retire 3.7 million units.

Quarterly Unit Exchange Program

Beginning inother such factors as the second quarterBoard of 2017, current and former senior Carlyle professionals are able to exchange their Carlyle Holdings partnership units for common units on a quarterly basis, subject toDirectors may deem relevant. In addition, the terms of the Exchange Agreement. DuringCompany’s credit facility provide certain limits on the three and nine months ended September 30, 2017, current and former senior Carlyle professionals exchanged 1,646,980 and 4,634,232, respectively, Carlyle Holdings partnership units for common units, resulting in a reallocation of capital of $9.2 million and $23.2 million, respectively, from non-controlling interests in Carlyle HoldingsCompany’s ability to partners' capital and accumulated other comprehensive loss. None of Carlyle's named executive officers participated in the quarterly unit exchange.pay dividends.

13. Equity-Based Compensation

In May 2012, Carlyle Group Management L.L.C., the general partner of the Partnership, adopted the Equity Incentive Plan. The Equity Incentive Plan, which was amended on January 1, 2020 in connection with the Conversion to reflect shares of the Company’s common stock, is a source of equity-based awards permitting the PartnershipCompany to grant to Carlyle employees, directors of the Partnership’s general partner and consultants non-qualified options, unitshare appreciation rights, common units,shares, restricted common units, deferred restricted common units, phantom restricted commonstock units and other awards based on the Partnership’sCompany’s common units and Carlyle Holdings partnership units.shares. The total number of the Partnership’sCompany’s common units and Carlyle Holdings partnership unitsshares which were initially available for grant under the Equity Incentive Plan was 30,450,000. ThePrior to June 1, 2021, the Equity Incentive Plan containscontained a provision which automatically increasesincreased the number of the Partnership’sCompany’s common units and Carlyle Holdings partnership unitsshares available for grant based on a pre-determined formula; this increase occursoccurred annually on January 1. As of January 1, 2017,2021, pursuant to the formula, the total number of the Partnership’sCompany’s common units and Carlyle Holdings partnership unitsshares available for grant under the Equity Incentive Plan was 32,645,874.
Unvested Partnership Common Units
35,352,057. On AugustJune 1, 2013,2021, the Partnership acquired the remaining 40% equity interest in AlpInvest. As partshareholders of the transaction,Company approved an amended and restated Equity Incentive Plan to establish a new 16,000,000 share reserve for awards granted under the Partnershipplan, to replace the former automatic share reserve formula.
A summary of the status of the Company’s non-vested equity-based awards as of June 30, 2021 and a summary of changes for the six months ended June 30, 2021, are presented below:
Unvested SharesRestricted
Stock
Units		Weighted-
Average
Grant Date
Fair Value
Unvested
Common
Shares (1)
Weighted-
Average
Grant Date
Fair Value
Balance, December 31, 20208,523,082$21.70 748,344 $25.39 
Granted10,622,239 $31.16 291,396 $32.93 
Vested1,573,395 $25.00 0 $0 
Forfeited108,423 $24.40 0 $0 
Balance, June 30, 202117,463,503$28.80 1,039,740 $27.50 
(1) Includes common shares issued 914,087 commonin connection with the Company’s strategic investment in NGP.
During the six months ended June 30, 2021, the Company granted 7.0 million long-term, strategic restricted stock units to AlpInvest sellers who are employeescertain senior professionals, the majority of the Partnership thatwhich are subject to vesting conditions. These common units were unvested at grant and vestbased on the achievement of annual performance targets over a period of up to fivefour years. The unvested common units are accounted for as equity-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). The grant-date fair value of the unvested common units is charged to equity-based compensation on a straight-line basiscost will be recognized over the requiredrequisite service period. For three and nine months ended September 30, 2017 and 2016,period if it is probable that the expense associated with these awards was not material.performance condition will be satisfied.


As of September 30, 2017, the total unrecognized equity-based compensation expense related to unvested common units was not material and is expected to be recognized within the year.
49
Unvested Carlyle Holdings Partnership Units
Unvested Carlyle Holdings partnership units are held by senior Carlyle professionals and other individuals engaged in Carlyle’s business and generally vest ratably over a six-year period. The unvested Carlyle Holdings partnership units are accounted for as equity-based compensation in accordance with ASC 718. The grant-date fair value of the unvested Carlyle Holdings partnership units are charged to equity-based compensation expense on a straight-line basis over the required service period. The Partnership recorded equity-based compensation expense associated with these awards of $42.7 million and $40.8 million for the three months ended September 30, 2017 and 2016, respectively, and $121.7 million and $147.6 million for the nine months ended September 30, 2017 and 2016, respectively. No tax benefits have been recorded related to the unvested Carlyle Holdings partnership units, as the vesting of these units does not result in a tax deduction to the corporate taxpayers.
In connection with the Partnership’s investment in NGP Management in December 2012, the Partnership issued 996,572 Carlyle Holdings partnership units to ECM Capital, L.P. which vest ratably over a period of five years. The Partnership also issued 597,944 Carlyle Holdings partnership units to ECM Capital, L.P. that were issued at closing but vest upon the
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



achievementThe Company recorded compensation expense for restricted stock units of performance conditions. As disclosed in Note 5, the performance condition was removed as part of the March 2017 agreement with NGP. The fair value of these units will be recognized as a reduction to the Partnership’s investment income in NGP Management over the relevant service period, based on the fair value of the units on each reporting date$47.1 million and adjusted$30.5 million for the actual fair valuethree months ended June 30, 2021 and 2020, respectively, with $10.6 million and $7.7 million of corresponding deferred tax benefits, respectively. The Company recorded compensation expense for restricted stock units of $79.5 million and $59.6 million for the units at each vesting date. For the periods prior to 2017 for Carlyle Holdings partnership units that vest based on the achievementsix months ended June 30, 2021 and 2020, respectively, with $17.3 million and $15.0 million of performance conditions, the Partnership used the minimum number of partnership units within the range of potential values for measurement and recognition purposes.
corresponding deferred tax benefits, respectively. As of SeptemberJune 30, 2017,2021, the total unrecognized equity-based compensation expense related to unvested Carlyle Holdings partnershiprestricted stock units is $100.8was $358.1 million, which is expected to be recognized over a weighted-average term of 0.62.4 years.

Deferred Restricted Common Units
The deferred restricted common units are unvested when granted and vest ratably over a service period, which ranges up to six years. The grant-date fair value of the deferred restricted common units granted to Carlyle’s employees is charged to equity-based compensation expense on a straight-line basis over the required service period. Additionally, the calculation of the expense assumes a per unit discount that generally ranges up to 40%, as these unvested awards do not participate in any Partnership distributions. The Partnership recorded compensation expense of $38.1 million and $40.6 million for the three months ended September 30, 2017 and 2016, respectively, with $4.6 million and $4.4 million of corresponding deferred tax benefits, respectively. The Partnership recorded compensation expense of $119.9 million and $116.8 million for the nine months ended September 30, 2017 and 2016, respectively with $14.0 million and $13.5 million of corresponding deferred tax benefits, respectively. As of September 30, 2017, the total unrecognized equity-based compensation expense related to unvested deferred restricted common units is $190.7 million, which is expected to be recognized over a weighted-average term of 2.0 years.
Equity-based awards issued to non-employees are recognized as general, administrative and other expenses. The expense associated with the deferred restricted common units granted to NGP personnel by the Partnership are recognized as a reduction of the Partnership’s investment income in NGP Management. The grant-date fair value of deferred restricted common units granted to Carlyle’s non-employee directors is charged to expense on a straight-line basis over the vesting period. The cost of services received in exchange for an equity-based award issued to consultants is measured at each vesting date. Equity-based awards that require the satisfaction of future service criteria are recognized over the relevant service period based on the fair value of the award on each reporting date and adjusted for the actual fair value of the award at each vesting date. The expense for equity-based awards issued to non-employees was not significant for the three and nine months ended September 30, 2017 and 2016.
A summary of the status of the Partnership’s non-vested equity-based awards as of September 30, 2017 and a summary of changes for the nine months ended September 30, 2017, are presented below:
 Carlyle Holdings The Carlyle Group L.P.
     Equity Settled Awards Cash Settled Awards
Unvested UnitsPartnership
Units		 Weighted-
Average
Grant Date
Fair Value		 Deferred
Restricted
Common
Units		 Weighted-
Average
Grant Date
Fair Value		 Unvested
Common
Units		 Weighted-
Average
Grant Date
Fair Value		 Phantom
Units		 Weighted-
Average
Grant Date
Fair Value
Balance, December 31, 201617,240,000
 $22.22
 16,705,920
 $19.21
 38,911
 $21.67
 2,520
 $34.81
Granted—
 $—
 8,226,461
 $14.14
 —
 $—
 —
 $—
Vested8,145,924
 $22.22
 8,288,838
 $19.67
 31,129
 $21.53
 2,520
 $34.81
Forfeited437,314
 $22.22
 453,461
 $20.22
 —
 $—
 —
 $—
Balance, September 30, 20178,656,762
 $22.00
 16,190,082
 $16.77
 7,782
 $22.22
 —
 $—


The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


15. Deconsolidation of a Real Estate Development Company

The Partnership, indirectly through certain Carlyle real estate investment funds, had an investment in Urbplan Desenvolvimento Urbano S.A. (“Urbplan”), a Brazilian residential subdivision and land development company. During the three months ended September 30, 2017, the Partnership disposed of its interests in Urbplan in a transaction with a third party. The third party acquired operational control and all of the economic interests in Urbplan in the transaction. Since the Partnership is no longer the primary beneficiary of Urbplan, Urbplan was deconsolidated from the Partnership's financial results. The Partnership recorded a pre-tax loss upon deconsolidation of $65 million during the three months ended September 30, 2017, which includes the impact of deconsolidation, the terms of the transaction with the third party and related reserves. The loss is recorded in interest and other expenses of a real estate VIE and loss on deconsolidation in the unaudited condensed consolidated statements of operations. Excluding the effect of this transaction, Urbplan's income before provision for income taxes prior to the transaction in the three months ended September 30, 2017 was not material to the Partnership's consolidated financial statements.

The Partnership concluded that Urbplan was a VIE as of September 30, 2013 because Urbplan’s equity investment at risk was not sufficient to permit it to finance its activities without additional financial support. The Partnership also concluded that it was the primary beneficiary of Urbplan. As such, the Partnership began consolidating Urbplan into its consolidated financial statements as of September 30, 2013. Due to the timing and availability of financial information from Urbplan, the Partnership consolidated the financial position and results of operations of Urbplan on a financial reporting lag of 90 days. The assets and liabilities of Urbplan were held in legal entities separate from the Partnership; the Partnership did not guarantee or assume any obligation for repayment of Urbplan’s liabilities nor were the assets of Urbplan available to meet the liquidity requirements of the Partnership.
Urbplan is party to various claims, litigation, government investigations and proceedings, including disputes with creditors and customers. The Partnership does not believe it is probable that the outcome of any Urbplan litigation, disputes or other potential claims will materially affect the Partnership or these consolidated financial statements.
The assets and liabilities recognized in the Partnership’s condensed consolidated balance sheets as of December 31, 2016 related to Urbplan were as follows:
 As of
 December 31, 2016
 (Dollars in millions)
Receivables and inventory of a real estate VIE: 
Customer and other receivables$99.4
Inventory costs in excess of billings and advances46.0
 $145.4
Other assets of a real estate VIE: 
Restricted investments$12.7
Fixed assets, net0.2
Deferred tax assets9.1
Other assets9.5
 $31.5
Loans payable of a real estate VIE at fair value (principal amount of $144.4 million as of December 31, 2016)$79.4
Other liabilities of a real estate VIE: 
Accounts payable$14.6
Other liabilities109.9
 $124.5

The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The revenues and expenses recognized in the Partnership’s unaudited condensed consolidated statements of operations for the nine months ended September 30, 2017 and 2016 related to Urbplan were as follows:
 Nine Months Ended September 30, 2017
 (Dollars in millions)
Revenue of a real estate VIE: 
Land development services$104.6
Investment income4.4
 $109.0
Interest and other expenses of a real estate VIE: 
Costs of products sold and services rendered$64.4
Interest expense18.5
Change in fair value of loans payable(6.6)
Compensation and benefits2.8
G&A and other expenses58.9
Loss on deconsolidation64.5
 $202.5
 Nine Months Ended September 30, 2016
 (Dollars in millions)
Revenue of a real estate VIE: 
Land development services$35.5
Investment income26.0
 $61.5
Interest and other expenses of a real estate VIE: 
Costs of products sold and services rendered$18.9
Interest expense36.2
Change in fair value of loans payable(2.6)
Compensation and benefits5.5
G&A and other expenses99.9
 $157.9

The following is a summary of the significant classifications of revenues and expenses of Urbplan:
Revenue of a real estate VIE – This balance consisted primarily of amounts earned for land development services using the completed contract method and investment income earned on Urbplan’s investments. Under the completed contract method of accounting, revenue was not recorded until the period in which the land development services contract is completed.
Interest and other expenses of a real estate VIE and loss on deconsolidation – This balance consisted primarily of interest expense on Urbplan’s borrowings, general and administrative expenses, compensation and benefits, costs associated with land development services, and the loss incurred upon the deconsolidation of Urbplan during the three months ended September 30, 2017. Also included in this caption was the change in the Partnership’s estimate of the fair value of Urbplan’s loans payable during the period. Interest expense is recorded on Urbplan’s borrowings at variable rates as defined. Costs related to Urbplan’s land development services activities were capitalized until the services are complete. Costs associated with advertising, marketing and other selling activities were expensed when incurred.


The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


16.14. Segment Reporting
Carlyle conducts its operations through four3 reportable segments:
CorporateGlobal Private Equity – The CorporateGlobal Private Equity segment is comprised of the Partnership’sCompany’s operations that advise a diverse group of funds that invest in buyout, middle market and growth capital, transactions that focus on either a particular geography or a particular industry.
Real Assets – The Real Assets segment is comprised of the Partnership’s operations that advise U.S. and international funds focused on real estate infrastructure, energy and renewable energynatural resources transactions.
Global Market StrategiesCredit – The Global Market StrategiesCredit segment advises a group of funds that pursue investment opportunities across various types of credit, equitiesincluding loans and alternative instruments,structured credit, direct lending, opportunistic credit, energy credit, distressed credit, aircraft financing and (as regards certain macroeconomic strategies) currencies,servicing, and interest rate products and their derivatives. We have now completed the exit of our hedge fund investment advisory and commodities investment advisory businesses.capital solutions.
Investment Solutions – The Investment Solutions segment advises global private equity fund of funds programs and related co-investment and secondary activities through AlpInvest. This segment also includesincluded Metropolitan Real Estate (“MRE”), a global manager of real estate fund of funds and related co-investment and secondary activities, and for the three months ended March 31, 2016, Diversified Global Asset Management ("DGAM"). The Partnership wound down the operations of DGAM throughout 2016.prior to its sale on April 1, 2021.
The Partnership’sCompany’s reportable business segments are differentiated by their various investment focuses and strategies. Overhead costs are generally allocated based on direct basecash-based compensation and benefits expense for each segment. The Partnership includes adjustments to reflect the Partnership’s economic interests in Claren Road (through January 2017) and ESG (through June 2016). Effective January 1, 2016, the Partnership's economic interest in Claren Road increased from 55% to 63% as a result of reallocation of interest from a departing founder. On January 31, 2017, the Partnership transferred all of its economic interests in Claren Road to its founders (see Note 9). The Partnership’sCompany’s earnings from its investment in NGP are presented in the respective operating captions within the Real AssetsGlobal Private Equity segment. The
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 3 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 income or loss fromrealized earnings without the effects of the consolidation of Urbplan allocable to the Partnership (after consideration of amounts allocable to non-controlling interests)Consolidated Funds. DE is presented within investment income in the Real Assets segment until the three months ended September 30, 2017 when Urbplan was deconsolidatedderived from the Partnership's financialCompany’s segment reported results (See Note15).and is used to assess performance.
Economic Net Income (“ENI”) and its components are key performance measures used by management to make operating decisions and assess the performance of the Partnership’s reportable segments. ENIDistributable 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 fees,revenues (comprised of performance allocations and incentive fees), and does not include unrealized performance allocations and related compensation expense, unrealized principal investment income, equity-based compensation expense, net income (loss) attributable to non-Carlyle interests in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items. Charges (credits) related to Carlyle corporate actions and non-recurring items include: charges (credits) associated with equity-based compensation that was issued in the initial public offering in May 2012 or is issued in acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earnouts and contingent consideration including gains and losses associated with the estimated fair value of contingent considerationconsiderations issued in conjunction with acquisitions or strategic investments, impairment charges associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract terminations and employee severance. Management believes the inclusion or exclusion of these items provides investors with a meaningful indication of the Company’s core operating performance.
Fee Related Earnings. Fee Related Earnings, (“FRE”) is a component of ENI andor “FRE,” is used to assess the ability of the business to cover direct base compensation and operating expenses from total fee revenues. FRE differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of ENIDE and also adjusts ENIDE to exclude net realized performance fees,revenues, realized principal investment income, from investments in Carlyle funds, equity-based compensationnet interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain.
Distributable Earnings (“DE”) is FRE plus realized net performance feesThe following tables present the financial data for the Company’s 3 reportable segments for the three and realized investment income, and is used to assess performance and amounts potentially available for distribution. DE is used by management primarily in making resource deployment and compensation decisions across the Partnership’s four reportable segments. Management also uses Distributable Earnings in our budgeting, forecasting, and the overall management of our segments. Management makes operating decisions and assesses the performance of each of the Partnership’s business segments based on financial and operating metrics and data that is presented without the consolidation of any of the Consolidated Funds. Consequently, the key performance measures discussed above and all segment data exclude the assets, liabilities and operating results related to the Consolidated Funds.six months ended June 30, 2021:


50
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)




The following table presents the financial data for the Partnership’s four reportable segments for the three and nine months ended September 30, 2017:
Three Months Ended June 30, 2021
Global
Private
Equity		Global
Credit		Investment
Solutions		Total
(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$263.4 $86.1 $60.3 $409.8 
Portfolio advisory and transaction fees, net and other6.2 9.4 0 15.6 
Total fund level fee revenues269.6 95.5 60.3 425.4 
Realized performance revenues428.9 0 25.1 454.0 
Realized principal investment income24.0 9.8 4.0 37.8 
Interest income0.5 1.2 0.1 1.8 
Total revenues723.0 106.5 89.5 919.0 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits133.6 55.6 28.2 217.4 
Realized performance revenues related compensation193.6 0 23.0 216.6 
Total compensation and benefits327.2 55.6 51.2 434.0 
General, administrative, and other indirect expenses36.4 13.0 6.2 55.6 
Depreciation and amortization expense6.1 2.0 1.1 9.2 
Interest expense15.7 6.3 2.8 24.8 
Total expenses385.4 76.9 61.3 523.6 
Distributable Earnings$337.6 $29.6 $28.2 $395.4 
(-) Realized Net Performance Revenues235.3 0 2.1 237.4 
(-) Realized Principal Investment Income24.0 9.8 4.0 37.8 
(+) Net Interest15.2 5.1 2.7 23.0 
(=) Fee Related Earnings93.5 24.9 24.8 143.2 


51
 Three Months Ended September 30, 2017
 Corporate
Private
Equity		 Real
Assets		 Global
Market
Strategies		 Investment
Solutions		 Total
 (Dollars in millions)
Segment Revenues         
Fund level fee revenues         
Fund management fees$118.3
 $71.4
 $47.6
 $41.1
 $278.4
Portfolio advisory fees, net3.6
 0.4
 0.1
 —
 4.1
Transaction fees, net5.3
 0.8
 —
 —
 6.1
Total fund level fee revenues127.2
 72.6
 47.7
 41.1
 288.6
Performance fees         
Realized345.4
 20.4
 15.0
 30.2
 411.0
Unrealized(193.2) 60.8
 2.6
 4.2
 (125.6)
Total performance fees152.2
 81.2
 17.6
 34.4
 285.4
Investment income (loss)         
Realized6.5
 (64.6) 4.7
 —
 (53.4)
Unrealized4.1
 12.4
 —
 1.6
 18.1
Total investment income (loss)10.6
 (52.2) 4.7
 1.6
 (35.3)
Interest income1.8
 1.0
 2.0
 0.6
 5.4
Other income1.6
 0.6
 1.1
 0.1
 3.4
Total revenues293.4
 103.2
 73.1
 77.8
 547.5
Segment Expenses         
Compensation and benefits         
Direct base compensation65.3
 24.5
 23.0
 19.7
 132.5
Indirect base compensation18.3
 14.8
 6.7
 5.0
 44.8
Equity-based compensation14.5
 8.7
 5.1
 2.1
 30.4
Performance fee related         
Realized147.7
 9.2
 7.3
 29.9
 194.1
Unrealized(76.1) 21.6
 0.8
 (2.0) (55.7)
Total compensation and benefits169.7
 78.8
 42.9
 54.7
 346.1
General, administrative, and other indirect expenses20.5
 10.5
 (63.6) 6.1
 (26.5)
Depreciation and amortization expense4.1
 1.9
 1.3
 0.9
 8.2
Interest expense7.0
 4.2
 4.2
 1.6
 17.0
Total expenses201.3
 95.4
 (15.2) 63.3
 344.8
Economic Net Income$92.1
 $7.8
 $88.3
 $14.5
 $202.7
(-) Net Performance Fees80.6
 50.4
 9.5
 6.5
 147.0
(-) Investment Income (Loss)10.6
 (52.2) 4.7
 1.6
 (35.3)
(+) Equity-based Compensation14.5
 8.7
 5.1
 2.1
 30.4
(+) Reserve for Litigation and Contingencies(12.5) (5.8) (4.1) (2.6) (25.0)
(=) Fee Related Earnings$2.9
 $12.5
 $75.1
 $5.9
 $96.4
(+) Realized Net Performance Fees197.7
 11.2
 7.7
 0.3
 216.9
(+) Realized Investment Income (Loss)6.5
 (64.6) 4.7
 —
 (53.4)
(=) Distributable Earnings$207.1
 $(40.9) $87.5
 $6.2
 $259.9
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)




 Six Months Ended June 30, 2021
 Global
Private
Equity		Global
Credit		Investment SolutionsTotal
 (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$523.6 $166.1 $112.3 $802.0 
Portfolio advisory and transaction fees, net and other16.8 18.2 0.3 35.3 
Total fund level fee revenues540.4 184.3 112.6 837.3 
Realized performance revenues563.0 0.1 59.3 622.4 
Realized principal investment income47.7 15.7 4.4 67.8 
Interest income0.7 3.2 0.1 4.0 
Total revenues1,151.8 203.3 176.4 1,531.5 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits262.7 109.3 57.6 429.6 
Realized performance revenues related compensation253.8 0 55.2 309.0 
Total compensation and benefits516.5 109.3 112.8 738.6 
General, administrative, and other indirect expenses77.8 24.8 14.6 117.2 
Depreciation and amortization expense12.2 3.9 2.2 18.3 
Interest expense29.5 12.6 5.0 47.1 
Total expenses636.0 150.6 134.6 921.2 
Distributable Earnings$515.8 $52.7 $41.8 $610.3 
(-) Realized Net Performance Revenues309.2 0.1 4.1 313.4 
(-) Realized Principal Investment Income47.7 15.7 4.4 67.8 
(+) Net Interest28.8 9.4 4.9 43.1 
(=) Fee Related Earnings187.7 46.3 38.2 272.2 
Segment assets as of June 30, 2021$9,822.8 $1,881.5 $1,612.9 $13,317.2 


52
 September 30, 2017 and the Nine Months Then Ended
 Corporate
Private
Equity		 Real
Assets		 Global
Market
Strategies		 Investment Solutions Total
 (Dollars in millions)
Segment Revenues         
Fund level fee revenues         
Fund management fees$351.7
 $185.6
 $140.8
 $113.1
 $791.2
Portfolio advisory fees, net11.9
 0.6
 0.5
 —
 13.0
Transaction fees, net14.2
 0.8
 —
 —
 15.0
Total fund level fee revenues377.8
 187.0
 141.3
 113.1
 819.2
Performance fees         
Realized668.8
 73.6
 37.8
 66.5
 846.7
Unrealized465.0
 200.1
 15.5
 32.1
 712.7
Total performance fees1,133.8
 273.7
 53.3
 98.6
 1,559.4
Investment income (loss)         
Realized15.6
 (72.4) 8.6
 —
 (48.2)
Unrealized22.9
 24.4
 4.3
 3.1
 54.7
Total investment income (loss)38.5
 (48.0) 12.9
 3.1
 6.5
Interest income3.7
 2.0
 4.6
 0.9
 11.2
Other income4.2
 1.3
 5.6
 0.3
 11.4
Total revenues1,558.0
 416.0
 217.7
 216.0
 2,407.7
Segment Expenses         
Compensation and benefits         
Direct base compensation175.4
 61.6
 55.3
 51.9
 344.2
Indirect base compensation55.0
 45.6
 20.9
 11.9
 133.4
Equity-based compensation47.3
 26.8
 16.9
 6.2
 97.2
Performance fee related         
Realized295.4
 33.4
 18.2
 65.4
 412.4
Unrealized221.1
 60.1
 6.9
 18.4
 306.5
Total compensation and benefits794.2
 227.5
 118.2
 153.8
 1,293.7
General, administrative, and other indirect expenses83.9
 52.6
 (18.6) 21.6
 139.5
Depreciation and amortization expense11.5
 5.3
 3.8
 2.6
 23.2
Interest expense21.1
 12.7
 10.0
 4.6
 48.4
Total expenses910.7
 298.1
 113.4
 182.6
 1,504.8
Economic Net Income$647.3
 $117.9
 $104.3
 $33.4
 $902.9
(-) Net Performance Fees617.3
 180.2
 28.2
 14.8
 840.5
(-) Investment Income (Loss)38.5
 (48.0) 12.9
 3.1
 6.5
(+) Equity-based Compensation47.3
 26.8
 16.9
 6.2
 97.2
(+) Reserve for Litigation and Contingencies(12.5) (5.8) (4.1) (2.6) (25.0)
(=) Fee Related Earnings$26.3
 $6.7
 $76.0
 $19.1
 $128.1
(+) Realized Net Performance Fees373.4
 40.2
 19.6
 1.1
 434.3
(+) Realized Investment Income (Loss)15.6
 (72.4) 8.6
 —
 (48.2)
(=) Distributable Earnings$415.3
 $(25.5) $104.2
 $20.2
 $514.2
Segment assets as of September 30, 2017$3,472.9
 $1,861.8
 $996.5
 $1,063.4
 $7,394.6

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



The following table presentstables present the financial data for the Partnership’s fourCompany’s 3 reportable segments for the three and ninesix months ended SeptemberJune 30, 2016:2020:

Three Months Ended June 30, 2020
Global
Private
Equity		Global
Credit		Investment
Solutions		Total
(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$262.5 $78.3 $45.6 $386.4 
Portfolio advisory and transaction fees, net and other3.1 15.2 0 18.3 
Total fund level fee revenues265.6 93.5 45.6 404.7 
Realized performance revenues116.0 5.5 30.7 152.2 
Realized principal investment income16.3 5.3 0.5 22.1 
Interest income0.5 2.6 0.1 3.2 
Total revenues398.4 106.9 76.9 582.2 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits130.6 54.5 25.0 210.1 
Realized performance revenues related compensation51.8 2.5 27.0 81.3 
Total compensation and benefits182.4 57.0 52.0 291.4 
General, administrative, and other indirect expenses37.6 13.1 7.4 58.1 
Depreciation and amortization expense6.1 1.8 1.3 9.2 
Interest expense15.8 6.9 2.4 25.1 
Total expenses241.9 78.8 63.1 383.8 
Distributable Earnings$156.5 $28.1 $13.8 $198.4 
(-) Realized Net Performance Revenues64.2 3.0 3.7 70.9 
(-) Realized Principal Investment Income16.3 5.3 0.5 22.1 
(+) Net Interest15.3 4.3 2.3 21.9 
(=) Fee Related Earnings$91.3 $24.1 $11.9 $127.3 


53
 Three Months Ended September 30, 2016
 Corporate
Private
Equity		 Real
Assets		 Global
Market
Strategies		 Investment
Solutions		 Total
 (Dollars in millions)
Segment Revenues         
Fund level fee revenues         
Fund management fees$122.9
 $60.3
 $44.1
 $33.1
 $260.4
Portfolio advisory fees, net2.9
 —
 0.1
 0.8
 3.8
Transaction fees, net1.4
 —
 —
 —
 1.4
Total fund level fee revenues127.2
 60.3
 44.2
 33.9
 265.6
Performance fees         
Realized311.1
 19.2
 14.3
 36.3
 380.9
Unrealized(124.2) 2.0
 3.1
 (6.8) (125.9)
Total performance fees186.9
 21.2
 17.4
 29.5
 255.0
Investment income (loss)         
Realized24.1
 (14.1) 1.1
 —
 11.1
Unrealized(9.6) 4.5
 7.1
 0.2
 2.2
Total investment income (loss)14.5
 (9.6) 8.2
 0.2
 13.3
Interest income0.9
 0.4
 1.1
 0.1
 2.5
Other income1.3
 0.4
 1.2
 0.2
 3.1
Total revenues330.8
 72.7
 72.1
 63.9
 539.5
Segment Expenses         
Compensation and benefits         
Direct base compensation52.7
 17.2
 20.9
 16.3
 107.1
Indirect base compensation17.8
 8.9
 7.5
 2.7
 36.9
Equity-based compensation19.8
 7.1
 4.4
 1.6
 32.9
Performance fee related         
Realized143.5
 8.7
 6.6
 35.8
 194.6
Unrealized(57.8) (15.7) 1.3
 (9.7) (81.9)
Total compensation and benefits176.0
 26.2
 40.7
 46.7
 289.6
General, administrative, and other indirect expenses81.4
 37.2
 37.7
 17.3
 173.6
Depreciation and amortization expense3.4
 1.4
 1.5
 0.9
 7.2
Interest expense7.0
 4.1
 3.0
 1.5
 15.6
Total expenses267.8
 68.9
 82.9
 66.4
 486.0
Economic Net Income (Loss)$63.0
 $3.8
 $(10.8) $(2.5) $53.5
(-) Net Performance Fees101.2
 28.2
 9.5
 3.4
 142.3
(-) Investment Income (Loss)14.5
 (9.6) 8.2
 0.2
 13.3
(+) Equity-based Compensation19.8
 7.1
 4.4
 1.6
 32.9
(+) Reserve for Litigation and Contingencies49.8
 21.6
 19.0
 9.6
 100.0
(=) Fee Related Earnings$16.9
 $13.9
 $(5.1) $5.1
 $30.8
(+) Realized Net Performance Fees167.6
 10.5
 7.7
 0.5
 186.3
(+) Realized Investment Income (Loss)24.1
 (14.1) 1.1
 —
 11.1
(=) Distributable Earnings$208.6
 $10.3
 $3.7
 $5.6
 $228.2

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



 Six Months Ended June 30, 2020
Global
Private
Equity		Global
Credit		Investment SolutionsTotal
 (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$531.2 $151.3 $85.4 $767.9 
Portfolio advisory and transaction fees, net and other7.3 17.8 0 25.1 
Total fund level fee revenues538.5 169.1 85.4 793.0 
Realized performance revenues181.2 26.5 116.1 323.8 
Realized principal investment income26.5 10.4 1.1 38.0 
Interest income2.3 5.7 0.5 8.5 
Total revenues748.5 211.7 203.1 1,163.3 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits260.3 103.6 50.0 413.9 
Realized performance revenues related compensation81.5 12.2 111.0 204.7 
Total compensation and benefits341.8 115.8 161.0 618.6 
General, administrative, and other indirect expenses74.8 18.7 12.9 106.4 
Depreciation and amortization expense10.9 3.4 2.3 16.6 
Interest expense29.7 13.9 4.7 48.3 
Total expenses457.2 151.8 180.9 789.9 
Distributable Earnings$291.3 $59.9 $22.2 $373.4 
(-) Realized Net Performance Revenues99.7 14.3 5.1 119.1 
(-) Realized Principal Investment Income26.5 10.4 1.1 38.0 
(+) Net Interest27.4 8.2 4.2 39.8 
(=) Fee Related Earnings$192.5 $43.4 $20.2 $256.1 
 Nine Months Ended September 30, 2016
 Corporate
Private
Equity		 Real
Assets		 Global
Market
Strategies		 Investment Solutions Total
 (Dollars in millions)
Segment Revenues         
Fund level fee revenues         
Fund management fees$376.9
 $192.0
 $147.4
 $103.7
 $820.0
Portfolio advisory fees, net11.2
 0.1
 0.7
 0.8
 12.8
Transaction fees, net24.3
 —
 —
 —
 24.3
Total fund level fee revenues412.4
 192.1
 148.1
 104.5
 857.1
Performance fees         
Realized775.2
 79.8
 21.5
 42.7
 919.2
Unrealized(496.2) 165.8
 4.6
 19.9
 (305.9)
Total performance fees279.0
 245.6
 26.1
 62.6
 613.3
Investment income (loss)         
Realized46.6
 (21.4) 2.7
 —
 27.9
Unrealized(12.7) 6.5
 14.9
 (0.8) 7.9
Total investment income (loss)33.9
 (14.9) 17.6
 (0.8) 35.8
Interest income2.7
 1.3
 3.7
 0.3
 8.0
Other income4.0
 1.0
 3.5
 0.4
 8.9
Total revenues732.0
 425.1
 199.0
 167.0
 1,523.1
Segment Expenses         
Compensation and benefits         
Direct base compensation165.8
 55.4
 66.3
 49.9
 337.4
Indirect base compensation55.6
 28.2
 22.7
 8.6
 115.1
Equity-based compensation56.0
 20.3
 13.8
 5.1
 95.2
Performance fee related         
Realized345.4
 34.8
 8.1
 41.2
 429.5
Unrealized(219.9) 55.2
 2.2
 13.3
 (149.2)
Total compensation and benefits402.9
 193.9
 113.1
 118.1
 828.0
General, administrative, and other indirect expenses144.3
 70.7
 77.1
 34.6
 326.7
Depreciation and amortization expense10.2
 4.4
 4.6
 2.6
 21.8
Interest expense21.2
 12.1
 8.5
 4.5
 46.3
Total expenses578.6
 281.1
 203.3
 159.8
 1,222.8
Economic Net Income (Loss)$153.4
 $144.0
 $(4.3) $7.2
 $300.3
(-) Net Performance Fees153.5
 155.6
 15.8
 8.1
 333.0
(-) Investment Income (Loss)33.9
 (14.9) 17.6
 (0.8) 35.8
(+) Equity-based Compensation56.0
 20.3
 13.8
 5.1
 95.2
(+) Reserve for Litigation and Contingencies49.8
 21.6
 19.0
 9.6
 100.0
(=) Fee Related Earnings$71.8
 $45.2
 $(4.9) $14.6
 $126.7
(+) Realized Net Performance Fees429.8
 45.0
 13.4
 1.5
 489.7
(+) Realized Investment Income (Loss)46.6
 (21.4) 2.7
 —
 27.9
(=) Distributable Earnings$548.2
 $68.8
 $11.2
 $16.1
 $644.3


    



54
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



The following table reconcilestables reconcile the Total Segments to the Partnership’sCompany’s Income (Loss) Before Provision for Taxes for the three months ended SeptemberJune 30, 20172021 and 2016.2020.

Three Months Ended June 30, 2021
Total 
Reportable Segments		Consolidated FundsReconciling ItemsCarlyle Consolidated
(Dollars in millions)
Revenues$919.0 $62.1 $1,725.2 (a) $2,706.3 
Expenses$523.6 $54.2 $873.2 (b) $1,451.0 
Other income$0 $(2.6)$0 (c) $(2.6)
Distributable earnings$395.4 $5.3 $852.0 (d) $1,252.7 
 Three Months Ended September 30, 2017
 Total Reportable Segments Consolidated Funds Reconciling Items   Carlyle Consolidated
     
 (Dollars in millions)
Revenues$547.5
 $44.7
 $47.7
 (a)  $639.9
Expenses$344.8
 $52.3
 $95.5
 (b)  $492.6
Other income$—
 $18.6
 $—
 (c)  $18.6
Economic net income$202.7
 $11.0
 $(47.8) (d)  $165.9
Three Months Ended September 30, 2016Three Months Ended June 30, 2020
Total Reportable Segments Consolidated Funds Reconciling Items   Carlyle ConsolidatedTotal Reportable SegmentsConsolidated FundsReconciling ItemsCarlyle Consolidated
   
(Dollars in millions)(Dollars in millions)
Revenues$539.5
 $43.0
 $24.8
 (a)  $607.3
Revenues$582.2 $55.2 $493.6 (a) $1,131.0 
Expenses$486.0
 $41.2
 $134.6
 (b)  $661.8
Expenses$383.8 $47.1 $493.6 (b) $924.5 
Other income$—
 $4.8
 $—
 (c)  $4.8
Other income$0 $50.3 $0 (c) $50.3 
Economic net income (loss)$53.5
 $6.6
 $(109.8) (d)  $(49.7)
Distributable earningsDistributable earnings$198.4 $58.4 $0 (d) $256.8 
The following table reconcilestables reconcile the Total Segments to the Partnership’sCompany’s Income (Loss) Before Provision for Taxes for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, and Total Assets as of SeptemberJune 30, 2017.2021.
 Six Months Ended June 30, 2021
 Total Reportable SegmentsConsolidated FundsReconciling ItemsCarlyle Consolidated
 
 (Dollars in millions)
Revenues$1,531.5 $123.2 $3,488.8 (a) $5,143.5 
Expenses$921.2 $110.7 $1,704.3 (b) $2,736.2 
Other income (loss)$0 $9.7 $0 (c) $9.7 
Distributable earnings$610.3 $22.2 $1,784.5 (d) $2,417.0 
Total assets$13,317.2 $6,500.0 $(168.0)(e) $19,649.2 
 September 30, 2017 and the Nine Months Then Ended
 Total Reportable Segments Consolidated Funds Reconciling Items   Carlyle Consolidated
     
 (Dollars in millions)
Revenues$2,407.7
 $132.6
 $128.1
 (a)  $2,668.4
Expenses$1,504.8
 $197.2
 $305.5
 (b)  $2,007.5
Other income$—
 $76.4
 $—
 (c)  $76.4
Economic net income$902.9
 $11.8
 $(177.4) (d)  $737.3
Total assets$7,394.6
 $4,495.5
 $(203.5) (e)  $11,686.6
Nine Months Ended September 30, 2016 Six Months Ended June 30, 2020
Total Reportable Segments Consolidated Funds Reconciling Items   Carlyle Consolidated Total Reportable SegmentsConsolidated FundsReconciling Items Carlyle Consolidated
     
(Dollars in millions) (Dollars in millions)
Revenues$1,523.1
 $107.8
 $67.5
 (a)  $1,698.4
Revenues$1,163.3 $108.2 $(886.2)(a) $385.3 
Expenses$1,222.8
 $105.9
 $339.4
 (b)  $1,668.1
Expenses$789.9 $100.9 $(36.1)(b) $854.7 
Other loss$—
 $3.1
 $—
 (c)  $3.1
Economic net income (loss)$300.3
 $5.0
 $(271.9) (d)  $33.4
Other income (loss)Other income (loss)$0 $(62.8)$0 (c) $(62.8)
Distributable earningsDistributable earnings$373.4 $(55.5)$(850.1)(d) $(532.2)
 
(a)The Revenues adjustment principally represents fund management and performance fees earned from the Consolidated Funds which were eliminated in consolidation to arrive at the Partnership’s total revenues, adjustments for amounts attributable to non-controlling interests in consolidated entities, adjustments related to expenses associated with the investments in NGP Management and its affiliates that are included in operating captions or are excluded from the segment results, adjustments to reflect the Partnership’s share of Urbplan’s net losses as a component of investment income until Urbplan was deconsolidated during the three months ended September 30, 2017, the inclusion of tax expenses associated with certain performance fees, and adjustments to reflect the Partnership’s ownership interests in
(a)The Revenues adjustment principally represents unrealized performance revenues, unrealized principal investment income (loss) (including Fortitude Re), revenues earned from the Consolidated Funds which were eliminated in consolidation to arrive at the Company’s total revenues, adjustments for amounts attributable to non-controlling interests in consolidated entities, adjustments related to expenses associated with the investments in NGP Management and its affiliates that are included in operating captions or are excluded from the segment results, adjustments to reflect the reimbursement of certain costs incurred on behalf of Carlyle funds on a net basis, and the inclusion of tax expenses associated with certain foreign performance revenues, as detailed below:


55
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
(Dollars in millions)
Unrealized performance revenues$1,620.7 $1,037.1 $3,242.5 $(71.9)
Unrealized principal investment income (loss)78.8 (459.5)210.1 (724.2)
Adjusted unrealized principal investment income (loss) from investment in Fortitude Re0 (81.6)0 (104.4)
Adjustments related to expenses associated with investments in NGP Management and its affiliates(3.0)(3.9)(6.6)(7.8)
Tax expense associated with certain performance revenues0.3 0.1 0.2 0.1 
Non-Carlyle economic interests in acquired businesses and other adjustments to present certain costs on a net basis41.1 56.8 86.4 (20.9)
Elimination of revenues of Consolidated Funds(12.7)(55.4)(43.8)42.9 
$1,725.2 $493.6 $3,488.8 $(886.2)
Claren Road (through January 2017)
The following table reconciles the total segments fund level fee revenue to the most directly comparable U.S. GAAP measure, the Company’s consolidated fund management fees, for the three and ESG (throughsix months ended June 2016) that30, 2021 and 2020.
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
Total Reportable Segments - Fund level fee revenues$425.4 $404.7 $837.3 $793.0 
Adjustments (1)
(31.0)(32.9)(61.9)(65.3)
Carlyle Consolidated - Fund management fees$394.4 $371.8 $775.4 $727.7 

(1) Adjustments represent the reclassification of NGP management fees from principal investment income, the reclassification of certain incentive fees from business development companies and other credit products, management fees earned from consolidated CLOs which were eliminated in consolidation to arrive at the Company’s fund management fees, and the reclassification of certain amounts included in Revenuesportfolio advisory fees, net and other in the Partnership’s segment reporting.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 Partnership, the inclusion of certain tax expenses associated with performance fee compensation, adjustments related to expenses associated with the investment in NGP Management that are included in operating captions, adjustments to reflect the Partnership’s share of Urbplan’s net losses as a component of investment income until Urbplan was deconsolidated during the three months ended September 30, 2017, changes in the tax receivable agreement liability, charges and credits associated with Carlyle corporate actions and non-recurring items and adjustments to reflect the Partnership’s economic interests in Claren Road (through January 2017) and ESG (through June 2016), as detailed below (Dollars in millions):
(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:


56
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Equity-based compensation issued in conjunction with the initial public offering, acquisitions and strategic investments$58.3
 $50.6
 $183.8
 $175.3
Acquisition related charges, including amortization of intangibles and impairment7.2
 27.7
 25.2
 67.0
Other non-operating expense (income)—
 (3.7) 0.1
 0.8
Tax expense associated with performance fees(1.7) (2.0) (7.0) (16.1)
Non-Carlyle economic interests in acquired businesses and the real estate VIE46.2
 69.4
 128.8
 120.7
Severance and other adjustments0.6
 1.5
 10.9
 10.3
Elimination of expenses of Consolidated Funds(15.1) (8.9) (36.3) (18.6)
 $95.5
 $134.6
 $305.5
 $339.4

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

(d)The following table is a reconciliation of Income Before Provision for Income Taxes to Economic Net Income, to Fee Related Earnings, and to Distributable Earnings (Dollars in millions):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Income (loss) before provision for income taxes$165.9
 $(49.7) $737.3
 $33.4
Adjustments:       
Equity-based compensation issued in conjunction with the initial public offering, acquisitions and strategic investments58.3
 50.6
 183.8
 175.3
Acquisition related charges, including amortization of intangibles and impairment7.2
 27.7
 25.2
 67.0
Other non-operating expense (income)—
 (3.7) 0.1
 0.8
Tax provision associated with performance fees(1.7) (2.0) (7.0) (16.1)
Net (income) loss attributable to non-controlling interests in consolidated entities(27.6) 29.1
 (47.4) 29.8
Severance and other adjustments0.6
 1.5
 10.9
 10.1
Economic Net Income$202.7
 $53.5
 $902.9
 $300.3
Net performance fees(1)
147.0
 142.3
 840.5
 333.0
Investment income (loss) (1)
(35.3) 13.3
 6.5
 35.8
Equity-based compensation30.4
 32.9
 97.2
 95.2
Reserve for litigation and contingencies(25.0) 100.0
 (25.0) 100.0
Fee Related Earnings$96.4
 $30.8
 $128.1
 $126.7
Realized performance fees, net of related compensation216.9
 186.3
 434.3
 489.7
Realized investment income (loss)(1)
(53.4) 11.1
 (48.2) 27.9
Distributable Earnings$259.9
 $228.2
 $514.2
 $644.3

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
(Dollars in millions)
Unrealized performance revenues related compensation$776.8 $449.7 $1,552.1 $(130.4)
Equity-based compensation50.3 34.6 85.2 66.3 
Acquisition or disposition-related charges (credits) and amortization of intangibles11.3 7.1 30.3 10.1 
Tax expense associated with certain foreign performance revenues related compensation(3.7)0.7 (9.6)11.9 
Non-Carlyle economic interests in acquired businesses and other adjustments to present certain costs on a net basis17.4 5.2 37.3 13.2 
Right-of-use asset impairment26.8 0 26.8 0 
Other adjustments including severance and C-Corp. conversion costs in 20202.0 4.1 4.0 8.8 
Elimination of expenses of Consolidated Funds(7.7)(7.8)(21.8)(16.0)
$873.2 $493.6 $1,704.3 $(36.1)
(1) See
(c)The Other Income (Loss) adjustment results from the Consolidated Funds which were eliminated in consolidation to arrive at the Company’s total Other Income (Loss).

(d)The following table is a reconciliation of Income (Loss) Before Provision for Income Taxes to most directly comparableDistributable Earnings and to Fee Related Earnings:
Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
(Dollars in millions)
Income (loss) before provision for income taxes$1,252.7 $256.8 $2,417.0 $(532.2)
Adjustments:
Net unrealized performance revenues(844.0)(587.4)(1,690.4)(58.5)
Unrealized principal investment (income) loss (1)
(78.8)459.5 (210.1)724.2 
Adjusted unrealized principal investment (income) loss from investment in Fortitude Re (2)
0 81.6 0 104.4 
Equity-based compensation (3)
50.3 34.6 85.2 66.3 
Acquisition or disposition-related charges (credits), including amortization of intangibles11.3 7.1 30.3 10.1 
Tax (expense) benefit associated with certain foreign performance revenues(3.4)0.7 (9.4)11.9 
Net (income) loss attributable to non-controlling interests in consolidated entities(21.5)(58.6)(43.1)38.4 
Right-of-use asset impairment26.8 0 26.8 0 
Other adjustments including severance and C-Corp. conversion costs in 20202.0 4.1 4.0 8.8 
Distributable Earnings$395.4 $198.4 $610.3 $373.4 
Realized performance revenues, net of related compensation (4)
237.4 70.9 313.4 119.1 
Realized principal investment income (4)
37.8 22.1 67.8 38.0 
Net interest23.0 21.9 43.1 39.8 
Fee Related Earnings$143.2 $127.3 $272.2 $256.1 
(1)Adjustments to unrealized principal investment income (loss) during the three and six months ended June 30, 2020 are inclusive of $300.9 million and $211.8 million, respectively, of unrealized gains, resulting from changes in the fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude Re’s U.S. GAAP measure below:financial statements prior to the contribution of the Company’s investment in Fortitude Holdings to Carlyle FRL on June 2, 2020. At the time of the contribution of the Company’s investment to Carlyle FRL, the Company began accounting for its investment under the equity method based on its net asset value in the fund, which is an investment company that accounts for its investment in Fortitude Holdings at fair value.


57
 Three Months Ended September 30, 2017
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$411.8
 $(0.8) $411.0
Unrealized(126.2) 0.6
 (125.6)
Total performance fees285.6
 (0.2) 285.4
Performance fee related compensation expense     
Realized189.4
 4.7
 194.1
Unrealized(51.8) (3.9) (55.7)
Total performance fee related compensation expense137.6
 0.8
 138.4
Net performance fees     
Realized222.4
 (5.5) 216.9
Unrealized(74.4) 4.5
 (69.9)
Total net performance fees$148.0
 $(1.0) $147.0
Investment income (loss)     
Realized$15.5
 $(68.9) $(53.4)
Unrealized21.7
 (3.6) 18.1
Investment income (loss)$37.2
 $(72.5) $(35.3)
 Three Months Ended September 30, 2016
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$383.4
 $(2.5) $380.9
Unrealized(168.7) 42.8
 (125.9)
Total performance fees214.7
 40.3
 255.0
Performance fee related compensation expense     
Realized189.0
 5.6
 194.6
Unrealized(78.1) (3.8) (81.9)
Total performance fee related compensation expense110.9
 1.8
 112.7
Net performance fees     
Realized194.4
 (8.1) 186.3
Unrealized(90.6) 46.6
 (44.0)
Total net performance fees$103.8
 $38.5
 $142.3
Investment income (loss)     
Realized$40.7
 $(29.6) $11.1
Unrealized29.8
 (27.6) 2.2
Total investment income (loss)$70.5
 $(57.2) $13.3

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



(2)Adjusted unrealized principal investment income (loss) from the investment in Fortitude Re represents 19.9% of Fortitude Holdings’ estimated net income (loss), excluding the unrealized gains (losses) related to embedded derivatives, prior to the contribution of the Company’s investment in Fortitude Holdings to Carlyle FRL on June 2, 2020.
(3)Equity-based compensation for the three and six months ended June 30, 2021 and 2020 includes amounts that are presented in principal investment income and general, administrative and other expenses in the Company’s U.S. GAAP statement of operations.
 Nine Months Ended September 30, 2017
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$852.7
 $(6.0) $846.7
Unrealized658.1
 54.6
 712.7
Total performance fees1,510.8
 48.6
 1,559.4
Performance fee related compensation expense     
Realized401.9
 10.5
 412.4
Unrealized309.9
 (3.4) 306.5
Total performance fee related compensation expense711.8
 7.1
 718.9
Net performance fees     
Realized450.8
 (16.5) 434.3
Unrealized348.2
 58.0
 406.2
Total net performance fees$799.0
 $41.5
 $840.5
Investment income (loss)     
Realized$42.0
 $(90.2) $(48.2)
Unrealized100.5
 (45.8) 54.7
Investment income (loss)$142.5
 $(136.0) $6.5
(4)See reconciliation to most directly comparable U.S. GAAP measure below:

Three Months Ended June 30, 2021
Carlyle
Consolidated
Adjustments (3)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$2,080.7 $(1,626.7)$454.0 
Performance revenues related compensation expense994.0 (777.4)216.6 
Net performance revenues$1,086.7 $(849.3)$237.4 
Principal investment income (loss)$137.7 $(99.9)$37.8 
Six Months Ended June 30, 2021
Carlyle
Consolidated
Adjustments (5)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$3,866.8 $(3,244.4)$622.4 
Performance revenues related compensation expense1,860.6 (1,551.6)309.0 
Net performance revenues$2,006.2 $(1,692.8)$313.4 
Principal investment income (loss)$316.8 $(249.0)$67.8 
Three Months Ended June 30, 2020
Carlyle
Consolidated
Adjustments (3)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$1,191.8 $(1,039.6)$152.2 
Performance revenues related compensation expense535.6 (454.3)81.3 
Net performance revenues$656.2 $(585.3)$70.9 
Principal investment income (loss)$(512.6)$534.7 $22.1 
Six Months Ended June 30, 2020
Carlyle
Consolidated
Adjustments (3)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$254.2 $69.6 $323.8 
Performance revenues related compensation expense93.1 111.6 204.7 
Net performance revenues$161.1 $(42.0)$119.1 
Principal investment income (loss)$(765.9)$803.9 $38.0 
 Nine Months Ended September 30, 2016
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$905.1
 $14.1
 $919.2
Unrealized(334.3) 28.4
 (305.9)
Total performance fees570.8
 42.5
 613.3
Performance fee related compensation expense     
Realized423.0
 6.5
 429.5
Unrealized(146.1) (3.1) (149.2)
Total performance fee related compensation expense276.9
 3.4
 280.3
Net performance fees     
Realized482.1
 7.6
 489.7
Unrealized(188.2) 31.5
 (156.7)
Total net performance fees$293.9
 $39.1
 $333.0
Investment income (loss)     
Realized$92.2
 $(64.3) $27.9
Unrealized34.0
 (26.1) 7.9
Total investment income (loss)$126.2
 $(90.4) $35.8


(2)(5) Adjustments to performance feesrevenues 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


58
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

included in the segment results, (ii)(iii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the segment results, (iii)(iv) the reclassification of NGP performance fees,revenues, which are included in principal investment income in U.S. GAAP financial statements, and (iv)(v) the reclassification of certain incentive fees from business development companies, which are included in fund management fees in the segment results, and (vi) the reclassification of tax expenses associated with certain foreign performance fees.revenues. Adjustments to principal investment income (loss) also
The Carlyle Group L.P.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)


include the reclassification of earnings for the investments in NGP Management and its affiliates to the appropriate operating captions for the segment results, and the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from the segment results, and adjustments to reflect the Partnership’s share of Urbplan’s net losses as investment losses for the segment results until Urbplan was deconsolidated during the three months ended September 30, 2017. Adjustments are also included in these financial statement captions to reflect the Partnership’s economic interests in Claren Road (through January 2017) and ESG (through June 2016).results.


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

17. Subsequent Events
In October 2017, the Board of Directors of the general partner of the Partnership declared a quarterly distribution of $0.56 per common unit to common unitholders of record at the close of business on November 10, 2017, payable on November 16, 2017.59

In October 2017, the Board of Directors of the general partner of the Partnership declared a quarterly distribution of $0.375347 per Preferred Unit to preferred unitholders of record at the close of business on December 1, 2017, payable on December 15, 2017. The first distribution on the Preferred Units is calculated based on the date of original issuance. See Note 14 for more information on the preferred units.
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)




18.15. Subsequent Events
Dividends
In July 2021, the Company’s Board of Directors declared a quarterly dividend of $0.25 per share of common stock to common stockholders of record at the close of business on August 10, 2021, payable on August 17, 2021.


60
The Carlyle Group Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

16. Supplemental Financial Information
The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Partnership’sCompany’s financial position as of SeptemberJune 30, 20172021 and December 31, 20162020 and results of operations for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016.2020. The supplemental statement of cash flows is presented without effects of the Consolidated Funds.
 As of June 30, 2021
 Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
 (Dollars in millions)
Assets
Cash and cash equivalents$1,586.2 $0 $0 $1,586.2 
Cash and cash equivalents held at Consolidated Funds0 187.5 0 187.5 
Restricted cash31.0 0 0 31.0 
Investments, including performance allocations of $8,145.9 million10,803.7 0 (161.4)10,642.3 
Investments of Consolidated Funds0 6,123.4 0 6,123.4 
Due from affiliates and other receivables, net282.6 0 (6.6)276.0 
Due from affiliates and other receivables of Consolidated Funds, net0 189.0 0 189.0 
Fixed assets, net142.0 0 0 142.0 
Lease right-of-use assets, net336.6 0 0 336.6 
Deposits and other76.8 0.1 0 76.9 
Intangible assets, net38.9 0 0 38.9 
Deferred tax assets19.4 0 0 19.4 
Total assets$13,317.2 $6,500.0 $(168.0)$19,649.2 
Liabilities and equity
Debt obligations$2,307.5 $0 $0 $2,307.5 
Loans payable of Consolidated Funds0 5,393.2 (0.1)5,393.1 
Accounts payable, accrued expenses and other liabilities309.8 0 0 309.8 
Accrued compensation and benefits4,566.7 0 0 4,566.7 
Due to affiliates402.1 0 0 402.1 
Deferred revenue123.1 0 0 123.1 
Deferred tax liabilities466.5 0 0 466.5 
Other liabilities of Consolidated Funds0 923.6 0 923.6 
Lease liabilities513.8 0 0 513.8 
Accrued giveback obligations21.0 0 0 21.0 
Total liabilities8,710.5 6,316.8 (0.1)15,027.2 
Common stock3.5 0 0 3.5 
Additional paid-in capital2,621.7 163.4 (163.4)2,621.7 
Retained earnings (deficit)1,940.1 0 0 1,940.1 
Accumulated other comprehensive income (loss)(225.2)1.4 (4.5)(228.3)
Non-controlling interests in consolidated entities266.6 18.4 0 285.0 
Total equity4,606.7 183.2 (167.9)4,622.0 
Total liabilities and equity$13,317.2 $6,500.0 $(168.0)$19,649.2 


61
 As of September 30, 2017
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Assets       
Cash and cash equivalents$1,355.7
 $—
 $—
 $1,355.7
Cash and cash equivalents held at Consolidated Funds—
 195.4
 —
 195.4
Restricted cash9.6
 —
 —
 9.6
Corporate treasury investments117.4
 —
 —
 117.4
Accrued performance fees3,498.6
 —
 —
 3,498.6
Investments1,679.9
 —
 (199.0) 1,480.9
Investments of Consolidated Funds—
 4,235.8
 —
 4,235.8
Due from affiliates and other receivables, net273.3
 —
 (4.5) 268.8
Due from affiliates and other receivables of Consolidated Funds, net—
 64.3
 —
 64.3
Fixed assets, net100.1
 —
 —
 100.1
Deposits and other58.5
 —
 —
 58.5
Intangible assets, net38.0
 —
 —
 38.0
Deferred tax assets263.5
 —
 —
 263.5
Total assets$7,394.6
 $4,495.5
 $(203.5) $11,686.6
Liabilities and partners’ capital       
Debt obligations$1,515.6
 $—
 $—
 $1,515.6
Loans payable of Consolidated Funds—
 3,794.8
 —
 3,794.8
Accounts payable, accrued expenses and other liabilities308.9
 —
 —
 308.9
Accrued compensation and benefits2,175.1
 —
 —
 2,175.1
Due to affiliates264.1
 0.2
 —
 264.3
Deferred revenue236.0
 —
 —
 236.0
Deferred tax liabilities77.1
 —
 —
 77.1
Other liabilities of Consolidated Funds—
 507.4
 (32.0) 475.4
Accrued giveback obligations67.6
 —
 —
 67.6
Total liabilities4,644.4
 4,302.4
 (32.0) 8,914.8
Series A preferred units387.6
 —
 —
 387.6
Partners’ capital660.4
 46.6
 (46.6) 660.4
Accumulated other comprehensive loss(68.9) 3.0
 (3.5) (69.4)
Non-controlling interests in consolidated entities351.2
 23.5
 —
 374.7
Non-controlling interests in Carlyle Holdings1,419.9
 120.0
 (121.4) 1,418.5
Total partners’ capital2,750.2
 193.1
 (171.5) 2,771.8
Total liabilities and partners’ capital$7,394.6
 $4,495.5
 $(203.5) $11,686.6

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



As of December 31, 2020
 Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
 (Dollars in millions)
Assets
Cash and cash equivalents$987.6 $0 $0 $987.6 
Cash and cash equivalents held at Consolidated Funds0 148.6 0 148.6 
Restricted cash2.0 0 0 2.0 
Investments, including performance allocations of $4,968.6 million7,551.7 0 (170.8)7,380.9 
Investments of Consolidated Funds0 6,056.9 0 6,056.9 
Due from affiliates and other receivables, net278.9 0 (6.4)272.5 
Due from affiliates and other receivables of Consolidated Funds, net0 89.1 0 89.1 
Fixed assets, net149.2 0 0 149.2 
Lease right-of-use assets, net361.1 0 0 361.1 
Deposits and other51.7 0 0 51.7 
Intangible assets, net48.7 0 0 48.7 
Deferred tax assets96.5 0 0 96.5 
Total assets$9,527.4 $6,294.6 $(177.2)$15,644.8 
Liabilities and equity
Debt obligations$1,970.9 $0 $0 $1,970.9 
Loans payable of Consolidated Funds0 5,563.0 0 5,563.0 
Accounts payable, accrued expenses and other liabilities286.3 0 0 286.3 
Accrued compensation and benefits3,222.6 0 0 3,222.6 
Due to affiliates436.7 0 0 436.7 
Deferred revenue89.0 0 0 89.0 
Deferred tax liabilities57.8 0 0 57.8 
Other liabilities of Consolidated Funds0 556.1 0 556.1 
Lease liabilities513.5 0 0 513.5 
Accrued giveback obligations18.7 0 0 18.7 
Total liabilities6,595.5 6,119.1 0 12,714.6 
Common stock3.5 0 0 3.5 
Additional paid-in capital2,546.2 167.6 (167.6)2,546.2 
Retained earnings348.2 0 0 348.2 
Accumulated other comprehensive income (loss)(205.8)6.7 (9.6)(208.7)
Non-controlling interests in consolidated entities239.8 1.2 0 241.0 
Total equity2,931.9 175.5 (177.2)2,930.2 
Total liabilities and equity$9,527.4 $6,294.6 $(177.2)$15,644.8 

 As of December 31, 2016
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Assets       
Cash and cash equivalents$670.9
 $—
 $—
 $670.9
Cash and cash equivalents held at Consolidated Funds—
 761.5
 —
 761.5
Restricted cash13.1
 —
 —
 13.1
Corporate treasury investments190.2
 —
 —
 190.2
Accrued performance fees2,481.1
 —
 —
 2,481.1
Investments1,272.2
 —
 (165.2) 1,107.0
Investments of Consolidated Funds—
 3,893.7
 —
 3,893.7
Due from affiliates and other receivables, net231.0
 —
 (3.8) 227.2
Due from affiliates and other receivables of Consolidated Funds, net—
 29.5
 —
 29.5
Receivables and inventory of a real estate VIE145.4
 —
 —
 145.4
Fixed assets, net106.1
 —
 —
 106.1
Deposits and other39.4
 —
 —
 39.4
Other assets of a real estate VIE31.5
 —
 —
 31.5
Intangible assets, net42.0
 —
 —
 42.0
Deferred tax assets234.4
 —
 —
 234.4
Total assets$5,457.3
 $4,684.7
 $(169.0) $9,973.0
Liabilities and partners’ capital       
Loans payable$1,265.2
 $—
 $—
 $1,265.2
Loans payable of Consolidated Funds—
 3,866.3
 —
 3,866.3
Loans payable of a real estate VIE at fair value (principal amount of $144.4 million)79.4
 —
 —
 79.4
Accounts payable, accrued expenses and other liabilities369.8
 —
 —
 369.8
Accrued compensation and benefits1,661.8
 —
 —
 1,661.8
Due to affiliates223.4
 0.2
 —
 223.6
Deferred revenue54.0
 —
 —
 54.0
Deferred tax liabilities76.6
 —
 —
 76.6
Other liabilities of Consolidated Funds—
 669.0
 (32.0) 637.0
Other liabilities of a real estate VIE124.5
 —
 —
 124.5
Accrued giveback obligations160.8
 —
 —
 160.8
Total liabilities4,015.5
 4,535.5
 (32.0) 8,519.0
Partners’ capital403.1
 36.7
 (36.7) 403.1
Accumulated other comprehensive income (loss)(94.9) (1.5) 1.2
 (95.2)
Non-controlling interests in consolidated entities264.3
 13.5
 —
 277.8
Non-controlling interests in Carlyle Holdings869.3
 100.5
 (101.5) 868.3
Total partners’ capital1,441.8
 149.2
 (137.0) 1,454.0
Total liabilities and partners’ capital$5,457.3
 $4,684.7
 $(169.0) $9,973.0







 













62
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



 Three Months Ended June 30, 2021
 Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
 (Dollars in millions)
Revenues
Fund management fees$400.4 $0 $(6.0)$394.4 
Incentive fees10.4 0 0 10.4 
Investment income
Performance allocations2,080.7 0 0 2,080.7 
Principal investment income139.5 0 (1.8)137.7 
Total investment income2,220.2 0 (1.8)2,218.4 
Interest and other income25.9 0 (4.9)21.0 
Interest and other income of Consolidated Funds0 62.1 0 62.1 
Total revenues2,656.9 62.1 (12.7)2,706.3 
Expenses
Compensation and benefits
Cash-based compensation and benefits231.8 0 0 231.8 
Equity-based compensation47.2 0 0 47.2 
Performance allocations and incentive fee related compensation994.0 0 0 994.0 
Total compensation and benefits1,273.0 0 0 1,273.0 
General, administrative and other expenses109.1 0 0 109.1 
Interest25.5 0 0 25.5 
Interest and other expenses of Consolidated Funds0 54.2 (7.7)46.5 
Other non-operating income(3.1)0 0 (3.1)
Total expenses1,404.5 54.2 (7.7)1,451.0 
Other income
Net investment loss of Consolidated Funds0 (2.6)0 (2.6)
Income before provision for income taxes1,252.4 5.3 (5.0)1,252.7 
Provision for income taxes306.2 0 0 306.2 
Net income946.2 5.3 (5.0)946.5 
Net income attributable to non-controlling interests in consolidated entities21.2 0 0.3 21.5 
Net income attributable to The Carlyle Group Inc.$925.0 $5.3 $(5.3)$925.0 


63
 Three Months Ended September 30, 2017
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Revenues       
Fund management fees$267.5
 $—
 $(5.0) $262.5
Performance fees       
Realized412.3
 —
 (0.5) 411.8
Unrealized(126.2) —
 —
 (126.2)
Total performance fees286.1
 —
 (0.5) 285.6
Investment income       
Realized15.4
 —
 0.1
 15.5
Unrealized26.1
 —
 (4.4) 21.7
Investment income41.5
 —
 (4.3) 37.2
Interest and other income18.0
 —
 (8.1) 9.9
Interest and other income of Consolidated Funds—
 44.7
 —
 44.7
Total revenues613.1
 44.7
 (17.9) 639.9
Expenses       
Compensation and benefits       
Base compensation174.1
 —
 —
 174.1
Equity-based compensation81.0
 —
 —
 81.0
Performance fee related       
Realized189.4
 —
 —
 189.4
Unrealized(51.8) —
 —
 (51.8)
Total compensation and benefits392.7
 —
 —
 392.7
General, administrative and other expenses(18.7) —
 —
 (18.7)
Interest16.9
 —
 —
 16.9
Interest and other expenses of Consolidated Funds—
 52.3
 (15.1) 37.2
Interest and other expenses of a real estate VIE and loss on deconsolidation64.5
 —
 —
 64.5
Total expenses455.4
 52.3
 (15.1) 492.6
Other income       
Net investment gains of Consolidated Funds—
 18.6
 —
 18.6
Income before provision for income taxes157.7
 11.0
 (2.8) 165.9
Benefit for income taxes(1.3) —
 —
 (1.3)
Net income159.0
 11.0
 (2.8) 167.2
Net income attributable to non-controlling interests in consolidated entities19.4
 —
 8.2
 27.6
Net income attributable to Carlyle Holdings139.6
 11.0
 (11.0) 139.6
Net income attributable to non-controlling interests in Carlyle Holdings95.0
 —
 —
 95.0
Net income attributable to The Carlyle Group L.P.$44.6
 $11.0
 $(11.0) $44.6

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



 Six Months Ended June 30, 2021
 Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
 (Dollars in millions)
Revenues
Fund management fees$787.2 $0 $(11.8)$775.4 
Incentive fees19.9 0 0 19.9 
Investment income
Performance allocations3,866.8 0 0 3,866.8 
Principal investment income337.9 0 (21.1)316.8 
Total investment income4,204.7 0 (21.1)4,183.6 
Interest and other income52.3 0 (10.9)41.4 
Interest and other income of Consolidated Funds0 123.2 0 123.2 
Total revenues5,064.1 123.2 (43.8)5,143.5 
Expenses
Compensation and benefits
Cash-based compensation and benefits460.3 0 0 460.3 
Equity-based compensation79.6 0 0 79.6 
Performance allocations and incentive fee related compensation1,860.6 0 0 1,860.6 
Total compensation and benefits2,400.5 0 0 2,400.5 
General, administrative and other expenses200.8 0 0 200.8 
Interest48.5 0 0 48.5 
Interest and other expenses of Consolidated Funds0 110.7 (21.8)88.9 
Other non-operating income(2.5)0 0 (2.5)
Total expenses2,647.3 110.7 (21.8)2,736.2 
Other income
Net investment gain of Consolidated Funds0 9.7 0 9.7 
Income before provision for income taxes2,416.8 22.2 (22.0)2,417.0 
Provision for income taxes579.6 0 0 579.6 
Net income1,837.2 22.2 (22.0)1,837.4 
Net income attributable to non-controlling interests in consolidated entities42.9 0 0.2 43.1 
Net income attributable to The Carlyle Group Inc.$1,794.3 $22.2 $(22.2)$1,794.3 


64
 Nine Months Ended September 30, 2017
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Revenues       
Fund management fees$761.2
 $—
 $(13.6) $747.6
Performance fees       
Realized855.2
 —
 (2.5) 852.7
Unrealized658.1
 —
 —
 658.1
Total performance fees1,513.3
 —
 (2.5) 1,510.8
Investment income       
Realized42.6
 —
 (0.6) 42.0
Unrealized105.5
 —
 (5.0) 100.5
Investment income148.1
 —
 (5.6) 142.5
Interest and other income44.2
 —
 (18.3) 25.9
Interest and other income of Consolidated Funds—
 132.6
 —
 132.6
Revenue of a real estate VIE109.0
 —
 —
 109.0
Total revenues2,575.8
 132.6
 (40.0) 2,668.4
Expenses       
Compensation and benefits       
Base compensation471.1
 —
 —
 471.1
Equity-based compensation241.8
 —
 —
 241.8
Performance fee related       
Realized401.9
 —
 —
 401.9
Unrealized309.9
 —
 —
 309.9
Total compensation and benefits1,424.7
 —
 —
 1,424.7
General, administrative and other expenses170.9
 —
 —
 170.9
Interest48.4
 —
 —
 48.4
Interest and other expenses of Consolidated Funds—
 197.2
 (36.3) 160.9
Interest and other expenses of a real estate VIE and loss on deconsolidation202.5
 —
 —
 202.5
Other non-operating expenses0.1
 —
 —
 0.1
Total expenses1,846.6
 197.2
 (36.3) 2,007.5
Other income       
Net investment gains of Consolidated Funds—
 76.4
 —
 76.4
Income before provision for income taxes729.2
 11.8
 (3.7) 737.3
Provision for income taxes17.7
 —
 —
 17.7
Net income711.5
 11.8
 (3.7) 719.6
Net income attributable to non-controlling interests in consolidated entities39.3
 —
 8.1
 47.4
Net income attributable to Carlyle Holdings672.2
 11.8
 (11.8) 672.2
Net income attributable to non-controlling interests in Carlyle Holdings487.0
 —
 —
 487.0
Net income attributable to The Carlyle Group L.P.$185.2
 $11.8
 $(11.8) $185.2


The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Three months ended June 30, 2020
Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
(Dollars in millions)
Revenues
Fund management fees$377.4 $0 $(5.6)$371.8 
Incentive fees9.0 0 0 9.0 
Investment income (loss)
Performance allocations1,191.8 0 0 1,191.8 
Principal investment income(463.0)0 (49.6)(512.6)
Total investment income (loss)728.8 0 (49.6)679.2 
Interest and other income16.0 0 (0.2)15.8 
Interest and other income of Consolidated Funds0 55.2 0 55.2 
Total revenues1,131.2 55.2 (55.4)1,131.0 
Expenses
Compensation and benefits
Cash-based compensation and benefits212.5 0 0 212.5 
Equity-based compensation30.5 0 0 30.5 
Performance allocations and incentive fee related compensation535.6 0 0 535.6 
Total compensation and benefits778.6 0 0 778.6 
General, administrative and other expenses80.2 0 0 80.2 
Interest25.9 0 0 25.9 
Interest and other expenses of Consolidated Funds0 47.1 (7.8)39.3 
Other non-operating expenses0.5 0 0 0.5 
Total expenses885.2 47.1 (7.8)924.5 
Other income
Net investment income of Consolidated Funds0 50.3 0 50.3 
Income before provision for income taxes246.0 58.4 (47.6)256.8 
Provision for income taxes52.3 0 0 52.3 
Net income193.7 58.4 (47.6)204.5 
Net income attributable to non-controlling interests in consolidated entities47.8 0 10.8 58.6 
Net income attributable to The Carlyle Group Inc.145.9 58.4 (58.4)145.9 


65
 Three Months Ended September 30, 2016
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Revenues       
Fund management fees$259.1
 $—
 $(4.0) $255.1
Performance fees       
Realized383.4
 —
 —
 383.4
Unrealized(168.7) —
 —
 (168.7)
Total performance fees214.7
 —
 —
 214.7
Investment income       
Realized40.3
 —
 0.4
 40.7
Unrealized43.0
 —
 (13.2) 29.8
Total investment income83.3
 —
 (12.8) 70.5
Interest and other income5.4
 —
 (0.1) 5.3
Interest and other income of Consolidated Funds—
 43.0
 —
 43.0
Revenue of a real estate VIE18.7
 —
 —
 18.7
Total revenues581.2
 43.0
 (16.9) 607.3
Expenses       
Compensation and benefits       
Base compensation154.3
 —
 —
 154.3
Equity-based compensation81.4
 —
 —
 81.4
Performance fee related       
Realized189.0
 —
 —
 189.0
Unrealized(78.1) —
 —
 (78.1)
Total compensation and benefits346.6
 —
 —
 346.6
General, administrative and other expenses188.9
 —
 —
 188.9
Interest15.6
 —
 —
 15.6
Interest and other expenses of Consolidated Funds—
 41.2
 (8.9) 32.3
Interest and other expenses of a real estate VIE82.1
 —
 —
 82.1
Other non-operating income(3.7) —
 —
 (3.7)
Total expenses629.5
 41.2
 (8.9) 661.8
Other income       
Net investment gains of Consolidated Funds—
 4.8
 —
 4.8
Income (loss) before provision for income taxes(48.3) 6.6
 (8.0) (49.7)
Provision for income taxes1.0
 —
 —
 1.0
Net income (loss)(49.3) 6.6
 (8.0) (50.7)
Net loss attributable to non-controlling interests in consolidated entities(27.7) —
 (1.4) (29.1)
Net income (loss) attributable to Carlyle Holdings(21.6) 6.6
 (6.6) (21.6)
Net loss attributable to non-controlling interests in Carlyle Holdings(22.4) —
 —
 (22.4)
Net income attributable to The Carlyle Group L.P.$0.8
 $6.6
 $(6.6) $0.8

The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



Six Months Ended June 30, 2020
 Consolidated
Operating
Entities		Consolidated
Funds		EliminationsConsolidated
 (Dollars in millions)
Revenues
Fund management fees$738.5 $0 $(10.8)$727.7 
Incentive fees17.9 0 0 17.9 
Investment income (loss)
Performance allocations254.2 0 0 254.2 
Principal investment income (loss)(826.2)0 60.3 (765.9)
Total investment income (loss)(572.0)0 60.3 (511.7)
Interest and other income49.8 0 (6.6)43.2 
Interest and other income of Consolidated Funds0 108.2 0 108.2 
Total revenues234.2 108.2 42.9 385.3 
Expenses
Compensation and benefits
Cash-based compensation and benefits416.8 0 0 416.8 
Equity-based compensation59.6 0 0 59.6 
Performance allocations and incentive fee related compensation93.1 0 0 93.1 
Total compensation and benefits569.5 0 0 569.5 
General, administrative and other expenses149.8 0 0 149.8 
Interest49.8 0 0 49.8 
Interest and other expenses of Consolidated Funds0 100.9 (16.0)84.9 
Other non-operating expenses0.7 0 0 0.7 
Total expenses769.8 100.9 (16.0)854.7 
Other loss
Net investment losses of Consolidated Funds0 (62.8)0 (62.8)
Loss before provision for income taxes(535.6)(55.5)58.9 (532.2)
Benefit for income taxes(27.7)0 0 (27.7)
Net loss(507.9)(55.5)58.9 (504.5)
Net loss attributable to non-controlling interests in consolidated entities(41.8)0 3.4 (38.4)
Net loss attributable to The Carlyle Group Inc.(466.1)(55.5)55.5 (466.1)

 Nine Months Ended September 30, 2016
 Consolidated
Operating
Entities		 Consolidated
Funds		 Eliminations Consolidated
 (Dollars in millions)
Revenues       
Fund management fees$827.5
 $—
 $(10.4) $817.1
Performance fees       
Realized905.3
 —
 (0.2) 905.1
Unrealized(334.3) —
 —
 (334.3)
Total performance fees571.0
 —
 (0.2) 570.8
Investment income       
Realized92.7
 —
 (0.5) 92.2
Unrealized45.1
 —
 (11.1) 34.0
Total investment income137.8
 —
 (11.6) 126.2
Interest and other income16.3
 —
 (1.3) 15.0
Interest and other income of Consolidated Funds—
 107.8
 —
 107.8
Revenue of a real estate VIE61.5
 —
 —
 61.5
Total revenues1,614.1
 107.8
 (23.5) 1,698.4
Expenses       
Compensation and benefits       
Base compensation470.5
 —
 —
 470.5
Equity-based compensation265.8
 —
 —
 265.8
Performance fee related       
Realized423.0
 —
 —
 423.0
Unrealized(146.1) —
 —
 (146.1)
Total compensation and benefits1,013.2
 —
 —
 1,013.2
General, administrative and other expenses362.6
 —
 —
 362.6
Interest46.3
 —
 —
 46.3
Interest and other expenses of Consolidated Funds—
 105.9
 (18.6) 87.3
Interest and other expenses of a real estate VIE157.9
 —
 —
 157.9
Other non-operating expenses0.8
 —
 —
 0.8
Total expenses1,580.8
 105.9
 (18.6) 1,668.1
Other income       
Net investment gains of Consolidated Funds—
 3.1
 —
 3.1
Income before provision for income taxes33.3
 5.0
 (4.9) 33.4
Provision for income taxes32.7
 —
 —
 32.7
Net income0.6
 5.0
 (4.9) 0.7
Net loss attributable to non-controlling interests in consolidated entities(29.9) —
 0.1
 (29.8)
Net income attributable to Carlyle Holdings30.5
 5.0
 (5.0) 30.5
Net income attributable to non-controlling interests in Carlyle Holdings15.2
 —
 —
 15.2
Net income attributable to The Carlyle Group L.P.$15.3
 $5.0
 $(5.0) $15.3
















 



66
The Carlyle Group L.P.Inc.


Notes to the Condensed Consolidated Financial Statements
(Unaudited)



 Six Months Ended June 30,
 20212020
 (Dollars in millions)
Cash flows from operating activities
Net income (loss)$1,837.2 $(507.9)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization26.8 26.0 
Right-of-use asset impairment, net of broker fees24.8 0 
Equity-based compensation79.6 59.6 
Non-cash performance allocations and incentive fees(1,703.9)28.7 
Non-cash principal investment (income) loss(313.3)841.2 
Other non-cash amounts5.5 (10.7)
Purchases of investments(161.3)(255.1)
Proceeds from the sale of investments418.5 190.8 
Payments of contingent consideration(49.9)0 
Change in deferred taxes, net481.9 (61.6)
Change in due from affiliates and other receivables(14.8)(19.2)
Change in deposits and other(26.6)(4.8)
Change in accounts payable, accrued expenses and other liabilities25.4 (46.5)
Change in accrued compensation and benefits(113.9)(125.4)
Change in due to affiliates24.5 (28.2)
Change in lease right-of-use asset and lease liability4.6 (5.9)
Change in deferred revenue35.6 (19.2)
Net cash provided by operating activities580.7 61.8 
Cash flows from investing activities
Purchases of fixed assets, net(17.6)(23.7)
Proceeds from sale of MRE, net of cash sold5.9 0 
Net cash used in investing activities(11.7)(23.7)
Cash flows from financing activities
Borrowings under credit facilities0 263.8 
Repayments under credit facilities0 (295.6)
Issuance of 4.625% subordinated notes due 2061, net of financing costs484.2 0 
Payments on debt obligations(229.4)(1.5)
Proceeds from debt obligations, net of financing costs87.6 0 
Payments of contingent consideration0 (0.3)
Dividends to common stockholders(177.4)(174.6)
Payment of deferred consideration for Carlyle Holdings units(68.8)(68.8)
Contributions from non-controlling interest holders7.4 14.0 
Distributions to non-controlling interest holders(22.9)(34.1)
Common shares repurchased(25.0)(26.4)
Change in due to/from affiliates financing activities12.8 30.0 
Net cash provided by (used in) financing activities68.5 (293.5)
Effect of foreign exchange rate changes(9.9)(13.6)
Increase (decrease) in cash, cash equivalents and restricted cash627.6 (269.0)
Cash, cash equivalents and restricted cash, beginning of period989.6 828.0 
Cash, cash equivalents and restricted cash, end of period$1,617.2 $559.0 
Reconciliation of cash, cash equivalents and restricted cash, end of period:
   Cash and cash equivalents$1,586.2 $554.5 
   Restricted cash31.0 4.5 
   Total cash, cash equivalents and restricted cash, end of period$1,617.2 $559.0 
   Cash and cash equivalents held at Consolidated Funds$187.5 $98.0 


67
 Nine Months Ended September 30,
 2017 2016
 (Dollars in millions)
Cash flows from operating activities   
Net income$711.5
 $0.6
Adjustments to reconcile net income to net cash flows from operating activities:   
Depreciation and amortization30.9
 52.6
Equity-based compensation241.8
 265.8
Non-cash performance fees(561.5) 108.0
Other non-cash amounts(8.2) (19.2)
Investment income(129.5) (135.8)
Purchases of investments(445.0) (262.7)
Proceeds from the sale of investments302.7
 236.7
Payments of contingent consideration(22.5) (82.6)
Deconsolidation of Claren Road (see Note 9)(23.3) —
Deconsolidation of Urbplan (see Note 15)14.0
 —
Change in deferred taxes, net(8.7) 3.7
Change in due from affiliates and other receivables(78.8) 0.7
Change in receivables and inventory of a real estate VIE(14.5) 45.1
Change in deposits and other(7.1) 6.0
Change in other assets of a real estate VIE1.6
 33.1
Change in accounts payable, accrued expenses and other liabilities1.9
 71.8
Change in accrued compensation and benefits42.2
 32.4
Change in due to affiliates15.0
 (22.4)
Change in other liabilities of a real estate VIE47.9
 (1.2)
Change in deferred revenue178.6
 154.9
Net cash provided by operating activities289.0
 487.5
Cash flows from investing activities   
Change in restricted cash3.6
 1.8
Purchases of fixed assets, net(26.0) (13.3)
Net cash used in investing activities(22.4) (11.5)
Cash flows from financing activities   
Proceeds from issuance of preferred units387.6
 —
Borrowings under credit facility250.0
 —
Repayments under credit facility(250.0) —
Payments on debt obligations(15.0) —
Proceeds from debt obligations202.6
 20.6
Net payments on loans payable of a real estate VIE(14.3) (27.3)
Payments of contingent consideration(0.4) (3.3)
Distributions to common unitholders(63.0) (98.5)
Distributions to non-controlling interest holders in Carlyle Holdings(163.1) (300.9)
Contributions from non-controlling interest holders87.7
 75.3
Distributions to non-controlling interest holders(74.0) (85.5)
Common units repurchased(0.2) (53.6)
Change in due to/from affiliates financing activities38.5
 49.5
Net cash provided by (used in) financing activities386.4
 (423.7)
Effect of foreign exchange rate changes31.8
 (0.5)
Increase in cash and cash equivalents684.8
 51.8
Cash and cash equivalents, beginning of period670.9
 991.5
Cash and cash equivalents, end of period$1,355.7
 $1,043.3



Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
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. Pursuant to the Conversion, at the specified effective time on January 1, 2020, each common unit of The Carlyle Group L.P. outstanding immediately prior to the effective time converted into one share of common stock of The Carlyle Group Inc. and each special voting unit and general partner unit was canceled for no consideration. In addition, holders of the partnership units in Carlyle Holdings I L.P., Carlyle Holdings II L.P., and Carlyle Holdings III L.P. exchanged such units for an equivalent number of shares of common stock and certain other restructuring steps occurred (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 (i) prior to the consummation of the Conversion to The Carlyle Group L.P. and its consolidated subsidiaries and (ii) from and after the consummation of the Conversion to The Carlyle Group Inc. and its consolidated subsidiaries. References to our common stock in periods prior to the Conversion refer to the common units of The Carlyle Group L.P.
The following discussion analyzes the financial condition and results of operations of The Carlyle Group L.P.Inc. (the “Partnership”“Company”). Such 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, 2016.2020.
Overview
We conduct our operations through fourthree reportable segments: CorporateGlobal Private Equity, Real Assets, Global Market Strategies,Credit, and Investment Solutions.
 
Corporate•Global Private Equity — Our CorporateGlobal Private Equity segment advises our 21 buyout, middle market and 10 growth capital funds, which seek a wide variety of investments of different sizes and growth potentials. As of September 30, 2017, our Corporate Private Equity segment had over $56 billion in AUM and over $36 billion in Fee-earning AUM.

Real Assets — Our Real Assets segment advises our eleven U.S. and internationally focused real estate funds, our two infrastructurenatural resources funds, and our two power funds, our international energy fund, as well as our four Legacy Energy funds (funds that we jointly advise with Riverstone)(as defined below). The segment also includes fivethe NGP management fee fundsPredecessor Funds and four carry fundsNGP Carry Funds advised by NGP. As of SeptemberJune 30, 2017,2021, our Real AssetsGlobal Private Equity segment had approximately $40$150 billion in AUM and over $30$90 billion in Fee-earning AUM.


•Global Market StrategiesCredit — Our Global Market StrategiesCredit segment advises a group of 56 funds and vehicles that pursue investment opportunities acrossstrategies including loans and structured credit, direct lending, opportunistic credit, distressed debt, corporatecredit, and energy mezzanine debt,aircraft financing and middle-market and senior debt.servicing. As of SeptemberJune 30, 2017,2021, our Global Market StrategiesCredit segment had approximately $32$61 billion in AUM and over $26$46 billion in Fee-earning AUM.


•Investment Solutions — Our Investment Solutions segment advises global private equity and real estate fund of funds programs and related co-investment and secondary activities across 190 fund vehicles.activities. As of SeptemberJune 30, 2017,2021, our Investment Solutions segment had approximately $47$65 billion in AUM and over $30$38 billion in Fee-earning AUM.
Our Investment Solutions segment also included Metropolitan Real Estate (“MRE”) prior to its sale on April 1, 2021.
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 and related advisory fees, realized performance feesrevenues (consisting of incentive fees and carried interestperformance allocations), realized principal investment income, including realized and unrealized gains on our investments in our funds and other trading securities, as well as interest and other income. Our segment expenses primarily consist of compensation and benefits expenses, including salaries, bonuses, realized performance payment arrangements, and equity-based compensation excluding awards granted in our initial public offering or in connection with acquisitions and strategic investments, and general and administrative expenses. While our segment expenses include depreciation and interest expense, our segment expenses exclude acquisition-relatedacquisition and disposition related charges and amortization of intangibles and impairment. Refer to Note 1614 to the unaudited 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.

Our Family of Funds
The following chart presents the name (acronym), total capital commitments (in the case of our carry funds, structured credit funds, and the NGP management fee funds)Predecessor Funds), assets under management (in the case of structured products)(open-end products and non-carry Aviation vehicles), gross assets (in the case of our business development companies),BDCs) and vintage year of the active funds in each of our segments, as of SeptemberJune 30, 2017.2021. We present total capital commitments (as opposed to assets under management) for our closed-end investment funds because we


68

believe this metric provides the most useful information regarding the relative size and scale of such funds. In the case of our products which are open-ended and accordingly do not have permanent committed capital, we generally believe the most useful metric regarding relative size and scale is assets under management.


Global Private Equity1
Global Private Equity1
Global Credit
Corporate Private EquityCorporate Private Equity Real Assets Global Market StrategiesCorporate Private EquityReal Estate Carry FundsLiquid Credit
Buyout Carry Funds Real Estate Carry Funds Structured Credit
Carlyle Partners (U.S.)Carlyle Partners (U.S.) Carlyle Realty Partners (U.S.) Cash CLOsCarlyle Partners (U.S.)Carlyle Realty Partners (U.S.)Cash CLOs
CP VIICP VII$18.5 bn2018CRP IX$5.4 bn2021U.S.$22.2 bn2012-2021
CP VI$13.0 bn2014 CRP VIII$4.3 bn2017 U.S.$15.7 bn2006-2017CP VI$13.0 bn2014CRP VIII$5.5 bn2017Europe€8.1 bn2013-2021
CP V$13.7 bn2007 CRP VII$4.2 bn2014 Europe€8.1 bn2005-2017CP V$13.7 bn2007CRP VII$4.2 bn2014Structured Credit Funds
CP IV$7.9 bn2005 CRP VI$2.3 bn2011 Structured Credit Carry Funds
Global Financial Services PartnersGlobal Financial Services Partners CRP V$3.0 bn2006 CSC$817 mm2016Global Financial Services PartnersCRP VI$2.3 bn2011CREV$0.5 bn2020
CGFSP III$418 mm2017 CRP IV$950 mm2005 CASCOF$445 mm2015CGFSP III$1.0 bn2018CRP V$3.0 bn2006CSC$0.8 bn2017
CGFSP II$1.0 bn2013 CRP III$564 mm2001 Private CreditCGFSP II$1.0 bn2013CRP IV$1.0 bn2005Illiquid Credit
CGFSP I$1.1 bn2008 Carlyle Europe Real Estate Partners 
Business Development Company 1
Carlyle Europe PartnersCarlyle Europe Partners CEREP III€2.2 bn2007 TCG BDC, Inc.$2.0 bn2013Carlyle Europe PartnersCore Plus Real Estate (U.S.)
Business Development Companies3
CEP VCEP V€6.4 bn2018
CPI4
$5.7 bn2016TCG BDC II, Inc.$2.2 bn2017
CEP IV€3.7 bn2014 CEREP II€763 mm2005 Corporate Mezzanine Carry FundCEP IV€3.8 bn2014International Real EstateTCG BDC, Inc.$2.0 bn2013
CEP III€5.3 bn2007 Carlyle Asia Real Estate Partners CMP II$553 mm2008CEP III€5.3 bn2007CER€0.5 bn2017Opportunistic Credit Carry Funds
CEP II€1.8 bn2003 CCR$120 mm2016 Opportunistic Credit Carry FundsCEP II€1.8 bn2003CEREP III€2.2 bn2007CCOF II$2.5 bn2020
Carlyle Asia PartnersCarlyle Asia Partners CAREP II$486 mm2008 CCOF$757 mm2017Carlyle Asia PartnersNatural Resources FundsCCOF$2.4 bn2017
CAP VCAP V$6.6 bn2018NGP Energy Carry FundsDistressed Credit Carry Funds
CBPF IICBPF IIRMB 2.0 bn2017NGP XII$4.3 bn2017CSP IV$2.5 bn2016
CAP IV$3.9 bn2014 Core Plus Real Estate (U.S.) Energy Credit Carry FundsCAP IV$3.9 bn2014NGP XI$5.3 bn2014CSP III$0.7 bn2011
CBPFRMB 2.0 bn2010 CPI$1.1 bn2016 CEMOF II$2.8 bn2015
CAP III$2.6 bn2008 Natural Resources Funds CEMOF I$1.4 bn2011CAP III$2.6 bn2008NGP X$3.6 bn2012CSP II$1.4 bn2007
CAP II$1.8 bn2006 Infrastructure Carry Funds Distressed Credit Carry Funds
Carlyle Japan PartnersCarlyle Japan Partners CGIOF$597 mm2017 CSP IV$2.5 bn2016Carlyle Japan PartnersOther NGP Carry FundsReal Assets Credit
CJP IVCJP IV¥258.0 bn2020NGP Minerals$0.3 bn2020Energy Credit Carry Funds
CJP III¥119.5 bn2013 CIP I$1.1 bn2006 CSP III$703 mm2011CJP III¥119.5 bn2013NGP GAP$0.4 bn2014CEMOF II$2.8 bn2015
CJP II¥165.6 bn2006 Power Carry Funds CSP II$1.4 bn2007CJP II¥165.6 bn2006NGP Predecessor FundsCEMOF I$1.4 bn2011
Carlyle Mexico Partners CPP II$1.5 bn2014 
Mexico$134 mm2005 CPOCP$478 mm2013 
Carlyle Global PartnersCarlyle Global Partners
Various2
$5.7 bn2007-2008Carlyle Aviation Partners
CGP IICGP II$1.8 bn2020International Energy Carry FundsSASOF V$1.0 bn2020
CGP ICGP I$3.6 bn2015CIEP II$2.3 bn2019SASOF IV$1.0 bn2018
Carlyle MENA PartnersCarlyle MENA Partners International Energy Carry Fund Investment SolutionsCarlyle MENA PartnersCIEP I$2.5 bn2013SASOF III$0.8 bn2015
MENA I$471 mm2008 CIEP$2.5 bn2013 AlpInvestMENA I$0.5 bn2008Infrastructure FundsSASOF II$0.6 bn2012
Carlyle South America Buyout Fund NGP Energy Carry Funds Fund of Private Equity Funds
Carlyle South American Buyout FundCarlyle South American Buyout FundCRSEF$0.7 bn2019
Securitization Vehicles4
$1.8 bnVarious
CSABF I$776 mm2009 NGP XII$696 mm2017 64 vehicles€41.4 bn2000-2017CSABF I$0.8 bn2009CGIOF$2.2 bn2019
9 Other Vehicles4
$2.8 bnVarious
Carlyle Sub-Saharan Africa FundCarlyle Sub-Saharan Africa Fund NGP XI$5.3 bn2014 Secondary InvestmentsCarlyle Sub-Saharan Africa FundCPP II$1.5 bn2014Other Credit
CSSAF I$698 mm2012 NGP X$3.6 bn2012 47 vehicles€14.6 bn2002-2017CSSAF I$0.7 bn2012CPOCP$0.5 bn2013
Fortitude5
$2.8 bn2020
Carlyle Peru FundCarlyle Peru Fund NGP Agribusiness Carry Fund Co-InvestmentsCarlyle Peru Fund
CPF I$308 mm2012 NGP GAP$402 mm2014 48 vehicles€14.2 bn2000-2017CPF I$0.3 bn2012
Investment Solutions6
Carlyle Global Partners NGP Management Fee Funds Metropolitan Real Estate
CGP$3.6 bn2015 
Various 2
$7.2 bn2004-2008 Real Estate Fund of Funds
Growth Carry Funds Legacy Energy Carry Funds 31 vehicles$3.6 bn2002-2017
Carlyle U.S. Venture/Growth PartnersCarlyle U.S. Venture/Growth Partners Carlyle/Riverstone Global Energy Carlyle U.S. Venture/Growth PartnersAlpInvest
CEOF II$2.4 bn2015 Energy IV$6.0 bn2008 CEOF II$2.4 bn2015Fund of Private Equity Funds
CEOF I$1.1 bn2011 Energy III$3.8 bn2005 CEOF I$1.1 bn2011110 vehicles€47.0 bn2000-2021
CUSGF III$605 mm2006 Energy II$1.1 bn2003 
CVP II$602 mm2001 Carlyle/Riverstone Renewable Energy CVP II$0.6 bn2001Secondary Investments
Carlyle Europe Technology PartnersCarlyle Europe Technology Partners Renew II$3.4 bn2008 Carlyle Europe Technology Partners85 vehicles€25.1 bn2002-2021
CETP IVCETP IV€1.4 bn2019Co-Investments
CETP III€657 mm2014 CETP III€0.7 bn201480 vehicles€19.7 bn2002-2021
CETP II€522 mm2008 
Carlyle Asia Venture/Growth PartnersCarlyle Asia Venture/Growth Partners Carlyle Asia Venture/Growth Partners
CAGP V$292 mm2017 
CAP Growth IICAP Growth II$0.5 bn2021
CAP Growth ICAP Growth I$0.3 bn2017
CAGP IV$1.0 bn2008 CAGP IV$1.0 bn2008
CAGP III$680 mm2005 
Carlyle Cardinal IrelandCarlyle Cardinal Ireland Carlyle Cardinal Ireland
CCI€292 mm2014 CCI€0.3 bn2014
Note: All amounts shown represent total capital commitments as of SeptemberJune 30, 20172021 unless otherwise noted. Certain of our recent vintage funds are currently in fundraising and total capital commitments are subject to change. In addition, certain carry funds included herein may be disclosed which are not included in fund performance if they have not made an initial capital call or commenced investment or calledactivity. The NGP funds are advised by NGP Energy Capital Management, LLC, a separately registered investment adviser, and we do not serve as an investment adviser to those funds.
(1)Global Private Equity also includes 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 NGP M&R, NGP ETP II, and NGP IX, on which we are not entitled to a share of carried interest.
(3)Amounts represent gross assets plus any available capital for investments or fees.
(1)Amounts represent gross assets as of September 30, 2017.
(2)Includes NGP ETP I, NGP M&R, NGP ETP II, NGP VIII and NGP IX.

as of June 30, 2021.




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(4)Amounts represent Total AUM as of June 30, 2021.
(5)Reflects AUM related to capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.
(6)On April 1, 2021, we completed the sale of our interest in Metropolitan Real Estate.

Trends Affecting our Business

Expectations for global economicGlobal growth generally have strengthened since the end ofin the second quarter of 2021 was largely consistent with upward revisions to the International Monetary Fund’s globalfrom earlier this year as advanced economies experienced strong sequential growth forecasts for both 2017driven by vaccine distribution and 2018. Public andgovernment stimulus. Our proprietary data suggest manufacturing and related trade flows have been responsible for mostthat U.S. gross domestic product (GDP) grew at a 9.1% annualized rate from the first quarter of 2021, while the euro zone economy expanded at a 6% annualized rate. Growth in much of the rest of the world also strengthened relative to the first quarter, with China’s economy expanding at a 5.3% annualized rate, up from just 1.6% in Q1 2021.
The acceleration in global growth. Our proprietary portfolio economic data also indicates that trade-sensitive industrial orders have been growing at their fastest rates since 2011, which has supported earnings growth across our global portfolio duringactivity and pandemic-related disruptions caused inflation to reach levels not seen in over a decade, with the first three quarters of 2017.

While real growth rates appear to have accelerated, inflation continues to fall short of central bank targets. In the U.S., the core PCEconsumer price index (the Federal Reserve’s preferred measure of inflation) roseincreasing by just 1.3%5.4% in the twelve months ending in August 2017June. Above-forecast inflation has translated into increased volatility in financial markets, as market participants react to both the data and central banks’ expected response to it. Expectations that the Fed would have to raise policy rates sooner than previously expected caused yields on the 10-year U.S. Treasury note to fall by more than 25 basis points from March 2021, stabilizing between 1.3% and 1.4%. Market participants expected that higher short-term rates in 2022 and 2023 will translate to less inflation in future years. Sub-investment grade corporate bond yields declined in tandem with U.S. treasuries as spreads continued to tighten. As of late July, B-rated U.S. corporate spreads had declined by roughly 40 basis points since the start of the year.
The broad economic reopening has remained belowalso resulted in a tightening of labor markets. During the Fed’s 2% target since April 2012. The Euro area core inflation rate was even lower at 1.1% for the twelve months ending in September 2017. As market surveys and our portfolio data currently do not point to signs of price pressuresquarter, businesses in the market, central banks are expectedU.S. and globally found it increasingly difficult to keep policy interest rates low despite continued declinesfill open positions, across a wide variety of skill levels. While this will likely increase technological utilization, it will also result in unemployment. The U.S. 10-year Treasury yield stood at 2.3% in mid-October, roughly unchanged fromhigher compensation expense than many firms anticipated entering the end of theyear.
The second quarter while the spread between the 10-year and two-year Treasury yields fell to 0.75%, its lowest level since November 2007. Stronger real growth and low longer-term interest rates led towas a further strengthening of risk appetite in the third quarter. The MSCI World Index advanced 6.6% andrecord setting period for equity markets as the S&P 500 added 5.3% both over the period from July 1 through October 24, bringing the year-to-date gains in the S&P 500 to 13.5%. Both realized and implied volatility remained well below historic averages during the third quarter.

Private equity has benefited from these favorable financial market conditions, which have resulted in tight credit spreads on portfolio company loan and bond issuances and a healthy fundraising environment. Credit spreads on B-rated corporate credit declined below 350 basis points in the third quarterbreached 4,300 for the first time, driven by strong corporate earnings and low interest rates. Second quarter corporate earnings estimates are expected to increase 70% from year over year recession levels but are also up 7.2% from strong Q1 2021 results. In the second quarter, the Dow Jones, S&P 500, and NASDAQ 100 rose 4.6%, 8.2%, and 11.2% respectively. Globally, over the second quarter of 2021, the MSCI ACWI, EuroStoxx 600 and Shanghai Composite rose 5.0%, 5.4%, and 4.3% respectively.
Our carry fund portfolio extended the strong positive trend experienced since 2014 due, in part, to a historically low trailing high-yield default ratethe first quarter of 2.3% (measured globally). According to Thomson Reuters, global private equity-backed M&A activity reached $212 billion year-to-date2020, appreciating 11% in the thirdsecond quarter and 25% year-to-date. Within our Global Private Equity segment, our corporate private equity funds appreciated 12% in the second quarter driven by strong gains in our U.S., Europe and Asia portfolios, our real estate funds appreciated 11% in the second quarter, continuing their attractive performance, and our natural resources funds appreciated 9%, boosted by the effect of 2017,rising commodity prices on our energy-focused investments. In our Global Credit segment, our carry funds (which represent approximately 17% of the total Global Credit remaining fair value) appreciated 8% in the second quarter, reflecting continued positive portfolio company performance. Our Investment Solutions funds appreciated 12% in the second quarter, which generally reflects investment fair values on a 25% increase relativeone-quarter lag in the valuations of our primary and secondary fund of funds.
With continued positive impact from valuations across the portfolio, net accrued performance revenues on our balance sheet reached another high at $4.0 billion at June 30, 2021, up 72% from December 31, 2020. The portion of our traditional carry funds attributable to publicly traded companies is 18% of fair value as of June 30, 2021, compared to 15% as of December 31, 2020 and 6% as of December 31, 2019. While our publicly traded investments have performed well to date overall, this shift may result in an increasing correlation to public market performance and a significant concentration of investment gains in individual investments for certain funds. To the same periodextent that there is volatility in 2016public equity markets and/or the prices of our publicly-traded portfolio companies, there may be elevated volatility in our performance revenue accrual in the coming quarters. For example, as of June 30, 2021, approximately 40% of our net accrued performance revenues were generated by Carlyle Partners VI, L.P. (“CP VI”), which has over 65% of its remaining fair value in publicly-traded portfolio companies.
We generated $8.7 billion in realized proceeds from our carry funds in the second quarter. We believe that the high level of public securities and maturing portfolio position us well to deliver higher levels of both realized proceeds and realized performance revenue over the highest totallong term. For example, during the second quarter we realized performance revenues for the first three quarterstime from our fourth Asia Buyout fund and our eighth U.S. Real Estate fund, and approximately 70% of a year since 2007. Nearly $100 billionour net accrued performance revenues are in private equity capital commitments closed infunds from which we are currently realizing performance revenues. We have announced several exit transactions that we expect will close during the third quarter, bringing total fundraising forsecond half of the year, to roughly $300 billionwhich we anticipate will generate at least $500 million of net realized performance revenues. These exits include Atotech, Pharmaceutical Product Development and raising total industry “dry powder” above $963 billion.Novetta in CP VI, AMEOS Group in Carlyle Europe Partners III, L.P. (“CEP III”) and The Bountiful Company in Carlyle Partners V, L.P. and CEP III.


While the increase in new capital commitments has raised concerns about too much capital chasing a finite number of investment opportunities, we believe that recent fundraising activity across the industry is commensurate with the size of the market opportunity for two primary reasons. First, asset values have been increasing substantially over the past decade. Year-to-date commitments to buyout funds in the U.S. amount to just 0.64% of U.S. stock market capitalization, 60% less than the peak ratio of 1.6% recorded in 2007. Second, there has been a secular shift in corporate finance away from initial public offerings and other public listings toward take private transactions and private financial solutions. Over the past 20 years, the number of public companies in the U.S. has shrunk by half from nearly 8,000 to just 3,500, while the number of private equity-backed companies has grown five-fold, from 1,462 in 2000 to more than 7,580 in 2016. The decline in the number of public companies has been fueled by a drop in the micro, small, and midcap companies that once constituted the “growth stocks” of public portfolios. Relative to their late-1990s peak, initial public offerings were down by 80% in 2016, as entrepreneurs increasingly seemed to prefer to raise capital and access liquidity by selling to a private equity investor rather than going public. In particular, private equity funds (including our funds) tend to invest in fast-growing private companies as these companies provide a particular value creation opportunity, in our case driven by the ability to leverage the resources of our OneCarlyle network.

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While higher asset valuations may continue to put downward pressure on rates of return for new investments across all asset classes, we remain confident in our ability to find investment opportunities that meet the investment criteria and strategic focus of our investment funds. During the thirdsecond quarter, weour carry funds invested $6.9$8.1 billion in new or follow-on transactions, and we have invested nearly $21announced or signed an additional $6.0 billion of new or follow-on transactions expected to close in the coming quarters. We have deployed capital at a pace faster than in recent years, investing more than $26 billion over the last twelve months. We also generated $8.4 billion in realized proceeds inmonths, and we anticipate the third quarter, and $26.5 billion over the last twelve months. Our diverse fund mandates, geographical footprint, and experienced investment teams continue to combine to generate a high level of investment lead generation.market activity and opportunities for large buyouts will facilitate strong deployment activity throughout the remainder of 2021, particularly in the healthcare, technology, and consumer sectors.

DuringAt our Investor Day in February 2021, we announced our goal of raising at least $130 billion by the third quarter, our overall carry fund portfolio appreciated by 3%end of 2024. Fundraising has been strong during the first half of the year, and is up 19%we are ahead of schedule in fundraising for the last twelve months. In the third quarter, our Corporate Private Equity funds appreciated by 4%, our real estate funds appreciated by 3% and our natural resources funds appreciated by 5%. The valuationsome of our Global Market Strategies carry funds was flatlarge successor funds. We raised $10.4 billion in new capital in the thirdsecond quarter, with the first closing in our ninth U.S. Real Estate fund, as well as continued strength in distressed credit offset by weaknessGlobal Credit and Investment Solutions. Additionally, we launched fundraising on our eighth flagship U.S. Buyout fund in energy debt funds. Dollar denominated appreciation in Investment Solutions was 2.5%, but as AlpInvest funds are primarily denominated in Euros, they were negatively impacted by the strength of the Euro relativesecond quarter. We have raised $18.2 billion year to the U.S. dollar during the quarter. Our private carry fund portfolio appreciated by 3% and our public carry fund portfolio appreciated by 2% during the third quarter, each excluding Investment Solutions.

date.
We are working to raise $100 billion in grossclosely evaluating the financial and other proposals put forth by the new capital over the four-year period that began in 2016Administration and will continue through the end of 2019. During the third quarter of 2017, we raised $7.1 billion of new capitalCongress and we raised $22.1 billion of gross new capital over the last twelve months. We expect that the pace of fundraising will accelerate for the remainder of 2017 and into 2018 as our largest flagship buyout funds proceed through the fundraising cycle. As we have previously indicated, fundraising activity generates one-time costs that are incurred upon the closing of new commitments. As these new commitments may not generate fees for several quarters, we will incur costs ahead of revenues. These costs are likely to increase in the fourth quarter and into 2018 because our largest buyout funds are actively fundraising for new commitments. When fees on those new commitments are activated, we expect to see an increase in Fee-Earning AUM and a similar increase in management fee revenue. Pending Fee-Earning AUM, which is capital that we have raised, but on which we have not yet activated fees, was $5.5 billion at September 30, 2017, down from $8.6 billion at June 30, 2017, primarily due to the activation of feestheir potential impacts on our mostbusiness. While there may be changes to current tax and regulatory regimes, recent vintage U.S. real estate fund.

Duringfiscal stimulus and proposed infrastructure packages could be followed by longer-term spending increases. The potential for policy changes may create regulatory uncertainty for our portfolio companies and our investment strategies and could adversely affect our profitability and the third quarter, we continued to invest our resources in further expanding and supporting our global credit business. We continued to identify and retain leaders in the industry to enhance our global credit team, which continues to aggressively focus on opportunities in the global credit space. As we continue to hire new employees, expand our global credit operations and compensate existing employees for an active and successful year and to incentivize future performance, we anticipate that expenses across the firm will be elevated as compared to prior periods.

In October 2017 we announced that effective January 1, 2018, Kewsong Lee and Glenn Youngkin will succeed Bill Conway and David Rubenstein as Co-Chief Executive Officers of the firm. Carlyle’s three founders (Bill Conway, Daniel D’Aniello and David Rubenstein) will remain actively involved in our business with Messrs. Conway and Rubenstein serving as Co-Executive Chairmen of the Board of Directors of the general partner of the Partnership, Mr. Conway also serving as Co-Chief Investment Officer, Mr. D’Aniello serving as Chairman Emeritus and all threeprofitability of our founders continuing to serve as members of the firm’s executive group. Peter Clare has been named Co-Chief Investment Officer alongside Bill Conway and remains co-head of Carlyle’s U.S. Buyout team. Messrs. Clare, Lee and Youngkin also will be joining the Board of Directors of the general partner of the Partnership. We do not anticipate that these leadership transitions will result in changes to our investment process or investment teams.portfolio companies.

Recent Transactions
Distributions

Dividends
In October 2017,July 2021, the Company’s Board of Directors of our general partner declared a quarterly distributiondividend of $0.56$0.25 per common unitshare to common unitholdersstockholders of record at the close of business on NovemberAugust 10, 2017,2021, payable on November 16, 2017.August 17, 2021.

On September 13, 2017, Carlyle issued 16 million of its 5.875% Series A Preferred Units (the “Preferred Units”) at a price of $25.00 per unit for total gross proceeds of $400 million, or $387.6 million, net of issuance costs and expenses. Distributions on the Preferred Units, when and if declared, will be payable quarterly on the 15th day of March, June, September and December of each year,beginning December 15, 2017.   Distributions on the Preferred Units are discretionary and non-cumulative. The Board of Directors of our general partner has declared a quarterly distribution of $0.375347 per Preferred Unit to holders of record at the close of business on December 1, 2017, payable on December 15, 2017. The first distribution on the Preferred Units is calculated based on the date of original issuance. See Note 14 of our unaudited condensed consolidated financial statements for more information.

Key Financial Measures
Our key financial measures are discussed in the following pages. Additional information regarding these key financial measures and our other significant accounting policies can be found in Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Revenues
Revenues primarily consist of fund management fees, performanceincentive fees, investment income including(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 with which we have an investment advisory or investment management agreement. Additionally, management fees 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. Approximately 90% of our fee revenue is in the form of management fees from traditional closed-end, long-dated funds, which are highly predictable and stable, and do not have significant exposure to the underlying fund valuations.
Management fees attributable to Carlyle Partners VI,VII, L.P. (“CP VI”VII”), our sixthseventh U.S. buyout fund with approximately $12.0$17.5 billion of Fee-earning AUM as of SeptemberJune 30, 2017,2021 were approximately 15% of total management fees recognized during the three months ended September 30, 2017 and 16% of total management fees recognized during the ninethree and six months ended SeptemberJune 30, 2017. Management fees attributable to CP VI were approximately 15%2021, respectively, and 17% of total management fees recognized during both the three and ninesix months ended SeptemberJune 30, 2016, respectively.2020. No other fund generated over 10% of total management fees in the periods presented.

Fund management fees exclude the reimbursement of any partnership expenses paid by the PartnershipCompany 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.
Transaction and Portfolio Advisory Fees.Transaction and portfolio advisory fees aregenerally 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 serviceperformance obligation has been providedsatisfied and collection is reasonably assured. We are required to offset our fund management fees earned by a percentage of the transaction and advisory fees earned, which we refer to as the “rebate offsets.” SuchHistorically, such rebate offset percentages generally approximateapproximated 80% of the fund’s portion of the transaction and advisory fees earned. However, the percentage of transaction and portfolio advisory fees we share with our investors on our recent vintage funds has generally increased, and as such the rebate offset percentages generally range from 80% to 100% of the fund’s portion of the transaction and advisory fees earned, such that a larger share of the transaction fee revenue we retain is driven by co-investment activity. In addition, Carlyle


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Global Capital Markets (“GCM”) generates capital markets fees 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 with respect to our most recent vintages (but are subject to the rebate offsets set forth above for older funds). Underwriting fees include gains, losses and fees arising from securities offerings in which we participate in the underwriter syndicate. The recognition of portfolio advisory fees, transactions fees, and transactionscapital markets fees can be volatile as they are primarily generated by investment activity within our funds, and therefore are impacted by our investment pace. We have received
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. Investment income consists of our performance allocations as well as the realized and expect to continue to receive requestsunrealized gains and losses resulting from a variety of investorsour equity method investments and groups representing investors to increase the percentage of transaction and advisory fees we share with our investors in future funds; to the extent that we accommodate such requests on future funds, the rebate offset percentages would increase relative to historical levels.other principal investments.
Performance Fees. Performance feesallocations 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 which historically has comprised over 80% of all performance fees in our consolidated financial statements, is recognized by Carlyle upon appreciation of the valuation of our funds'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 feesallocations reflects our share of the fair value gains and losses of the associated funds'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 feesallocations 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.
In addition to itsthe performance feesallocations from our CorporateGlobal Private Equity and Real Assets funds and closed-end carry funds in the Global Market StrategiesCredit segment, we are also entitled to receive performance feesallocations from our Investment Solutions, Carlyle Aviation and NGP carry funds.Carry Funds. We also retained our interest in the net accrued performance allocations of existing funds at the time of the sale of MRE. The timing of performance feeallocations realizations for these funds is typically later than in our other carry funds based on the terms of such arrangements.
Our performance feesallocations are generated by a diverse set of funds with different vintages, geographic concentration, investment strategies and industry specialties. For an explanation of the fund acronyms used throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, refer to “— Our Family of Funds.”
Performance feesallocations in excess of 10% of the total for the three and six months ended SeptemberJune 30, 20172021 and 2020 were generated from the following funds:
$74.2 million from CP VI (with total AUM of approximately $14.6 billion),
$36.7 million from Carlyle International Energy Partners, L.P. (“CIEP”) (with total AUM of approximately $2.7 billion),
$33.7 million from Carlyle Partners V, L.P. (“CP V”) (with total AUM of approximately $5.6 billion), and
$(34.2) million from Carlyle Equity Opportunity Fund, L.P. (“CEOF”) (with total AUM of approximately $1.1 billion).

Performance fees in excess of 10% of the total for the nine months ended September 30, 2017 were generated from the following funds:
$471.5 million from CP VI,
$286.7 million from CP V, and
$221.7 million from Carlyle Asia Partners IV, L.P. (“CAP IV”).
Performance fees in excess of 10% of the total for the three months ended September 30, 2016 were generated primarily from the following funds:
•$183.4 million from CP VI,
•$(53.1) million from Carlyle Realty Partners V, L.P. (“CRP V”), and
•$(22.4) million from Carlyle Asia Partners III, L.P. (“CAP III”).
Performance fees in excess of 10% of the total for the nine months ended September 30, 2016 were generated primarily from the following funds:
•$184.8 million from CP VI,
•$79.2 million from CP V, and
•$74.2 million from CRP VII.
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
CP VI$532.2 CP VI$1,126.2 CP VI$1,067.8 CP VI$567.6 
CEOF II208.4 CEP IV478.0 CAP IV190.5 
CETP III34.7 
CIEP(160.1)
CP V(57.3)
CEOF(45.7)
Alpinvest Co - & Secondary Investments 2006-2008(30.2)
CEP III(30.2)
CAP V(29.4)
No other fund generated over 10% of performance feesallocations in the periods presented above. Performance allocations from CP VI during the three and six months ended June 30, 2021 were driven by appreciation across the portfolio, with notable increases in the values of the publicly traded investments in the portfolio and private investments with pending sale


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transactions. During the three months ended March 31, 2020, our carry fund portfolio experienced depreciation driven by the turbulence in the global economies, which resulted in the reversal of $558.6 million in previously recognized performance allocations in CP VI, which it subsequently more than recovered during the three months ended June 30, 2020. As a result, performance allocations generated by CP VI during the three months ended June 30, 2020 were in excess of performance allocations generated during the six months ended June 30, 2020.
Under our arrangements with the historical owners and management team of AlpInvest, we generally do not retain any carried interest in respect of the historical investments and commitments to our fund vehicles that existed as of July 1, 2011 (including any options to increase any such commitments exercised after such date). We are entitled to 15% of the carried interest in respect of commitments from the historical owners of AlpInvest for the period between 2011 and 2020, except in certain instances, and 40% of the carried interest in respect of all other commitments (including all future commitments from third parties). In certain instances, carried interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands.
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. When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized performance feesallocations are reversed. In all cases, each investment fund is considered separately in evaluating carried interest and potential giveback obligations. For any given period, performance feeallocations revenue on our statement of operations may include reversals of previously recognized performance feesallocations due to a decrease in the value of a particular fund that results in a decrease of cumulative performance feesallocations earned to date. Since fund return hurdles are cumulative, previously recognized performance feesallocations also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. For the three months ended SeptemberJune 30, 20172021 and 2016,2020, the reversals of performance feesallocations were $60.7$8.1 million and $121.8$97.5 million, respectively. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, the reversals of performance feesallocations were $90.0$10.0 million and $95.0$638.3 million, respectively. 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.
As of SeptemberJune 30, 2017,2021, accrued performance feesallocations and accrued giveback obligations were approximately $3.5$8.1 billion and $67.6$21.0 million, respectively. Each balance assumes a hypothetical liquidation of the funds’ investments at SeptemberJune 30, 20172021 at their then current fair values. These assets and liabilities will continue to fluctuate in accordance with the fair values of the fundfunds’ investments until they are realized. As of SeptemberJune 30, 2017, approximately $38.32021, $9.9 million of the accrued giveback obligation is the responsibility of various current and former senior Carlyle professionals and other limited partners of the Carlyle Holdings partnerships, and the net accrued giveback obligation attributable to Carlyle Holdingsthe Company is $29.3$11.1 million. The PartnershipCompany uses “net accrued performance fees”revenues” to refer to the aggregation of the accrued performance allocations and incentive fees net of (i) accrued giveback obligations, (ii) accrued performance feeallocations 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 and excludes any net accrued performance allocations and incentive fees that have been realized but will be collected in subsequent periods. Net accrued performance feesrevenues as of SeptemberJune 30, 20172021 are $1.5$4.0 billion.

In addition, realized performance feesallocations may be reversed in future periods to the extent that such amounts become subject to a giveback obligation. If, at SeptemberJune 30, 2017,2021, all investments held by our carry funds were deemed worthless, the amount of realized and previously distributed performance feesallocations subject to potential giveback would be approximately $0.8$0.7 billion on an after-tax basis where applicable.applicable, of which approximately $0.3 billion would be the responsibility of current and former senior Carlyle professionals. See the related discussion of “Contingent Obligations (Giveback)” within “— Liquidity and Capital Resources.” Since Carlyle’s inception,
The following table summarizes the total amount of aggregate giveback obligations that we have realized a total of approximately $217.8 million in aggregate giveback obligations. Approximately $37.3 millionsince Carlyle’s inception. Given various current and former senior Carlyle professionals and other former limited partners of the $217.8 million in aggregateCarlyle Holdings partnerships are responsible for paying the majority of the realized giveback obligationsobligation, the table below also summarizes the amount that was attributable to Carlyle Holdings. the Company:
 Inception through June 30, 2021
 Total GivebackGiveback Attributable to Carlyle
(Dollars in millions)
Various Legacy Energy Funds$158.0 $55.0 
All other Carlyle Funds58.1 0.6 
Aggregate Giveback since Inception$216.1 $55.6 


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The funding for employee obligations and givebacks related to carry realized pre-IPO is primarily through a collection of employee receivables related to giveback obligations and from non-controlling interests for their portion of the obligation. The realization of giveback obligations for the Partnership'sCompany’s portion of such obligations reduces Distributable Earnings in the period realized and negatively impacts earnings available for distributiondistributions to unitholders in the period realized. Further, each individual 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 feeallocation compensation is subject to return to the PartnershipCompany 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'sfund’s life.
Each investment fund is considered separately in evaluating carried interest and potential giveback obligations. As a result, performance feesallocations within funds will continue to fluctuate primarily due to certain investments within each fund constituting a material portion of the carry in that fund. Additionally, the fair value of investments in our funds may have substantial fluctuations from period to period.
In addition, in our discussion of our non-GAAP results, we use the term “net performance fees” to refer to the performance fees from our funds net of the portion allocated to our investment professionals, if any, and certain tax expenses associated with carried interest attributable to certain partners and employees, which are reflected as performance fee related compensation expense. We use the term “realized net performance fees”revenues” to refer to realized performance allocations and incentive fees from our funds, net of the portion allocated to our investment professionals, if any, and certain tax expenses associated with carried interest attributable to certain partners and employees, which are reflected as realized performance feeallocations and incentive fees related compensation expense. See “— Non-GAAP Financial Measures” for the amount of realized and unrealizednet performance feesrevenues recognized each period. See “— Segment Analysis” for the realized and unrealizednet performance feesrevenues by segment and related discussion for each period.

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, as well as any interest and other income. Investment income also includes the related amortization of the basis difference between the carrying value of our investment and our share of the underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by us to employees of our equity method investee, as it relates to our investments in NGP. Principal investment income also included our proportionate share of U.S. GAAP earnings from our strategic investment in Fortitude Holdings prior to the contribution of our investment to a Carlyle-affiliated investment fund (see Note 4). 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.
Fair Value Measurement. U.S. GAAP establishes a hierarchalhierarchical 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.

The table below summarizes the valuation of investments and other financial instruments included within our AUM, by segment and fair value hierarchy levels, as of SeptemberJune 30, 2017 (amounts in millions):2021:
 As of June 30, 2021
 Global
Private
Equity		Global
Credit		Investment SolutionsTotal
Consolidated Results(Dollars in millions)
Level I$9,918 $256 $1,885 $12,059 
Level II10,656 1,513 194 12,363 
Level III87,412 48,830 38,554 174,796 
Fair Value of Investments107,986 50,599 40,633 199,218 
Available Capital42,162 10,482 24,015 76,659 
Total AUM$150,148 $61,081 $64,648 $275,877 
 As of September 30, 2017
 Corporate
Private
Equity		 
Real
Assets
 Global Market Strategies Investment Solutions Total
Consolidated Results         
Level I$2,515
 $2,447
 $209
 $750
 $5,921
Level II162
 757
 70
 294
 1,283
Level III36,711
 21,530
 24,484
 29,940
 112,665
Total Fair Value39,388
 24,734
 24,763
 30,984
 119,869
Other Net Asset Value3,135
 (835) (320) (633) 1,347
Total AUM, Excluding Available Capital Commitments42,523
 23,899
 24,443
 30,351
 121,216
Available Capital Commitments13,220
 15,869
 7,432
 16,691
 53,212
Total AUM$55,743
 $39,768
 $31,875
 $47,042
 $174,428

Investment Income, Interest, and Other Income. Investment income, interest, and other income represent the unrealized and realized gains and losses on our principal investments, including our investments in Carlyle funds that are not consolidated, our equity method investments and other principal investments, as well as any interest and other income. Investment income (loss) also includes the related amortization of the basis difference between the carrying value of our investment and our share of the underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by us to employees of our equity method investee, as it relates to our investments in NGP. Realized 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 investment loss is also recorded when an investment is deemed to be worthless. Unrealized 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.

Interest and Other Income of Consolidated Funds. Interest and other income of Consolidated Funds primarily represents the interest earned on CLO assets. However, the Consolidated Funds are not the same entities in all periods presented. The Consolidated Funds in future periods may change due to changes in fund terms, formation of new funds, and terminations of funds.


Revenue of a Real Estate VIE. Revenue of a real estate VIE consists of revenue generated by Urbplan, which primarily is revenue earned for land development services using the completed contract method and investment income earned on Urbplan's investments. Under the completed contract method of revenue recognition, revenue is not recognized until the period in which the land development services contract is completed, which can cause volatility from period to period based on which contracts are completed. Urbplan was deconsolidated from the Partnership's financial results during the three months ended September 30, 2017 as a result of the Partnership disposing of its interests in Urbplan in a transaction in which a third party acquired operational control and all of the economic interests in Urbplan (see Note 15 to the unaudited condensed consolidated financial statements).

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Net Investment Gains (Losses) of Consolidated Funds. Net investment gains (losses) of Consolidated Funds measures the change in the difference in fair value between the assets and the liabilities of the Consolidated Funds. A gain (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. A gain 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 gains (losses) of Consolidated Funds attributable to the limited partner investors is allocated to non-controlling interests. Therefore a gain or loss is not expected to have a material impact on the revenues or profitability of the Partnership.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, a gain or loss from the Consolidated Funds generally does not impact the assets available to our equity holders.

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. Therefore, for any given period, the ratio of performance allocations and incentive fee compensation to performance allocations and incentive fee revenue may vary based on the funds generating the performance allocations and incentive fee revenue for that period and their particular allocation percentages.

In addition, we have implemented various equity-based compensation arrangements that require senior Carlyle professionals and other employees to vest ownership of a portion of their equity interests over a service period of upgenerally one to 60 months,four years, which under U.S. GAAP will result in compensation charges over current and future periods. Further, in order to recruitDuring 2019 and retain existing and future senior Carlyle professionals and other employees,2020, we have implemented additional equity-based compensation programs that have resulted in increases to our equity-based compensation expenses, which is a trend that may continue in the future ifgranted fewer equity awards than we increase our issuance of deferred restricted common units as employee compensation.had previously. For example, in February 2017,2018, 2019 and 2020, we granted approximately 7.613.3 million, deferred6.7 million and 3.7 million of restricted commonstock units acrossand other awards, respectively. In 2021, we granted 7.0 million long-term strategic restricted stock units to certain senior professionals, the majority of which are subject to vesting based on the achievement of annual performance targets over four years, with a significantlarger proportion of the awards vesting based on the 2024 performance year. As a result, the number of our employees forrestricted stock units granted in 2021 is higher than in 2020, which, combined with a total estimated grant-date fair value of approximately $106 million; these awards vest over a period of

18 to 60 months. Compensation charges associated with thehigher share price than in prior periods, will result in higher equity-based compensation grants issuedexpense in our initial public offering in May 2012 or grants issued in acquisitions or strategic investments are excluded from our calculation of Economic Net Income.the coming years. 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 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. A portion of our compensation expense relates to internal fundraising costs, and compensation will fluctuate based on increases or decreases in our fundraising activity. Amounts due to employees related to such fundraising will be expensed when earned even though the benefit of the new capital and related fees will be reflected in operations over the life of the related fund.
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) and foreign currency transactions. We expect that general, administrative and other expenses will vary due to infrequently occurring or unusual items, such as the impairment of intangible 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. Additionally, we anticipate that general, administrative and other expenses will fluctuate from period to period due to the impact of foreign exchange transactions.
We also could incur additional expenses in the future related to our acquisitions including amortization of acquired intangibles, earn-outs to equity holders and fair value adjustments on contingent consideration issued, as well as related to our global compliance efforts. As discussed in Note 6 to the unaudited condensed consolidated financial statements, we evaluate our intangible assets (including goodwill) for impairment and could record additional impairment losses in future periods.

Interest and Other Expenses of Consolidated Funds. The interest and other expenses of Consolidated Funds consist primarily of interest expenses related primarily to our CLO loans, professional fees and other third-party expenses.

Interest and Other Expenses of a Real Estate VIE and LossIncome Taxes. Following the Conversion on Deconsolidation. Interest and other expenses of a real estate VIE and loss on deconsolidation reflects the loss recognized in the three months ended September 30, 2017 as a result of the Partnership disposing of its interests in Urbplan in a transaction in which a third party acquired operational control andJanuary 1, 2020, all of the economic interests in Urbplan, which resulted in the deconsolidation of Urbplan from the Partnership's financial results (see Note 15income before provision for income taxes attributable to the unaudited condensed consolidated financial statements). This line item also includes expenses incurred by Urbplan prior to deconsolidation, which consisted primarily of interest expense, general and administrative expenses, impairment charges, compensation and benefits, and costs associated with land development services. Also included in this caption was the change in our estimate of the fair value of Urbplan's loans payable.

Income Taxes. The Carlyle Holdings partnerships and their subsidiaries primarily operate as pass-through entities for U.S. income tax purposes and record a provision for state and local income taxes for certain entities based on applicable laws and a provision for foreign income taxes for certain foreign entities. In addition, Carlyle Holdings I GPGroup Inc. is subject to U.S. federal, state, and local corporate income taxestaxes. Prior to the Conversion, the Company was generally organized as a series of pass through entities pursuant to the United States Internal Revenue Code. As such, the Company was not responsible for the tax liability due on only a portion of ourcertain income or loss.  Depending onearned during the sources of our taxableyear. Such income or loss, ourwas taxed at the unitholder and non-controlling interest holder level, and any income tax provision or benefit can vary significantly from periodwas the responsibility of the unitholders


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and is paid at that level. See Note 9 to period.

the accompanying unaudited condensed consolidated financial statements for more information regarding the impact of the Conversion.
Income taxes for foreign entities 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.

The interim provision for income taxes is calculated using the discrete effective tax rate method as allowed by ASC 740, Accounting for Income Taxes. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis.
In the normal course of business, we are subject to examination by federal and certain state, local and foreign tax regulators. WthWith a few exceptions, as of SeptemberJune 30, 2017,2021, our U.S. federal income tax returns for thetax years 20142017 through 20162019 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 2012for tax years 2015 to 2016.2019. Foreign tax returns are generally subject to audit from 2009for tax years 2011 to 2016.2019. Certain of our affiliates are currently under audit by federal, state and foreign tax authorities. Currently, the Internal Revenue Service is examining the tax returns of certain subsidiaries for the 2013, 2014 and 2015 years. We do not believe the outcome of any future audit will have a material impact on our consolidated financial statements.

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 record significant non-controlling interestscompute earnings per common share in Carlyle Holdings relatingaccordance with ASC 260, Earnings Per Share. Basic earnings per common share is calculated by dividing net income (loss) attributable to the ownership interestscommon shares of the limited partnersCompany by the weighted average number of common shares outstanding for the Carlyle Holdings partnerships. The Partnership, through wholly owned subsidiaries, isperiod. Diluted earnings per common share reflects the sole general partnerassumed conversion of Carlyle Holdings. Accordingly,all dilutive securities. We apply the Partnership consolidatestreasury stock method to determine the financial position and results of operations of Carlyle Holdings into its financial statements, and the other ownership interests in Carlyle Holdings are reflected as a non-controlling interest in the Partnership’s financial statements.dilutive weighted-average common shares represented by unvested restricted stock units.
Non-GAAP Financial Measures
Economic Net Income. Economic net income,Distributable Earnings. Distributable Earnings, or “ENI,”“DE”, is a key performance benchmark used in our industry. ENIindustry 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 and determine amounts potentially available for distribution to the Company’s common stockholders.
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 fees,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 interestsinterest in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items. Charges (credits) related to Carlyle corporate actions and non-recurring items include: charges (credits) associated with equity-based compensation that was issued in the initial public offering in May 2012 or is issued in acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earnouts and contingent consideration including gains and losses associated with the estimated fair value of contingent 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. We believe the inclusion or exclusion of these items provides investors with a meaningful indication of our core operating performance. For segment reporting purposes, revenues and expenses, and, accordingly, segment net income, are presented on a basis that deconsolidates the Consolidated Funds. Total Segment ENI equals the aggregate of ENI for all segments. 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,”“FRE”, is a component of ENIDE and measures ouris used to assess the ability of the business to cover direct base compensation and operating profitability exclusiveexpenses from total fee revenues. FRE differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts DE to exclude net realized performance fees,revenues, realized principal investment income from investments in ourCarlyle funds, performance fee-related compensation, equity-based compensation expense,net interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain. Accordingly, Fee Related Earnings reflect the ability of the business to cover direct base compensation and operating expenses from fee revenues other than performance fees. Fee Related Earnings are reported as part of our segment results. We use Fee Related Earnings from operations to measure our profitability from fund management fees.
Distributable Earnings. Distributable Earnings is FRE plus realized net performance fees and realized investment income. Distributable Earnings is intended to show the amount of net realized earnings without the effects of consolidation of the Consolidated Funds. Distributable Earnings is derived from our segment reported results and is an additional measure to assess performance and determine amounts potentially available for distribution from Carlyle Holdings to its unitholders. Distributable Earnings is evaluated regularly by management in making resource deployment and compensation decisions and in assessing performance of our four segments. We also use Distributable Earnings in our budgeting, forecasting, and the overall management of our segments. We believe that reporting Distributable Earnings is helpful to understanding our business and that investors should review the same supplemental financial measure that management uses to analyze our segment performance.



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Operating Metrics
We monitor certain operating metrics that are common to the alternative asset management industry.

Fee-earning Assets under Management
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, for AlpInvest carry funds during the commitment fee period and for Metropolitan carry funds during the weighted-average investment period of the underlying funds (see “Fee-earning AUM based on capital commitments” in the table below for the amount of this component at each period);

(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period has not expired, for AlpInvest carry funds during the commitment fee period (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 Metropolitan carry funds after the expiration of the weighted-average investment period of the underlying funds (see “Fee-earning AUM based on invested capital” in the table below for the amount of this component at each period);
(c)the amount of aggregate fee-earning collateral balance at par of our collateralized loan obligations (“CLOs”), as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date for each CLO (see “Fee-earning AUM based on collateral balances, at par” in the table below for the amount of this component at each period);
(d)the external investor portion of the net asset value of our hedge fund and fund of hedge funds vehicles (pre redemptions and subscriptions), as well as certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period); and
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired, (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period).
(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 of our CLOs and other securitization vehicles, as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date;
(d)the external investor portion of the net asset value of our open-ended funds (pre redemptions and subscriptions), as well as certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period); and
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired, (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period).
The table below details Fee-earning AUM by its respective components at each period.
 As of June 30,
 20212020
Consolidated Results(Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments (1)$76,238 $71,792 
Fee-earning AUM based on invested capital (2)40,901 38,801 
Fee-earning AUM based on collateral balances, at par (3)28,111 25,811 
Fee-earning AUM based on net asset value (4)8,935 6,679 
Fee-earning AUM based on lower of cost or fair value and other (5)20,671 19,306 
Balance, End of Period (6) (7)$174,856 $162,389 
(1)Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.
(2)Reflects limited partner invested capital at cost and includes amounts committed to or reserved for investments for certain Global Private Equity and Investment Solutions funds.
(3)Represents the amount of aggregate Fee-earning collateral balances and principal balances, at par, for our CLOs/structured products.
(4)Reflects the net asset value of certain other carry funds.
(5)Includes funds with fees based on gross asset value.
(6)Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”), are managed with Riverstone Holdings LLC and its affiliates. Affiliates of both Carlyle and Riverstone act as investment advisors to each of the Legacy Energy Funds. Carlyle has a minority representation on the management committees of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on the management committee of Energy III, but the investment period for this fund has expired and the remaining investments in such fund are being disposed of in the ordinary course of business. As of June 30, 2021, the Legacy Energy Funds had, in the aggregate, approximately $0.6 billion in AUM and $0.7 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down.


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 As of September 30,
 2017 2016
Consolidated Results(Dollars in millions)
Components of Fee-earning AUM   
Fee-earning AUM based on capital commitments (1)$60,065
 $51,256
Fee-earning AUM based on invested capital (2)21,252
 27,922
Fee-earning AUM based on collateral balances, at par (3)17,647
 17,677
Fee-earning AUM based on net asset value (4)1,518
 5,103
Fee-earning AUM based on lower of cost or fair value and other (5)21,299
 21,794
Balance, End of Period (6)$121,781
 $123,752
(1)Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.
(2)Reflects limited partner invested capital at cost and includes amounts committed to or reserved for investments for certain Real Assets and Investment Solutions funds.
(3)Represents the amount of aggregate Fee-earning collateral balances and principal balances, at par, for our CLOs/structured products.
(4)Reflects the net asset value (pre-redemptions and subscriptions) of our hedge funds, fund of hedge funds vehicles, and certain other carry funds.
(5)Includes funds with fees based on gross asset value.
(6)Energy II, Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”), are managed with Riverstone Holdings LLC and its affiliates. Affiliates of both Carlyle and Riverstone act as investment advisers to each of the Legacy Energy Funds. Carlyle has a minority representation on the management committees of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on the management committees of Energy II and Energy III, but the investment period for these funds has expired and the remaining investments in such funds are being disposed of in the ordinary course of business. As of September 30, 2017, the Legacy Energy Funds had, in the aggregate, approximately $5.2 billion in AUM and $3.8 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down.

(7)Ending balances as of June 30, 2021 and 2020 exclude $17.3 billion and $8.5 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 June 30,Six Months Ended June 30,
 2021202020212020
Consolidated Results(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$173,132 $158,246 $170,102 $161,057 
Inflows (1)6,092 9,671 14,051 12,568 
Outflows (including realizations) (2)(5,771)(5,865)(9,345)(10,521)
Market Activity & Other (3)1,078 (1,197)1,586 (1,168)
Foreign Exchange (4)325 1,534 (1,538)453 
Balance, End of Period$174,856 $162,389 $174,856 $162,389 
(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, 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.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Consolidated Results(Dollars in millions) (Dollars in millions)
Fee-earning AUM Rollforward       
Balance, Beginning of Period$116,134
 $125,319
 $114,994
 $130,994
Inflows, including Fee-paying Commitments (1)7,708
 3,438
 12,747
 8,043
Outflows, including Distributions (2)(3,590) (3,662) (9,751) (11,350)
Subscriptions, net of Redemptions (3)—
 (955) —
 (3,850)
Changes in CLO collateral balances (4)332
 (267) (17) (400)
Market Appreciation/(Depreciation) (5)(65) (710) (220) (1,439)
Foreign Exchange and other (6)1,262
 589
 4,028
 1,754
Balance, End of Period$121,781
 $123,752
 $121,781
 $123,752
(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 runoff of CLO collateral balances. Distributions for funds earning management fees based on commitments during the period do not affect Fee-earning AUM. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.3 billion of Fee-earning AUM as of March 31, 2021.
(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, as well as activity of funds with fees based on gross asset value.
(1)Inflows represent limited partner capital raised and capital invested by our carry funds and the NGP management fee funds outside the investment period, weighted-average investment period or commitment fee period. Inflows do not include funds raised of $5.5 billion, which are not yet earning fees.
(2)Outflows represent limited partner distributions from our carry funds and NGP management fee funds, changes in basis for our carry funds where the investment period, weighted-average investment period or commitment fee period has expired, and reductions for funds that are no longer calling for fees.
(3)Represents the net result of subscriptions to and redemptions from our hedge funds and fund of hedge funds vehicles.
(4)Represents the change in the aggregate Fee-earning collateral balances at par of our CLOs/structured products, as of the quarterly cut-off dates.
(5)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value and also includes for periods prior to their disposition, the changes in the net asset value of our former hedge funds and fund of hedge funds vehicles.
(6)Includes activity of funds with fees based on gross asset value. Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.

(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
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 the capital invested inour carry funds and related co-investment vehicles, NGP Predecessor Funds and NGP management fee fundsseparately 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);
(c)the net asset value (pre-redemptions and subscriptions) of our long/short credit, emerging markets, multi-product macroeconomic, fund of hedge funds vehicles, mutual fund and other hedge funds; and
(d)the gross assets (including assets acquired with leverage) of our business development companies.
(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);
(c)     the net asset value of certain carry funds; and
(d)     the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

We include in our calculation of AUM and Fee-earning AUM certain energy and renewable resources funds that we jointly advise with Riverstone, and certainthe NGP management fee funds and carry fundsEnergy Funds that are advised by NGP.NGP, as well as capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.


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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, at cost, 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 Fee-earning AUM and AUM may differ from the calculations of other alternative asset managers. As a result, these measures may not be comparable to similar measures presented by other alternative 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 or performance fees.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.
We generally use Fee-earning AUM as a metric to measure changes in the assets from which we earn recurring management fees. Total AUM tends to be a better measure of our investment and fundraising performance as it reflects assetsinvestments at fair value plus available uncalled capital.
Available Capital
Capital. “Available capital, commonly known as “dry powder,” for our carry funds and NGP management fee funds referCapital” refers to the amount of capital commitments available to be called for investments, which may be reduced for equity invested that is funded via a fund credit facility and expected to be called from investors at a later date, plus any additional assets/liabilities at the fund level other than active investments. Amounts previously called may be added back to available capital following certain distributions. “Expired Available Capital” occurs when a fund has passed the investment and follow-on periods and can no longer invest capital into new or existing deals. Any remaining Available Capital, typically a result of either recycled distributions or specific reserves established for the follow-on period that are not drawn, can only be called for fees and expenses and is therefore removed from the Total AUM calculation.

The table below provides the period to period rollforward of Available Capital and Fair ValueTotal AUM.
 Three Months Ended June 30, 2021Six Months Ended
June 30, 2021
Consolidated Results(Dollars in millions)
Total AUM Rollforward
Balance, Beginning of Period$259,844 $245,769 
Inflows (1)10,445 18,238 
Outflows (including realizations) (2)(10,795)(18,651)
Market Activity & Other (3)15,802 32,992 
Foreign Exchange (4)581 (2,471)
Balance, End of Period$275,877 $275,877 
(1)Inflows reflects the impact of Capital,gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
(2)Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, separately managed accounts and the resulting rollforwardNGP Predecessor Funds, gross redemptions in our open-end funds, runoff of CLO collateral balances and the expiration of available capital. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.4 billion of Total AUM.AUM as of March 31, 2021.
 Three Months Ended 
 September 30, 2017		 Nine Months Ended 
 September 30, 2017
 Available
Capital		 Fair Value
of Capital		 Total
AUM		 Available
Capital		 Fair Value
of Capital		 Total
AUM
 (Dollars in millions) (Dollars in millions)
Consolidated Results           
Balance, Beginning of Period$54,096
 $115,729
 $169,825
 $50,140
 $107,467
 $157,607
Commitments (1)4,880
 —
 4,880
 13,929
 —
 13,929
Capital Called, net (2)(6,813) 6,765
 (48) (13,534) 13,255
 (279)
Distributions (3)691
 (5,797) (5,106) 1,647
 (16,316) (14,669)
Subscriptions, net of Redemptions (4)—
 —
 —
 —
 (7) (7)
Changes in CLO collateral balances (5)—
 377
 377
 —
 131
 131
Market Appreciation/(Depreciation) (6)—
 2,479
 2,479
 —
 11,899
 11,899
Foreign Exchange and other (7)358
 1,663
 2,021
 1,030
 4,787
 5,817
Balance, End of Period$53,212
 $121,216
 $174,428
 $53,212
 $121,216
 $174,428
(1)Represents capital raised by our carry funds and NGP management fee funds, net of expired available capital.
(2)Represents capital called by our carry funds and NGP management fee funds, net of fund fees and expenses(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our business development companies. Invested capital amounts may vary from capital called due to timing differences between investment acquisition and capital call dates.
(3)Represents distributions from our carry funds and NGP management fee funds, net of amounts recycled and distributions from our business development companies. Distributions are based on when proceeds are actually distributed to investors, which may differ from when they are realized.
(4)Represents the net result of subscriptions to and redemptions from our hedge funds and and fund of hedge funds vehicles.
(5)Represents the change in the aggregate collateral balance and principal cash at par of the CLOs/structured products.
(6)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments. Appreciation for the third quarter of 2017 was driven by 2% appreciation ($0.2 billion) in the public portfolio and 3% appreciation ($1.5 billion) in the private portfolio of our Corporate Private Equity, Real Assets, and Global Market

Strategies carry funds and related co-investment vehicles, the NGP Predecessor Funds and separately managed accounts, as well as the net impact of fees, expenses and non-investment income, change in addition to $0.9 billion of appreciation ingross asset value for our Investment Solutions carry funds. This also includes for periods prior to their disposition,business development companies and other changes in AUM.
(4)Foreign Exchange represents the net asset valueimpact of foreign exchange rate fluctuations on the translation of our hedge funds, mutual fund, and fundnon-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 hedge funds vehicles.the period end.
(7)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds and other changes in AUM. 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.


Please refer to “— Segment Analysis” for a detailed discussion by segment of the activity affecting Total AUM for each of the periods presented.
Portfolio Appreciation (Depreciation). The table below presentsoverall portfolio appreciation of 11% for the changethree months ended June 30, 2021 is comprised of 12% appreciation for carry funds within our Global Private Equity segment focusing on corporate private equity, 11% for funds focusing on real estate, and 9% for funds focusing on natural resources; 8% appreciation for carry funds in the Global Credit segment; and 12% appreciation for carry funds in the Investment Solutions segment. Overall portfolio appreciation for the six months ended June 30, 2021 of 25% is comprised of 28% appreciation for carry funds within our Global


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Private Equity segment focusing on corporate private equity, 15% for funds focusing on real estate, and 17% for funds focusing on natural resources; 16% appreciation for carry funds in the Global Credit segment; and 28% appreciation for carry funds in the Investment Solutions segment.
While there is no perfectly comparable market index benchmark for the overall portfolio investmentsor any of our carry funds. Please refer to “— Segment Analysis”its segments or strategies, we would note that S&P 500 and MSCI ACWI appreciation for a detailed discussion by segment of the activity affecting Total AUMthree months ended June 30, 2021 were 8.2% and 6.9%, respectively, while the FTSE NAREIT Composite appreciation was 10.9%, the S&P Oil and Gas Exploration and Production Index was 15.6%, and the S&P Leveraged Loan Index appreciation was 1.1%. S&P 500 and MSCI ACWI appreciation for each of the periods presented.six months ended June 30, 2021 were 14.4% and 11.4%, respectively, while the FTSE NAREIT Composite appreciation was 19.3%, the S&P Oil and Gas Exploration and Production Index was 58.8%, and the S&P Leveraged Loan Index appreciation was 1.6%.
a3q2017appreciationchart.jpg
(1)Corporate Private Equity, Real Assets, and Global Market Strategies carry funds only, excluding external co-investment.
(2)For Carlyle returns, “Appreciation/Depreciation” represents realized and unrealized gain / loss for the period on a total return basis before fees and expenses. The percentage of return is calculated as the sum of ending remaining investment fair market value ("FMV") and net investment outflow (sales proceeds less net purchases) less beginning remaining investment FMV divided by beginning remaining investment FMV.
(3)Public portfolio includes initial public offerings ("IPO") that occurred in the quarter. Investments may be reported as private in quarters prior to the IPO quarter.
(4)The MSCI ACWI - All Cap Index represents the performance of the MSCI All Country World Index across all market capitalization sizes of the global equity market.  There are significant differences between the types of securities and assets typically acquired by our carry funds and the investments covered by the MSCI All Country World Index. Specifically, our carry funds may make investments in securities and other assets that have a greater degree of risk and volatility, and less liquidity, than those securities included in the MSCI All Country World Index.  Moreover, investors in the securities included in the MSCI All Country World Index may not be subject to the management fees, carried interest or expenses to which investors in our carry funds are typically subject.  Comparisons between the our carry fund appreciation and the MSCI All Country World Index are included for informational purposes only.


Consolidation of Certain Carlyle FundsNon-GAAP Financial Measures
The Partnership consolidates all entities that it controls either throughDistributable Earnings. Distributable Earnings, or “DE”, is a majority voting interest or as the primary beneficiary of variable interest entities. On January 1, 2016, the Partnership adopted ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which provides a revised consolidation model for all reporting entities to use in evaluating whether to consolidate certain types of legal entities. As a result, the Partnership deconsolidated the majority of the Partnership's consolidated funds on January 1, 2016. The entities we consolidate are referred to collectively as the Consolidated Fundskey performance benchmark used in our unaudited condensed consolidated financial statements. For further information on our consolidation policy, see Note 2 toindustry and is evaluated regularly by management in making resource deployment and compensation decisions, and in assessing the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
As of September 30, 2017, our Consolidated Funds represent approximately 2%performance of our AUM; 2%three segments. We also use DE in our budgeting, forecasting, and the overall management of our fundsegments. We believe that reporting DE is helpful to understanding our business and that investors should review the same supplemental financial measure that management fees for bothuses to analyze our segment performance. DE is intended to show the three and nine months ended September 30, 2017; and less than 1%amount of our performance fees for bothnet realized earnings without the three and nine months ended September 30, 2017.
We are not required under theeffects of consolidation guidance to consolidate in our financial statements most of the investment funds we advise. However, we consolidate certain CLOs that we advise. As of September 30, 2017, our consolidated CLOs held approximately $4.5 billion of total assets and comprised substantially all of the assets and loans payable of the Consolidated Funds. TheDE is derived from our segment reported results and is an additional measure to assess performance and determine amounts potentially available for distribution to the Company’s common stockholders.
Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it includes 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. Charges (credits) related to Carlyle corporate actions and non-recurring items include: charges (credits) associated with acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and liabilitiesdispositions, charges associated with earnouts 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. 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 Consolidated Funds are generally held within separate legal entitiesresults 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 as a result,is used to assess the liabilitiesability of the Consolidated Fundsbusiness to cover direct base compensation and operating expenses from total fee revenues. FRE differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts DE to exclude net realized performance revenues, realized principal investment income from investments in Carlyle funds, net interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain.


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Operating Metrics
We monitor certain operating metrics that are non-recourse to us. For further information on consolidation of certain funds, see Note 2common to the unaudited condensed consolidated financial statements included in this Quarterly Reportasset 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 Form 10-Q.

Generally, the consolidationone of the Consolidated Fundsfollowing, once fees have been activated:
(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period has a gross-up effectnot expired, 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 assets, liabilitiesbusiness 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 of our CLOs and cash flows but has no net effect onother securitization vehicles, as defined in the net income attributable tofund indentures (typically exclusive of equities and defaulted positions) as of the Partnership and partners’ capital. The majorityquarterly cut-off date;
(d)the external investor portion of the net economic ownership interestsasset value of our open-ended funds (pre redemptions and subscriptions), as well as certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period); and
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired, (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period).
The table below details Fee-earning AUM by its respective components at each period.
 As of June 30,
 20212020
Consolidated Results(Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments (1)$76,238 $71,792 
Fee-earning AUM based on invested capital (2)40,901 38,801 
Fee-earning AUM based on collateral balances, at par (3)28,111 25,811 
Fee-earning AUM based on net asset value (4)8,935 6,679 
Fee-earning AUM based on lower of cost or fair value and other (5)20,671 19,306 
Balance, End of Period (6) (7)$174,856 $162,389 
(1)Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.
(2)Reflects limited partner invested capital at cost and includes amounts committed to or reserved for investments for certain Global Private Equity and Investment Solutions funds.
(3)Represents the amount of aggregate Fee-earning collateral balances and principal balances, at par, for our CLOs/structured products.
(4)Reflects the net asset value of certain other carry funds.
(5)Includes funds with fees based on gross asset value.
(6)Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”), are managed with Riverstone Holdings LLC and its affiliates. Affiliates of both Carlyle and Riverstone act as investment advisors to each of the Consolidated FundsLegacy Energy Funds. Carlyle has a minority representation on the management committees of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on the management committee of Energy III, but the investment period for this fund has expired and the remaining investments in such fund are reflected as non-controlling interests in consolidated entitiesbeing disposed of in the consolidated financial statements. For further information, see Note 2ordinary course of business. As of June 30, 2021, the Legacy Energy Funds had, in the aggregate, approximately $0.6 billion in AUM and $0.7 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.funds wind down.
Because only a small portion


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(7)Ending balances as of our funds are consolidated, the performanceJune 30, 2021 and 2020 exclude $17.3 billion and $8.5 billion, respectively, of the Consolidated Funds ispending Fee-earning AUM for which fees have not necessarily consistent with or representative of the combined performance trends of all of our funds.

Consolidated Results of Operationsyet been activated.
The following table below provides the period to period rollforward of Fee-earning AUM.
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Consolidated Results(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$173,132 $158,246 $170,102 $161,057 
Inflows (1)6,092 9,671 14,051 12,568 
Outflows (including realizations) (2)(5,771)(5,865)(9,345)(10,521)
Market Activity & Other (3)1,078 (1,197)1,586 (1,168)
Foreign Exchange (4)325 1,534 (1,538)453 
Balance, End of Period$174,856 $162,389 $174,856 $162,389 
(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, 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.
(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 discussion sets forth information regarding our unaudited condensed consolidated resultsrunoff of operationsCLO collateral balances. Distributions for funds earning management fees based on commitments during the period do not affect Fee-earning AUM. Outflows during the three and ninesix months ended SeptemberJune 30, 20172021 also reflect the sale of MRE on April 1, 2021, which had $2.3 billion of Fee-earning AUM as of March 31, 2021.
(3)Market Activity & Other represents realized and 2016. The unaudited condensed consolidated financial statements have been preparedunrealized gains (losses) on substantiallyportfolio investments in our carry funds based on the same basis for all historical periods presented; however, the consolidatedlower of cost or fair value and net asset value, as well as activity of funds are not the same entities in all periods shown due to changes in U.S. GAAP, changes in fund terms and the creation and termination of funds. As further described below, the consolidation of these funds primarily hadwith fees based on gross asset value.
(4)Foreign Exchange represents the impact of increasing interestforeign 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, NGP Predecessor Funds 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);
(c)     the net asset value of certain carry funds; and
(d)     the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

We include in our calculation of AUM and Fee-earning AUM certain energy and renewable resources funds that we jointly advise with Riverstone, the NGP Energy Funds that are advised by NGP, as well as capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.


78

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 Fee-earning AUM and 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 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.
We generally use Fee-earning AUM as a metric to measure changes in the assets from which we earn recurring management fees. Total AUM tends to be a better measure of our investment and fundraising performance as it reflects investments at fair value plus available capital.
Available Capital. “Available Capital” refers to the amount of capital commitments available to be called for investments, which may be reduced for equity invested that is funded via a fund credit facility and expected to be called from investors at a later date, plus any additional assets/liabilities at the fund level other than active investments. Amounts previously called may be added back to available capital following certain distributions. “Expired Available Capital” occurs when a fund has passed the investment and follow-on periods and can no longer invest capital into new or existing deals. Any remaining Available Capital, typically a result of either recycled distributions or specific reserves established for the follow-on period that are not drawn, can only be called for fees and expenses and is therefore removed from the Total AUM calculation.
The table below provides the period to period rollforward of Total AUM.
 Three Months Ended June 30, 2021Six Months Ended
June 30, 2021
Consolidated Results(Dollars in millions)
Total AUM Rollforward
Balance, Beginning of Period$259,844 $245,769 
Inflows (1)10,445 18,238 
Outflows (including realizations) (2)(10,795)(18,651)
Market Activity & Other (3)15,802 32,992 
Foreign Exchange (4)581 (2,471)
Balance, End of Period$275,877 $275,877 
(1)Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
(2)Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, separately managed accounts and the NGP Predecessor Funds, gross redemptions in our open-end funds, runoff of CLO collateral balances and the expiration of available capital. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.4 billion of Total AUM as of March 31, 2021.
(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, the NGP Predecessor Funds and separately managed accounts, as well as the net impact of fees, expenses and non-investment income, of Consolidated Funds, interestchange in gross asset value for our business development companies and other expenseschanges in AUM.
(4)Foreign Exchange represents the impact of Consolidated Funds, and net investment gains (losses)foreign exchange rate fluctuations on the translation of Consolidated Funds inour non-U.S. dollar denominated funds. Activity during the year thatperiod is translated at the fund is initially consolidated. The consolidationaverage rate for the period. Ending balances are translated at the spot rate as of these funds had no effect on net income attributablethe period end.

Please refer to “— Segment Analysis” for a detailed discussion by segment of the Partnershipactivity affecting Total AUM for each of the periods presented.

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions, except unit and per unit data)
Revenues       
Fund management fees$262.5
 $255.1
 $747.6
 $817.1
Performance fees       
Realized411.8
 383.4
 852.7
 905.1
Unrealized(126.2) (168.7) 658.1
 (334.3)
Total performance fees285.6
 214.7
 1,510.8
 570.8
Investment income       
Realized15.5
 40.7
 42.0
 92.2
Unrealized21.7
 29.8
 100.5
 34.0
Total investment income37.2
 70.5
 142.5
 126.2
Interest and other income9.9
 5.3
 25.9
 15.0
Interest and other income of Consolidated Funds44.7
 43.0
 132.6
 107.8
Revenue of a real estate VIE—
 18.7
 109.0
 61.5
Total revenues639.9
 607.3
 2,668.4
 1,698.4
Expenses       
Compensation and benefits       
Base compensation174.1
 154.3
 471.1
 470.5
Equity-based compensation81.0
 81.4
 241.8
 265.8
Performance fee related       
Realized189.4
 189.0
 401.9
 423.0
Unrealized(51.8) (78.1) 309.9
 (146.1)
Total compensation and benefits392.7
 346.6
 1,424.7
 1,013.2
General, administrative and other expenses(18.7) 188.9
 170.9
 362.6
Interest16.9
 15.6
 48.4
 46.3
Interest and other expenses of Consolidated Funds37.2
 32.3
 160.9
 87.3
Interest and other expenses of a real estate VIE and loss on deconsolidation64.5
 82.1
 202.5
 157.9
Other non-operating expenses (income)—
 (3.7) 0.1
 0.8
Total expenses492.6
 661.8
 2,007.5
 1,668.1
Other income       
Net investment gains of Consolidated Funds18.6
 4.8
 76.4
 3.1
Income before provision for income taxes165.9
 (49.7) 737.3
 33.4
Provision (benefit) for income taxes(1.3) 1.0
 17.7
 32.7
Net income (loss)167.2
 (50.7) 719.6
 0.7
Net income (loss) attributable to non-controlling interests in consolidated entities27.6
 (29.1) 47.4
 (29.8)
Net income (loss) attributable to Carlyle Holdings139.6
 (21.6) 672.2
 30.5
Net income (loss) attributable to non-controlling interests in Carlyle Holdings95.0
 (22.4) 487.0
 15.2
Net income (loss) attributable to The Carlyle Group L.P.$44.6
 $0.8
 $185.2
 $15.3
        
Net income (loss) attributable to The Carlyle Group L.P. per common unit       
Basic$0.47
 $0.01
 $2.06
 $0.19
Diluted$0.43
 $(0.02) $1.90
 $0.08
Weighted-average common units       
Basic95,198,102
 83,602,503
 89,815,112
 82,062,633
Diluted334,392,424
 312,534,968
 97,538,190
 306,981,103


Three Months Ended September 30, 2017 Compared to the Three Months Ended September 30, 2016 and Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016
Revenues
Total revenues increased $32.6 million, or 5%,Portfolio Appreciation (Depreciation). The overall portfolio appreciation of 11% for the three months ended SeptemberJune 30, 2017 as compared to2021 is comprised of 12% appreciation for carry funds within our Global Private Equity segment focusing on corporate private equity, 11% for funds focusing on real estate, and 9% for funds focusing on natural resources; 8% appreciation for carry funds in the threeGlobal Credit segment; and 12% appreciation for carry funds in the Investment Solutions segment. Overall portfolio appreciation for the six months ended SeptemberJune 30, 20162021 of 25% is comprised of 28% appreciation for carry funds within our Global


79

Private Equity segment focusing on corporate private equity, 15% for funds focusing on real estate, and increased $970.0 million, or 57%17% for funds focusing on natural resources; 16% appreciation for carry funds in the Global Credit segment; and 28% appreciation for carry funds in the Investment Solutions segment.
While there is no perfectly comparable market index benchmark for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the componentsoverall portfolio or any of the changes in total revenues for the threeits segments or strategies, we would note that S&P 500 and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Total Revenue, September 30, 2016$607.3
$1,698.4
   Increase (decrease) in fund management fees7.4
(69.5)
   Increase in performance fees70.9
940.0
   (Decrease) increase in investment income(33.3)16.3
   Increase in interest and other income of Consolidated Funds1.7
24.8
   (Decrease) increase in revenue from a real estate VIE(18.7)47.5
   All other changes4.6
10.9
   Total increase32.6
970.0
Total Revenue, September 30, 2017$639.9
$2,668.4
Fund Management Fees. Fund management fees increased $7.4 million, or 3%, to $262.5 millionMSCI ACWI appreciation for the three months ended SeptemberJune 30, 2017 as compared to2021 were 8.2% and 6.9%, respectively, while the threeFTSE NAREIT Composite appreciation was 10.9%, the S&P Oil and Gas Exploration and Production Index was 15.6%, and the S&P Leveraged Loan Index appreciation was 1.1%. S&P 500 and MSCI ACWI appreciation for the six months ended SeptemberJune 30, 20162021 were 14.4% and decreased $69.5 million, or 9%11.4%, to $747.6 million forrespectively, while the nine months ended September 30, 2017 as compared toFTSE NAREIT Composite appreciation was 19.3%, the nine months ended September 30, 2016, primarily due to the following:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Higher management fees from the commencement of the
investment period for certain newly raised funds		$31.0
59.6
Lower management fees resulting from the change in basis for
earning management fees from commitments to invested capital
for certain funds and from distributions from funds whose
management fees are based on invested capital		(11.5)(48.8)
Decrease in catch-up management fees from subsequent closes of
funds that are in the fundraising period		(0.1)(6.5)
Lower management fees from lower assets under management in
our former hedge funds		(16.8)(60.2)
Higher (lower) transaction and portfolio advisory fees5.0
(9.1)
All other changes(0.2)(4.5)
Total increase (decrease) in fund management fees$7.4
$(69.5)
Fund management fees include transactionS&P Oil and portfolio advisory fees, net of rebate offsets, of $10.2 millionGas Exploration and $5.2 million for the three months ended September 30, 2017 and 2016, respectively, and $28.0 million and $37.1 million for the nine months ended September 30, 2017 and 2016, respectively. The $9.1 million decrease in transaction and portfolio advisory fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 resulted primarily from a significant transaction related to one of our U.S. buyout funds in the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2017.

Performance Fees. Performance fees increased $70.9 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $940.0 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Performance fees by segment on a consolidated U.S. GAAP basis for the three and nine months ended September 30, 2017 and 2016 comprised the following:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
 (Dollars in Millions)
Corporate Private Equity$159.6
$186.5
 $1,147.4
$283.0
Real Assets74.5
(19.1) 214.0
198.6
Global Market Strategies17.2
17.8
 50.8
26.8
Investment Solutions34.3
29.5
 98.6
62.4
Total performance fees$285.6
$214.7
 $1,510.8
$570.8
      
Total carry fund appreciation3%3% 14%7%
Approximately $110.4 million of our performance fees for the three months ended September 30, 2017 were related to CP VI, CP V, CIEP, and CEOF while approximately $107.9 million of our performance fees for the three months ended September 30, 2016 were related to CP VI, CRP V, and CAP III. Approximately $979.9 million of our performance fees for the nine months ended September 30, 2017 were related to CP VI, CP V, and CAP IV, while approximately $338.2 million of our performance fees for the nine months ended September 30, 2016 were related to CP VI, CP V, and CRP VII.
Expectations for global economic growth generally have strengthened since the end of the second quarter, with upward revisions to the International Monetary Fund’s global growth forecasts for both 2017 and 2018. Public and proprietary data suggest manufacturing and related trade flows have been responsible for most of the acceleration in global growth. Our proprietary portfolio economic data also indicates that trade-sensitive industrial orders have been growing at their fastest rates since 2011, which has supported earnings growth across our global portfolio during the first three quarters of 2017. Private equity has benefited from these favorable financial market conditions, which have resulted in tight credit spreads on portfolio company loan and bond issuances and a healthy fundraising environment. Further, while higher asset valuations may continue to put downward pressure on rates of return for new investments across all asset classes, we remain confident in our ability to find investment opportunities that meet the investment criteria and strategic focus of our investment funds. The positive economic climateProduction Index was 58.8%, and the strong underlying performance of many of the portfolio companies in our funds facilitated theS&P Leveraged Loan Index appreciation of our carry funds during the third quarter. The measurement of our performance fees for any given period reflects the change in the valuation of our portfolios for funds that have exceeded their performance hurdles and are otherwise in accrued carry which is impacted by market volatility. During the third quarter, our overall carry fund portfolio appreciated by 3% and is up 19% for the last twelve months. Our Corporate Private Equity funds increased 4% and our real estate funds up 3% and natural resources up 5% in the third quarter. The valuation of our Global Market Strategies carry funds was flat in the third quarter with strength in distressed credit offset by weakness in energy debt funds. Dollar denominated appreciation in Investment Solutions was 2.5%, but as AlpInvest funds are primarily denominated in Euros, they were negatively impacted by the strength of the Euro relative to the U.S. dollar during the quarter. Our private carry fund portfolio appreciated by 4% and our public carry fund portfolio appreciated by 1% during the third quarter, each excluding Investment Solutions.1.6%.






Investment Income. Investment income decreased $33.3 million to $37.2 million for the three months ended September 30, 2017 as compared to investment income of $70.5 million for the three months ended September 30, 2016 and increased $16.3 million to $142.5 million for the nine months ended September 30, 2017 as compared to investment income of $126.2 million for the nine months ended September 30, 2016, primarily due to the following:

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
   (Decrease) increase in investment income from NGP, which includes
performance fees from the investments in NGP		$(29.4)$29.6
   Investment loss related to Q1 2017 amended NGP agreements
(See Note 5 to the unaudited condensed consolidated financial statements)		—
(20.8)
   (Decrease) increase in investment income from our buyout and growth funds(6.0)0.9
   Decrease in losses on foreign currency hedges3.0
12.5
   Increase (decrease) in investment income from our real assets funds,
excluding NGP		0.3
(7.0)
   Decrease in investment loss from our distressed debt funds, former hedge
funds, and energy mezzanine funds		0.4
3.7
   Decrease in investment income from CLOs(4.1)(9.2)
   All other changes2.5
6.6
Total (decrease) increase in investment income$(33.3)$16.3

Interest and Other Income of Consolidated Funds. Our CLOs generate interest income primarily from investments in bonds and loans inclusive of amortization of discounts and generate other income from consent and amendment fees. Substantially all interest and other income of the CLOs and other consolidated funds together with interest expense of our CLOs and net investment gains (losses) of Consolidated Funds is attributable to the related funds’ limited partners or CLO investors and therefore is allocated to non-controlling interests. Accordingly, such amounts have no material impact on net income attributable to the Partnership.

Interest and other income of Consolidated Funds increased $1.7 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $24.8 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Substantially all of the increase in interest and other income of Consolidated Funds for both periods relates to increased interest income from CLOs.
Revenue of a Real Estate VIE. Revenue of a real estate VIE was $18.7 million for the three months ended September 30, 2016. There was no revenue recognized for the three months ended September 30, 2017 due to the deconsolidation of the VIE (see Note 15 to our unaudited condensed consolidated financial statements).
Revenue of a real estate VIE was $109.0 million for the nine months ended September 30, 2017 as compared to $61.5 million for the nine months ended September 30, 2016. The increase in revenue of a real estate VIE for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to an increase in the number of completed land development projects in the first half of 2017 prior to deconsolidation as compared to 2016, partially offset by a decrease in investment income.

Expenses
Total expenses decreased $169.2 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $339.4 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in total expenses for the three and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Total Expenses, September 30, 2016$661.8
$1,668.1
Increases (Decreases):  
   Increase in total compensation and benefits46.1
411.5
   Decrease in general, administrative and other expenses(207.6)(191.7)
   Increase in interest and other expenses of Consolidated Funds4.9
73.6
   (Decrease) increase in interest and other expenses of a real estate VIE
and loss on deconsolidation		(17.6)44.6
   All other changes5.0
1.4
   Total (decrease) increase(169.2)339.4
Total Expenses, September 30, 2017$492.6
$2,007.5

Total Compensation and Benefits. Total compensation and benefits increased $46.1 million, or 13%, for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $411.5 million, or 41%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, due to the following:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Increase in base compensation$19.8
$0.6
Decrease in equity-based compensation(0.4)(24.0)
Increase in performance fee related compensation26.7
434.9
Total increase in total compensation and benefits$46.1
$411.5
Base compensation and benefits. Base compensation and benefits increased $19.8 million, or 13%, for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $0.6 million, or 0%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to the following:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Decrease in hedge fund headcount and bonuses$(3.4)$(21.6)
Increase (decrease) in all other headcount and bonuses16.7
(9.3)
Increase in compensation costs associated with fundraising
activities		5.6
17.7
Absence in 2017 of prior year net write-down of acquisition-
related compensatory arrangements		0.9
13.8
Total increase in base compensation and benefits$19.8
$0.6

Equity-based Compensation. Equity-based compensation decreased $24.0 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The decrease in equity-based compensation was due primarily to the forfeiture of equity-based awards due to employee terminations occurring since the third quarter of 2016 and the accounting policy change on January 1, 2017 to account for forfeitures as they occur instead of estimating an expense at the grant date. These decreases were partially offset by the settlement of the DGAM earnout arrangement due to the commencement of the wind down of DGAM during 2016 in which a reduction of expense was incurred in 2016 and by ongoing grants of deferred restricted common units to new and existing employees during 2016 and 2017.

Performance fee related compensation expense. Performance fee related compensation expense increased $26.7 million for the three months ended September 30, 2017 as compared to three months ended September 30, 2016 and increased $434.9 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Performance fee related compensation as a percentage of performance fees was 48% and 47% for the three and nine months ended September 30, 2017, respectively, and 52% and 49% for the three and nine months ended September 30, 2016, respectively. For our largest segment, Corporate Private Equity, our performance fee related compensation expense as a percentage of performance fees is generally around 45%. Performance fees from our Investment Solutions segment pay a higher ratio of performance fees as compensation. Conversely, performance fees from the Legacy Energy funds in the Real Assets segment are primarily allocated to Carlyle because the investment teams for the Legacy Energy funds are employed by Riverstone and not Carlyle.
General, Administrative and Other Expenses. General, administrative and other expenses decreased $207.6 million for the three months ended September 30, 2017 as compared to three months ended September 30, 2016 and decreased $191.7 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Lower intangible asset amortization$(8.5)(22.8)
(Lower) higher expenses for litigation and contingencies *
(125.0)23.8
Net insurance proceeds recognized for certain legal matters(74.0)(212.6)
Lower professional fees and office expenses(7.5)(10.8)
Lower external fundraising costs(1.2)(0.6)
Foreign exchange and other changes8.6
31.3
Total decrease in general, administrative and other expenses$(207.6)$(191.7)
* For the three months ended September 30, 2017 compared to the three months ended September 30, 2016, this reflects the $100 million Q3 2016 commodities charge as compared to the $25 million reversal of the CCC litigation reserve in Q3 2017.
Interest and Other Expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds increased $4.9 million for the three months ended September 30, 2017 as compared to three months ended September 30, 2016 and increased $73.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The increase for both periods is primarily due to higher interest expense on the consolidated CLOs.
The CLOs incur interest expense on their loans payable and incur other expenses consisting of trustee fees, rating agency fees and professional fees. Substantially all interest and other income of the CLOs together with interest expense of our CLOs and net investment gains (losses) of Consolidated Funds is attributable to the related funds’ limited partners or CLO investors and therefore is allocated to non-controlling interests. Accordingly, such amounts have no material impact on net income attributable to the Partnership.
Interest and Other Expenses of a Real Estate VIE and Loss on Deconsolidation. Interest and other expenses of a real estate VIE and loss on deconsolidation decreased $17.6 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $44.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. During the three months ended September 30, 2017, the Partnership recognized a loss of approximately $65 million as a result of the Partnership disposing of its interests in Urbplan in a transaction in which a third party acquired operational control and all of the economic interests in Urbplan. With this

transaction, Urbplan has been deconsolidated from the Partnership's financial results (see Note 15 to our unaudited condensed consolidated financial statements). Excluding the effect of this transaction, Urbplan's income before provision for income taxes (including interest and other expenses of a real estate VIE and loss on deconsolidation) was not material for the three months ended September 30, 2017.
The increase for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to:
 Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Higher expenses associated with land development services$45.5
Lower income related to fair market value adjustment for Urbplan loans(4.0)
Lower interest expense(17.7)
Lower compensation and benefits(2.7)
Lower general, administrative and other expenses(41.0)
Loss on deconsolidation$64.5
Total increase in interest and other expenses of a real estate VIE and loss on deconsolidation$44.6
Other Non-operating Expenses. For the three and nine months ended September 30, 2017 and 2016, this caption primarily represents the change in fair value of contingent consideration associated with the Partnership's acquisitions.
The increase in other non-operating expenses for both the three and nine months ended September 30, 2017 as compared to the three and nine months ended September 30, 2016 was the result of the separation from ESG and Claren Road and the associated termination of their respective earnout arrangements and the change in fair value of contingent consideration associated with the Partnership's other acquisitions.

Net Investment Gains of Consolidated Funds
For the three months ended September 30, 2017, net investment gains of Consolidated Funds were $18.6 million as compared to net investment gains of $4.8 million for the three months ended September 30, 2016. For the nine months ended September 30, 2017, net investment gains of Consolidated Funds were $76.4 million as compared to net investment gains of $3.1 million for the nine months ended September 30, 2016. For both the three and nine months ended September 30, 2017 and 2016, net investment gains (losses) comprise the activity of the consolidated CLOs and certain other funds. For the consolidated CLOs, the amount reflects the net gain or loss on the fair value adjustment of both assets and liabilities. The components of net investment gains of consolidated funds for the respective periods are:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Realized losses$(3.3) $—
 $(9.1) $(9.6)
Net change in unrealized gains0.8
 18.6
 36.2
 54.6
Total gains (losses)(2.5) 18.6
 27.1
 45.0
Gains (losses) from liabilities of CLOs21.1
 (15.9) 49.3
 (43.8)
Gains on other assets of CLOs—
 2.1
 —
 1.9
Total investment gains of Consolidated Funds$18.6
 $4.8
 $76.4
 $3.1
For the three and nine months ended September 30, 2017 and 2016, the unrealized investment gains/losses primarily included the appreciation/depreciation of consolidated funds.

The net investment gains (losses) for the three and nine months ended September 30, 2017 and 2016 were due to the following:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
 (Dollars in Millions)
Gains (losses) attributable to other consolidated funds$13.9
$(2.1) $13.9
$0.6
Net appreciation of CLOs4.7
6.9
 62.5
2.5
Total net investment gains$18.6
$4.8
 $76.4
$3.1
Net Income Attributable to Non-controlling Interests in Consolidated Entities
Net income attributable to non-controlling interests in consolidated entities was $27.6 million for the three months ended September 30, 2017 as compared to net loss attributable to non-controlling interests in consolidated entities of $29.1 million for the three months ended September 30, 2016. Net income attributable to non-controlling interests in consolidated entities was $47.4 million for the nine months ended September 30, 2017 as compared to net loss attributable to non-controlling interests in consolidated entities of $29.8 million for the nine months ended September 30, 2016. These amounts are primarily attributable to the net earnings or losses of non-Carlyle interests in majority-owned subsidiaries and non-controlling interest in carried interest and giveback obligations for each period. This balance also includes the allocation of Urbplan’s net losses that are attributable to non-controlling interests.
The net income (loss) of our Consolidated Funds for the three and nine months ended September 30, 2017 and 2016 is comprised of the following:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
 (Dollars in Millions)
Net income (loss) from the consolidated CLOs$(2.8)$8.8
 $(1.9)$5.7
Net income (loss) from other consolidated funds13.8
(2.2) 13.7
(0.7)
Total net income of our Consolidated Funds$11.0
$6.6
 $11.8
$5.0
Net Income Attributable to The Carlyle Group L.P.
The net income attributable to the Partnership was $44.6 million for the three months ended September 30, 2017 as compared to net income attributable to the Partnership of $0.8 million for the three months ended September 30, 2016. The net income attributable to the Partnership was $185.2 million for the nine months ended September 30, 2017 as compared to net income attributable to the Partnership of $15.3 million for the nine months ended September 30, 2016. The Partnership is allocated a portion of the monthly net income (loss) attributable to Carlyle Holdings based on the Partnership’s ownership in Carlyle Holdings (which was approximately 29% and 26% as of September 30, 2017 and 2016, respectively). Net income or loss attributable to the Partnership also includes 100% of the net income or loss attributable to the Partnership’s wholly-owned taxable subsidiary, Carlyle Holdings I GP Inc., which was $5.4 million and $8.7 million for the three months ended September 30, 2017 and 2016, respectively, and $2.5 million and $10.0 million for the nine months ended September 30, 2017 and 2016, respectively. As a result, the total net income or loss attributable to the Partnership will vary as a percentage of the net income or loss attributable to Carlyle Holdings.


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 and determine amounts potentially available for distribution to the Company’s common stockholders.
Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it includes 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. Charges (credits) related to Carlyle corporate actions and non-recurring items include: charges (credits) associated with acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions, charges associated with earnouts and contingent consideration including gains and losses associated with the estimated fair value of contingent 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. 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 direct base compensation and operating expenses from total fee revenues. FRE differs from income (loss) before provision for income taxes computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts DE to exclude net realized performance revenues, realized principal investment income from investments in Carlyle funds, net interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain.


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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, 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 of our CLOs and other securitization vehicles, as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date;
(d)the external investor portion of the net asset value of our open-ended funds (pre redemptions and subscriptions), as well as certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);
(e)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period); and
(f)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee period has expired and certain carry funds where the investment period has expired, (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period).
The table below details Fee-earning AUM by its respective components at each period.
 As of June 30,
 20212020
Consolidated Results(Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments (1)$76,238 $71,792 
Fee-earning AUM based on invested capital (2)40,901 38,801 
Fee-earning AUM based on collateral balances, at par (3)28,111 25,811 
Fee-earning AUM based on net asset value (4)8,935 6,679 
Fee-earning AUM based on lower of cost or fair value and other (5)20,671 19,306 
Balance, End of Period (6) (7)$174,856 $162,389 
(1)Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.
(2)Reflects limited partner invested capital at cost and includes amounts committed to or reserved for investments for certain Global Private Equity and Investment Solutions funds.
(3)Represents the amount of aggregate Fee-earning collateral balances and principal balances, at par, for our CLOs/structured products.
(4)Reflects the net asset value of certain other carry funds.
(5)Includes funds with fees based on gross asset value.
(6)Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”), are managed with Riverstone Holdings LLC and its affiliates. Affiliates of both Carlyle and Riverstone act as investment advisors to each of the Legacy Energy Funds. Carlyle has a minority representation on the management committees of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on the management committee of Energy III, but the investment period for this fund has expired and the remaining investments in such fund are being disposed of in the ordinary course of business. As of June 30, 2021, the Legacy Energy Funds had, in the aggregate, approximately $0.6 billion in AUM and $0.7 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down.


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(7)Ending balances as of June 30, 2021 and 2020 exclude $17.3 billion and $8.5 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 June 30,Six Months Ended June 30,
 2021202020212020
Consolidated Results(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$173,132 $158,246 $170,102 $161,057 
Inflows (1)6,092 9,671 14,051 12,568 
Outflows (including realizations) (2)(5,771)(5,865)(9,345)(10,521)
Market Activity & Other (3)1,078 (1,197)1,586 (1,168)
Foreign Exchange (4)325 1,534 (1,538)453 
Balance, End of Period$174,856 $162,389 $174,856 $162,389 
(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, 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.
(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 runoff of CLO collateral balances. Distributions for funds earning management fees based on commitments during the period do not affect Fee-earning AUM. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.3 billion of Fee-earning AUM as of March 31, 2021.
(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, as well as activity of funds with fees based on gross asset value.
(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, NGP Predecessor Funds 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);
(c)     the net asset value of certain carry funds; and
(d)     the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

We include in our calculation of AUM and Fee-earning AUM certain energy and renewable resources funds that we jointly advise with Riverstone, the NGP Energy Funds that are advised by NGP, as well as capital raised from third-party investors to acquire a 76.6% interest in Fortitude Holdings.


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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 Fee-earning AUM and 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 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.
We generally use Fee-earning AUM as a metric to measure changes in the assets from which we earn recurring management fees. Total AUM tends to be a better measure of our investment and fundraising performance as it reflects investments at fair value plus available capital.
Available Capital. “Available Capital” refers to the amount of capital commitments available to be called for investments, which may be reduced for equity invested that is funded via a fund credit facility and expected to be called from investors at a later date, plus any additional assets/liabilities at the fund level other than active investments. Amounts previously called may be added back to available capital following certain distributions. “Expired Available Capital” occurs when a fund has passed the investment and follow-on periods and can no longer invest capital into new or existing deals. Any remaining Available Capital, typically a result of either recycled distributions or specific reserves established for the follow-on period that are not drawn, can only be called for fees and expenses and is therefore removed from the Total AUM calculation.
The table below provides the period to period rollforward of Total AUM.
 Three Months Ended June 30, 2021Six Months Ended
June 30, 2021
Consolidated Results(Dollars in millions)
Total AUM Rollforward
Balance, Beginning of Period$259,844 $245,769 
Inflows (1)10,445 18,238 
Outflows (including realizations) (2)(10,795)(18,651)
Market Activity & Other (3)15,802 32,992 
Foreign Exchange (4)581 (2,471)
Balance, End of Period$275,877 $275,877 
(1)Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
(2)Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, separately managed accounts and the NGP Predecessor Funds, gross redemptions in our open-end funds, runoff of CLO collateral balances and the expiration of available capital. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.4 billion of Total AUM as of March 31, 2021.
(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, the NGP Predecessor Funds and separately managed accounts, as well as the net impact of fees, expenses and non-investment income, change in gross asset value for our business development companies and other changes in AUM.
(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.

Please refer to “— Segment Analysis” for a detailed discussion by segment of the activity affecting Total AUM for each of the periods presented.
Portfolio Appreciation (Depreciation). The overall portfolio appreciation of 11% for the three months ended June 30, 2021 is comprised of 12% appreciation for carry funds within our Global Private Equity segment focusing on corporate private equity, 11% for funds focusing on real estate, and 9% for funds focusing on natural resources; 8% appreciation for carry funds in the Global Credit segment; and 12% appreciation for carry funds in the Investment Solutions segment. Overall portfolio appreciation for the six months ended June 30, 2021 of 25% is comprised of 28% appreciation for carry funds within our Global


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Private Equity segment focusing on corporate private equity, 15% for funds focusing on real estate, and 17% for funds focusing on natural resources; 16% appreciation for carry funds in the Global Credit segment; and 28% appreciation for carry funds in the Investment Solutions segment.
While there is no perfectly comparable market index benchmark for the overall portfolio or any of its segments or strategies, we would note that S&P 500 and MSCI ACWI appreciation for the three months ended June 30, 2021 were 8.2% and 6.9%, respectively, while the FTSE NAREIT Composite appreciation was 10.9%, the S&P Oil and Gas Exploration and Production Index was 15.6%, and the S&P Leveraged Loan Index appreciation was 1.1%. S&P 500 and MSCI ACWI appreciation for the six months ended June 30, 2021 were 14.4% and 11.4%, respectively, while the FTSE NAREIT Composite appreciation was 19.3%, the S&P Oil and Gas Exploration and Production Index was 58.8%, and the S&P Leveraged Loan Index appreciation was 1.6%.
Consolidation of Certain Carlyle Funds
The Company consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of variable interest entities. The entities we consolidate are referred to collectively as the Consolidated Funds in our unaudited condensed consolidated financial statements. As of June 30, 2021, our Consolidated Funds represent approximately 2% of our AUM; 2% of our management fees for both the three and six months ended June 30, 2021; 1% of our total investment income or loss for the six months ended June 30, 2021.
We are not required under the consolidation guidance to consolidate in our financial statements most of the investment funds we advise. However, we consolidate certain CLOs that we advise. As of June 30, 2021, our consolidated CLOs held approximately $6.5 billion of total assets and comprised substantially all of the assets and loans payable of the Consolidated Funds. The assets and liabilities of the Consolidated Funds are generally held within separate legal entities and, as a result, the liabilities of the Consolidated Funds are non-recourse to us.
Generally, the consolidation of the Consolidated Funds has a gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to the Company and equity. The majority of the net economic ownership interests of the Consolidated Funds are reflected as non-controlling interests in consolidated entities in the consolidated financial statements. Because only a small portion of our funds are consolidated, the performance of the Consolidated Funds is not necessarily consistent with or representative of the combined performance trends of all of our funds.
For further information on our consolidation policy and the consolidation of certain funds, see Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.


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Consolidated Results of Operations
The following table and discussion sets forth information regarding our unaudited condensed consolidated results of operations for the three and six months ended June 30, 2021 and 2020. The unaudited condensed consolidated financial statements have been prepared on substantially the same basis for all historical periods presented; however, the consolidated funds are not the same entities in all periods shown due to changes in U.S. GAAP, changes in fund terms and the creation and termination of funds. As further described above, the consolidation of these funds primarily has the impact of increasing interest and other income of Consolidated Funds, interest and other expenses of Consolidated Funds, and net investment gains (losses) of Consolidated Funds in the year that the fund is initially consolidated. The consolidation of these funds had no effect on net income attributable to the Company for the periods presented.
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions, except share and per share data)
Revenues
Fund management fees$394.4 $371.8 $775.4 $727.7 
Incentive fees10.4 9.0 19.9 17.9 
Investment income (loss)
Performance allocations2,080.7 1,191.8 3,866.8 254.2 
Principal investment income (loss)137.7 (512.6)316.8 (765.9)
Total investment income (loss)2,218.4 679.2 4,183.6 (511.7)
Interest and other income21.0 15.8 41.4 43.2 
Interest and other income of Consolidated Funds62.1 55.2 123.2 108.2 
Total revenues2,706.3 1,131.0 5,143.5 385.3 
Expenses
Compensation and benefits
Cash-based compensation and benefits231.8 212.5 460.3 416.8 
Equity-based compensation47.2 30.5 79.6 59.6 
Performance allocations and incentive fee related compensation994.0 535.6 1,860.6 93.1 
Total compensation and benefits1,273.0 778.6 2,400.5 569.5 
General, administrative and other expenses109.1 80.2 200.8 149.8 
Interest25.5 25.9 48.5 49.8 
Interest and other expenses of Consolidated Funds46.5 39.3 88.9 84.9 
Other non-operating expenses(3.1)0.5 (2.5)0.7 
Total expenses1,451.0 924.5 2,736.2 854.7 
Other income (loss)
Net investment income (losses) of Consolidated Funds(2.6)50.3 9.7 (62.8)
Income (Loss) before provision for income taxes1,252.7 256.8 2,417.0 (532.2)
Provision (Benefit) for income taxes306.2 52.3 579.6 (27.7)
Net income (loss)946.5 204.5 1,837.4 (504.5)
Net income (loss) attributable to non-controlling interests in consolidated entities21.5 58.6 43.1 (38.4)
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders$925.0 $145.9 $1,794.3 $(466.1)
Net income (loss) attributable to The Carlyle Group Inc. per common share
Basic$2.61 $0.42 $5.06 $(1.34)
Diluted$2.55 $0.41 $4.97 $(1.34)
Weighted-average common shares
Basic354,506,335 348,574,528 354,368,976 348,407,144 
Diluted362,151,588 357,268,275 361,328,946 348,407,144 



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Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020 and Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
Revenues
Total revenues increased $1.6 billion, or 139.3%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $4.8 billion, or 1,234.9%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. The following table provides the components of the changes in total revenues for the three and six months ended June 30, 2021:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Total Revenues, June 30, 2020$1,131.0 $385.3 
Increases (Decreases):
Increase in fund management fees22.6 47.7 
Increase in incentive fees1.4 2.0 
Increase in investment income, including performance allocations1,539.2 4,695.3 
Increase (decrease) in interest and other income5.2 (1.8)
Increase in interest and other income of Consolidated Funds6.9 15.0 
Total increase1,575.3 4,758.2 
Total Revenues, June 30, 2021$2,706.3 $5,143.5 

Fund Management Fees. Fund management fees increased $22.6 million, or 6.1%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $47.7 million, or 6.6%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Higher management fees from the commencement of the investment period for certain newly raised funds$41.4 $72.5 
Lower management fees resulting from the change in basis for earning management fees from commitments to invested capital for certain funds and from distributions from funds whose management fees are based on invested capital(22.9)(46.5)
Increase in catch-up management fees from subsequent closes of funds that are in the fundraising period3.1 3.2 
Higher management fees on CLOs (after the effect of consolidation) due to the deferral of subordinated fees in 20203.5 7.0 
(Lower) higher transaction and portfolio advisory fees(2.8)10.8 
All other changes0.3 0.7 
Total increase in fund management fees$22.6 $47.7 

Fund management fees include transaction and portfolio advisory fees, net of rebate offsets, of $14.4 million and $17.2 million for the three months ended June 30, 2021 and 2020, respectively. The decrease was primarily driven by transaction fees related to our investment in Carlyle FRL during the three months ended June 30, 2020, partially offset by higher underwriting and placement fees generated by Carlyle Global Capital Markets during the three months ended June 30, 2021. Transaction and portfolio advisory fees, net of rebate offsets, were $32.4 million and $21.6 million for the six months ended June 30, 2021 and 2020, respectively. The increase was primarily driven by higher underwriting and placement fees generated by Carlyle Global Capital Markets and transaction fees related to investments in CJP IV during the three and six months ended June 30, 2021, partially offset by transaction fees related to our investment in Carlyle FRL during the three months ended June 30, 2020.


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Investment Income. Investment income increased $1.5 billion to $2.2 billion for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $4.7 billion to $4.2 billion for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Increase in performance allocations, excluding NGP$888.9 $3,612.6 
Increase in investment income from NGP, which includes performance allocations from the investments in NGP5.4 27.4 
Increase in investment income from our corporate private equity funds25.1 138.2 
Decrease in losses on foreign currency hedges4.0 9.7 
Increase in investment income from our real estate funds0.9 4.9 
Increase in investment income from our natural resources funds, excluding NGP1.8 14.0 
Increase in investment income from our Global Credit carry funds0.7 12.7 
(Decrease) increase in investment income from our direct lending funds and interval funds(1.9)18.4 
Increase in investment income from Carlyle Aviation0.2 1.2 
(Decrease) increase in investment income from our CLOs(28.0)51.0 
Increase in investment income from Fortitude Re634.2 791.6 
All other changes7.9 13.6 
Total increase in investment income$1,539.2 $4,695.3 
Prior to the Control Transaction which closed on June 2, 2020, as described in Note 4 to the unaudited condensed consolidated financial statements, we accounted for our investment in Fortitude Re under the equity method of accounting by recognizing our pro rata share of Fortitude Holdings’ U.S. GAAP earnings, which is included in principal investment income (loss) in the unaudited condensed consolidated statements of operations. These amounts were inclusive of unrealized gains (losses) resulting from changes in the fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude Re’s U.S. GAAP financial statements. Modified coinsurance is subject to the general accounting principles for hedging, specifically the guidance originally issued as Derivatives Implementation Group Issue No. B36: Embedded Derivatives: Modified Coinsurance Agreements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments (“DIG B36”). At the time we contributed our existing 19.9% interest in Fortitude Holdings to Carlyle FRL, a Carlyle-affiliated investment fund, we began accounting for our investment under the equity method based on our net asset value in the fund, which resulted in a loss in principal investment income (loss) of $620.7 million during the three months ended June 30, 2020, as compared to principal investment income of $13.5 million during the three months ended June 30, 2021. As of June 30, 2021, our investment in Carlyle FRL was $613.3 million, relative to our cost of $465.3 million.
We recorded a decrease in the investment income from CLOs during the three months ended June 30, 2021 and an increase in the investment income from CLOs during the six months ended June 30, 2021 relative to the comparable periods in 2020. The fair value of the CLO investments held by the firm (before the effects of consolidation) decreased 1% during the quarter, with our investments in subordinated notes depreciating 3% during the three months ended June 30, 2021, while our investments in the senior notes were flat quarter over quarter. The fair value of the CLO investments held by the firm (before the effects of consolidation) decreased 2% year-to-date, with our investments in subordinated notes appreciating 2% during the six months ended June 30, 2021, while our investments in the senior notes depreciated 3% year-to-date.


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Performance Allocations. Performance allocations increased $888.9 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and $3.6 billion for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. Performance allocations by segment on a consolidated U.S. GAAP basis for the three and six months ended June 30, 2021 and 2020 comprised the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
Global Private Equity$1,798.2 $1,198.7 $3,364.7 $389.4 
Global Credit76.2 22.7 97.2 (40.3)
Investment Solutions (1)
206.3 (29.6)404.9 (94.9)
Total performance allocations$2,080.7 $1,191.8 $3,866.8 $254.2 
Total carry fund appreciation (depreciation)11 %5 %25 %(3)%
(1) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.
Refer to “— Key Financial Measures” for a listing of the funds with performance allocations in excess of 10% of the total for the periods presented.
Global growth in the second quarter of 2021 was largely consistent with upward revisions from earlier this year as advanced economies experienced strong sequential growth driven by vaccine distribution and government stimulus. Proprietary data suggest that U.S. gross domestic product (GDP) grew at a 9.1% annualized rate from the first quarter of 2021, while the euro zone economy expanded at a 6% annualized rate in the second quarter. The acceleration in economic activity and pandemic-related disruptions caused inflation to reach levels not seen in over a decade and above-forecast inflation has translated into increased volatility in financial markets.
The second quarter was a record setting period for equity markets as the S&P 500 breached 4,300 for the first time, driven by strong corporate earnings, combined with low interest rates. Second quarter corporate earnings estimates are expected to increase 70% from year over year recession levels but are also up 7.2% from strong Q1 2021 results. Similarly, our carry fund portfolio extended the strong positive trend experienced since the first quarter of 2020. Within our Global Private Equity segment, our corporate private equity funds appreciated by 12% in the quarter, driven by strong gains in our U.S., Europe and Asia buyout portfolio, our real estate funds appreciated by 11% in the quarter, continuing their attractive performance, and our natural resources funds appreciated by 9% in the quarter, boosted by the effect of rising commodity prices on our energy-focused investments. In our Global Credit segment, our carry funds, which represent approximately 17% of the total Global Credit remaining fair value, appreciated by 8% in the second quarter, reflecting continued positive portfolio company performance. Our Investment Solutions funds appreciated by 12%, though our primary and secondary fund of funds generally reflect investment fair values on a one-quarter lag. The portion of our traditional carry funds attributable to publicly traded companies is 18% of fair value as of June 30, 2021, compared to 15% as of December 31, 2020 and 6% as of December 31, 2019. While our publicly traded investments have performed well to date overall, this shift may result in an increasing correlation to public market performance and a significant concentration of investment gains in individual investments for certain funds. To the extent that there is volatility in public equity markets and/or the prices of our publicly-traded portfolio companies, there may be elevated volatility in our performance revenue accrual in the coming quarters. For example, as of June 30, 2021, approximately 40% of our net accrued performance revenues were generated by Carlyle Partners VI, L.P. (“CP VI”), which has over 65% of its remaining fair value in publicly-traded portfolio companies.
Interest and Other Income. Interest and other income increased $5.2 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020, primarily as result of increases from the reimbursement of certain costs incurred on behalf of Carlyle funds and interest income from investments in CLO subordinated notes.
Interest and other income decreased $1.8 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily as result of decreases from the reimbursement of certain costs incurred on behalf of Carlyle funds and interest income from investments in CLO subordinated notes.
Interest and Other Income of Consolidated Funds. Interest and other income of Consolidated Funds increased $6.9 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $15.0


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million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. Substantially all of the increase in interest and other income of Consolidated Funds relates to increased interest income from CLOs.
Our CLOs generate interest income primarily from investments in bonds and loans inclusive of amortization of discounts and generate other income from consent and amendment fees. Substantially all interest and other income of the CLOs and other consolidated funds together with interest expense of our CLOs and net investment gains (losses) of Consolidated Funds is attributable to the related funds’ limited partners or CLO investors. Accordingly, such amounts have no material impact on net income attributable to the Company.
Expenses
Total expenses increased $526.5 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $1.9 billion for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. The following table provides the components of the changes in total expenses for the three and six months ended June 30, 2021:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Total Expenses, June 30, 2020$924.5 $854.7 
Increases (Decreases):
Increase in total compensation and benefits494.4 1,831.0 
Increase in general, administrative and other expenses28.9 51.0 
Increase in interest and other expenses of Consolidated Funds7.2 4.0 
Increase in other non-operating income(3.6)(3.2)
All other changes(0.4)(1.3)
Total increase526.5 1,881.5 
Total Expenses, June 30, 2021$1,451.0 $2,736.2 
Total Compensation and Benefits. Total compensation and benefits increased $494.4 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $1.8 billion for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, due to the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Increase in cash-based compensation and benefits$19.3 $43.5 
Increase in equity-based compensation16.7 20.0 
Increase in performance allocations and incentive fee related compensation458.4 1,767.5 
Increase in total compensation and benefits$494.4 $1,831.0 
Cash-based Compensation and Benefits. Cash-based compensation and benefits increased $19.3 million, or 9%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $43.5 million, or 10.4%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Increase in headcount and bonuses$10.8 $25.5 
Contingent earnout associated with Carlyle Aviation Partners acquisition(1)
8.5 18.0 
Total increase in cash-based compensation and benefits$19.3 $43.5 


85

(1) The Carlyle Aviation Partners acquisition included an earn-out of up to $150.0 million, under which we have paid $49.9 million through June 30, 2021. For additional information, refer to “—Liquidity and Capital Resources—Contingent Cash Payments For Business Acquisitions and Strategic Investments.”
Equity-based Compensation. Equity-based compensation increased $16.7 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $20.0 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to a larger number of unvested restricted stock units with a higher weighted average grant date fair value. During the three months ended June 30, 2021, we also recorded an increase in equity-based compensation related to 2021 performance-based awards to reflect the impact of positive year-to-date performance on the number of shares projected to vest under these awards. During the six months ended June 30, 2021, we granted 7.0 million long-term strategic restricted stock units to certain senior professionals, the majority of which are subject to vesting based on the achievement of annual performance targets over four years, with a larger proportion of the awards vesting based on the 2024 performance year. As a result, the number of restricted stock units granted in 2021 is higher than in 2020, which, combined with a higher share price than in prior periods, will result in higher equity-based compensation expense in the coming years.
Performance allocations and incentive fee related compensation expense. Performance allocations and incentive fee related compensation expense increased $458.4 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $1.8 billion for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. Performance allocations and incentive fee related compensation as a percentage of performance allocations and incentive fees was 48% for both the three and six months ended June 30, 2021 and 45% and 37% for the three and six months ended June 30, 2020, respectively. Performance allocations and incentive fee related compensation as a percentage of performance allocations and incentive fees fluctuates depending on the mix of funds contributing to performance allocations and incentive fees in a given period. For our largest segment, Global Private Equity, our performance allocations and incentive fee related compensation expense as a percentage of performance allocations and incentive fees is generally around 45%. Performance allocations from our Investment Solutions segment pay a higher ratio of performance allocations and incentive fees as compensation, primarily as a result of the terms of our acquisition of AlpInvest. Conversely, performance allocations from the Legacy Energy funds in our Global Private Equity segment are primarily allocated to Carlyle because the investment teams for the Legacy Energy funds are employed by Riverstone and not Carlyle.
General, Administrative and Other Expenses. General, administrative and other expenses increased $28.9 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $51.0 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
CCC litigation cost recovery in 2020 (1)
$— $29.9 
Right-of-use asset impairment(1)
26.8 26.8 
Lower intangible asset amortization(0.3)(0.6)
Higher depreciation and amortization0.3 1.4 
Higher (lower) professional fees, including corporate conversion costs0.2 (16.2)
Higher (lower) travel and conference expenses1.4 (10.6)
Foreign exchange adjustments(2)
0.1 23.4 
Other changes0.4 (3.1)
Total increase in general, administrative and other expenses$28.9 $51.0 
(1) General, administrative and other expenses included the positive impact of a $29.9 million recovery of litigation costs during the six months ended June 30, 2020 and $26.8 million right-of-use asset impairment during the six months ended June 30, 2021. See Note 7 to our unaudited condensed consolidated financial statements.
(2) Foreign exchange adjustments for the six months ended June 30, 2021 as compared to six months ended June 30, 2020 are primarily driven by the revaluation in our European CLOs investments.

In connection with the April 1, 2021 sale of MRE, we entered into a sublease of certain office space in New York which resulted in a $26.8 million right-of-use asset impairment charge during the three and six months ended June 30, 2021. We expect general, administrative and other costs to benefit from lower rent expense and leasehold improvement amortization in future years as a result of the sublease.


86

Interest and Other Expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds increased $7.2 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 and increased $4.0 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to higher interest expense on the consolidated CLOs.
The CLOs incur interest expense on their loans payable and incur other expenses consisting of trustee fees, rating agency fees and professional fees. Substantially all interest and other income of our CLOs together with interest expense of our CLOs and net investment gains (losses) of Consolidated Funds is attributable to the related funds’ limited partners or CLO investors. Accordingly, such amounts have no material impact on net income attributable to the Company.
Other Non-operating Expenses (Income). For the three and six months ended June 30, 2021, this includes a $5.0 million gain on the sale of our interest in MRE.
Net Investment Gains of Consolidated Funds. For the three months ended June 30, 2021, net investment losses of Consolidated Funds were $2.6 million as compared to net investment gains of $50.3 million for the three months ended June 30, 2020. For six months ended June 30, 2021, net investment gains of Consolidated Funds were $9.7 million as compared to net investment losses of $62.8 million for the six months ended June 30, 2020. For both the three and six months ended June 30, 2021 and 2020, net investment gains (losses) comprise the activity of the consolidated CLOs and certain other funds. For the consolidated CLOs, the amount reflects the net gain or loss on the fair value adjustment of both the assets and liabilities. The six months ended June 30, 2020 include significant losses on the CLO assets and gains on the CLO liabilities resulting from the rapid decline in asset prices and widening of credit spreads. The components of net investment gains (losses) of Consolidated Funds for the respective periods are:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions)
Realized gains (losses)$12.5 $(39.8)$17.2 $(40.3)
Net change in unrealized gains (losses)1.0 590.2 85.6 (342.0)
Total gains (losses)13.5 550.4 102.8 (382.3)
Gains (losses) from liabilities of CLOs(16.1)(500.1)(93.1)319.5 
Total net investment gains (losses) of Consolidated Funds$(2.6)$50.3 $9.7 $(62.8)



87

Provision (Benefit) for Income Taxes. The Company’s provision (benefit) for income taxes was $306.2 million and $52.3 million for the three months ended June 30, 2021 and 2020, respectively, and $579.6 million and $(27.7) million for the six months ended June 30, 2021 and 2020, respectively. During the six months ended June 30, 2020, the provision for income taxes reflects a tax benefit of $118.0 million related to the net loss recorded during the period, net of the $90.3 million expense related to Conversion (see Note 9 to the accompanying unaudited condensed consolidated financial statements for more information regarding the impact of Conversion). The Company’s effective tax rate was approximately 24% and 20% for the three months ended June 30, 2021 and 2020, respectively, and 24% and 5% for the six months ended June 30, 2021 and 2020, respectively. The effective tax rate for the six months ended June 30, 2021 is primarily comprised of the 21% U.S. federal corporate income tax rate plus U.S. state and foreign corporate income taxes, partially offset by non-controlling interests. U.S. federal taxes relate to both current and deferred taxes, as we fully utilized our remaining net operating loss carryforwards during the three months ended June 30, 2021. The effective tax rate for the six months ended June 30, 2020 differs from the statutory rate primarily due to the income tax expense resulting from the Conversion offsetting the tax benefit from the net loss recorded in the period.
Net Income Attributable to Non-controlling Interests in Consolidated Entities. Net income attributable to non-controlling interests in consolidated entities was $21.5 million for the three months ended June 30, 2021 as compared to net income of $58.6 million for the three months ended June 30, 2020. Net income attributable to non-controlling interests in consolidated entities was $43.1 million for the six months ended June 30, 2021 as compared to net loss of $38.4 million for the six months ended June 30, 2020. These amounts primarily reflect the net income attributable to non-controlling interests in carried interest, giveback obligations, and cash held for carried interest distributions. This balance also includes the net earnings or losses of the Consolidated Funds for each period, which are substantially all allocated to the related funds’ limited partners or CLO investors.
Net Income Attributable to The Carlyle Group Inc. Common Stockholders. The net income (loss) attributable to The Carlyle Group Inc. common stockholders was $925.0 million for the three months ended June 30, 2021 as compared to $145.9 million for the three months ended June 30, 2020. The net income (loss) attributable to The Carlyle Group Inc. common stockholders was $1.8 billion for the six months ended June 30, 2021, a $2.3 billion increase from a net loss of $466.1 million for the six months ended June 30, 2020, reflecting strong portfolio appreciation in the first half of 2021 as compared to depreciation at the onset of the pandemic in the first half of 2020.
Non-GAAP Financial Measures
The following tables set forth information in the format used by management when making resource deployment decisions and in assessing performance of our segments. These non-GAAP financial measures are presented for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016. The tables below show our total segment Economic Net Income which is the sum of Fee Related Earnings, Net Performance Fees, Investment Income (Loss), and Equity-based compensation expense (excluding equity-based compensation grants issued in May 2012 upon the completion of the initial public offering or grants issued in acquisitions or strategic investments).2020. Our Non-GAAP financial measures exclude the effects of unrealized performance allocations net of related compensation expense, unrealized principal investment income, consolidated funds, acquisition-relatedacquisition and disposition-related items including amortization and any impairment charges of acquired intangible assets and contingent consideration taking the form of earn-outs, charges associated with equity-based compensation, grants issued in May 2012 upon completion of the initial public offering or grants issued in acquisitions or strategic investments, changes in the tax receivable agreement liability, corporate actions and infrequently occurring or unusual events.

The following table shows our total segment Economic Net Income, Fee Related EarningsDE and Distributable EarningsFRE for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.

Three Months Ended June 30,Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
Total Segment Revenues$919.0 $582.2 $1,531.5 $1,163.3 
Total Segment Expenses523.6 383.8 921.2 789.9 
Distributable Earnings$395.4 $198.4 $610.3 $373.4 
(-) Realized Net Performance Revenues237.4 70.9 313.4 119.1 
(-) Realized Principal Investment Income37.8 22.1 67.8 38.0 
(+) Net Interest23.0 21.9 43.1 39.8 
(=) Fee Related Earnings$143.2 $127.3 $272.2 $256.1 


88
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Total Segment Revenues$547.5
 $539.5
 $2,407.7
 $1,523.1
Total Segment Expenses344.8
 486.0
 1,504.8
 1,222.8
Economic Net Income$202.7
 $53.5
 $902.9
 $300.3
(-) Net Performance Fees147.0
 142.3
 840.5
 333.0
(-) Investment Income (Loss)(35.3) 13.3
 6.5
 35.8
(+) Equity-based Compensation30.4
 32.9
 97.2
 95.2
(+) Reserve for Litigation and Contingencies(25.0) 100.0
 (25.0) 100.0
(=) Fee Related Earnings$96.4
 $30.8
 $128.1
 $126.7
(+) Realized Net Performance Fees216.9
 186.3
 434.3
 489.7
(+) Realized Investment Income (Loss)(53.4) 11.1
 (48.2) 27.9
(=) Distributable Earnings$259.9
 $228.2
 $514.2
 $644.3




The following table sets forth our total segment revenues for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Revenues       
Fund level fee revenues       
Fund management fees$278.4
 $260.4
 $791.2
 $820.0
Portfolio advisory fees, net4.1
 3.8
 13.0
 12.8
Transaction fees, net6.1
 1.4
 15.0
 24.3
Total fund level fee revenues288.6
 265.6
 819.2
 857.1
Performance fees       
Realized411.0
 380.9
 846.7
 919.2
Unrealized(125.6) (125.9) 712.7
 (305.9)
Total performance fees285.4
 255.0
 1,559.4
 613.3
Investment income (loss)       
Realized(53.4) 11.1
 (48.2) 27.9
Unrealized18.1
 2.2
 54.7
 7.9
Total investment income (loss)(35.3) 13.3
 6.5
 35.8
Interest income5.4
 2.5
 11.2
 8.0
Other income3.4
 3.1
 11.4
 8.9
Total Segment Revenues$547.5
 $539.5
 $2,407.7
 $1,523.1

Three Months Ended June 30,Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$409.8 $386.4 $802.0 $767.9 
Portfolio advisory and transaction fees, net and other15.6 18.3 35.3 25.1 
Total fund level fee revenues425.4 404.7 837.3 793.0 
Realized performance revenues454.0 152.2 622.4 323.8 
Realized principal investment income37.8 22.1 67.8 38.0 
Interest income1.8 3.2 4.0 8.5 
Total Segment Revenues$919.0 $582.2 $1,531.5 $1,163.3 
The following table sets forth our total segment expenses for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.
Three Months Ended June 30,Six Months Ended
June 30,
2021202020212020
(Dollars in millions)
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits$217.4 $210.1 $429.6 $413.9 
Realized performance revenue related compensation216.6 81.3 309.0 204.7 
Total compensation and benefits434.0 291.4 738.6 618.6 
General, administrative, and other indirect expenses55.6 58.1 117.2 106.4 
Depreciation and amortization expense9.2 9.2 18.3 16.6 
Interest expense24.8 25.1 47.1 48.3 
Total Segment Expenses$523.6 $383.8 $921.2 $789.9 


89
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Expenses       
Compensation and benefits       
Direct base compensation$132.5
 $107.1
 $344.2
 $337.4
Indirect base compensation44.8
 36.9
 133.4
 115.1
Equity-based compensation30.4
 32.9
 97.2
 95.2
Performance fee related       
Realized194.1
 194.6
 412.4
 429.5
Unrealized(55.7) (81.9) 306.5
 (149.2)
Total compensation and benefits346.1
 289.6
 1,293.7
 828.0
General, administrative, and other indirect expenses(26.5) 173.6
 139.5
 326.7
Depreciation and amortization expense8.2
 7.2
 23.2
 21.8
Interest expense17.0
 15.6
 48.4
 46.3
Total Segment Expenses$344.8
 $486.0
 $1,504.8
 $1,222.8





Income (loss) before provision for income taxes is the U.S. GAAP financial measure most comparable to economic net income, fee related earnings,Distributable Earnings and distributable earnings.Fee Related Earnings. The following table is a reconciliation of income (loss) before provision for income taxes to economicDistributable Earnings and to Fee Related Earnings.
Three Months Ended June 30,Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions)
Income (loss) before provision for income taxes$1,252.7 $256.8 $2,417.0 $(532.2)
Adjustments:
Net unrealized performance revenues(844.0)(587.4)(1,690.4)(58.5)
Unrealized principal investment (income) loss(1)
(78.8)459.5 (210.1)724.2 
Adjusted unrealized principal investment (income) loss from investment in Fortitude Re(2)
— 81.6 — 104.4 
Equity-based compensation(3)
50.3 34.6 85.2 66.3 
Acquisition or disposition-related charges (credits), including amortization of intangibles11.3 7.1 30.3 10.1 
Tax expense (benefit) associated with certain foreign performance fee revenues(3.4)0.7 (9.4)11.9 
Net (income) loss attributable to non-controlling interests in consolidated entities(21.5)(58.6)(43.1)38.4 
Right-of-use asset impairment26.8 — 26.8 — 
Other adjustments including severance and C-Corp. conversion costs in 20202.0 4.1 4.0 8.8 
(=) Distributable Earnings$395.4 $198.4 $610.3 $373.4 
(-) Realized net performance revenues(4)
237.4 70.9 313.4 119.1 
(-) Realized principal investment income(4)
37.8 22.1 67.8 38.0 
(+) Net Interest23.0 21.9 43.1 39.8 
 (=) Fee Related Earnings$143.2 $127.3 $272.2 $256.1 

(1)    Adjustments to unrealized principal investment income (loss) during the three and six months ended June 30, 2020 are inclusive of $300.9 million and $211.8 million of unrealized gains, respectively, resulting from changes in the fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude Re’s U.S. GAAP financial statements prior to the contribution of our investment in Fortitude Holdings to Carlyle FRL on June 2, 2020. At the time of the contribution of our investment to Carlyle FRL, we began accounting for our investment under the equity method based on our net asset value in the fund, which is an investment company that accounts for its investment in Fortitude Holdings at fair value. This resulted in an unrealized loss in principal investment income (loss) of $620.7 million during the three and six months ended June 30, 2020.
(2)    Adjusted unrealized principal investment income (loss) from the investment in Fortitude Re represents 19.9% of Fortitude Holdings’ estimated net income (loss), excluding the unrealized gains (losses) related to fee related earnings,embedded derivatives, prior to the contribution of our investment in Fortitude Holdings to Carlyle FRL on June 2, 2020.
(3)    Equity-based compensation includes amounts presented in principal investment income and to distributable earnings.
general, administrative and other expenses in our U.S. GAAP statement of operations.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Income (loss) before provision for income taxes$165.9
 $(49.7) $737.3
 $33.4
Adjustments:       
Equity-based compensation issued in conjunction with the initial public offering, acquisitions and strategic investments58.3
 50.6
 183.8
 175.3
Acquisition related charges, including amortization of intangibles and impairment7.2
 27.7
 25.2
 67.0
Other non-operating expense (income)—
 (3.7) 0.1
 0.8
Tax provision associated with performance fees(1.7) (2.0) (7.0) (16.1)
Net (income) loss attributable to non-controlling interests in consolidated entities(27.6) 29.1
 (47.4) 29.8
Severance and other adjustments0.6
 1.5
 10.9
 10.1
Economic Net Income$202.7
 $53.5
 $902.9
 $300.3
(-) Net performance fees(1)
147.0
 142.3
 840.5
 333.0
(-) Investment income (loss)(1)
(35.3) 13.3
 6.5
 35.8
(+) Equity-based compensation30.4
 32.9
 97.2
 95.2
(+) Reserve for Litigation and Contingencies(25.0) 100.0
 (25.0) 100.0
 (=) Fee Related Earnings$96.4
 $30.8
 $128.1
 $126.7
(+) Realized performance fees, net of related compensation(1)
216.9
 186.3
 434.3
 489.7
(+) Realized investment income (loss)(1)
(53.4) 11.1
 (48.2) 27.9
(=) Distributable Earnings$259.9
 $228.2
 $514.2
 $644.3




90
(1)
– See reconciliation to most directly comparable U.S. GAAP measure below:


 Three Months Ended September 30, 2017
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$411.8
 $(0.8) $411.0
Unrealized(126.2) 0.6
 (125.6)
Total performance fees285.6
 (0.2) 285.4
Performance fee related compensation expense     
Realized189.4
 4.7
 194.1
Unrealized(51.8) (3.9) (55.7)
Total performance fee related compensation expense137.6
 0.8
 138.4
Net performance fees     
Realized222.4
 (5.5) 216.9
Unrealized(74.4) 4.5
 (69.9)
Total net performance fees$148.0
 $(1.0) $147.0
Investment income (loss)     
Realized$15.5
 $(68.9) $(53.4)
Unrealized21.7
 (3.6) 18.1
Investment income (loss)$37.2
 $(72.5) $(35.3)
      
 Nine Months Ended September 30, 2017
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$852.7
 $(6.0) $846.7
Unrealized658.1
 54.6
 712.7
Total performance fees1,510.8
 48.6
 1,559.4
Performance fee related compensation expense     
Realized401.9
 10.5
 412.4
Unrealized309.9
 (3.4) 306.5
Total performance fee related compensation expense711.8
 7.1
 718.9
Net performance fees     
Realized450.8
 (16.5) 434.3
Unrealized348.2
 58.0
 406.2
Total net performance fees$799.0
 $41.5
 $840.5
Investment income (loss)     
Realized$42.0
 $(90.2) $(48.2)
Unrealized100.5
 (45.8) 54.7
Investment income (loss)$142.5
 $(136.0) $6.5
(4) See reconciliation to most directly comparable U.S. GAAP measure below:


 Three Months Ended June 30, 2021
 Carlyle
Consolidated
Adjustments (5)
Total
Reportable
Segments
 (Dollars in millions)
Performance revenues$2,080.7 $(1,626.7)$454.0 
Performance revenues related compensation expense994.0 (777.4)216.6 
Net performance revenues$1,086.7 $(849.3)$237.4 
Principal investment income (loss)$137.7 $(99.9)$37.8 
Six Months Ended June 30, 2021
Carlyle
Consolidated
Adjustments (5)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$3,866.8 $(3,244.4)$622.4 
Performance revenues related compensation expense1,860.6 (1,551.6)309.0 
Net performance revenues$2,006.2 $(1,692.8)$313.4 
Principal investment income (loss)$316.8 $(249.0)$67.8 
 Three Months Ended September 30, 2016
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$383.4
 $(2.5) $380.9
Unrealized(168.7) 42.8
 (125.9)
Total performance fees214.7
 40.3
 255.0
Performance fee related compensation expense     
Realized189.0
 5.6
 194.6
Unrealized(78.1) (3.8) (81.9)
Total performance fee related compensation expense110.9
 1.8
 112.7
Net performance fees     
Realized194.4
 (8.1) 186.3
Unrealized(90.6) 46.6
 (44.0)
Total net performance fees$103.8
 $38.5
 $142.3
Investment income (loss)     
Realized$40.7
 $(29.6) $11.1
Unrealized29.8
 (27.6) 2.2
Total investment income (loss)$70.5
 $(57.2) $13.3
      
 Nine Months Ended September 30, 2016
 Carlyle
Consolidated		 
Adjustments (2)
 Total
Reportable
Segments
 (Dollars in millions)
Performance fees     
Realized$905.1
 $14.1
 $919.2
Unrealized(334.3) 28.4
 (305.9)
Total performance fees570.8
 42.5
 613.3
Performance fee related compensation expense     
Realized423.0
 6.5
 429.5
Unrealized(146.1) (3.1) (149.2)
Total performance fee related compensation expense276.9
 3.4
 280.3
Net performance fees     
Realized482.1
 7.6
 489.7
Unrealized(188.2) 31.5
 (156.7)
Total net performance fees$293.9
 $39.1
 $333.0
Investment income (loss)     
Realized$92.2
 $(64.3) $27.9
Unrealized34.0
 (26.1) 7.9
Total investment income (loss)$126.2
 $(90.4) $35.8
 Three Months Ended June 30, 2020
 Carlyle
Consolidated
Adjustments (5)
Total
Reportable
Segments
 (Dollars in millions)
Performance revenues$1,191.8 $(1,039.6)$152.2 
Performance revenues related compensation expense535.6 (454.3)81.3 
Net performance revenues$656.2 $(585.3)$70.9 
Principal investment income (loss)$(512.6)$534.7 $22.1 
Six Months Ended June 30, 2020
Carlyle
Consolidated
Adjustments (5)
Total
Reportable
Segments
(Dollars in millions)
Performance revenues$254.2 $69.6 $323.8 
Performance revenues related compensation expense93.1 111.6 204.7 
Net performance revenues$161.1 $(42.0)$119.1 
Principal investment income (loss)$(765.9)$803.9 $38.0 
(2)Adjustments to performance fees and investment income (loss) relate to (i) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the Non-GAAP results, (ii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the Non-GAAP results, (iii) the reclassification of NGP performance fees, which are included in investment income in the U.S. GAAP financial statements, and (iv) the reclassification of certain tax expenses associated with performance fees.

(5) Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net of related compensation expense and unrealized principal investment income, which are excluded from our Non-GAAP results, (ii) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the Non-GAAP results, (iii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the Non-GAAP results, (iv) the reclassification of NGP performance revenues, which are included in investment income in the U.S. GAAP financial statements, (v) the reclassification of certain incentive fees from business development companies, which are included in fund management fees in the segment results, and (vi) the reclassification of tax expenses associated with certain foreign performance revenues. Adjustments to principal investment income (loss) also include the reclassification of earnings for the investment in NGP Management and its affiliates to the appropriate operating captions for the Non-GAAP results, the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from the Non-GAAP results and adjustments(see Note 4 to reflect the Partnership’s share of Urbplan net losses, until Urbplan was deconsolidated during the three months ended September 30, 2017, as investment losses for the Non-GAAP results. Adjustments are also included in theseour unaudited condensed consolidated financial statement captions to reflect Carlyle’s economic interests in Claren Road (through January 2017), ESG (through June 2016) and Vermillion.statements).


Economic Net Income and
91

Distributable Earnings for our reportable segments are as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (Dollars in millions)
Global Private Equity$337.6 $156.5 $515.8 $291.3 
Global Credit29.6 28.1 52.7 59.9 
Investment Solutions28.2 13.8 41.8 22.2 
Distributable Earnings$395.4 $198.4 $610.3 $373.4 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Economic Net Income       
Corporate Private Equity$92.1
 $63.0
 $647.3
 $153.4
Real Assets7.8
 3.8
 117.9
 144.0
Global Market Strategies88.3
 (10.8) 104.3
 (4.3)
Investment Solutions14.5
 (2.5) 33.4
 7.2
Economic Net Income$202.7
 $53.5
 $902.9
 $300.3
Distributable Earnings       
Corporate Private Equity$207.1
 $208.6
 $415.3
 $548.2
Real Assets(40.9) 10.3
 (25.5) 68.8
Global Market Strategies87.5
 3.7
 104.2
 11.2
Investment Solutions6.2
 5.6
 20.2
 16.1
Distributable Earnings$259.9
 $228.2
 $514.2
 $644.3

Segment Analysis

Discussed below is our DE FRE and ENIFRE for our segments for the periods presented. Our segment information is reflected in the manner used by our senior management to make operating and compensation decisions, assess performance and allocate resources.

For segment reporting purposes, revenues and expenses are presented on a basis that deconsolidates our Consolidated Funds. As a result, segment revenues from management fees, realized performance feesrevenues and realized principal investment income (loss) are different than those presented on a consolidated U.S. GAAP basis because fund management feesthese revenues recognized in certain segments are received from Consolidated Funds and are eliminated in consolidation when presented on a consolidated U.S. GAAP basis. Furthermore, segment expenses are different than related amounts presented on a consolidated U.S. GAAP basis due to the exclusion of fund expenses that are paid by the Consolidated Funds. Segment revenue and expenses are also different than those presented on a consolidated U.S. GAAP basis because we present our segment revenues and expenses related to Claren Road and ESG based on our economic interest in those entities. Effective January 1, 2016 and through January 31, 2017 (the date we transferred our ownership interests to its principals), our segment revenue and expenses related to Claren Road are based on our approximate 63% economic interest in that entity as a result of a reallocation of interest from a departing founder. Further, our economic interest in ESG was 55% through June 30, 2016. Also, ENI excludes expenses associated with equity-based compensation that was issued in our initial public offering or issued in acquisitions and strategic investments.






Corporate


92

Global Private Equity

The following table presents our results of operations for our CorporateGlobal Private Equity segment:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$263.4 $262.5 $523.6 $531.2 
Portfolio advisory and transaction fees, net and other6.2 3.1 16.8 7.3 
Total fund level fee revenues269.6 265.6 540.4 538.5 
Realized performance revenues428.9 116.0 563.0 181.2 
Realized principal investment income24.0 16.3 47.7 26.5 
Interest income0.5 0.5 0.7 2.3 
Total revenues723.0 398.4 1,151.8 748.5 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits133.6 130.6 262.7 260.3 
Realized performance revenues related compensation193.6 51.8 253.8 81.5 
Total compensation and benefits327.2 182.4 516.5 341.8 
General, administrative, and other indirect expenses36.4 37.6 77.8 74.8 
Depreciation and amortization expense6.1 6.1 12.2 10.9 
Interest expense15.7 15.8 29.5 29.7 
Total expenses385.4 241.9 636.0 457.2 
Distributable Earnings$337.6 $156.5 $515.8 $291.3 
(-) Realized Net Performance Revenues235.3 64.2 309.2 99.7 
(-) Realized Principal Investment Income24.0 16.3 47.7 26.5 
(+) Net Interest15.2 15.3 28.8 27.4 
(=) Fee Related Earnings$93.5 $91.3 $187.7 $192.5 



93
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Revenues       
Fund level fee revenues       
Fund management fees$118.3
 $122.9
 $351.7
 $376.9
Portfolio advisory fees, net3.6
 2.9
 11.9
 11.2
Transaction fees, net5.3
 1.4
 14.2
 24.3
Total fund level fee revenues127.2
 127.2
 377.8
 412.4
Performance fees       
Realized345.4
 311.1
 668.8
 775.2
Unrealized(193.2) (124.2) 465.0
 (496.2)
Total performance fees152.2
 186.9
 1,133.8
 279.0
Investment income (loss)       
Realized6.5
 24.1
 15.6
 46.6
Unrealized4.1
 (9.6) 22.9
 (12.7)
Total investment income10.6
 14.5
 38.5
 33.9
Interest income1.8
 0.9
 3.7
 2.7
Other income1.6
 1.3
 4.2
 4.0
Total revenues293.4
 330.8
 1,558.0
 732.0
Segment Expenses       
Compensation and benefits       
Direct base compensation65.3
 52.7
 175.4
 165.8
Indirect base compensation18.3
 17.8
 55.0
 55.6
Equity-based compensation14.5
 19.8
 47.3
 56.0
Performance fee related       
Realized147.7
 143.5
 295.4
 345.4
Unrealized(76.1) (57.8) 221.1
 (219.9)
Total compensation and benefits169.7
 176.0
 794.2
 402.9
General, administrative, and other indirect expenses20.5
 81.4
 83.9
 144.3
Depreciation and amortization expense4.1
 3.4
 11.5
 10.2
Interest expense7.0
 7.0
 21.1
 21.2
Total expenses201.3
 267.8
 910.7
 578.6
Economic Net Income$92.1
 $63.0
 $647.3
 $153.4
(-) Net Performance Fees80.6
 101.2
 617.3
 153.5
(-) Investment Income10.6
 14.5
 38.5
 33.9
(+) Equity-based Compensation14.5
 19.8
 47.3
 56.0
(+) Reserve for Litigation and Contingencies(12.5) 49.8
 (12.5) 49.8
(=) Fee Related Earnings$2.9
 $16.9
 $26.3
 $71.8
(+) Realized Net Performance Fees197.7
 167.6
 373.4
 429.8
(+) Realized Investment Income6.5
 24.1
 15.6
 46.6
(=) Distributable Earnings$207.1
 $208.6
 $415.3
 $548.2



Three Months Ended SeptemberJune 30, 20172021 Compared to the Three Months Ended SeptemberJune 30, 20162020 and NineSix Months Ended SeptemberJune 30, 20172021 Compared to the NineSix Months Ended SeptemberJune 30, 2016
2020
Distributable Earnings

Distributable Earnings decreased $1.5increased $181.1 million for the three months ended SeptemberJune 30, 20172021 as compared to the three months ended SeptemberJune 30, 20162020 and decreased $132.9increased $224.5 million for the ninesix months ended SeptemberJune 30, 20172021 as compared to the ninesix months ended SeptemberJune 30, 2016.2020. The following table provides the components of the changes in distributable earningsDistributable Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Distributable Earnings, June 30, 2020$156.5 $291.3 
Increases (decreases):
Increase (decrease) in fee related earnings2.2 (4.8)
Increase in realized net performance revenues171.1 209.5 
Increase in realized principal investment income7.7 21.2 
(Decrease) increase in net interest0.1 (1.4)
Total increase181.1 224.5 
Distributable Earnings, June 30, 2021$337.6 $515.8 

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Distributable earnings, September 30, 2016$208.6
$548.2
Increases (decreases):  
   Increase (decrease) in realized net performance fees30.1
(56.4)
   Decrease in realized investment income(17.6)(31.0)
   Decrease in fee related earnings(14.0)(45.5)
   Total decrease(1.5)(132.9)
Distributable earnings, September 30, 2017$207.1
$415.3

Realized Net Performance Fees.Revenues. Realized net performance feesrevenues increased $30.1$171.1 million for the three months ended SeptemberJune 30, 20172021 as compared to the three months ended SeptemberJune 30, 20162020 and decreased $56.4increased $209.5 million for the ninesix months ended SeptemberJune 30, 20172021 as compared to the ninesix months ended SeptemberJune 30, 2016. The increase2020, driven by exit activity in realized net performance fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 was primarily due to larger realizations from our U.S. buyout funds in carry in 2017 as compared to 2016, partially offset by lower realizations from our Europe buyout funds in 2017 as compared to 2016. The decrease in realized net performance fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to lower realizations from our Europe buyout funds in carry in 2017 as compared to 2016, partially offset by larger realizations from our U.S. and Asia buyout funds, in 2017 as compared to 2016.well as our U.S. real estate and financial services funds. During the six months ended June 30, 2021 we realized performance revenues for the first time on our eighth U.S. real estate fund, our fourth Asia buyout fund, and our third Japan buyout fund. Realized net performance feesrevenues were primarily generated by the following funds for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016:2020.
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
CP VICETP IICP VICP IV
CAP IVCGFSP IICAP IVCGFSP I
CRP VCRP VCERF
CRP VIICGFSP II
CRP VIIICRP VII
CRP VIII
CJP III
Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
20172016 20172016
CP VCP V CP VCP V
CEP IIICEP III CEP IIICEP III
CETP IICGFSP I CAP IIICP IV
 CP IV CGFSP ICGFSP I
 CJP CETP IICAGP II
    CAP III
    CJP


Realized Principal Investment Income. Realized principal investment income decreased $17.6was $24.0 million for the three months ended SeptemberJune 30, 20172021 as compared to the three months ended September 30, 2016 and decreased $31.0 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The decrease in realized principal investment income for both the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to lower realized gains in our investments in U.S. and Europe buyout funds, partially offset by realized gains on U.S. growth funds and the financial services funds.


Fee Related Earnings

Fee related earnings decreased $14.0of $16.3 million for the three months ended SeptemberJune 30, 20172020, primarily due to higher realized gains from our investments in U.S. buyout, U.S. real estate and international energy funds, partially offset by lower realized gains from investments in our Europe buyout and Europe growth funds.
Realized principal investment income was $47.7 million for the six months ended June 30, 2021 as compared to realized principal investment income of $26.5 million for the six months ended June 30, 2020, primarily due to higher realized gains from investments in our U.S. buyout, financial services, U.S. real estate and international energy funds, as well as realized gains compared to realized losses in 2020 from our investments in our U.S. growth funds, partially offset by lower realized gains from our investments in our Europe growth and Asia buyout funds.


94

Fee Related Earnings
Fee Related Earnings increased $2.2 million for the three months ended June 30, 2021 as compared to three months ended June 30, 2020 and decreased $4.8 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 and decreased $45.5 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.2020. The following table provides the components of the changes in fee related earningsFee Related Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Fee Related Earnings, June 30, 2020$91.3 $192.5 
Increases (decreases):
Increase in fee revenues4.0 1.9 
Increase in cash-based compensation and benefits(3.0)(2.4)
CCC litigation cost recovery in 2020(1)
— (20.3)
Decrease in general, administrative and other indirect expenses1.2 17.3 
   All other changes— (1.3)
Total increase (decrease)2.2 (4.8)
Fee Related Earnings, June 30, 2021$93.5 $187.7 
(1) General, administrative and other indirect expenses during the six months ended June 30, 2020 included the allocated portion of the cost recovery associated with the CCC litigation costs. See Note 7 to our unaudited condensed consolidated financial statements.
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Fee related earnings, September 30, 2016$16.9
$71.8
Increases (decreases):  
   Decrease in fee revenues—
(34.6)
   Increase in direct and indirect base compensation(13.1)(9.0)
   Increase in general, administrative and other indirect expenses(1.4)(1.9)
   All other changes0.5
—
   Total decrease(14.0)(45.5)
Fee related earnings, September 30, 2017$2.9
$26.3


Fee Revenues. Total fee revenues were flatincreased $4.0 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $1.9 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 and decreased $34.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016,2020, due to the following:

Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Higher (lower) fund management fees$0.9 $(7.6)
Higher portfolio advisory and transaction fees, net and other3.1 9.5 
Total increase in fee revenues$4.0 $1.9 

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Lower fund management fees$(4.6)$(25.2)
Higher (lower) transaction fees3.9
(10.1)
Higher portfolio advisory fees0.7
0.7
Total decrease in fee revenues$—
$(34.6)

The increase in total fee revenues for the three months ended June 30, 2021 as compared to three months ended June 30, 2020 was primarily due to higher management fees on CJP IV, which activated management fees in Q4 2020, as well as CRSEF, which had catch-up management fees of $3.1 million from its final closing in three months ended June 30, 2021, and CPI and CEP V. This increase was partially offset by lower management fees for funds on which management fees are based on invested capital and have had realizations over the last twelve months.
The decrease in fund management fees for both the three and ninesix months ended SeptemberJune 30, 20172021 as compared to both the three and ninesix months ended SeptemberJune 30, 20162020 was primarily due to CIEP II, which had catch-up management fees of $6.3 million in Q2 2020, and lower assets under management from sales offees for funds on which management fees are based on invested capital and have had realizations over the last twelve months. This decrease was partially offset by higher management fees for CJP IV, CRSEF, which had catch-up management fees in Q2 2021 mentioned above, as well as CPI and CEP V.
The increases in portfolio advisory and transaction fees, net and other for the three and six months ended June 30, 2021 as compared to the three and six months ended June 30, 2020 was primarily due to transaction fees related to investments during 2016 for CPin CJP IV and CEP V, our first financial services fund (“CGFSP I”), our third Europe buyout fund (“CEP III”),as well as portfolio fees related to investments in CEOF II and our second Asia buyout fund (“CAP II”).

CIEP II.
The total weighted-average management fee rate increased from 1.30% at Septemberrates as of June 30, 2016 to 1.32% at September 30, 2017. The modest increase in the total weighted-average management fee rate reflects the increased weighted impact of funds in the original investment period with fees based on commitments, which charge higher fee rates, compared to those funds with fees based on invested equity or fair value.2021 and 2020 were 1.25% and 1.26%. Fee-earning assets under management were $35.6$90.5 billion and $37.8$88.8 billion as of SeptemberJune 30, 20172021 and 2016,2020, respectively, reflecting a decreasean increase of $2.2$1.7 billion.

The increase in transaction feesCash-based compensation and benefits expense. Cash-based compensation and benefits expense increased $3.0 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $2.4 million for the


95

six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 was primarily from significant investments in one of our U.S buyout funds in the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. The decrease in transaction fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily from a significant investment in one of our U.S. buyout funds in the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2017.

Direct and indirect base compensation expense. Direct and indirect base compensation expense increased $13.1 million, or 19%, for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, and increased $9.0 million, or 4%, for the nine months ended September 30, 2017 as compared to the nine months ended September

30, 2016. The increase in both periods was2020, primarily due to increased headcount and an increase inhigher projected year-end bonuses.

General, administrative and other indirect expenses. General, administrative and other indirect expenses increased $1.4decreased $17.3 million, excluding the impact of litigation cost recoveries in 2020, for the threesix months ended SeptemberJune 30, 20172021 as compared to the threesix months ended SeptemberJune 30, 2016,2020, primarily due to higher negative foreign currency adjustments and real estate costs, partially offset by lower professional fees.

General, administrative and other indirect expenses increased $1.9 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to higher negative foreign currency adjustments and real estate costs, partially offset by lower professional fees and travel and entertainment expenses as a $2.0 million decrease in external costs associated with fundraising activities in nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.

Fundraising and related costs in the three and nine months ended September 30, 2017 were modest. However, we expect that tworesult of our large buyout funds will have substantial first closestravel restrictions during the fourth quarter of 2017 that will drive a significant increase in fundraising and related costs that will be reflected in higher compensation expense and general, administrative and other indirect expenses. These two buyout funds are expected to activate fees in the middle of 2018 at which time we would expect an increase in management fee revenue.

Economic Net Income

Economic net income increased $29.1 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $493.9 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in economic net income for the three and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Economic net income, September 30, 2016$63.0
$153.4
Increases (decreases):  
   (Decrease) increase in net performance fees(20.6)463.8
   (Decrease) increase in investment income(3.9)4.6
   Decrease in equity-based compensation5.3
8.7
   Decrease in fee related earnings(14.0)(45.5)
   Decrease in reserve for litigation and contingencies62.3
62.3
   Total increase29.1
493.9
Economic net income, September 30, 2017$92.1
$647.3

Performance Fees. Performance Fees (realized and unrealized) decreased $34.7 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $854.8 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The decrease in performance fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, despite the overall increase in appreciation in the same period, is primarily attributable to a decrease in performance fees earned by CP VI, as the fund was in the catch-up phase in 2016, thereby resulting in higher performance fees earned in 2016 as compared to 2017. The decrease was also due to lower appreciation on this fund in the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. The increase for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to higher appreciation on certain of our U.S. and Asia buyout funds.


Performance fees are from the following types of funds:

 Performance Fees
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)    
Buyout funds$148.6
 $205.3
 $1,097.1
 $296.1
Growth Capital funds3.6
 (18.4) 36.7
 (17.1)
Total$152.2
 $186.9
 $1,133.8
 $279.0

The $152.2 million of performance fees for the three months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CP VI of $74.2 million,
•CP V of $33.3 million,
•CETP III of $22.3 million,
•CGFSP II of $17.2 million,
•CAP II of $10.7 million, and
•CEOF of $(34.2) million.

The $186.9 million of performance fees for the three months ended September 30, 2016 was driven by performance fees recognized from the following funds:

•CP VI of $183.4 million,
•CGFSP of $13.6 million,
•CJIP III of $10.8 million,
•CAP III of $(22.4) million, and
•CEOF of $(12.2) million.

The $1,133.8 million of performance fees for the nine months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CP VI of $471.5 million,
•CP V of $284.9 million,
•CAP IV of $221.7 million,
•CGFSP II of $46.9 million,
•CETP II of $30.1 million,
•CETP III of $28.0 million,
•CEOF of $(22.7) million, and
•CP IV of $(22.5) million.

The $279.0 million of performance fees for the nine months ended September 30, 2016 was driven by performance fees recognized from the following funds:

•CP VI of $184.8 million,
•CP V of $79.2 million,
•CBPF of $24.9 million,
•CGFSP of $14.6 million,
•CJIP III of $10.8 million,
•CAP III of $(27.1) million, and
•CEOF of $(15.1) million.

Performance fees of $152.2 million and $186.9 million are inclusive of performance fees reversed of approximately $57.6 million and $51.9 million for the three months ended September 30, 2017 and 2016, respectively. Performance fees of $1,133.8 million and $279.0 million are inclusive of performance fees reversed of approximately $72.1 million and $68.8 million for the nine months ended September 30, 2017 and 2016, respectively. Additionally, during the nine months ended September 30,

2016, the Partnership paid $47.3 million to satisfy a giveback obligation related to CAP II. Substantially all of the giveback obligation was paid by current and former senior Carlyle professionals.

The appreciation (depreciation) in remaining value of assets for this segment by type of fund are as follows:

 Three Months Ended September 30, Nine Months Ended September 30,
 20172016 20172016
Buyout funds3%3% 24%9%
Growth Capital funds6%—% 17%—%
Total4%3% 23%8%

Net performance fees as a percentage of total performance fees are as follows:

 Three Months Ended September 30, Nine Months Ended September 30,
 20172016 20172016
 (Dollars in millions)
Net Performance Fees$80.6$101.2 $617.3$153.5
      
Percentage of Total Performance Fees53%54% 54%55%

Unrealized performance fees reflect the difference between total performance fees and realized performance fees. The recognition of realized performance fees results in a reversal of accumulated unrealized performance fees, generally resulting in minimal impact on total performance fees. Because unrealized performance fees are reversed upon a realization event, in periods where the Partnership generates significant realized performance fees unrealized performance fees may be negative even in periods of portfolio appreciation.

Total investment income. Total investment income (realized and unrealized) for the three months ended September 30, 2017 was $10.6 million as compared to total investment income of $14.5 million for the three months ended September 30, 2016. The decrease in total investment income from the three months ended September 30, 2016 to the three months ended September 30, 2017 relates primarily to lower realizations in our investments in U.S. and Europe buyout funds for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.

Total investment income (realized and unrealized) for the nine months ended September 30, 2017 was $38.5 million as compared to total investment income of $33.9 million for the nine months ended September 30, 2016. The increase in total investment income from the nine months ended September 30, 2016 to the nine months ended September 30, 2017 related primarily to higher appreciation in our investments in the buyout and growth funds, particularly on investments in our Asia buyout funds for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. These increases to total investment income wereCOVID-19 pandemic, partially offset by lower realized gains in our investments in U.S. and Europe buyout funds as well as our investments in Europe growth funds.negative foreign currency adjustments.

Equity-based compensation. Equity-based compensation was $14.5 million for the three months ended September 30, 2017, a decrease of $5.3 million from $19.8 million for the three months ended September 30, 2016.

Equity-based compensation was $47.3 million for the nine months ended September 30, 2017, a decrease of $8.7 million from $56.0 million for the nine months ended September 30, 2016.

Reserve for Litigation and Contingencies. Corporate Private Equity's (“CPE”) share of the reserve for litigation and contingencies decreased $62.3 million for both the three and nine months ended September 30, 2017. The decrease was primarily related to CPE's share of the $25 million reserve reversal related to the CCC litigation recognized in 2017, while CPE recognized its share of the $100 million reserve in 2016 related to a commodities legal matter.


Fee-earning AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 20172021 and 20162020
Fee-earning AUM is presented below for each period together with the components of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each period.
 As of June 30,
 20212020
Global Private Equity(Dollars in millions)
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments$54,502 $52,530 
Fee-earning AUM based on invested capital29,406 31,409 
Fee-earning AUM based on net asset value3,817 2,475 
Fee-earning AUM based on lower of cost or fair value2,752 2,378 
Total Fee-earning AUM$90,477 $88,792 
Weighted Average Management Fee Rates (2)
All Funds1.25 %1.26 %
Funds in Investment Period1.37 %1.39 %
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
 As of September 30,
 2017 2016
Corporate Private Equity(Dollars in millions)
Components of Fee-earning AUM (1)   
Fee-earning AUM based on capital commitments$26,180
 $25,813
Fee-earning AUM based on invested capital7,726
 10,227
Fee-earning AUM based on lower of cost or fair value1,697
 1,745
Total Fee-earning AUM$35,603
 $37,785
Weighted Average Management Fee Rates (2)   
All Funds1.32% 1.30%
Funds in Investment Period1.44% 1.43%
(2)Represents the aggregate effective management fee rate of each fund in the segment, weighted by each fund’s Fee-earning AUM, as of the end of each period presented.
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
(2)Represents the aggregate effective management fee rate of each fund in the segment, weighted by each fund’s Fee-earning AUM, as of the end of each period presented.
The table below provides the period to period rollforward of Fee-earning AUM.
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
Global Private Equity(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$90,559 $91,979 $91,571 $94,811 
Inflows (1)966 804 1,602 1,604 
Outflows (including realizations) (2)(1,493)(3,911)(2,476)(6,963)
Market Activity & Other (3)316 (434)412 (570)
Foreign Exchange (4)129 354 (632)(90)
Balance, End of Period$90,477 $88,792 $90,477 $88,792 
(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, and the fee-earning commitments invested in vehicles for which management fees are based on invested capital. Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM.
(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, and reductions for funds that are no longer calling for fees. Realizations 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.


96

 Three Months Ended September 30, Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Corporate Private Equity(Dollars in millions) (Dollars in millions)
Fee-earning AUM Rollforward       
Balance, Beginning of Period$36,216
 $38,938
 $36,327
 $40,926
Inflows, including Fee-paying Commitments (1)303
 9
 830
 601
Outflows, including Distributions (2)(1,167) (935) (2,299) (3,900)
Market Appreciation/(Depreciation) (3)21
 (339) 12
 (352)
Foreign Exchange and other (4)230
 112
 733
 510
Balance, End of Period$35,603
 $37,785
 $35,603
 $37,785
(1)Inflows represent limited partner capital raised and capital invested by carry funds outside the original investment period.
(2)Outflows represent distributions from funds outside the investment period and changes in fee basis for our carry funds where the original investment period has expired.
(3)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value.
(4)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of period end.

(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.
Fee-earning AUM was $35.6$90.5 billion at SeptemberJune 30, 2017,2021, generally flat to March 31, 2021, as realizations of $1.5 billion in funds which charge fees based on invested capital were offset by $1.0 billion of inflows from new fee-paying commitments raised in CAP Growth II and CRSEF and capital deployment for funds that charge management fees on invested capital, as well as $0.4 billion of market activity and positive foreign exchange activity from the translation of our EUR-denominated funds’ AUM to USD. Investment and distribution activity has no impact for funds still in the original investment period where Fee-earning AUM is based on commitments.
Fee-earning AUM was $90.5 billion at June 30, 2021, a decrease of $1.1 billion, or approximately 1%, compared to $91.6 billion at December 31, 2020. The decrease was driven by outflows of $2.5 billion primarily due to dispositions in funds which charge fees based on invested capital, as well as $0.6 billion in negative foreign exchange activity from the translation of our EUR-denominated funds’ AUM to USD. Partially offsetting the decrease were inflows of $1.6 billion primarily from new fee-paying commitments raised in CAP Growth II and CRSEF as well as investments in other funds which charge fees based on invested capital.
Fee-earning AUM was $90.5 billion at June 30, 2021, an increase of $1.7 billion, or approximately 2%, compared to $36.2$88.8 billion at June 30, 2017.2020. The decreaseincrease was driven by inflows of $5.4 billion primarily from new fee-paying commitments raised in CJP IV, CAP Growth II, and CRSEF, as well as investments in other funds which charge fees based on invested capital, $0.7 billion of market appreciation and $0.6 billion of positive foreign exchange activity from the translation of our EUR-denominated funds’ AUM to USD. Partially offsetting the increase were outflows of $1.2$5.0 billion primarily due to dispositions in CP V and CEP III. This decrease was partially offset by inflows of $0.3 billion from new investments made by CGP and foreign exchange gains of $0.2 billion primarily due to the translation of Fee-earning AUM in our Europe buyout and growth funds

from EUR to USD. Investment and distribution activity by funds still in the investment period does not impact Fee-earning AUM as these funds arewhich charge fees based on commitments.
Fee-earning AUM was $35.6 billion at September 30, 2017, a decrease of $0.7 billion, or approximately 2% compared to $36.3 billion at December 31, 2016. The decrease was driven by outflows of $2.3 billion primarily due to dispositions in CP V. This was offset by inflows of $0.8 billion primarily related to new investments made by CGP and new commitments to CAGP V, and foreign exchange gains of $0.7 billion primarily due to the translation of Fee-earning AUM in our Europe buyout and growth funds from EUR to USD.
Fee-earning AUM was $35.6 billion at September 30, 2017, a decrease of $2.2 billion, or approximately 6%, compared to $37.8 billion at September 30, 2016. Driving the decrease were outflows of $3.9 billion primarily driven by dispositions in our US, Europe, and Asia buyout funds, as well as other funds outside of their original investment period. Partially offsetting the decrease were inflows of $1.4 billion primarily related to new investments made by CGP, in addition to new fee-paying commitments raised by CAGP V.
Fee-earning AUM was $37.8 billion at September 30, 2016, a decrease of $1.1 billion, or approximately 3%, compared to $38.9 billion at June 30, 2016. The decrease was driven by outflows of $0.9 billion from distributions in CAP II, CP V and several other funds outside of the original investment period, and market depreciation of $0.3 billion primarily attributable to CAP II.
Fee-earning AUM was $37.8 billion at September 30, 2016, a decrease of $3.1 billion, or approximately 8%, compared to $40.9 billion at December 31, 2015. The decrease was driven by outflows of $3.9 billion from distributions in CP V and several other funds outside of the original investment period, partially offset by $0.6 billion of inflows primarily attributable to equity invested by funds outside of the original investment period and $0.5 billion of foreign exchange gain primarily from our Europe and Japan buyout funds.capital.
Total AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 20172021
The table below provides the period to period rollforwards of Available Capital and Fair Value of Capital, and the resulting rollforward of Total AUM.
 Three Months Ended
June 30, 2021		Six Months Ended June 30, 2021
 (Dollars in millions)
Global Private Equity
Total AUM Rollforward
Balance, Beginning of Period$137,451 $131,780 
Inflows (1)6,747 8,144 
Outflows (including realizations) (2)(4,415)(9,195)
Market Activity & Other (3)10,202 20,258 
Foreign Exchange (4)163 (839)
Balance, End of Period$150,148 $150,148 
(1)    Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
 Three Months Ended 
 September 30, 2017		 Nine Months Ended 
 September 30, 2017
 Available
Capital		 Fair Value
of Capital		 Total
AUM		 Available
Capital		 Fair Value
of Capital		 Total
AUM
 (Dollars in millions) (Dollars in millions)
Corporate Private Equity           
Balance, Beginning of Period$15,995
 $38,328
 $54,323
 $17,499
 $33,365
 $50,864
Commitments (1)791
 —
 791
 1,302
 —
 1,302
Capital Called, net (2)(3,947) 4,009
 62
 (6,811) 6,826
 15
Distributions (3)265
 (1,244) (979) 842
 (5,074) (4,232)
Market Appreciation/(Depreciation) (4)—
 1,251
 1,251
 —
 6,799
 6,799
Foreign Exchange and other (5)116
 179
 295
 388
 607
 995
Balance, End of Period$13,220
 $42,523
 $55,743
 $13,220
 $42,523
 $55,743
(2)    Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, separately managed accounts, and the NGP Predecessor Funds, gross redemptions in our open-end funds, and the expiration of available capital.
(1)Represents capital raised by our carry funds, net of expired available capital.
(2)Represents capital called by our carry funds, net of fund fees and expenses. Equity invested amounts may vary from capital called due to timing differences between acquisition and capital call dates.
(3)Represents distributions from our carry funds, net of amounts recycled. Distributions are based on when proceeds are actually distributed to investors, which may differ from when they are realized.
(4)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments.
(5)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.
(3)    Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related co-investment vehicles, separately managed accounts, and the NGP Predecessor Funds, as well as the impact of fees, expenses and non-investment income, and other changes in AUM.

(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.

Total AUM was $55.7$150.1 billion at SeptemberJune 30, 2017,2021, an increase of $1.4$12.6 billion or approximately 3%, compared to $54.3$137.5 billion as of June 30, 2017. ThisMarch 31, 2021. The increase was driven by $1.3 billion of market appreciation due to a 4% increase in our private portfolio of carry funds for the period, resulting in overall segment appreciation of 4% for the period. The carry funds driving appreciation$10.2 billion for the period, included $0.4driven by appreciation of $3.0 billion in CP VI, $0.7 billion in CEOF II, $0.7 billion in CP VII, and $0.5 billion in CAP IV. Total AUM also increased as a result of $6.7 billion of fundraising, largely attributable to CP VI, $0.2 billion attributable to CEP IV, and $0.2 billion attributable to CP V. Also drivingthe first closing in CRP IX. Partially offsetting the increase were $0.8


97

outflows of $4.4 billion primarily from distributions of new commitments raised in CGFSP III and various external coinvestment entities, as well as $0.3 billion of foreign exchange gains primarily due to the translation of AUMinvestment proceeds in our Europe buyoutU.S. Buyout, Asia Buyout and growth funds from EUR to USD. The increase was partially offset by distributions of $1.2 billion, of which $0.3 billion were recallable, primarily in our US, Asia, and Europe buyoutU.S. Real Estate funds.

Total AUM was $55.7$150.1 billion at SeptemberJune 30, 2017,2021, an increase of $4.8$18.3 billion or approximately 9%, compared to $50.9$131.8 billion as of December 31, 2016. This2020. The increase was driven by $6.8 billion of market appreciation due to a 25% increase in our public portfolio of carry funds and a 22% increase in our private portfolio of carry funds for the period, resulting in overall segment appreciation of 23% for the period. The carry funds driving appreciation$20.3 billion for the period, included $1.8 billion attributable to CP VI, $1.5 billion attributable to CP V and $1.0 billion attributable to CAP IV. Also driving the increase were $1.3 billion of new commitments raised primarily in CGFSP III and various external coinvestment entities, as well as $1.0$8.1 billion of foreign exchange gains due to the translation of AUM in our Europe buyout and growth funds from EUR to USD. The increase wasfundraising, partially offset by outflows of $9.2 billion primarily from distributions of $5.1 billion, of which $0.8 billion were recallable, primarily in our US, Asia, and Europe buyout funds.investment proceeds.
Fund Performance Metrics
Fund performance information for our investment funds that generally have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of September 30, 2017, which we refer to as our “significant funds” is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.


The following tables reflect the performance of our significant funds in our Corporate Private Equity business. Please see “— Our Family of Funds” for a legend of the fund acronyms listed below.
     TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(5)
     As of September 30, 2017 As of September 30, 2017
 Fund
Inception
Date(1)		 Committed
Capital		 Cumulative
Invested
Capital(2)		 Total Fair
Value(3)		 MOIC(4) 
Gross
IRR
(7)(12)
 
Net
IRR
(8)(12)
 Cumulative
Invested
Capital(2)		 Total Fair
Value(3)		 
MOIC
(4)
 Gross
IRR(7)
Corporate Private Equity(Reported in Local Currency, in Millions) 
(Reported in Local Currency, in 
Millions)
Fully Invested/Committed Funds(6)                    
CP II10/1994 $1,331.1
 $1,362.4
 $4,072.2
 3.0x 34% 25% $1,362.4
 $4,072.2
 3.0x 34%
CP III2/2000 $3,912.7
 $4,031.6
 $10,146.9
 2.5x 27% 21% $4,031.6
 $10,146.9
 2.5x 27%
CP IV12/2004 $7,850.0
 $7,612.6
 $17,977.4
 2.4x 16% 13% $7,612.6
 $17,977.4
 2.4x 16%
CP V5/2007 $13,719.7
 $13,190.9
 $27,228.2
 2.1x 18% 14% $9,201.1
 $24,306.6
 2.6x 26%
CEP I12/1997 €1,003.6
 €981.6
 €2,126.5
 2.2x 18% 11% €981.6
 €2,126.5
 2.2x 18%
CEP II9/2003 €1,805.4
 €2,048.9
 €4,121.2
 2.0x 36% 20% €1,883.8
 €4,106.8
 2.2x 43%
CEP III12/2006 €5,294.9
 €5,116.1
 €11,294.6
 2.2x 19% 14% €4,284.4
 €10,404.5
 2.4x 20%
CAP I12/1998 $750.0
 $627.7
 $2,521.8
 4.0x 25% 18% $627.7
 $2,521.8
 4.0x 25%
CAP II2/2006 $1,810.0
 $1,628.2
 $3,032.9
 1.9x 11% 8% $1,452.4
 $2,830.0
 1.9x 12%
CAP III5/2008 $2,551.6
 $2,543.2
 $4,672.9
 1.8x 18% 12% $2,071.8
 $4,237.2
 2.0x 20%
CJP I10/2001 ¥50,000.0
 ¥47,291.4
 ¥138,902.1
 2.9x 61% 37% ¥47,291.4
 ¥138,902.1
 2.9x 61%
CJP II7/2006 ¥165,600.0
 ¥141,866.7
 ¥215,181.9
 1.5x 8% 4% ¥70,933.1
 ¥130,219.6
 1.8x 12%
CGFSP I9/2008 $1,100.2
 $1,080.7
 $2,398.4
 2.2x 20% 14% $866.9
 $1,834.7
 2.1x 20%
CEOF I5/2011 $1,119.1
 $1,154.5
 $1,523.4
 1.3x 12% 8% $328.4
 $749.7
 2.3x 37%
CETP II2/2007 €521.6
 €437.4
 €1,245.6
 2.8x 28% 19% €278.8
 €1,140.8
 4.1x 36%
CAGP IV6/2008 $1,041.4
 $954.1
 $1,416.7
 1.5x 11% 6% $439.5
 $778.9
 1.8x 15%
All Other Funds (9)Various   $4,637.6
 $7,138.0
 1.5x 16% 7% $3,676.3
 $5,970.3
 1.6x 18%
Coinvestments and
Other (10)
Various   $10,358.3
 $24,025.6
 2.3x 36% 33% $6,723.7
 $20,036.2
 3.0x 36%
Total Fully Invested Funds $60,991.3
 $131,469.6
 2.2x 26% 19% $48,210.4
 $118,831.8
 2.5x 28%
Funds in the Investment Period (6)                  
CP VI5/2012 $13,000.0
 $10,971.3
 $14,482.7
 1.3x 18%
 11%
        
CEP IV8/2013 €3,669.5
 €2,659.9
 €3,162.3
 1.2x 17%
 7%
        
CAP IV11/2012 $3,880.4
 $2,946.9
 $4,458.5
 1.5x 27%
 17%
        
CGP12/2014 $3,588.0
 $1,836.0
 $1,932.0
 1.1x NM
 NM
        
CGFSP II4/2013 $1,000.0
 $768.2
 $1,136.2
 1.5x 24% 14%
        
CJP III8/2013 ¥119,505.1
 ¥60,094.5
 ¥98,393.8
 1.6x NM
 NM
        
CEOF II3/2015 $2,400.0
 $893.8
 $1,074.5
 1.2x NM
 NM
        
All Other Funds (11)Various   $1,154.1
 $1,478.9
 1.3x NM
 NM
        
Total Funds in the Investment Period $22,242.8
 $29,168.1
 1.3x 19% 11% $1,234.1
 $3,146.3
 2.5x 60%
TOTAL CORPORATE PRIVATE EQUITY (13) $83,234.1
 $160,637.7
 1.9x 26% 18% $49,444.5
 $121,978.1
 2.5x 28%
(1)The data presented herein that provides “inception to date” performance results of our segments relates to the period following the formation of the first fund within each segment. For our Corporate Private Equity segment our first fund was formed in 1990.
(2)
Represents the original cost of investments since inception of the fund.
(3)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)An investment is considered realized when the investment fund has completely exited, and ceases to own an interest in, the investment. An investment is considered partially realized when the total amount of proceeds received in respect of such investment, including dividends, interest or other distributions and/or return of capital, represents at least 85% of invested capital and such investment is not yet fully realized. Because part of our value creation strategy involves pursuing best exit alternatives, we believe information regarding Realized/Partially Realized MOIC and Gross IRR, when considered together with the other investment performance metrics presented, provides investors with meaningful information regarding our

investment performance by removing the impact of investments where significant realization activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR have limitations as measures of investment performance, and should not be considered in isolation. Such limitations include the fact that these measures do not include the performance of earlier stage and other investments that do not satisfy the criteria provided above. The exclusion of such investments will have a positive impact on Realized/Partially Realized MOIC and Gross IRR in instances when the MOIC and Gross IRR in respect of such investments are less than the aggregate MOIC and Gross IRR. Our measurements of Realized/Partially Realized MOIC and Gross IRR may not be comparable to those of other companies that use similarly titled measures. We do not present Realized/Partially Realized performance information separately for funds that are still in the investment period because of the relatively insignificant level of realizations for funds of this type. However, to the extent such funds have had realizations, they are included in the Realized/Partially Realized performance information presented for Total Corporate Private Equity.
(6)
Fully Invested funds are past the expiration date of the investment period as defined in the respective limited partnership agreement. In instances where a successor fund has had its first capital call, the predecessor fund is categorized as fully invested.
(7)
Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value before management fees, expenses and carried interest.
(8)
Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value after management fees, expenses and carried interest.
(9)Aggregate includes the following funds: CP I, CMG, CVP I, CVP II, CUSGF III, CEVP, CETP I, CAVP I, CAVP II, CAGP III, CSABF, Mexico, CBPF, and MENA.
(10)Includes coinvestments and certain other stand-alone investments arranged by us.
(11)Aggregate, which is considered not meaningful, includes the following funds and their respective commencement dates: CSSAF (April 2012) , CPF I (June 2012), CCI (December 2012), CETP III (May 2014), and CAGP V (May 2016).
(12)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.
(13)
For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.
 Remaining
Fair
Value(1)		 Unrealized
MOIC(2)		 Total
MOIC(3)		 %
Invested(4)		 In Accrued
Carry/
(Clawback) (5)		 LTM
Realized
Carry (6)		 Catch-up
Rate		 Fee
Initiation
Date(7)		 Quarters
Since
Fee
Initiation		 Original
Investment
Period End
Date
 As of September 30, 2017        
Corporate Private Equity(Reported in Local Currency, in Millions)        
CP VI$12,251.8
 1.2x 1.3x 84% X 
 100% Jun-13 17 May-18
CP V$5,432.2
 0.7x 2.1x 96% X X 100% Jun-07 41 May-13
CAP IV$3,451.9
 1.5x 1.5x 76% X 
 100% Jul-13 16 Nov-18
CEP IV€2,387.8
 1.1x 1.2x 72% 
 
 100% Sep-14 12 Aug-19
CGP$1,934.0
 1.0x 1.1x 51% 
 
 100% Jan-15 10 Dec-20
CEP III€1,381.4
 1.3x 2.2x 97% X X 100% Jul-07 40 Dec-12
CAP III$1,289.5
 1.9x 1.8x 100% X X 100% Jun-08 37 May-14
CEOF I$975.4
 1.0x 1.3x 103% X 
 80% Sep-11 24 May-17
CEOF II$818.0
 1.2x 1.2x 37% X 
 80% Nov-15 7 Mar-21
CJP III¥88,293.3
 1.5x 1.6x 50% X 
 100% Sep-13 16 Feb-20
CGFSP II$752.1
 1.4x 1.5x 77% X 
 100% Jun-13 17 Dec-17
CAGP IV$610.7
 1.2x 1.5x 92% 
 
 100% Aug-08 36 Jun-14
CGFSP I$578.4
 2.0x 2.2x 98% X X 100% Oct-08 35 Sep-14
CJP II¥63,598.8
 1.2x 1.5x 86% 
 
 80% Oct-06 43 Jul-12
CAP II$280.9
 1.4x 1.9x 90% 
 
 80% Mar-06 46 Feb-12
CP IV$234.2
 2.4x 2.4x 97% X X 80% Apr-05 49 Dec-10
CETP II€109.5
 0.7x 2.8x 84% X X 100% Jan-08 38 Jul-13
All Other Funds (8)$2,625.3
 1.1x 2.2x   NM NM        
Coinvestment and Other (9)$5,357.8
 1.3x 2.3x   NM NM        
Total Corporate Private Equity (10)$42,518.2
 1.2x 1.9x   
 
        
(1)
Net asset value of our carry funds. Reflects significant funds with remaining fair value of greater than $100 million.
(2)
Unrealized multiple of invested capital (“MOIC”) represents remaining fair market value, before management fees, expenses and carried interest, divided by remaining investment cost.

(3)
Total MOIC represents total fair value (realized proceeds combined with remaining fair value), before management fees, expenses and carried interest, divided by cumulative invested capital. For certain funds, represents the original cost of investments net of investment-level recallable proceeds, which is adjusted to reflect recyclability of invested capital for the purpose of calculating the fund MOIC.
(4)
Represents cumulative equity invested as of the reporting period divided by total commitments. Amount can be greater than 100% due to the re-investment of recallable distributions to fund investors.
(5)
Fund has a net accrued performance fee balance/(giveback obligation) as of the current quarter end, driven by a significant portion of the fund’s asset base.
(6)
Fund has generated realized net performance fees/(realized giveback) in the last twelve months.
(7)Represents the date of the first capital contribution for management fees.
(8)Aggregate includes the following funds: CMG, CP I, CP II, CP III, CEP I, CEP II, CAP I, CBPF, CJP I, CEVP, CETP I, CETP III, CCI, CAVP I, CAVP II, CAGP III, CAGP V, Mexico, MENA, CSABF, CSSAF, CPF, CVP I, CVP II, and CUSGF III. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.
(9)
Includes co-investments, prefund investments and certain other stand-alone investments arranged by us. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.
(10)
For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.


Real Assets

For purposes of presenting results of operations for this segment, our earnings from our investments in NGP are presented in the respective operating captions, and the net income or loss from Urbplan allocable to the Partnership (after consideration of amounts allocable to non-controlling interests) is presented within investment income. We disposed of our interests in Urbplan in a transaction in which a third party acquired operational control and all of the economic interests in Urbplan in the three months ended September 30, 2017. With this transaction, we deconsolidated Urbplan from our financial results (see Note 15 to our unaudited condensed consolidated financial statements) and we expect that this will reduce investment losses in the segment going forward. The following table presents our results of operations for our Real Assets segment: 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Revenues       
Fund level fee revenues       
Fund management fees$71.4
 $60.3
 $185.6
 $192.0
Portfolio advisory fees, net0.4
 —
 0.6
 0.1
Transaction fees, net0.8
 —
 0.8
 —
Total fund level fee revenues72.6
 60.3
 187.0
 192.1
Performance fees       
Realized20.4
 19.2
 73.6
 79.8
Unrealized60.8
 2.0
 200.1
 165.8
Total performance fees81.2
 21.2
 273.7
 245.6
Investment income (loss)       
Realized(64.6) (14.1) (72.4) (21.4)
Unrealized12.4
 4.5
 24.4
 6.5
Total investment loss(52.2) (9.6) (48.0) (14.9)
Interest1.0
 0.4
 2.0
 1.3
Other income0.6
 0.4
 1.3
 1.0
Total revenues103.2
 72.7
 416.0
 425.1
Segment Expenses       
Compensation and benefits       
Direct base compensation24.5
 17.2
 61.6
 55.4
Indirect base compensation14.8
 8.9
 45.6
 28.2
Equity-based compensation8.7
 7.1
 26.8
 20.3
Performance fee related       
Realized9.2
 8.7
 33.4
 34.8
Unrealized21.6
 (15.7) 60.1
 55.2
Total compensation and benefits78.8
 26.2
 227.5
 193.9
General, administrative, and other indirect expenses10.5
 37.2
 52.6
 70.7
Depreciation and amortization expense1.9
 1.4
 5.3
 4.4
Interest expense4.2
 4.1
 12.7
 12.1
Total expenses95.4
 68.9
 298.1
 281.1
Economic Net Income$7.8
 $3.8
 $117.9
 $144.0
(-) Net Performance Fees50.4
 28.2
 180.2
 155.6
(-) Investment Loss(52.2) (9.6) (48.0) (14.9)
(+) Equity-based Compensation8.7
 7.1
 26.8
 20.3
(+) Reserve for Litigation and Contingencies(5.8) 21.6
 (5.8) 21.6
(=) Fee Related Earnings$12.5
 $13.9
 $6.7
 $45.2
(+) Realized Net Performance Fees11.2
 10.5
 40.2
 45.0
(+) Realized Investment Loss(64.6) (14.1) (72.4) (21.4)
(=) Distributable Earnings$(40.9) $10.3
 $(25.5) $68.8

Three Months Ended September 30, 2017 Compared to the Three Months Ended September 30, 2016 and Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016

Distributable Earnings

Distributable earnings decreased $51.2 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $94.3 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in distributable earnings for the three and nine months ended September 30, 2017:

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Distributable earnings, September 30, 2016$10.3
$68.8
Increases (decreases):  
   Increase (decrease) in realized net performance fees0.7
(4.8)
   Increase in realized investment loss(50.5)(51.0)
   Decrease in fee related earnings(1.4)(38.5)
   Total decrease(51.2)(94.3)
Distributable earnings, September 30, 2017$(40.9)$(25.5)

Realized Net Performance Fees. Realized net performance fees increased $0.7 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $4.8 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The realized net performance fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 were from one of our U.S real estate funds. The decrease in realized net performance fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to lower realization on certain Europe real estate funds, partially offset by higher realization on a certain U.S. real estate fund. Realized net performance fees were primarily generated by the following funds for the three and nine months ended September 30, 2017 and 2016:
Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
20172016 20172016
CRP VICRP VI CRP VICRP VI


 CPOCPCEREP III - External Coinvest
 
 CEREP III - External CoinvestCRP III

Realized Investment Loss. Realized investment loss for the three months ended September 30, 2017 was $64.6 million as compared to realized investment loss of $14.1 million for the three months ended September 30, 2016, and realized investment loss for the nine months ended September 30, 2017 was $72.4 million as compared to realized investment loss of $21.4 million for the nine months ended September 30, 2016. The decrease in realized investment loss for both the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 primarily related to the recognition of a $65.0 million realized investment loss in the three months ended September 30, 2017 associated with the disposal of our interests in Urbplan in a transaction in which a third party acquired operational control and all of the economic interests in Urbplan. With this transaction,we deconsolidated Urbplan from our financial results (see Note 15 to the unaudited condensed consolidated financial statements). Additionally, we recognized realized investment losses related to Urbplan of $21.4 million and $32.1 million for the three and nine months ended September 30, 2016.




Fee Related Earnings

Fee related earnings decreased $1.4 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $38.5 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in fee related earnings for the three and nine months ended September 30, 2017:

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Fee related earnings, September 30, 2016$13.9
$45.2
Increases (decreases):  
   Increase (decrease) in fee revenues12.3
(5.1)
   Increase in direct and indirect base compensation(13.2)(23.6)
   Increase in general, administrative and other indirect expenses(0.7)(9.3)
   Increase in interest expense(0.1)(0.6)
   All other changes0.3
0.1
   Total decrease(1.4)(38.5)
Fee related earnings, September 30, 2017$12.5
$6.7

Fee Revenues. Fee revenues increased $12.3 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $5.1 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, due to the following:

 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2017 v. 2016
 (Dollars in Millions)
Higher (lower) fund management fees$11.1
$(6.4)
Higher transaction fees0.8
0.8
Higher portfolio advisory fees0.4
0.5
Total increase (decrease) in fee revenues$12.3
$(5.1)

The increase in fund management fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 primarily reflects increased management fees from our eighth real estate fund (“CRP VIII”), which had its first closing earlier in 2017, and NGP XII as well as a $1.3 million increase in catch-up management fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. While there were $1.3 million of catch-up management fees for the three months ended September 30, 2017, there were no catch-up management fees for the three months ended September 30, 2016.

The decrease in fund management fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 primarily reflects a $8.6 million decrease in catch-up management fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. While there were no significant catch-up management fees for the nine months ended September 30, 2017, catch-up management fees of $8.6 million for the nine months ended September 30, 2016 were primarily due to subsequent closes in 2016 for our second power fund (“CPP II”) and our first international energy fund (“CIEP I”). This decrease was partially offset by increased management fees from CRP VIII, which had its first closing earlier in 2017.

The weighted average management fee rate for funds in the investment period decreased to 1.30% at September 30, 2017 from 1.44% at September 30, 2016 due to new funds, primarily CRP VIII, being raised with lower management fee rates than our other funds in the original investment period. The total weighted average management fee was 1.21% at September 30, 2017, a decline from 1.24% at September 30, 2016.

Direct and indirect base compensation expense. Direct and indirect base compensation expense increased $13.2 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, primarily due to an increase in projected year-end bonuses, and higher compensation associated with fundraising activities of $3.9 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.

Direct and indirect base compensation expense increased $23.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to higher compensation associated with fundraising activities of $15.2 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, and an increase in projected year-end bonuses.
General, administrative and other indirect expenses. General, administrative and other indirect expenses increased $0.7 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. The primary drivers of the increase were increased real estate costs, foreign currency losses recorded in the three months ended September 30, 2017, as well as increased external costs associated with fundraising activities of $1.0 million. This increase was partially offset by lower professional fees.
General, administrative and other indirect expenses increased $9.3 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The primary drivers of the increase were foreign currency losses recorded in the nine months ended September 30, 2017 as compared to foreign currency gains recorded in the nine months ended September 30, 2016, increased real estate costs, and increased external costs associated with fundraising activities of $3.2 million. This increase was partially offset by lower professional fees.
Economic Net Income
Economic net income increased $4.0 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $26.1 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in economic net income for the three and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Economic net income, September 30, 2016$3.8
$144.0
Increases (decreases):  
   Increase in net performance fees22.2
24.6
   Increase in investment loss(42.6)(33.1)
   Increase in equity-based compensation(1.6)(6.5)
   Decrease in fee related earnings(1.4)(38.5)
   Decrease in reserve for litigation and contingencies27.4
27.4
   Total increase (decrease)4.0
(26.1)
Economic net income, September 30, 2017$7.8
$117.9
Performance Fees. Performance fees (realized and unrealized) increased $60.0 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 primarily due to higher appreciation from certain of our real estate and natural resources funds, partially offset by a decrease in performance fees generated by the NGP funds. Performance fees (realized and unrealized) increased $28.1 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 primarily due to higher appreciation from our NGP funds, partially offset by a decrease in performance fees generated by the real estate funds.

Performance fees are from the following types of funds:
 Performance Fees
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Real Estate funds$33.2
 $(16.0) $164.5
 $199.9
Natural Resources funds45.2
 37.5
 106.1
 45.9
Legacy Energy funds2.8
 (0.3) 3.1
 (0.2)
Total$81.2
 $21.2
 $273.7
 $245.6

The $81.2 million of performance fees for the three months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CIEP of $36.7 million,
•CRP VII of $14.4 million,
•CRP V of $8.0 million,
•NGP XI of $6.8 million, and
•CRP III of $6.7 million.

The $21.2 million of performance fees for the three months ended September 30, 2016 was driven primarily by performance fees recognized from the following funds:

•NGP XI of $30.5 million,
•CRP VII of $18.3 million,
•CRP VI of $6.9 million,
•NGP X of $6.2 million,
•CRP V of $(51.7) million, and
•CRP III of $(10.3) million.

The $273.7 million of performance fees for the nine months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CRP VII of $75.8 million,
•NGP XI of $62.0 million,
•CRP V of $51.6 million,
•CIEP of $36.9 million, and
•CRP III of $24.9 million.

The $245.6 million of performance fees for the nine months ended September 30, 2016 was driven primarily by performance fees recognized from the following funds:

•CRP VII of $74.2 million,
•CRP V of $45.4 million,
•NGP XI of $37.4 million,
•CRP VI of $34.9 million,
•CRP III of $17.6 million, and
•NGP X of $9.0 million.
Performance fees of $81.2 million and $21.2 million are inclusive of performance fees reversed of approximately $1.0 million and $62.3 million for the three months ended September 30, 2017 and 2016, respectively. Performance fees of $273.7 million and $245.6 million are inclusive of performance fees reversed of approximately $9.4 million and $4.6 million for the nine months ended September 30, 2017 and 2016, respectively.

The appreciation (depreciation) in remaining value of assets for this segment by type of fund are as follows:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
Real Estate funds3%—% 15%16%
Natural Resources funds5%12% 20%24%
Legacy Energy funds(3)%1% 5%1%
Total2%4% 14%13%
Net performance fees for the three months ended September 30, 2017 were $50.4 million, representing an increase of $22.2 million from $28.2 million in net performance fees for the three months ended September 30, 2016. The increase was primarily due to increased performance fees from the real estate and natural resources funds, partially offset by decreased performance fees from the NGP funds, for which there is no performance fee related compensation expense. Net performance fees for the nine months ended September 30, 2017 were $180.2 million, representing an increase of $24.6 million from $155.6 million in net performance fees for the nine months ended September 30, 2016. The increase was primarily due to increased performance fees from the NGP funds, for which there is no performance fee related compensation expense, partially offset by decreased performance fees from the real estate funds.
Performance fees earned from the Legacy Energy funds and from NGP funds are primarily allocated to Carlyle and are not otherwise shared or allocated with our investment professionals since the investment teams are employed by Riverstone and NGP, respectively, and not Carlyle. Accordingly, performance fee compensation as a percentage of performance fees is generally not a comparable measurement for Real Assets from period to period.
Total Investment Loss. Total investment loss (realized and unrealized) for the three months ended September 30, 2017 was $52.2 million as compared to total investment loss of $9.6 million for the three months ended September 30, 2016, and total investment loss (realized and unrealized) for the nine months ended September 30, 2017 was $48.0 million as compared to total investment loss of $14.9 million for the nine months ended September 30, 2016. The increase in total investment loss for both the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to the recognition of a $65.0 million realized investment loss in the three months ended September 30, 2017 associated with the disposal of our interests in Urbplan in a transaction in which a third party acquired operational control and all of the economic interests in Urbplan. With this transaction, we deconsolidated Urbplan from our financial results (see Note 15 to the unaudited condensed consolidated financial statements). These increases in total investment loss were partially offset by higher appreciation on investments in our U.S. and Europe real estate funds for both the three and nine months ended September 30, 2017 as compared to the same periods of 2016.
Equity-based Compensation. Equity-based compensation was $8.7 million for the three months ended September 30, 2017, an increase of $1.6 million from $7.1 million for the three months ended September 30, 2016 and was $26.8 million for the nine months ended September 30, 2017, an increase of $6.5 million from $20.3 million for the nine months ended September 30, 2016. The increase for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 is primarily attributable to equity-based compensation expense in connection with the March 2017 agreement with NGP (see Note 5 to the unaudited condensed consolidated financial statements).

Reserve for Litigation and Contingencies. Real Assets' (“RA”) share of the reserve for litigation and contingencies decreased $27.4 million for both the three and nine months ended September 30, 2017. The decrease was primarily related to RA's share of the $25 million reserve reversal related to the CCC litigation recognized in 2017, while RA recognized its share of the $100 million reserve in 2016 related to a commodities legal matter.


Fee-earning AUM as of and for the Three and Nine Months Ended September 30, 2017 and 2016
Fee-earning AUM is presented below for each period together with the components of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each period.
 As of September 30,
 2017 2016
Real Assets(Dollars in millions)
Components of Fee-earning AUM (1)   
Fee-earning AUM based on capital commitments$17,714
 $12,918
Fee-earning AUM based on invested capital (2)11,154
 15,150
Fee-earning AUM based on net asset value622
 127
Fee-earning AUM based on lower of cost or fair value and other (3)330
 710
Total Fee-earning AUM (4)$29,820
 $28,905
Weighted Average Management Fee Rates (5)   
All Funds1.21% 1.24%
Funds in Investment Period1.30% 1.44%

(1)For additional information concerning the components of Fee-earning AUM, See “—Fee-earning Assets under Management.”
(2)Includes amounts committed to or reserved for investments for certain real estate funds.
(3)Includes certain funds that are calculated on gross asset value.
(4)Energy II, Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”), are managed with Riverstone Holdings LLC and its affiliates. Affiliates of both Carlyle and Riverstone act as investment advisers to each of the Legacy Energy Funds. Carlyle has a minority representation on the management committees of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on the management committees of Energy II and Energy III, but the investment period for these funds has expired and the remaining investments in such funds are being disposed of in the ordinary course of business. As of September 30, 2017, the Legacy Energy Funds had, in the aggregate, approximately $5.2 billion in AUM and $3.8 billion in Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down. NGP VII, NGP VIII, NGP IX, or in the case of NGP M&R, NGP ETP I, and NGP ETP II, certain affiliated entities (collectively, the “NGP management fee funds”) and NGP X, NGP GAP, NGP XI, and NGP XII (referred to herein as “carry funds”), are managed by NGP Energy Capital Management. As of September 30, 2017, the NGP management fee funds and carry funds had, in the aggregate, approximately $10.7 billion in AUM and $9.6 billion in Fee-earning AUM.
(5)Represents the aggregate effective management fee rate of each fund in the segment, weighted by each fund’s Fee-earning AUM, as of the end of each period presented. Calculation reflects Carlyle’s 10% interest in management fees earned by the Legacy Energy funds and 55% interest in management fees earned by the NGP management fee funds and carry funds. Accounts based on gross asset base generally have an effective management fee rate of 0.5% or less.


The table below provides the period to period rollforward of Fee-earning AUM.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Real Assets(Dollars in millions) (Dollars in millions)
Fee-earning AUM Rollforward       
Balance, Beginning of Period$26,236
 $30,422
 $27,487
 $30,905
Inflows, including Fee-paying Commitments (1)5,033
 186
 5,504
 1,161
Outflows, including Distributions (2)(1,315) (1,589) (3,153) (3,089)
Market Appreciation/(Depreciation) (3)20
 6
 45
 14
Foreign Exchange and other (4)(154) (120) (63) (86)
Balance, End of Period$29,820
 $28,905
 $29,820
 $28,905
(1)Inflows represent limited partner capital raised and capital invested by funds outside the investment period.
(2)Outflows represent distributions from funds outside the investment period and changes in fee basis for our carry funds where the investment period has expired.
(3)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value.
(4)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.
Fee-earning AUM was $29.8 billion at September 30, 2017, an increase of $3.6 billion, or approximately 14%, compared to $26.2 billion at June 30, 2017. The increase was driven by inflows of $5.0 billion, primarily from new fee-paying commitments raised in CRP VIII. The increase was partially offset by outflows of $1.3 billion, primarily related to distribution activity in the Legacy Energy funds and other funds outside the original investment period. Changes in fair value have no material impact on Fee-earning AUM for Real Assets as substantially all of the funds generate management fees based on either commitments or invested capital at cost, neither of which is impacted by fair value movements. Investment and distribution activity by funds still in the original investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital.
Fee-earning AUM was $29.8 billion at September 30, 2017, an increase of $2.3 billion, or approximately 8%, compared to $27.5 billion at December 31, 2016. This increase was driven by inflows of $5.5 billion, primarily related to new limited partner capital invested in CPI and new fee-paying commitments to CRP VIII. The increase was partially offset by outflows of $3.2 billion primarily related to distribution activity in the Legacy Energy funds, NGP management fee funds, and US real estate funds, as well as other funds outside the original investment period.
Fee-earning AUM was $29.8 billion at September 30, 2017, an increase of $0.9 billion, or 3%, compared to $28.9 billion at September 30, 2016. This increase was driven by inflows of $5.9 billion, primarily due to new fee-paying commitments to CRP VIII and new limited partner capital invested in CPI. The increase was offset by outflows of $4.9 billion, including dispositions in various funds with fees based on invested capital, primarily in our NGP carry and management fee funds, Legacy Energy funds, and in our Asia, Europe, and US real estate funds.
Fee-earning AUM was $28.9 billion at September 30, 2016, a decrease of $1.5 billion, or approximately 5%, compared to $30.4 billion at June 30, 2016. This decrease was driven by outflows of $1.6 billion, primarily related to distribution activity in our funds outside the original investment period. The decrease was partially offset by inflows of $0.2 billion, primarily related to new limited partner commitments in CPI and purchases by funds outside the original investment period.
Fee-earning AUM was $28.9 billion at September 30, 2016, a decrease of $2.0 billion, or 6%, compared to $30.9 billion at December 31, 2015. The decrease is related to outflows of $3.1 billion primarily attributable to dispositions in various funds with fees based on invested capital. The decrease was partially offset by inflows of $1.2 billion, primarily related to new limited partner commitments in CPP II and CPI, and purchases by funds outside the original investment period.


Total AUM as of and for the Three and Nine Months Ended September 30, 2017
The table below provides the period to period rollforwards of Available Capital and Fair Value of Capital, and the resulting rollforward of Total AUM.
 Three Months Ended 
 September 30, 2017		 Nine Months Ended 
 September 30, 2017
 Available
Capital		 Fair Value
of Capital		 Total
AUM		 Available
Capital		 Fair Value
of Capital		 Total
AUM
 (Dollars in millions) (Dollars in millions)
Real Assets           
Balance, Beginning of Period$14,636
 $24,308
 $38,944
 $11,573
 $22,679
 $34,252
Commitments (1)1,987
 —
 1,987
 6,333
 —
 6,333
Capital Called, net (2)(1,034) 926
 (108) (2,548) 2,279
 (269)
Distributions (3)277
 (1,696) (1,419) 497
 (3,759) (3,262)
Market Appreciation/(Depreciation) (4)—
 334
 334
 —
 2,610
 2,610
Foreign Exchange and other (5)3
 27
 30
 14
 90
 104
Balance, End of Period$15,869
 $23,899
 $39,768
 $15,869
 $23,899
 $39,768
(1)Represents capital raised by our carry funds and the NGP management fee funds, net of expired available capital.
(2)Represents capital called by our carry funds and the NGP management fee funds, net of fund fees and expenses. Equity invested amounts may vary from capital called due to timing differences between acquisition and capital call dates.
(3)Represents distributions from our carry funds and the NGP management fee funds, net of amounts recycled. Distributions are based on when proceeds are actually distributed to investors, which may differ from when they are realized.
(4)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments.
(5)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.
Total AUM was $39.8 billion at September 30, 2017, an increase of $0.9 billion, or approximately 2%, compared to $38.9 billion at June 30, 2017. The increase was driven by new commitments of $2.0 billion resulting from new funds raised primarily in CRP VIII and NGP XII, as well as market appreciation of $0.3 billion. Carry fund market appreciation of 2% was driven by a 6% in our public portfolio and a 1% increase in our private portfolio. The carry funds driving appreciation for the period included $0.1 billion attributable to CIP, $0.1 billion attributable to NGP XI, and $0.1 billion attributable to CIEP . This increase was partially offset by distributions of $1.7 billion, of which $0.3 billion were recallable, primarily in our US real estate and Legacy Energy funds.
Total AUM was $39.8 billion at September 30, 2017, an increase of $5.5 billion, or approximately 16%, compared to $34.3 billion at December 31, 2016. The increase was driven by new commitments of $6.3 billion resulting from new funds raised primarily in CRP VIII, NGP XII, and CPI, as well as market appreciation of $2.6 billion. Carry fund market appreciation of 14% was driven by a 15% increase in our private portfolio and a 12% increase in our public portfolio. The carry funds driving appreciation for the period included $0.8 billion attributable to NGP XI, $0.4 billion attributable to CRP VII, and $0.2 billion attributable to CIEP . This increase was partially offset by distributions of $3.8 billion, of which $0.5 billion were recallable, primarily in our US and Europe real estate funds, Legacy Energy funds, and NGP carry and management fee funds.
Fund Performance Metrics
Fund performance information for our carryinvestment funds that generally have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of SeptemberJune 30, 2017,2021, which we refer to as our “significant funds,”funds” is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group L.P.Inc. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group L.P.Inc. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following tables reflect the performance of our significant funds in our Real AssetsGlobal Private Equity business. Please see “— Our Family of Funds” for a legend of the fund acronyms listed below.



98

TOTAL INVESTMENTSREALIZED/PARTIALLY REALIZED INVESTMENTS(5)
 As of June 30, 2021As of June 30, 2021
Fund (Fee Initiation Date/Stepdown Date)(19)Committed
Capital		Cumulative
Invested
Capital(1)		Percent InvestedRealized
Value(2)		Remaining Fair Value(3)MOIC
(4)		Gross IRR
(6)(12)		Net IRR
(7)(12)		Net Accrued Carry/(Clawback)
(8)		Total
Fair
Value(9)		MOIC
(4)		Gross
IRR
(6)(12)
Corporate Private Equity
CP VII (May 2018 / May 2024)$18,510 $13,466 73%$544 $15,937 1.2x20%9%$175 $905 2.6x56%
CP VI (May 2013 / May 2018)$13,000 $13,078 101%$10,490 $20,879 2.4x23%18%$1,558 $14,133 2.6x28%
CP V (Jun 2007 / May 2013)$13,720 $13,238 96%$26,225 $2,229 2.1x18%14%$211 $27,121 2.5x24%
CEP V (Oct 2018 / Sep 2024)€6,436 €2,987 46%€12 €3,353 1.1x NM NM$—  n/an/a n/a
CEP IV (Sep 2014 / Oct 2018)€3,752 €3,758 100%€2,816 €3,539 1.7x17%11%$261 €2,673 2.2x27%
CEP III (Jul 2007 / Dec 2012)€5,295 €5,177 98%€10,997 €698 2.3x19%14%$61 €11,563 2.5x20%
CEP II (Sep 2003 / Sep 2007)€1,805 €2,048 113%€4,113 €26 2.0x36%20%$4 €4,123 2.2x43%
CAP V (Jun 2018 / Jun 2024)$6,554 $3,412 52%$724 $4,307 1.5x57%31%$120 $923 1.9x164%
CAP IV (Jul 2013 / Jun 2018)$3,880 $4,044 104%$4,168 $3,924 2.0x20%14%$328 $4,677 3.3x35%
CAP III (Jun 2008 / Jul 2013)$2,552 $2,543 100%$4,417 $419 1.9x17%12%$43 $4,417 2.1x19%
CJP IV (Oct 2020 / Oct 2026)¥258,000 ¥24,472 9%¥— ¥26,919 1.1x NM NM$—  n/a n/a n/a
CJP III (Sep 2013 / Aug 2020)¥119,505 ¥91,192 76%¥96,501 ¥80,862 1.9x20%12%$49 ¥117,140 3.1x33%
CJP II (Oct 2006 / Jul 2013)¥165,600 ¥141,867 86%¥205,301 ¥4,680 1.5x7%4%$— ¥203,831 1.5x7%
CGFSP III (Dec 2017 / Dec 2023)$1,005 $870 87%$13 $1,227 1.4x34%21%$29  n/an/a n/a
CGFSP II (Jun 2013 / Dec 2017)$1,000 $943 94%$1,602 $525 2.3x26%19%$39 $1,600 2.3x28%
CEOF II (Nov 2015 / Mar 2020)$2,400 $2,103 88%$500 $2,964 1.6x18%12%$114 $728 2.3x43%
CEOF I (Sep 2011 / Nov 2015)$1,119 $1,174 105%$1,505 $281 1.5x12%8%$33 $1,359 1.8x23%
CETP IV (Jul 2019 / Jul 2025)€1,350 €762 56%€— €993 1.3x50%25%$19  n/a n/a n/a
CETP III (Jul 2014 / Jul 2019)€657 €602 92%€1,063 €741 3.0x46%33%$60 €1,064 4.5x53%
CGP II (Dec 2020 / Jan 2025)$1,840 $175 10%$— $184 1.1x NM NM$—  n/an/a n/a
CGP (Jan 2015 / Mar 2021)$3,588 $2,933 82%$389 $3,358 1.3x6%5%$39 $444 3.0x70%
CAGP IV (Aug 2008 / Dec 2014)$1,041 $954 92%$1,123 $120 1.3x7%2%$— $1,122 1.3x7%
All Other Active Funds & Vehicles(10)$17,052  n/a$16,891 $11,224 1.6x13%10%$66 $17,148 2.1x17%
Fully Realized Funds & Vehicles(11)$23,441  n/a$59,581 $— 2.5x28%21%$3 $59,581 2.5x28%
TOTAL CORPORATE PRIVATE EQUITY(13)$119,912  n/a$153,400 $79,668 1.9x26%18%$3,213 $160,058 2.4x27%
Real Estate
CRP VIII (Aug 2017 / May 2022)$5,505 $3,524 64%$1,341 $3,602 1.4x40%20%$129 $1,351 1.8x51%
CRP VII (Jun 2014 / Dec 2017)$4,162 $3,789 91%$4,085 $2,070 1.6x19%12%$85 $4,072 1.8x25%
CRP VI (Mar 2011 / Jun 2014)$2,340 $2,167 93%$3,636 $284 1.8x27%18%$4 $3,535 2.0x31%
CRP V (Nov 2006 / Mar 2011)$3,000 $3,318 111%$5,276 $697 1.8x12%9%$120 $5,908 1.8x13%
CRP IV (Jan 2005 / Nov 2006)$950 $1,216 128%$1,954 $15 1.6x7%4%$— $1,952 1.7x7%
CPI (May 2016 / n/a)$5,743 $3,580 62%$792 $3,891 1.3x16%14%$31 $469 1.7x NM
CEREP III (Jun 2007 / May 2012)€2,230 €2,053 92%€2,447 €47 1.2x4%1%$— €2,447 1.2x4%
All Other Active Funds & Vehicles(14)$3,361  n/a$3,038 $2,169 1.5x10%8%$8 $2,763 1.7x11%
Fully Realized Funds & Vehicles(15)$5,228  n/a$6,913 $2 1.3x13%6%$— $6,915 1.3x13%
TOTAL REAL ESTATE(13)$28,615  n/a$29,934 $12,786 1.5x12%8%$376 $29,864 1.6x13%
Natural Resources
CIEP II (Apr 2019 / Apr 2025)$2,286 $841 37%$203 $806 1.2x NM NM$5  n/an/a n/a
CIEP I (Sep 2013 / Jun 2019)$2,500 $2,339 94%$960 $2,476 1.5x15%8%$33 $1,467 2.2x23%
CPP II (Sep 2014 / Apr 2021)$1,527 $1,269 83%$324 $1,381 1.3x11%6%$—  n/an/a n/a
CGIOF (Dec 2018 / Sep 2023)$2,201 $914 42%$90 $743 0.9x NM NM$— $37 2.1x NM
NGP XII (Jul 2017 / Jul 2022)$4,278 $2,311 54%$99 $2,746 1.2x10%5%$—  n/an/a n/a
NGP XI (Oct 2014 / Jul 2017)$5,325 $4,961 93%$1,951 $4,039 1.2x6%4%$— $1,930 1.2x22%
NGP X (Jan 2012 / Dec 2014)$3,586 $3,346 93%$3,062 $476 1.1x2% Neg$— $2,938 1.2x8%
All Other Active Funds & Vehicles(17)$3,146  n/a$1,357 $2,810 1.3x12%10%$8 $1,494 2.2x26%
Fully Realized Funds & Vehicles(18)$1,190  n/a$1,435 $1 1.2x3%1%$— $1,436 1.2x3%
TOTAL NATURAL RESOURCES$20,318  n/a$9,482 $15,476 1.2x7%3%$46 $39,166 1.6x11%
Legacy Energy Funds(16)$16,741  n/a$23,759 $413 1.4x12%6%$(4)$23,605 1.5x14%


99

     TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED
INVESTMENTS(5)
     As of September 30, 2017 As of September 30, 2017
 Fund
Inception
Date(1)		 Committed
Capital		 Cumulative
Invested
Capital(2)		 Total Fair
Value(3)		 MOIC(4) 
Gross
IRR
(7)(12)
 
Net
IRR
(8)(12)
 Cumulative
Invested
Capital(2)		 Total Fair
Value(3)		 MOIC(4) 
Gross
IRR
(7)(12)
Real Assets    (Reported in Local Currency, in Millions) (Reported in Local Currency, in Millions)
Fully Invested/Committed Funds(6)                  
CRP III11/2000 $564.1
 $522.5
 $1,838.2
 3.5x 44% 30% $522.5
 $1,838.2
 3.5x 44%
CRP IV12/2004 $950.0
 $1,198.5
 $1,935.7
 1.6x 8% 5% $984.8
 $1,659.3
 1.7x 10%
CRP V11/2006 $3,000.0
 $3,293.5
 $5,520.4
 1.7x 12% 9% $2,988.2
 $5,163.6
 1.7x 14%
CRP VI9/2010 $2,340.0
 $2,108.0
 $3,914.5
 1.9x 29% 20% $1,529.5
 $3,128.7
 2.0x 34%
CRP VII3/2014 $4,161.6
 $2,840.4
 $3,733.8
 1.3x 22%
 12%
 $117.0
 $216.1
 1.8x 38%
CEREP I3/2002 €426.6
 €517.0
 €698.6
 1.4x 14%
 7%
 €517.0
 €698.6
 1.4x 14%
CEREP II4/2005 €762.7
 €833.8
 €128.1
 0.2x Neg
 Neg
 €798.2
 €133.9
 0.2x Neg
CEREP III5/2007 €2,229.5
 €2,054.2
 €2,438.8
 1.2x 4% 1% €1,622.7
 €2,093.2
 1.3x 6%
CIP9/2006 $1,143.7
 $1,069.8
 $1,426.7
 1.3x 6% 3% $857.0
 $1,041.3
 1.2x 4%
NGP X1/2012 $3,586.0
 $3,262.7
 $4,043.1
 1.2x 8% 5% $1,333.9
 $2,431.1
 1.8x 26%
NGP XI6/2014 $5,325.0
 $3,308.4
 $4,556.4
 1.4x 36% 31% $228.8
 $471.2
 2.1x 159%
Energy II7/2002 $1,100.0
 $1,334.8
 $3,131.2
 2.3x 81% 55% $1,334.8
 $3,131.2
 2.3x 94%
Energy III10/2005 $3,800.0
 $3,569.7
 $5,426.4
 1.5x 9% 6% $2,873.9
 $5,046.0
 1.8x 17%
Energy IV12/2007 $5,979.1
 $6,232.7
 $8,105.0
 1.3x 8% 5% $4,064.6
 $5,920.4
 1.5x 19%
Renew II3/2008 $3,417.5
 $2,809.4
 $4,143.3
 1.5x 9% 5% $1,555.3
 $2,411.1
 1.6x 13%
All Other Funds(9)Various   $2,939.5
 $3,281.9
 1.1x 4% Neg
 $2,662.1
 $3,019.7
 1.1x 5%
Coinvestments and Other(10)Various   $5,739.6
 $9,440.4
 1.6x 16% 13% $4,112.9
 $7,439.6
 1.8x 20%
Total Fully Invested Funds $44,247.7
 $64,350.6
 1.5x 12% 8% $28,632.5
 $46,370.0
 1.6x 17%
Funds in the Investment Period(6) 
 
 
 
 
 
 
 
 
CRP VIII5/2017 $4,310.8
 $74.4
 $73.3
 1.0x NM
 NM
 
 
 
 
CIEP I9/2013 $2,500.0
 $501.3
 $919.8
 1.8x NM
 NM
 

 

 
 

CPP II6/2014 $1,526.9
 $643.9
 $683.2
 1.1x NM
 NM
 
 
 
 
CPI5/2016 $1,144.0
 $816.2
 $906.8
 1.1x NM
 NM
 

 

 
 

All Other Funds(11)Various   $583.0
 $590.4
 1.0x NM
 NM
 

 

 
 

Total Funds in the Investment Period $2,618.7
 $3,173.4
 1.2x 18% 5% $—
 $—
 n/a NM
TOTAL Real Assets(13) $46,866.5
 $67,524.0
 1.4x 12% 8% $28,632.5
 $46,370.0
 1.6x 17%

(1)Represents the original cost of investments since inception of the fund.
(1)The data presented herein that provides “inception to date” performance results of our segments relates to the period following the formation of the first fund within each segment. For our Corporate Private Equity segment our first fund was formed in 1990. For our Real Assets segment our first fund was formed in 1997. For our Global Market Strategies segment our first carry fund was formed in 2004.
(2)Represents the original cost of investments since inception of the fund.
(3)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)
(2)Represents all realized proceeds since inception of the fund.
(3)Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining escrow values for realized investments.
(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)An investment is considered realized when the investment fund has completely exited, and ceases to own an interest in, the investment. An investment is considered partially realized when the total amount of proceeds received in respect of such investment, including dividends, interest or other distributions and/or return of capital, represents at least 85% of invested capital and such investment is not yet fully realized. Because part of our value creation strategy involves pursuing best exit alternatives, we believe information regarding Realized/Partially Realized MOIC and Gross IRR, when considered together with the other investment performance metrics presented, provides investors with meaningful information regarding our investment performance by removing the impact of investments where significant realization activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR have limitations as measures of investment performance, and should not be considered in isolation. Such limitations include the fact that these measures do not include the performance of earlier stage and other investments that do not satisfy the criteria provided above. The exclusion of such investments will have a positive impact on Realized/Partially Realized MOIC and Gross IRR in instances when the MOIC and Gross IRR in respect of such investments are less than the aggregate MOIC and Gross IRR. Our measurements of Realized/Partially Realized MOIC and Gross IRR, when considered together with the other investment performance metrics presented, provides investors with meaningful information regarding our investment performance by removing the impact of investments where significant realization activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR have limitations as measures of investment performance, and should not be considered in isolation. Such limitations include the fact that these measures do not include the performance of earlier stage and other investments that do not satisfy the criteria provided above. The exclusion of such investments will have a positive impact on Realized/Partially Realized MOIC and Gross IRR in instances when the MOIC and Gross IRR in respect of such investments are less than the aggregate MOIC and Gross IRR. Our measurements of Realized/Partially Realized MOIC and

Gross IRR may not be comparable to those of other companies that use similarly titled measures. We do
(6)Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in each fund.
(7)Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash flows for the fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a blended Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in each fund.
(8)Represents the net accrued performance fee balance/(giveback obligation) as of the current quarter end.
(9)Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(10)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and stand-alone investments arranged by us: CVP II, MENA, CCI, CSSAF I, CSABF, CPF, CAP Growth I, and CBPF II.
(11)Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-alone investments arranged by us: CP I, CP II, CP III, CP IV, CEP I, CAP I, CAP II, CBPF I, CJP I, CMG, CVP I, CUSGF III, CGFSP I, CEVP I, CETP I, CETP II, CAVP I, CAVP II, CAGP III and Mexico.
(12)For funds marked “NM,” IRR may be positive or negative, but is not present Realized/Partially Realized performance information separately for funds that are still in the investment periodconsidered meaningful because of the relatively insignificant levellimited time since initial investment and early stage of realizations forcapital deployment. For funds marked “Neg,” IRR is considered meaningful but is negative as of this type. However, to the extent such funds have had realizations, they are included in the Realized/Partially Realized performance information presented for Total Real Assets.
(6)
Fully Invested funds are past the expiration date of the investment period as defined in the respective limited partnership agreement. In instances where a successor fund has had its first capital call, the predecessor fund is categorized as fully invested.
(7)
Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value before management fees, expenses and carried interest.
(8)
Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value after management fees, expenses and carried interest.
(9)
Aggregate includes the following funds: CRP I, CRP II, CAREP I, CAREP II, CRCP I, CPOCP, Energy I and Renew I.
(10)Includes coinvestments and certain other stand-alone investments arranged by us.
(11)
Aggregate includes NGP GAP, CCR, and NGP XII. Return is not considered meaningful, as the investment period commenced in December 2013 for NGP GAP, October 2016 for CCR, and July 2017 for NGP XII.
(12)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.
(13)
For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.

reporting period end.
 Remaining
Fair
Value(1)		 Unrealized
MOIC(2)		 Total
MOIC(3)		 %
Invested(4)		 In Accrued
Carry/
(Clawback) (5)		 LTM
Realized
Carry (6)		 Catch-up Rate Fee
Initiation
Date(7)		 Quarters
Since Fee
Initiation		 Original
Investment
Period
End Date
 As of September 30, 2017        
Real Assets(Reported in Local Currency, in Millions)        
NGP XI$4,089.3
 1.3x 1.4x 62% X 
 80% Feb-15 10 Oct-19
CRP VII$3,470.0
 1.3x 1.3x 68% X 
 80% Jun-14 13 Mar-19
Energy IV$2,754.7
 1.2x 1.3x 104% (X) 
 80% Feb-08 38 Dec-13
NGP X$1,727.5
 0.9x 1.2x 91% 
 
 80% Jan-12 22 May-17
Renew II$1,696.9
 1.4x 1.5x 82% (X) 
 80% Mar-08 38 May-14
CRP V$1,191.8
 2.1x 1.7x 110% X 
 50% Nov-06 43 Nov-11
CIEP I$870.9
 1.8x 1.8x 20% X 
 80% Oct-13 15 Sep-19
CRP VI$794.6
 1.4x 1.9x 90% X X 50% Mar-11 26 Mar-16
CRP IV$742.0
 2.7x 1.6x 126% 
 
 50% Jan-05 50 Dec-09
CPI$621.7
 1.1x 1.1x n/a
 X 
 50% May-16 5 Apr-21
CRP III$462.6
 137.8x 3.5x 93% X X 50% Mar-01 66 May-05
CPP II$431.8
 1.0x 1.1x 42% 
 
 80% Sep-14 12 Apr-21
CEREP III€310.0
 0.7x 1.2x 92% 
 
 67% Jun-07 41 May-11
CIP$337.1
 1.9x 1.3x 94% 
 
 80% Oct-06 43 Sep-12
Energy III$303.6
 0.4x 1.5x 94% 
 (X) 80% Nov-05 47 Oct-11
All Other Funds (8)$298.1
 0.9x 1.2x   NM NM        
Coinvestment and Other (9)$2,160.2
 1.5x 1.6x   NM NM        
Total Real Assets (10)$22,318.6
 1.3x 1.4x   
 
        

(1)
Net asset value of our carry funds. Reflects significant funds with remaining fair value of greater than $100 million.
(2)
Unrealized multiple of invested capital (“MOIC”) represents remaining fair market value, before management fees, expenses and carried interest, divided by remaining investment cost.
(3)
Total MOIC represents total fair value (realized proceeds combined with remaining fair value), before management fees, expenses and carried interest, divided by cumulative invested capital. For certain funds, represents the original cost of investments net of investment-level recallable proceeds, which is adjusted to reflect recyclability of invested capital for the purpose of calculating the fund MOIC.
(4)
Represents cumulative equity invested as of the reporting period divided by total commitments. Amount can be greater than 100% due to the re-investment of recallable distributions to fund investors.
(5)
Fund has a net accrued performance fee balance/(giveback obligation) as of the current quarter end, driven by a significant portion of the fund’s asset base.
(6)
Fund has generated realized net performance fees/(realized giveback) in the last twelve months.
(7)Represents the date of the first capital contribution for management fees.

(8)Aggregate includes the following funds: CRP I, CRP II, CRCP I, CRP VIII, CEREP I, CEREP II, CAREP I, CAREP II, CCR, CPOCP I, NGP GAP, NGP XII, Energy I, Energy II and Renew I. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.
(9)Includes co-investments, prefund investments and certain other stand-alone investments arranged by us. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.
(10)For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.


Global Market Strategies
Global Market Strategies is now focused on building our global credit business. We conducted a review in 2016 of the segment in order to realign and reorganize certain of the segment’s operations. We have exited our hedge fund business (ESG in 2016 and Claren Road in January 2017) and, as a result of settlements reached during 2017 with investors in two commodities investment vehicles managed by Vermillion, we have completed the exit of the commodities investment advisory business and other hedge fund investment advisory businesses that we had acquired from 2010 to 2014. In the near to mid term, this segment will incur additional expenses to build the credit business and raise additional capital.
(13)For purposes of presenting our results of operationsaggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.
(14)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and stand-alone investments arranged by us: CCR and CER.


100

(15)Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-alone investments arranged by us: CRP I, CRP II, CRP III, CRCP I, CAREP I, CAREP II, CEREP I, and CEREP II.
(16)Aggregate includes the following Legacy Energy funds and related co-investments: Energy I, Energy II, Energy III, Energy IV, Renew I, and Renew II.
(17)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and stand-alone investments arranged by us: NGP GAP, CPOCP, CRSEF, and NGP RP.
(18)Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-alone investments arranged by us: CIP.
(19)The fund stepdown date represents the contractual stepdown date under the respective fund agreements for this segment, we include only our economic interests infunds on which the results of operations of Claren Road (through January 2017) and ESG (through June 2016). fee basis stepdown has not yet occurred.
Global Credit
The following table presents our results of operations for our Global Market StrategiesCredit segment:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$86.1 $78.3 $166.1 $151.3 
Portfolio advisory and transaction fees, net and other9.4 15.2 18.2 17.8 
Total fund level fee revenues95.5 93.5 184.3 169.1 
Realized performance revenues— 5.5 0.1 26.5 
Realized principal investment income9.8 5.3 15.7 10.4 
Interest income1.2 2.6 3.2 5.7 
Total revenues106.5 106.9 203.3 211.7 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits55.6 54.5 109.3 103.6 
Realized performance revenues related compensation— 2.5 — 12.2 
Total compensation and benefits55.6 57.0 109.3 115.8 
General, administrative, and other indirect expenses13.0 13.1 24.8 18.7 
Depreciation and amortization expense2.0 1.8 3.9 3.4 
Interest expense6.3 6.9 12.6 13.9 
Total expenses76.9 78.8 150.6 151.8 
(=) Distributable Earnings$29.6 $28.1 $52.7 $59.9 
(-) Realized Net Performance Revenues— 3.0 0.1 14.3 
(-) Realized Principal Investment Income9.8 5.3 15.7 10.4 
(+) Net Interest5.1 4.3 9.4 8.2 
(=) Fee Related Earnings$24.9 $24.1 $46.3 $43.4 


101
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Revenues       
Fund level fee revenues       
Fund management fees$47.6
 $44.1
 $140.8
 $147.4
Portfolio advisory fees, net0.1
 0.1
 0.5
 0.7
Transaction fees, net—
 —
 —
 —
Total fund level fee revenues47.7
 44.2
 141.3
 148.1
Performance fees       
Realized15.0
 14.3
 37.8
 21.5
Unrealized2.6
 3.1
 15.5
 4.6
Total performance fees17.6
 17.4
 53.3
 26.1
Investment income       
Realized4.7
 1.1
 8.6
 2.7
Unrealized—
 7.1
 4.3
 14.9
Total investment income4.7
 8.2
 12.9
 17.6
Interest2.0
 1.1
 4.6
 3.7
Other income1.1
 1.2
 5.6
 3.5
Total revenues73.1
 72.1
 217.7
 199.0
Segment Expenses       
Compensation and benefits       
Direct base compensation23.0
 20.9
 55.3
 66.3
Indirect base compensation6.7
 7.5
 20.9
 22.7
Equity-based compensation5.1
 4.4
 16.9
 13.8
Performance fee related       
Realized7.3
 6.6
 18.2
 8.1
Unrealized0.8
 1.3
 6.9
 2.2
Total compensation and benefits42.9
 40.7
 118.2
 113.1
General, administrative, and other indirect expenses(63.6) 37.7
 (18.6) 77.1
Depreciation and amortization expense1.3
 1.5
 3.8
 4.6
Interest expense4.2
 3.0
 10.0
 8.5
Total expenses(15.2) 82.9
 113.4
 203.3
Economic Net Income (Loss)$88.3
 $(10.8) $104.3
 $(4.3)
(-) Net Performance Fees9.5
 9.5
 28.2
 15.8
(-) Investment Income4.7
 8.2
 12.9
 17.6
(+) Equity-based Compensation5.1
 4.4
 16.9
 13.8
(+) Reserve for Litigation and Contingencies(4.1) 19.0
 (4.1) 19.0
(=) Fee Related Earnings$75.1
 $(5.1) $76.0
 $(4.9)
(+) Realized Net Performance Fees7.7
 7.7
 19.6
 13.4
(+) Realized Investment Income4.7
 1.1
 8.6
 2.7
(=) Distributable Earnings$87.5
 $3.7
 $104.2
 $11.2


Three Months Ended SeptemberJune 30, 20172021 Compared to the Three Months Ended SeptemberJune 30, 20162020 and NineSix Months Ended SeptemberJune 30, 20172021 Compared to the NineSix Months Ended SeptemberJune 30, 2016

2020
Distributable Earnings

Distributable earningsEarnings increased $83.8$1.5 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and decreased $7.2 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 and increased $93.0 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.2020. The following table provides the components of the changes in distributable earningsDistributable Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Distributable Earnings, June 30, 2020$28.1 $59.9 
Increases (decreases):
Increase in fee related earnings0.8 2.9 
Decrease in realized net performance revenues(3.0)(14.2)
Increase in realized principal investment income4.5 5.3 
Increase in net interest(0.8)(1.2)
Total increase (decrease)1.5 (7.2)
Distributable Earnings, June 30, 2021$29.6 $52.7 
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Distributable earnings, September 30, 2016$3.7
$11.2
Increases (decreases):  
   Increase in realized net performance fees—
6.2
   Increase in realized investment income3.6
5.9
   Increase in fee related earnings80.2
80.9
   Total increase83.8
93.0
Distributable earnings, September 30, 2017$87.5
$104.2

Realized Net Performance Fees.Revenues. Realized net performance fees were flat for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $6.2 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Substantially all of the realized net performance fees were generated by the business development companies, the structured credit funds and our third distressed and corporate opportunities fund (“CSP III”) for both the three and nine months ended September 30, 2017. Net realized performance fees generated by the structured credit funds primarily contributed to realized net performance fees for the three and nine months ended September 30, 2016.

Realized Investment Income. Realized investment income for the three months ended September 30, 2017 was $4.7 million compared to realized investment income of $1.1revenues decreased $3.0 million for the three months ended SeptemberJune 30, 2016. The increase2021 as compared to three months ended June 30, 2020 and decreased $14.2 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to realized net performance revenues generated by our Asia structured credit fund in realizedthe three months ended June 30, 2020 and Carlyle Aviation Partners in the six months ended June 30, 2020.
Realized Principal Investment Income. Realized principal investment income increased $4.5 million for the three months ended SeptemberJune 30, 2017 was2021 as compared to three months ended June 30, 2020 and increased $5.3 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to higher realizations on investments in our structured credit funds.

Realized investment income for the nine months ended September 30, 2017 was $8.6 million compared to realized investment income of $2.7 million for the nine months ended September 30, 2016. The increase in realized investment income for the nine months ended September 30, 2017 was primarily due to higher realizationsgains on investments in our structured credit funds, distressed credit carry funds and BDCs. The increase for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was partially offset by realized losses on investments in Carlyle Global Capital Markets and in our energy credit carry funds.





102

Fee Related Earnings

Fee related earningsRelated Earnings increased $80.2$0.8 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $2.9 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 and increased $80.9 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.2020. The following table provides the components of the changes in fee related earningsFee Related Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Fee Related Earnings, June 30, 2020$24.1 $43.4 
Increases (decreases):
Increase in fee revenues2.0 15.2 
Increase in cash-based compensation and benefits(1.1)(5.7)
CCC litigation cost recovery in 2020(1)
— (6.3)
Decrease in general, administrative and other indirect expenses0.1 0.2 
All other changes(0.2)(0.5)
Total increase0.8 2.9 
Fee Related Earnings, June 30, 2021$24.9 $46.3 
(1) General, administrative and other indirect expenses during the six months ended June 30, 2020 included the allocated portion of the cost recovery associated with the CCC litigation costs. See Note 7 to our unaudited condensed consolidated financial statements.
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Fee related earnings, September 30, 2016$(5.1)$(4.9)
Increases (decreases):  
   Increase (decrease) in fee revenues3.5
(6.8)
   (Increase) decrease in direct and indirect base compensation(1.3)12.8
   Decrease in general, administrative and other indirect expenses78.2
72.6
   All other changes(0.2)2.3
   Total increase80.2
80.9
Fee related earnings, September 30, 2017$75.1
$76.0


Fee Revenues. Fee revenues increased $3.5$2.0 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $15.2 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, due to the following:
Three Months Ended
June 30,		Six Months Ended
June 30,
2021 v. 2020
(Dollars in millions)
Higher fund management fees$7.8 $14.8 
(Lower) higher portfolio advisory and transaction fees, net and other(5.8)0.4 
Total increase in fee revenues$2.0 $15.2 
The increase in fund management fees for the three and six months ended June 30, 2021 as compared to the three and six months ended SeptemberJune 30, 20162020 was primarily due to a $4.9driven by the deferral of $3.6 million increase in fundand $7.6 million of subordinated management fees primarily as a resultin certain of increased commitmentsour CLOs during the three and subsequent closings for our fourth distressed fund (“CSP IV”) insix months ended June 30, 2020, respectively, which were subsequently recognized during the firstthird quarter of 2017. This increase was2020, as well as increased management fees from our structured credit funds, opportunistic credit carry funds, interval fund and Carlyle FRL. These increases were partially offset by a decrease of $2.5 million in fundlower management fees related to the separation from the hedge fundsour distressed credit and lower basis on certainour energy credit carry funds.

Fee revenues decreased $6.8 millionThe decrease in portfolio advisory and transaction fees, net and other for the ninethree and six months ended SeptemberJune 30, 20172021 as compared to the ninethree and six months ended SeptemberJune 30, 20162020 was primarily due to a decrease of $28.7 million in fund managementfrom transaction fees related toassociated with Carlyle FRL during the separation from the hedge fundsthree and lower basis on certain carry funds. These decreases weresix months ended June 30, 2020, partially offset by a $23.7 million increase in fund managementhigher underwriting and placement fees primarily as a result of increased commitmentsassociated with Carlyle Global Capital Markets during the three and subsequent closings for CSP IV in the first quarter of 2017.

six months ended June 30, 2021.
The weighted average management fee rate on our carry funds was 1.36%decreased from 1.27% at SeptemberJune 30, 2016 and September2020 to 1.24% at June 30, 2017.2021. The rate stayed the samedecrease was primarily due to the stepdown of CSP IV from commitments to invested capital, partially offset by new fee-paying commitments raised in CSP IVSASOF V with managementa higher effective fee rates close to the segment average.rate.
DirectCash-based compensation and indirect basebenefits expense. Cash-based compensation expense. Direct and indirect base compensationbenefits expense increased $1.3$1.1 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $5.7 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016, primarily due to an increase in projected year-end bonuses, partially offset by lower headcount from the separation of the hedge fund businesses, which resulted in $3.4 million of lower compensation.
Direct and indirect base compensation expense decreased $12.8 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to lower headcount from the separation of the hedge fund businesses, which resulted in $21.6 million of lower compensation. This decrease was partially offset by an increase in projected year-end bonuses.
We expect that as we add new talent to our growing global credit business, our direct and indirect base compensation expense will increase. However, as this strategy raises incremental capital, we expect the positive impact from additional fee revenue to more than offset our increased compensation levels.
General, administrative and other indirect expenses. General, administrative and other indirect expenses decreased $78.2 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and decreased $72.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to net incremental insurance recoveries of $74 million recognized during the three months ended September 30, 2017 for litigation and contingencies attributable to the Vermillion matter (see Note 9 to the unaudited condensed consolidated financial statements).

Economic Net Income (Loss)
Economic net income (loss) increased $99.1 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $108.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in economic net income (loss) for the three and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Economic net loss, September 30, 2016$(10.8)$(4.3)
Increases (decreases):  
   Increase in net performance fees—
12.4
   Decrease in investment income(3.5)(4.7)
   Increase in equity-based compensation(0.7)(3.1)
   Increase in fee related earnings80.2
80.9
   Decrease in reserve for litigation and contingencies23.1
23.1
   Total increase99.1
108.6
Economic net income, September 30, 2017$88.3
$104.3
Performance Fees. Performance fees (realized and unrealized) for the three and nine months ended September 30, 2017 and 2016 are from the following types of funds:
 Performance Fees
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Carry funds$6.0
 $3.1
 $21.8
 $4.2
Hedge funds—
 —
 —
 0.9
Structured credit funds and business development companies11.6
 14.3
 31.5
 21.0
Performance fees$17.6
 $17.4
 $53.3
 $26.1

The $17.6 million of performance fees for the three months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CLOs and business development companies of $11.6 million, and
•CSP IV of $5.9 million.

The $17.4 million of performance fees for the three months ended September 30, 2016 was driven by performance fees recognized from the following funds:

•CLOs and business development companies of $14.3 million,
•CSP III of $4.7 million,
•CSP II of $1.6 million, and
•Carlyle Mezzanine Partners II, L.P. (“CMP II”) of $(3.2) million.

The $53.3 million of performance fees for the nine months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•CLOs and business development companies of $31.5 million,
•CSP III of $12.2 million,
•CSP IV of $11.2 million,

•CSP II of $4.1 million, and
•CMP II of $(5.8) million.

The $26.1 million of performance fees for the nine months ended September 30, 2016 was driven by performance fees recognized from the following funds:

•CLOs and business development companies of $21.0 million,
•CSP III of $3.2 million,
•CSP II of $2.8 million, and
•CMP II of $(1.8) million.

Performance fees of $17.6 million and $17.4 million are inclusive of performance fees reversed of approximately $0.5 million and $3.4 million for the three months ended September 30, 2017 and 2016, respectively. Performance fees of $53.3 million and $26.1 million are inclusive of performance fees reversed of approximately $5.8 million and $1.8 million for the nine months ended September 30, 2017 and 2016, respectively.

The appreciation (depreciation) in remaining value of assets for this segment's carry funds are as follows:

 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
Carry funds—%—% 9%(13)%

Net performance fees as a percentage of total performance fees are as follows:

 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
 (Dollars in millions)
Net Performance Fees$9.5$9.5 $28.2$15.8
      
Percentage of Total Performance Fees54%55% 53%61%

The increase in net performance fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was2020, primarily due to increased performance fees generated from our carry funds and business development companies in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.headcount.


Total Investment Income. Total investment income (realized and unrealized) for the three months ended September 30, 2017 was $4.7 million compared to total investment income of $8.2 million for the three months ended September 30, 2016. The decrease in investment income relates primarily to depreciation on certain U.S. and Euro-denominated collateralized loan obligations for the three months ended September 30, 2017 as compared to appreciation on our U.S.-denominated collateralized loan obligations for the three months ended September 30, 2016.


Total investment income (realized and unrealized) for the nine months ended September 30, 2017 was $12.9 million compared to total investment income of $17.6 million for the nine months ended September 30, 2016. The decrease in investment income relates primarily to lower appreciation on certain U.S. and Euro-denominated collateralized loan obligations for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. This decrease is partially offset by appreciation on our carry funds for the nine months ended September 30, 2017 as compared to depreciation on our carry funds for the nine months ended September 30, 2016.

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Equity-based Compensation. Equity-based compensation was $5.1 million for the three months ended September 30, 2017, an increase of $0.7 million from $4.4 million for the three months ended September 30, 2016.


Equity-based compensation was $16.9 million for the nine months ended September 30, 2017, an increase of $3.1 million from $13.8 million for the nine months ended September 30, 2016.

Reserve for Litigation and Contingencies. Global Market Strategies' (“GMS”) share of the reserve for litigation and contingencies decreased $23.1 million for both the three and nine months ended September 30, 2017. The decrease was primarily related to GMS' share of the $25 million reserve reversal related to the CCC litigation recognized in 2017, while GMS recognized its share of the $100 million reserve in 2016 related to a commodities legal matter.

Fee-earning AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 20172021 and 20162020
Fee-earning AUM is presented below for each period together with the components of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each period.
 As of June 30,
 20212020
Global Credit(Dollars in millions)
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments$2,758 $5,018 
Fee-earning AUM based on invested capital8,025 5,286 
Fee-earning AUM based on collateral balances, at par28,111 25,811 
Fee-earning AUM based on net asset value1,645 1,407 
Fee-earning AUM based on other (2)5,346 4,308 
Total Fee-earning AUM$45,885 $41,830 
Weighted Average Management Fee Rates (3)
All Funds, excluding CLOs1.24 %1.27 %
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
 As of September 30,
 2017 2016
Global Market Strategies(Dollars in millions)
Components of Fee-earning AUM (1)   
Fee-earning AUM based on capital commitments$5,026
 $3,389
Fee-earning AUM based on invested capital1,202
 1,343
Fee-earning AUM based on collateral balances, at par17,647
 17,677
Fee-earning AUM based on net asset value41
 4,761
Fee-earning AUM based on other (2)2,096
 1,797
Total Fee-earning AUM$26,012
 $28,967
Weighted Average Management Fee Rates (3)   
All Funds, excluding CLOs1.36% 1.43%
(2)Includes funds with fees based on gross asset value.
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
(2)Includes funds with fees based on gross asset value.
(3)    Represents the aggregate effective management fee rate for carry funds and hedge funds, weighted by each fund’s Fee-earning AUM, as of the end of each period presented. Management fees for CLOs are based on the total par amount of the assets (collateral) and principal balance of the notes in the fund and are not calculated as a percentage of equity and are therefore not included.

The table below provides the period to period rollforward of Fee-earning AUM.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Global Market Strategies(Dollars in millions) (Dollars in millions)
Fee-earning AUM Rollforward       
Balance, Beginning of Period$25,214
 $28,732
 $24,126
 $30,972
Inflows, including Fee-paying Commitments (1)29
 810
 1,138
 1,268
Outflows, including Distributions (2)(15) (45) (161) (594)
Subscriptions, net of Redemptions (3)—
 (373) —
 (2,266)
Changes in CLO collateral balances (4)332
 (267) (17) (400)
Market Appreciation/(Depreciation) (5)2
 (169) 3
 (571)
Foreign Exchange and other (6)450
 279
 923
 558
Balance, End of Period$26,012
 $28,967
 $26,012
 $28,967

 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
Global Credit(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$43,286 $38,065 $42,133 $37,862 
Inflows (1)3,244 3,457 5,938 4,517 
Outflows (including realizations) (2)(955)(412)(2,276)(1,310)
Market Activity & Other (3)247 61 369 270 
Foreign Exchange (4)63 659 (279)491 
Balance, End of Period$45,885 $41,830 $45,885 $41,830 
(1)Inflows represent limited partner capital raised and capital invested by our carry funds outside the investment period.
(2)Outflows represent limited partner distributions from our carry funds, changes in fee basis for our carry funds where the investment period has expired, and reductions for funds that are no longer calling fees.
(3)Represents subscriptions and redemptions in our hedge funds.

(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, 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.
(4)Represents the change in the aggregate Fee-earning collateral balances and principal balances at par of our CLOs/structured products, as of the quarterly cut-off dates.
(5)Market Appreciation/ (Depreciation) represents changes in the net asset value of our hedge funds.
(6)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds and other changes in Total AUM. 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.
(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-ended funds, and runoff of CLO collateral balances. Realizations for funds earning management fees based on commitments during the period do not affect Fee-earning AUM.


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(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in funds or vehicles based on the lower of cost or fair value or net asset value, as well as activity of funds with fees based on gross asset value.
(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.
Fee-earning AUM was $26.0 billion at September 30, 2017, an increase of $0.8 billion, or approximately 3%, compared to $25.2$45.9 billion at June 30, 2017. The difference was driven by foreign exchange gains of $0.5 billion primarily due to the translation of Fee-earning AUM in our European CLOs from EUR to USD and increases in our CLO collateral balances of $0.3 billion. Distributions from carry funds still in the investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital.
Fee-earning AUM was $26.0 billion at September 30, 2017,2021, an increase of $1.9$2.6 billion or approximately 8%, compared to $24.1$43.3 billion at DecemberMarch 31, 2016. The2021. This increase was driven by net inflows of $1.1$3.2 billion primarily due tofrom investment activity in CCOF II and the closings of one new limited partner commitments raised in CSP IVU.S. CLO and foreign exchange gains of $0.9 billion primarily due to the translation of Fee-earning AUM in our European CLOs from EUR to USD.one new Europe CLO. This increase was partially offset by $0.2outflows of $1.0 billion due to runoff of distributions primarilyCLO collateral balances. Investment and distribution activity has no impact for funds still in our distressed debt carry funds.the original investment period where Fee-earning AUM is based on commitments.
Fee-earning AUM was $26.0$45.9 billion at SeptemberJune 30, 2017, a decrease2021, an increase of $3.0$3.8 billion, or approximately 9%, compared to $42.1 billion at December 31, 2020. The increase was driven by inflows of $5.9 billion primarily related to the raising of additional U.S. and Europe CLOs and investment activity in our credit opportunities funds. This was partially offset by outflows of $2.3 billion primarily due to runoff of our CLO collateral balances and dispositions in other funds with fees tied to invested capital including CCOF I and CEMOF I.
Fee-earning AUM was $45.9 billion at June 30, 2021, an increase of $4.1 billion, or approximately 10%, compared to $29.0$41.8 billion at SeptemberJune 30, 2016. This decrease2020. The increase was driven by divestment activityinflows of $4.4$7.8 billion primarily related to the transferraising of ESGadditional U.S. and Claren Road hedge fund assets back to their founders, as well as net redemptionsEurope CLOs and investment activity in our hedge funds of $0.5 billion, primarily in our hedge funds at Claren Road and ESG.credit opportunities funds. This decrease was partially offset by net inflowsoutflows of $1.8 billion, primarily related to new limited partner commitments raised in CSP IV.
Fee-earning AUM was $29.0 billion at September 30, 2016, an increase of $0.3 billion, or approximately 1%, compared to $28.7 billion at June 30, 2016. This increase was driven by net inflows of $0.8 billion primarily in CSP IV and foreign exchange gains of $0.3 billion in our Euro-denominated CLOs. This increase was partially offset by net redemptions in our hedge funds of $0.4 billion and $0.3 billion of decreases in our CLO collateral balances.
Fee-earning AUM was $29.0 billion at September 30, 2016, a decrease of $2.0 billion, or approximately 6%, compared to $31.0 billion at December 31, 2015. This decrease was driven by net redemptions in our hedge funds of $2.3 billion, primarily in our hedge funds at Claren Road and ESG, net outflows including distributions of $0.6$4.9 billion primarily due to fees no longer being charged on onerunoff of our commodities hedge fundsCLO collateral balances, the stepdown of CSP IV from commitments to invested capital, and distributions bydispositions in other funds with a management fee basis offees tied to invested equity, and $0.6 billion of market depreciation in our hedge funds. This decrease was partially offset by net inflows of $1.3 billion, primarily due to fundraising in CEMOF II and CSP IV.

capital.
Total AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 2017.2021.
The table below provides the period to period rollforwards of Available Capital and Fair Value of Capital, and the resulting rollforward of Total AUM.
 Three Months Ended
June 30, 2021		Six Months Ended
June 30, 2021
 (Dollars in millions)
Global Credit
Total AUM Rollforward
Balance, Beginning of Period$58,837 $55,881 
Inflows (1)2,450 5,648 
Outflows (including realizations) (2)(1,110)(2,085)
Market Activity & Other (3)835 1,927 
Foreign Exchange (4)69 (290)
Balance, End of Period$61,081 $61,081 
(1)    Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
 Three Months Ended 
 September 30, 2017		 Nine Months Ended 
 September 30, 2017
 Available
Capital		 Fair Value
of Capital		 Total
AUM		 Available
Capital		 Fair Value
of Capital		 Total
AUM
 (Dollars in millions) (Dollars in millions)
Global Market Strategies           
Balance, Beginning of Period$7,701
 $23,191
 $30,892
 $6,774
 $22,625
 $29,399
Commitments (1)363
 —
 363
 1,674
 —
 1,674
Capital Called, net (2)(645) 623
 (22) (1,098) 1,196
 98
Distributions (3)13
 (226) (213) 76
 (476) (400)
Subscriptions, net of Redemptions (4)—
 —
 —
 —
 (7) (7)
Changes in CLO collateral balances (5)—
 377
 377
 —
 131
 131
Market Appreciation/(Depreciation) (6)—
 (2) (2) —
 138
 138
Foreign Exchange and other (7)—
 480
 480
 6
 836
 842
Balance, End of Period (8)$7,432
 $24,443
 $31,875
 $7,432
 $24,443
 $31,875
(2)    Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, and separately managed accounts, gross redemptions in our open-end funds, runoff of CLO collateral balances, and the expiration of available capital.
(3)    Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, change in gross asset value for our business development companies and other changes in AUM.
(1)Represents capital raised by our carry funds, net of expired available capital.
(2)Represents capital called by our carry funds and business development companies, net of fund fees and expenses. Equity invested amounts may vary from capital called due to timing differences between acquisition and capital call dates.
(3)Represents distributions from our carry funds and business development companies, net of amounts recycled. Distributions are based on when proceeds are actually distributed to investors, which may differ from when they are realized.
(4)Represents the net result of subscriptions to and redemptions from our hedge funds.
(5)Represents the change in the aggregate collateral balance and principal cash and principal notes at par of the CLOs/structured products.
(6)Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments and changes in the net asset value of our hedge funds.
(7)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds and other changes in AUM. 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.
(8)Ending balance is comprised of approximately $19.4 billion from our structured credit funds, $10.4 billion (including $7.4 billion of Available Capital) in our carry funds, and $2.1 billion from our business development company.
(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.

Total AUM was $31.9 billion at September 30, 2017, an increase of $1.0 billion, or approximately 3%, compared to $30.9$61.1 billion at June 30, 2017.2021, an increase of $2.3 billion, or approximately 4%, compared to $58.8 billion at March 31, 2021. The increase was driven by foreign exchange$2.5 billion of inflows primarily related to the closing of one new U.S. CLO and one new Europe CLO, as well as fundraising in infrastructure credit, aviation, and credit opportunities, and $0.8


105

billion of market appreciation and other gainsactivity primarily driven by carry fund appreciation. This increase was partially offset by $1.1 billion of $0.5 billionoutflows primarily due to an increase in the gross asset valuerunoff of our publicly traded BDCCLO and gains on the translation of AUM in our European CLOs from EUR to USD, as well as $0.4 billion of new commitments raised primarily in CSC and CCOF. Also driving the increase were $0.4 billion of gains in our CLOother collateral balances.
Total AUM was $31.9$61.1 billion at SeptemberJune 30, 2017,2021, an increase of $2.5$5.2 billion, or approximately 9%, compared to $29.4$55.9 billion at December 31, 2016.2020. The increase was driven by $1.7$5.6 billion of new commitments raisedinflows primarily in CSC, CCOF,related to the raising of additional U.S. and CSP IV,Europe CLOs, as well as foreign exchangefundraising in infrastructure credit, aviation, and credit opportunities, and $1.9 billion of market appreciation and other gains of $0.8 billionactivity primarily due to the translation of AUM in our European CLOs from EUR to USD.driven by carry fund appreciation. This increase was partially offset by distributions of $0.5$2.1 billion of which $0.1 billion were recallable,outflows primarily in our distressed debt carry funds.

due to runoff of CLO and other collateral balances.
Fund Performance Metrics
Fund performance information for certain of our Global Market StrategiesCredit funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group L.P.Inc. and is also not

necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group L.P.Inc. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table reflects the performance of carry funds in our Global Market StrategiesCredit business. These tables separately present carry funds that, as of SeptemberJune 30, 2017,2021, had at least $1.0 billion in capital commitments, cumulative equity invested or total equity value. Please see “— Our Family of Funds” for a legend of the fund acronyms listed below.

(Dollars in millions) TOTAL INVESTMENTS
  As of June 30, 2021
Fund (Fee Initiation Date/Stepdown Date)(11)Committed
Capital		Cumulative
Invested 
Capital (1)		Percent InvestedRealized
Value (2)		Remaining Fair Value (3)MOIC (4)Gross IRR
(5) (8)		Net IRR
(6) (8)		Net Accrued Carry/(Clawback) (7)
Global Credit Carry Funds
CSP IV (Apr 2016 / Dec 2020)$2,500 $2,381 95%$1,156 $1,755 1.2x20%8%$20 
CSP III (Dec 2011 / Aug 2015)$703 $703 100%$837 $174 1.4x20%10%$(2)
CSP II (Dec 2007 / Jun 2011)$1,352 $1,352 100%$2,431 $62 1.8x17%11%$7 
CCOF II (Nov 2020 / Oct 2025)$2,491 $833 33%$6 $855 1.0xNMNM$2 
CCOF I (Nov 2017 / Sep 2022)$2,373 $3,182 134%$1,252 $2,541 1.2x21%15%$48 
CEMOF II (Dec 2015 / Jun 2019)$2,819 $1,699 60%$786 $1,174 1.2x61$— 
CEMOF I (Dec 2010 / Dec 2015)$1,383 $1,606 116%$894 $185 0.7xNegNeg$— 
CSC (Mar 2017/ n/a)$838 $1,303 155%$834 $769 1.2x18%13%$28 
All Other Active Funds & Vehicles(9)$3,526 n/a$2,926 $1,178 1.2x8%3%$19 
Fully Realized Funds & Vehicles(10)$1,447 n/a$1,988 $— 1.4x12%7%$— 
TOTAL GLOBAL CREDIT$18,032 n/a$13,111 $8,693 1.2x11%5%$124 
(1)Represents the original cost of investments since the inception of the fund. For CSP II and CSP III, reflects amounts net of investment level recallable proceeds which is adjusted to reflect recyclability of invested capital for the purpose of calculating the fund MOIC.
(2)Represents all realized proceeds since inception of the fund.
(3)Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining escrow values for realized investments.
(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in each fund.


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     TOTAL INVESTMENTS
     As of September 30, 2017 As of September 30, 2017
 Fund
Inception
Date(1)		 Committed
Capital		 Cumulative
Invested  Capital(2)		 Total Fair
Value(3)		 MOIC(4) 
Gross IRR
(5)(10)
 Net IRR (6)(10)
Global Market Strategies (Carry Funds Only)(Reported in Local Currency, in Millions)    
Fully Invested/Committed Funds (7)         
CSP II6/2007 $1,352.3
 $1,352.3
 $2,468.6
 1.8x 17% 11%
CSP III8/2011 $702.8
 $702.8
 $1,155.6
 1.6x 33% 21%
CEMOF I12/2010 $1,382.5
 $1,465.0
 $1,254.5
 0.9x Neg
 Neg
All Other Funds(8)    $1,438.5
 $1,999.1
 1.4x 12% 7%
Coinvestments and Other(9)    $890.6
 $838.5
 0.9x NM
 NM
Total Fully Invested Funds$5,849.2
 $7,716.2
 1.3x 12% 6%
Funds in the Investment Period (7)         
CSP IV3/2016 $2,500.0
 $483.9
 $601.4
 1.2x NM
 NM
CEMOF II2/2015 $2,819.2
 $478.6
 $520.3
 1.1x NM
 NM
All Other Funds    $49.6
 $52.2
 1.1x NM
 NM
Total Funds in the Investment Period    $1,012.1
 $1,173.9
 1.2x NM
 NM
TOTAL Global Market Strategies    $6,861.3
 $8,890.1
 1.3x 12% 6%
(6)Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash flows for the fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a blended Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in each fund.
(1)The data presented herein that provides “inception to date” performance results of our segments relates to the period following the formation of the first fund within each segment. For our Global Market Strategies segment our first carry fund was formed in 2004.
(2)Represents the original cost of investments net of investment level recallable proceeds which is adjusted to reflect recyclability of invested capital for the purpose of calculating the fund MOIC.
(3)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(4)
Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value before management fees, expenses and carried interest.
(6)Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value after management fees, expenses and carried interest.
(7)Fully Invested funds are past the expiration date of the investment period as defined in the respective limited partnership agreement. In instances where a successor fund has had its first capital call, the predecessor fund is categorized as fully invested.
(8)
Aggregate includes the following funds: CMP I, CMP II, CSP I, and CASCOF.
(9)Includes coinvestments and certain other stand-alone investments arranged by us.
(10)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.

(7)Represents the net accrued performance fee balance/(giveback obligation) as of the current quarter end.

(8)For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful but is negative as of reporting period end.
(9)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and stand-alone investments arranged by us: SASOF II, SASOF III, SASOF IV, and SASOF V.
(10)Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-alone investments arranged by us: CSP I, CMP I, CMP II, and CASCOF.
(11)The fund stepdown date represents the contractual stepdown date under the respective fund agreements for funds on which the fee basis stepdown has not yet occurred.


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 Remaining 
Fair
Value(1)		 Unrealized
MOIC(2)		 Total
MOIC(3)		 %
Invested(4)		 In Accrued
Carry/
(Clawback) (5)		 LTM
Realized
Carry (6)		 Catch-up
Rate		 Fee
Initiation
Date(7)		 Quarters
Since 
Fee
Initiation		 Original
Investment
Period
End Date
 As of September 30, 2017        
Global Market Strategies(Reported in Local Currency, in Millions)        
CEMOF I$687.2
 0.6x 0.9x 106% 
 
 100% Dec-10 27 Dec-15
CEMOF II$495.5
 1.0x 1.1x 17% 
 
 100% Dec-15 7 Feb-20
CSP III$491.6
 1.4x 1.6x 100% X X 80% Dec-11 23 Aug-15
CSP IV$296.8
 1.2x 1.2x 19% X 
 100% Feb-17 2 Jun-20
All Other Funds (8)$275.2
 0.7x 1.6x   NM NM        
Coinvestment and Other (9)$717.6
 0.8x 0.9x   NM NM        
Total Global Market Strategies$2,963.8
 0.8x 1.3x   
 
        


(1)
Net asset value of our carry funds. Reflects significant funds with remaining fair value of greater than $100 million.
(2)
Unrealized multiple of invested capital (“MOIC”) represents remaining fair market value, before management fees, expenses and carried interest, divided by remaining investment cost.
(3)
Total MOIC represents total fair value (realized proceeds combined with remaining fair value), before management fees, expenses and carried interest, divided by cumulative invested capital. For certain funds, represents the original cost of investments net of investment-level recallable proceeds, which is adjusted to reflect recyclability of invested capital for the purpose of calculating the fund MOIC.
(4)
Represents cumulative equity invested as of the reporting period divided by total commitments. Amount can be greater than 100% due to the re-investment of recallable distributions to fund investors.
(5)
Fund has a net accrued performance fee balance/(giveback obligation) as of the current quarter end, driven by a significant portion of the fund’s asset base.
(6)
Fund has generated realized net performance fees/(realized giveback) in the last twelve months.
(7)Represents the date of the first capital contribution for management fees.
(8)Aggregate includes the following funds: CSP I, CSP II, CMP I, CMP II, CSC, and CASCOF. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.
(9)Includes co-investments, prefund investments and certain other stand-alone investments arranged by us. In Accrued Carry/(Clawback) and LTM Realized Carry not indicated because the indicator does not apply to each fund within the aggregate.



Investment Solutions
In February 2016, we decided to restructure our Investment Solutions segment to focus on private market secondaries, primary investments, co-investment and managed account activities and, given the challenging market environment, discontinue our fund of hedge funds and liquid alternative initiatives. As a result, the Partnership has substantially wound down the operations of DGAM.
The following table presents our results of operations for our Investment Solutions(1) segment:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
 (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees$60.3 $45.6 $112.3 $85.4 
Portfolio advisory and transaction fees, net and other— — 0.3 — 
Total fund level fee revenues60.3 45.6 112.6 85.4 
Realized performance revenues25.1 30.7 59.3 116.1 
Realized principal investment income4.0 0.5 4.4 1.1 
Interest income0.1 0.1 0.1 0.5 
Total revenues89.5 76.9 176.4 203.1 
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits28.2 25.0 57.6 50.0 
Realized performance revenues related compensation23.0 27.0 55.2 111.0 
Total compensation and benefits51.2 52.0 112.8 161.0 
General, administrative, and other indirect expenses6.2 7.4 14.6 12.9 
Depreciation and amortization expense1.1 1.3 2.2 2.3 
Interest expense2.8 2.4 5.0 4.7 
Total expenses61.3 63.1 134.6 180.9 
(=) Distributable Earnings$28.2 $13.8 $41.8 $22.2 
(-) Realized Net Performance Revenues2.1 3.7 4.1 5.1 
(-) Realized Principal Investment Income4.0 0.5 4.4 1.1 
(+) Net Interest2.7 2.3 4.9 4.2 
(=) Fee Related Earnings$24.8 $11.9 $38.2 $20.2 
(1) On April 1, 2021, we closed on the sale of our interest in Metropolitan Real Estate (“MRE”). Distributable Earnings and Fee Related Earnings attributable to MRE in periods prior to the sale were immaterial to the Investment Solutions segment. The $5.0 million gain on the sale and the $26.8 million right-of-use asset impairment, as a result of the sublease transaction (see Note 7), are not included in DE or FRE. See “Non-GAAP Financial Measures” for the reconciliation of Total DE and FRE to the U.S. GAAP financial statements.


108
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Segment Revenues       
Fund level fee revenues       
Fund management fees$41.1
 $33.1
 $113.1
 $103.7
Portfolio advisory fees, net—
 0.8
 —
 0.8
Transaction fees, net—
 —
 —
 —
Total fund level fee revenues41.1
 33.9
 113.1
 104.5
Performance fees       
Realized30.2
 36.3
 66.5
 42.7
Unrealized4.2
 (6.8) 32.1
 19.9
Total performance fees34.4
 29.5
 98.6
 62.6
Investment income (loss)       
Realized—
 —
 —
 —
Unrealized1.6
 0.2
 3.1
 (0.8)
Total investment income (loss)1.6
 0.2
 3.1
 (0.8)
Interest0.6
 0.1
 0.9
 0.3
Other income0.1
 0.2
 0.3
 0.4
Total revenues77.8
 63.9
 216.0
 167.0
Segment Expenses       
Compensation and benefits       
Direct base compensation19.7
 16.3
 51.9
 49.9
Indirect base compensation5.0
 2.7
 11.9
 8.6
Equity-based compensation2.1
 1.6
 6.2
 5.1
Performance fee related       
Realized29.9
 35.8
 65.4
 41.2
Unrealized(2.0) (9.7) 18.4
 13.3
Total compensation and benefits54.7
 46.7
 153.8
 118.1
General, administrative, and other indirect expenses6.1
 17.3
 21.6
 34.6
Depreciation and amortization expense0.9
 0.9
 2.6
 2.6
Interest expense1.6
 1.5
 4.6
 4.5
Total expenses63.3
 66.4
 182.6
 159.8
Economic Net Income (Loss)$14.5
 $(2.5) $33.4
 $7.2
(-) Net Performance Fees6.5
 3.4
 14.8
 8.1
(-) Investment Income (Loss)1.6
 0.2
 3.1
 (0.8)
(+) Equity-based Compensation2.1
 1.6
 6.2
 5.1
(+) Reserve for Litigation and Contingencies(2.6) 9.6
 (2.6) 9.6
(=) Fee Related Earnings$5.9
 $5.1
 $19.1
 $14.6
(+) Realized Net Performance Fees0.3
 0.5
 1.1
 1.5
(+) Realized Investment Income—
 —
 —
 —
(=) Distributable Earnings$6.2
 $5.6
 $20.2
 $16.1



Three Months Ended SeptemberJune 30, 20172021 Compared to the Three Months Ended SeptemberJune 30, 20162020 and NineSix Months Ended SeptemberJune 30, 20172021 Compared to the NineSix Months Ended SeptemberJune 30, 2016

2020
Distributable Earnings

Distributable earningsEarnings increased $0.6$14.4 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $19.6 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016 and increased $4.1 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.2020. The following table provides the components of the changes in distributable earningsDistributable Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Distributable Earnings, June 30, 2020$13.8 $22.2 
Increases (decreases):
Increase in fee related earnings12.9 18.0 
Decrease in realized net performance revenues(1.6)(1.0)
Increase in realized principal investment income3.5 3.3 
Increase in net interest(0.4)(0.7)
Total increase14.4 19.6 
Distributable Earnings, June 30, 2021$28.2 $41.8 
Investment Solutions had realized performance revenues of $59.3 million during the six months ended June 30, 2021. However, most of these realizations are from AlpInvest fund vehicles in which we generally do not retain any carried interest, therefore our net realized performance revenues were $4.1 million during the six months ended June 30, 2021.
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Distributable earnings, September 30, 2016$5.6
$16.1
Increases (decreases):  
   Decrease in realized net performance fees(0.2)(0.4)
   Increase in fee related earnings0.8
4.5
   Total increase0.6
4.1
Distributable earnings, September 30, 2017$6.2
$20.2

Fee Related Earnings

Fee related earningsRealized Principal Investment Income. Realized principal investment income increased $0.8$3.5 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and $3.3 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 primarily due to higher realized gains on investments on our secondaries funds.
Fee Related Earnings
Fee Related Earnings increased $12.9 million for the three months ended SeptemberJune 30, 20162021 as compared to three months ended June 30, 2020 and increased $4.5$18.0 million for the ninesix months ended SeptemberJune 30, 20172021 as compared to the ninesix months ended SeptemberJune 30, 2016.2020. The following table provides the components of the changes in fee related earningsFee Related Earnings for the three and ninesix months ended SeptemberJune 30, 2017:2021:

Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)
Fee Related Earnings, June 30, 2020$11.9 $20.2 
Increases (decreases):
Increase in fee revenues14.7 27.2 
Increase in cash-based compensation and benefits(3.2)(7.6)
CCC litigation cost recovery in 2020(1)
— (3.3)
Decrease in general, administrative and other indirect expenses1.2 1.6 
All other changes0.2 0.1 
Total increase12.9 18.0 
Fee Related Earnings, June 30, 2021$24.8 $38.2 
(1) General, administrative and other indirect expenses during the six months ended June 30, 2020 included the allocated portion of the cost recovery associated with the CCC litigation costs. See Note 7 to our unaudited condensed consolidated financial statements.
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Fee related earnings, September 30, 2016$5.1
$14.6
Increases (decreases):  
   Increase in fee revenues7.2
8.6
   Increase in direct and indirect base compensation(5.7)(5.3)
   (Increase) decrease in general, administrative and other indirect expenses(1.0)0.8
   All other changes0.3
0.4
   Total increase0.8
4.5
Fee related earnings, September 30, 2017$5.9
$19.1


Fee Revenues. Total fee revenues increased $7.2$14.7 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $27.2 million for the six months ended June 30, 2021 as compared to the threesix months


109

ended SeptemberJune 30, 2016 and increased $8.6 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016,2020 primarily due to increased management fees from our private equity fund vehicles as a resultdriven by the activation of closingsmanagement fees on our latest secondaries fund in the second quarter of new2020 and our latest coinvestment fund vehicles, which have a higher average management fee rate than older fund vehicles,in the second quarter of 2021, as well as $1.2$4.4 million ofin catch-up management fees in the the nine months ended September 30, 2017. Fee revenues also benefited from favorable foreign currency adjustments during both the three and nine months ended September 30, 2017. This increase isfees. These increases were partially offset by the wind downimpact of DGAM and the related redemptions from its fundsale of hedge funds,MRE on April 1, 2021, which decreased our fee revenues by $0.5 million and $5.4 million for the three and nine months ended September 30, 2017, respectively, as compared to the three and nine months ended September 30, 2016.

Direct and indirect base compensation expense. Direct and indirect base compensation expense increased $5.7had management fees of $5.9 million for the three months ended SeptemberJune 30, 2017 as compared to the three months ended September 30, 2016, primarily due to an increase in projected year-end bonuses2020.
Cash-based compensation and increasedbenefits expense. Cash-based compensation associated with fundraising activities of $1.6 million.


Direct and indirect base compensationbenefits expense increased $5.3 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to an increase in projected year-end bonuses and increased compensation associated with fundraising activities of $3.0 million.
General, administrative and other indirect expenses. General, administrative and other indirect expenses increased $1.0$3.2 million for the three months ended SeptemberJune 30, 20172021 as compared to three months ended June 30, 2020 and increased $7.6 million for the six months ended June 30, 2021 as compared to the threesix months ended SeptemberJune 30, 2016,2020 primarily due to negative foreign currency adjustments, partially offset by lower professional fees.increased headcount and higher projected year-end bonuses.
General, administrative and other indirect expenses decreased $0.8 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to lower professional fees and real estate costs. These decreases were partially offset by negative foreign currency adjustments and increased external costs associated with fundraising activities.
Economic Net Income (Loss)
Economic net income (loss) increased $17.0 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 and increased $26.2 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The following table provides the components of the changes in economic net income (loss) for the three and nine months ended September 30, 2017:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 (Dollars in Millions)
Economic net income (loss), September 30, 2016$(2.5)$7.2
Increases (decreases):  
   Increase in net performance fees3.1
6.7
   Increase in investment income1.4
3.9
   Increase in equity-based compensation(0.5)(1.1)
   Increase in fee related earnings0.8
4.5
   Decrease in reserve for litigation and contingencies12.2
12.2
   Total increase17.0
26.2
Economic net income, September 30, 2017$14.5
$33.4
Performance Fees. Performance fees (realized and unrealized) for the three and nine months ended September 30, 2017 and 2016 are from the following types of funds:
 Performance Fees
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (Dollars in millions)
Private equity fund vehicles$34.0
 $28.7
 $96.7
 $62.1
Real estate fund vehicles0.4
 0.8
 1.9
 0.5
Total performance fees$34.4
 $29.5
 $98.6
 $62.6
Under our arrangements with the historical owners and management team of AlpInvest, we generally do not retain any carried interest with respect to the historical investments and commitments to our AlpInvest fund vehicles that existed as of July 1, 2011 (including any options to increase any such commitments exercised after such date). We are entitled to 15% of the carried interest with respect to commitments from the historical owners of AlpInvest for the period between 2011 and 2020 and 40% of the carried interest in respect of all other commitments (including all future commitments from third parties).
The increase in performance fees for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 was primarily due to higher realizations in our carry funds in 2017. Additionally, our carry funds

appreciated 3% in the three months ended September 30, 2017 (excluding the impact of foreign currency, appreciation was 5% for the three months ended September 30, 2017) while appreciating 2% in the three months ended September 30, 2016.
The increase in performance fees for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was primarily due to higher realizations in our carry funds in 2017. Overall, our carry funds appreciated 6% in the nine months ended September 30, 2017 (excluding the impact of foreign currency, appreciation was 14% for the nine months ended September 30, 2017) while appreciating 5% in the nine months ended September 30, 2016.

The $34.4 million of performance fees for the three months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•Co-investment Fund & Secondaries Fund (2012-2013) of $5.0 million,
•Co-investment Fund & Secondaries Fund (2014-2015) of $2.7 million,
•APG Partnership Fund (2009) of $2.6 million,
•APG Partnership Fund (2010) of $2.1 million, and
•Co-investment Fund & Secondaries Fund (2009-2010) of $1.8 million.
The $29.5 million of performance fees for the three months ended September 30, 2016 was driven primarily by performance fees recognized from the following funds:

•Co-investment Fund & Secondaries Fund (2009-2010) of $8.3 million,
•Co-investment Fund & Secondaries Fund (2012-2013) of $2.9 million,
•Co-investment Fund & Secondaries Fund (2010) of $2.3 million, and
•Co-investment Fund & Secondaries Fund (2014-2015) of $2.0 million.

The $98.6 million of performance fees for the nine months ended September 30, 2017 was driven primarily by performance fees recognized from the following funds:

•Co-investment Fund & Secondaries Fund (2009-2010) of $9.4 million,
•Co-investment Fund & Secondaries Fund (2012-2013) of $9.3 million,
•Co-investment Fund & Secondaries Fund (2014-2015) of $9.0 million,
•Partnership Fund (2008) of $6.0 million,
•APG Partnership Fund (2010) of $5.8 million,
•APG Partnership Fund (2009) of $5.8 million, and
•ASF V (Onshore) of $5.5 million.
The $62.6 million of performance fees for the nine months ended September 30, 2016 was driven primarily by performance fees recognized from the following funds:

•Co-investment Fund & Secondaries Fund (2012-2013) of $12.5 million,
•Co-investment Fund & Secondaries Fund (2009-2010) of $11.3 million,
•Co-investment Fund & Secondaries Fund (2014-2015) of $4.9 million, and
•Co-investment Fund & Secondaries Fund (2010) of $4.3 million.
Performance fees of $29.5 million for the three months ended September 30, 2016 are inclusive of performance fees reversed of approximately $0.6 million. Performance fees of $62.6 million for the nine months ended September 30, 2016 are inclusive of performance fees reversed of approximately $2.5 million. There were no significant performance fees reversed for the three and nine months ended September 30, 2017.
The appreciation in remaining value of our Investment Solutions carry funds for this segment are as follows:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 20172016 20172016
Carry funds3%2% 6%5%

Note: The appreciation presented is a weighted average blend of the remaining investments in the respective carry funds within Investment Solutions. These carry funds include private equity and real estate investments in primary fund, co-investment and secondary strategies, which have different return profiles.
Net performance fees for the three months ended September 30, 2017 were $6.5 million, representing an increase of $3.1 million from $3.4 million in net performance fees for the three months ended September 30, 2016. Net performance fees for the nine months ended September 30, 2017 were $14.8 million, representing an increase of $6.7 million from $8.1 million in net performance fees for the nine months ended September 30, 2016. The increase in net performance fees for both periods was due to the higher appreciation of the carry funds for the three and nine months ended September 30, 2017 as compared to the three and nine months ended September 30, 2016.
Equity-based Compensation. Equity-based compensation was $2.1 million for the three months ended September 30, 2017, an increase of $0.5 million from $1.6 million for the three months ended September 30, 2016.
Equity-based compensation was $6.2 million for the nine months ended September 30, 2017, an increase of $1.1 million from $5.1 million for the nine months ended September 30, 2016.

Reserve for Litigation and Contingencies. Investment Solutions' (“IS”) share of the reserve for litigation and contingencies decreased $12.2 million for both the three and nine months ended September 30, 2017. The decrease was primarily related to IS' share of the $25 million reserve reversal related to the CCC litigation recognized in 2017, while IS recognized its share of the $100 million reserve in 2016 related to a commodities legal matter.
Fee-earning AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 20172021 and 20162020
Fee-earning AUM is presented below for each period together with the components of change during each respective period.
 As of June 30,
 20212020
Investment Solutions(Dollars in millions)
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments$18,978 $14,244 
Fee-earning AUM based on invested capital (2)3,470 2,106 
Fee-earning AUM based on net asset value3,473 2,797 
Fee-earning AUM based on lower of cost or fair market value12,573 12,620 
Total Fee-earning AUM$38,494 $31,767 
 As of September 30,
 2017 2016
Investment Solutions(Dollars in millions)
Components of Fee-earning AUM (1)   
Fee-earning AUM based on capital commitments$11,145
 $9,136
Fee-earning AUM based on invested capital (2)1,170
 1,202
Fee-earning AUM based on net asset value855
 215
Fee-earning AUM based on lower of cost or fair market value17,176
 17,542
Total Fee-earning AUM$30,346
 $28,095
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
(2)Includes amounts committed to or reserved for certain AlpInvest funds
(1)For additional information concerning the components of Fee-earning AUM, see “—Fee-earning Assets under Management.”
(2)Includes amounts committed to or reserved for certain AlpInvest and Metropolitan carry funds.


The table below provides the period to period rollforward of Fee-earning AUM.
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2021202020212020
Investment Solutions(Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period$39,287 $28,202 $36,398 $28,384 
Inflows (1)1,882 5,410 6,511 6,447 
Outflows (including realizations) (2)(3,323)(1,542)(4,593)(2,248)
Market Activity & Other (3)515 (824)805 (868)
Foreign Exchange (4)133 521 (627)52 
Balance, End of Period$38,494 $31,767 $38,494 $31,767 
(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 and the fee-earning commitments invested in vehicles for which management fees are based on invested capital. Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM.
(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, and reductions for funds that are no longer calling for fees. Distributions for funds earning management fees based on commitments during the period do not affect Fee-earning AUM. Outflows during the three and six months ended June 30, 2021 also reflect the sale of MRE on April 1, 2021, which had $2.3 billion of Fee-earning AUM as of March 31, 2021.
(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.


110

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Investment Solutions(Dollars in millions) (Dollars in millions)
Fee-earning AUM Rollforward       
Balance, Beginning of Period$28,468
 $27,227
 $27,054
 $28,191
Inflows, including Fee-paying Commitments (1)2,343
 2,433
 5,275
 5,013
Outflows, including Distributions (2)(1,093) (1,093) (4,138) (3,767)
Subscriptions, net of Redemptions (3)—
 (582) —
 (1,584)
Market Appreciation/(Depreciation) (4)(108) (208) (280) (530)
Foreign Exchange and other (5)736
 318
 2,435
 772
Balance, End of Period$30,346
 $28,095
 $30,346
 $28,095
(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.
(1)Inflows represent mandates where commitment fee period was activated and capital invested by carry fund vehicles outside the commitment fee period or weighted-average investment period.
(2)Outflows represent distributions from carry fund vehicles outside the commitment fee period or weighted-average investment period and changes in fee basis for carry fund vehicles where the commitment fee period or weighted-average investment period has expired.
(3)Represents subscriptions and redemptions in our fund of hedge funds vehicles.
(4)Market Appreciation/(Depreciation) represents changes in the net asset value of our fund of hedge funds vehicles and realized and unrealized gains (losses) on our carry fund vehicles based on the lower of cost or fair value.
(5)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.
Fee-earning AUM was $30.3 billion at September 30, 2017, an increase of $1.8 billion, or approximately 6%, compared to $28.5$38.5 billion at June 30, 2017.2021, a decrease of $0.8 billion compared to $39.3 billion at March 31, 2021. This was driven by inflows,outflows of $3.3 billion, including fee-paying commitmentsthe sale of MRE, which had Fee-Earning AUM of $2.3 billion due toas of March 31, 2021, as well as distributions in our AlpInvest carry funds. This decrease was partially offset by inflows of $1.9 billion primarily from new fee-paying commitments raised, the activation of previously raised mandates, and purchases in our AlpInvest vehicles, and foreign exchange gainsas well as appreciation of $0.7 billion from translating our euro-denominated AlpInvest Fee-earning AUM to USD. Partially offsetting this increase were outflows, including distributions, of $1.1 billion which were primarily attributable to our AlpInvest carry funds.$0.5 billion. Distributions from funds still in the commitment or weighted-average investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital. Increases in fair value have an impact on Fee-earning AUM for Investment Solutions as fully committed funds are based on the lower of cost or fair value of the underlying investments.
Fee-earning AUM was $30.3$38.5 billion at SeptemberJune 30, 2017,2021, an increase of $3.2$2.1 billion, or approximately 12%6%, compared to $27.1$36.4 billion at December 31, 2016.2020. The increase was driven by inflows, including fee-paying commitments, of $5.3$6.5 billion due to activation of previously raised mandates and purchases in our AlpInvest vehicles,carry funds, and foreign exchange gains$0.8 billion of $2.4 billion from translating our euro-denominated AlpInvest Fee-earning AUM to USD. This wasappreciation. These increases were partially offset by outflows of $4.6 billion, including distributions,the sale of $4.1MRE, as well as $0.6 billion primarily inof negative foreign exchange activity from the translation of our AlpInvest carry funds.Fee-earning AUM from EUR to USD.
Fee-earning AUM was $30.3$38.5 billion at SeptemberJune 30, 2017,2021, an increase of $2.2$6.7 billion, or approximately 8%21%, compared to $28.1$31.8 billion at SeptemberJune 30, 2016.2020. The increase was driven by inflows, including fee-paying commitments, of $7.5$10.8 billion due to activation of previously raised mandates and purchases in our AlpInvest vehicles, foreign exchange gainscarry funds, as well as the MRE carry funds prior to the sale of $1.0MRE on April 1, 2021. Also driving the increase was $0.9 billion from translating our euro-denominated AlpInvest Fee-earning AUM to USD, and marketof appreciation of $0.8 billion in funds outside the investment period. This was partially offset by outflows, including distributions, of $6.5 billion primarily in our AlpInvest carry funds and net redemptions$1.1 billion of $0.6 billion inpositive foreign exchange activity from the translation of our previously held DGAM fund of funds vehicles.

AlpInvest Fee-earning AUM was $28.1 billion at September 30, 2016, an increase of $0.9 billion, or approximately 3%, comparedfrom EUR to $27.2 billion at June 30, 2016. This was driven by inflows, including fee-paying commitments of $2.4 billion, due to activation of previously raised mandates in our AlpInvest vehicles.USD. This was partially offset by outflows including distributions of $1.1$6.1 billion primarily from distributions in our AlpInvest fundcarry funds and the sale of funds vehicles and net redemptions in our DGAM fund of hedge funds vehicles of $0.6 billion. This was partially offset by inflows, including fee-paying commitments of $2.4 billion, due to activation of previously raised mandates in our AlpInvest vehicles.

Fee-earning AUM was $28.1 billion at September 30, 2016, a decrease of $0.1 billion compared to $28.2 billion at December 31, 2015. This was driven by outflows of $3.8 billion, primarily in our AlpInvest fund of funds vehicles, net redemptions in our DGAM fund of hedge funds vehicles of $1.6 billion, and market depreciation of $0.5 billion primarily in our AlpInvest fund of funds vehicles. This was partially offset by inflows of $5.0 billion, due to activation of previously raised mandates in our AlpInvest vehicles.MRE.
Total AUM as of and for the Three and NineSix Months Ended SeptemberJune 30, 20172021
The table below provides the period to period rollforwards of Available Capital and Fair Value of Capital, and the resulting rollforward of Total AUM.
 Three Months Ended
June 30, 2021		Six Months Ended
June 30, 2021
 (Dollars in millions)
Investment Solutions
Total AUM Rollforward
Balance, Beginning of Period$63,556 $58,108 
Inflows (1)1,248 4,446 
Outflows (including realizations) (2)(5,270)(7,371)
Market Activity & Other (3)4,765 10,807 
Foreign Exchange (4)349 (1,342)
Balance, End of Period$64,648 $64,648 
(1)Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.
(2)Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts, as well as the expiration of available capital. Outflows also reflect the sale of MRE on April 1, 2021, which had $2.4 billion in Total AUM as of March 31, 2021.
(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related co-investment vehicles and separately managed accounts, the net impact of fees, expenses and non-investment income, as well as other changes in AUM. The fair market values for our Investment Solutions primary and secondary carry funds are based on the latest available valuations of the underlying limited partnership interests as provided by their general partners which typically has a lag of up to 90 days, plus the net cash flows since the latest valuation, up to June 30, 2021.


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 Three Months Ended 
 September 30, 2017		 Nine Months Ended 
 September 30, 2017
 Available
Capital		 Fair Value
of Capital		 Total
AUM		 Available
Capital		 Fair Value
of Capital		 Total
AUM
 (Dollars in millions) (Dollars in millions)
Investment Solutions           
Balance, Beginning of Period$15,764
 $29,902
 $45,666
 $14,294
 $28,798
 $43,092
Commitments (1)1,739
 —
 1,739
 4,620
 —
 4,620
Capital Called, net (2)(1,187) 1,207
 20
 (3,077) 2,954
 (123)
Distributions (3)136
 (2,631) (2,495) 232
 (7,007) (6,775)
Market Appreciation/(Depreciation) (4)—
 896
 896
 —
 2,352
 2,352
Foreign Exchange and other (5)239
 977
 1,216
 622
 3,254
 3,876
Balance, End of Period$16,691
 $30,351
 $47,042
 $16,691
 $30,351
 $47,042
(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.
(1)Represents capital raised by our carry fund vehicles, including activation of new mandates, net of expired available capital.
(2)Represents capital called by our carry fund vehicles, net of fund fees and expenses.
(3)Represents distributions from our carry fund vehicles, net of amounts recycled.
(4)Market Appreciation/(Depreciation) represents changes in the net asset value of our fund of hedge funds vehicles and realized and unrealized gains (losses) on fund investments, secondary investments, co-investments, and real estate fund vehicles. Fair market values for carry fund vehicles are based on the latest available valuations of the underlying limited partnership interests (in most cases as of June 30, 2017) as provided by their general partners, plus the net cash flows since the latest valuation, up to September 30, 2017.
(5)Represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the period end.
Total AUM was $47.0 billion at September 30, 2017, an increase of $1.3 billion or approximately 3%, compared to $45.7$64.6 billion at June 30, 2017. This2021, an increase of $1.0 billion, or approximately 2%, compared to $63.6 billion at March 31, 2021. The increase was driven by $1.7 billion of new commitments raised primarily in our AlpInvest carry funds, $1.2 billion of foreign exchange gains resulting from the translation of our Euro-denominated AlpInvest AUM to USD, and $0.9$4.8 billion of market appreciation primarily in our AlpInvest carry funds and inflows of $1.2 billion billion related to fundraising in our AlpInvest funds. This was partially offset by $2.6outflows of $5.3 billion, including the sale of MRE, which had $2.4 billion in Total AUM as of March 31, 2021, and distributions primarily in our AlpInvest carry funds, of which $0.1 billion were recallable.funds.
Total AUM was $47.0$64.6 billion at SeptemberJune 30, 2017,2021, an increase of $3.9$6.5 billion, or approximately 9%11%, compared to $43.1$58.1 billion at December 31, 2016. This2020. The increase was driven by $4.6 billion of new commitments raised primarily in our AlpInvest carry funds, $3.9 billion of foreign exchange gains resulting from the translation of our Euro-denominated AlpInvest AUM to USD, and $2.4$10.8 billion of market appreciation primarily in our AlpInvest carry funds and inflows of $4.4 billion related to fundraising in our AlpInvest funds. This was partially offset by $7.0outflows of $7.4 billion, including the sale of MRE, as well as $1.3 billion of distributions, primarily innegative foreign exchange activity from the translation of our AlpInvest carry funds, of which $0.2 billion were recallable.

Total AUM from EUR to USD.
Fund Performance Metrics
Fund performance information for our AlpInvestInvestment Solutions funds that have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of SeptemberJune 30, 2017,2021, which we refer to as our “significant funds” is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group L.P.Inc. and is also

not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group L.P.Inc. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. Primary and secondary investments in external funds are generally valued based on the proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.



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The following tables reflect the performance of our significant funds in our Investment Solutions business.
   TOTAL INVESTMENTS
   As of June 30, 2021
Investment Solutions (1)(8)(13)Vintage YearFund SizeCumulative
Invested
Capital
(2)(3)		Realized Value (3)Remaining Fair Value(3)Total Fair
Value(3)(4)		MOIC
(5)		Gross
IRR  (6)(10)		Net
IRR
(7)(10)		Net Accrued Carry/(Clawback)
(12)
   (Reported in Local Currency, in Millions)
Main Fund VI - Fund Investments2015€1,106 €984 €605 €1,241 €1,846 1.9x27%25%$3 
Main Fund V - Fund Investments2012€5,080 €5,363 €4,816 €5,919 €10,735 2.0x20%19%$19 
Main Fund IV - Fund Investments2009€4,877 €5,427 €7,645 €3,874 €11,519 2.1x18%18%$2 
Main Fund III - Fund Investments2005€11,500 €12,760 €19,547 €2,389 €21,936 1.7x10%10%$— 
Main Fund II - Fund Investments2003€4,545 €4,781 €7,447 €264 €7,711 1.6x10%9%$— 
Main Fund I - Fund Investments2000€5,175 €4,195 €6,880 €60 €6,940 1.7x12%11%$— 
Main Fund VII - Secondary Investments2020$8,388 $2,013 $252 $2,155 $2,407 1.2xNMNM$14 
AlpInvest Secondaries Fund VII2020$6,769 $1,414 $179 $1,516 $1,695 1.2xNMNM$10 
Main Fund VI - Secondary Investments2017$6,017 $4,928 $1,545 $5,348 $6,892 1.4x17%15%$51 
AlpInvest Secondaries Fund VI2017$3,333 $2,725 $808 $2,949 $3,757 1.4x17%13%$34 
Main Fund V - Secondary Investments2011€4,273 €4,143 €5,662 €1,678 €7,341 1.8x21%19%$34 
AlpInvest Secondaries Fund V2012$756 $652 $753 $317 $1,070 1.6x17%14%$14 
Main Fund IV - Secondary Investments2010€1,859 €1,925 €3,187 €127 €3,315 1.7x19%18%$— 
Main Fund III - Secondary Investments2006€2,250 €2,328 €3,526 €61 €3,588 1.5x11%10%$— 
Main Fund II - Secondary Investments2003€998 €993 €1,812 €8 €1,820 1.8x27%26%$— 
Main Fund VIII - Co-Investments2021$3,815 $127 $— $126 $126 1.0xNMNM$—��
AlpInvest Co-Investment Fund VIII2021$3,614 $124 $— $124 $124 1.0xNMNM$— 
Main Fund VII - Co-Investments2017$2,842 $2,487 $135 $3,715 $3,850 1.5x23%19%$46 
AlpInvest Co-Investment Fund VII2017$1,688 $1,500 $75 $2,291 $2,366 1.6x23%19%$31 
Main Fund VI - Co-Investments2014€1,115 €937 €1,351 €1,078 €2,429 2.6x28%26%$13 
Main Fund V - Co-Investments2012€1,124 €1,029 €2,221 €790 €3,012 2.9x29%27%$7 
Main Fund IV - Co-Investments2010€1,475 €1,331 €3,244 €556 €3,799 2.9x24%22%$— 
Main Fund III - Co-Investments2006€2,760 €2,734 €3,734 €329 €4,063 1.5x6%5%$— 
Main Fund III - Mezzanine Investments2006€2,000 €1,950 €2,512 €165 €2,676 1.4x10%9%$— 
Main Fund II - Mezzanine Investments2004€700 €747 €1,030 €9 €1,040 1.4x8%7%$— 
All Other Active Funds & Vehicles(9)Various$6,751 $2,703 $6,648 $9,351 1.4x11%10%$61 
Fully Realized Funds & VehiclesVarious€2,126 €4,803 €2 €4,805 2.3x35%32%$— 
TOTAL INVESTMENT SOLUTIONS (USD)(11)$79,994 $99,448 $39,972 $139,420 1.7x14%13%$250 
     TOTAL INVESTMENTS
     As of September 30, 2017
 Vintage
Year		 Fund Size Cumulative
Invested
Capital
(2)(8)		 Total Fair
Value (3)(8)		 MOIC (4) 
Gross
 IRR
(6)(10)
 Net IRR(7)(10)
Investment Solutions (1)(Reported in Local Currency, in Millions)
Fully Committed Funds (5)             
Main Fund I - Fund Investments2000 €5,174.6
 €4,204.6
 €6,911.1
 1.6x 12% 11%
Main Fund II - Fund Investments2003 €4,545.0
 €4,781.0
 €7,546.5
 1.6x 10% 9%
Main Fund III - Fund Investments2005 €11,500.0
 €12,620.0
 €20,020.3
 1.6x 10% 9%
Main Fund IV - Fund Investments2009 €4,877.3
 €4,884.2
 €7,674.8
 1.6x 16% 16%
Main Fund V - Fund Investments2012 €5,080.0
 €3,607.8
 €4,474.1
 1.2x 12% 11%
Main Fund VI - Fund Investments2015 €1,106.4
 €338.9
 €338.1
 1.0x NM
 NM
Main Fund I - Secondary Investments2002 €519.4
 €475.4
 €896.0
 1.9x 57% 53%
Main Fund II - Secondary Investments2003 €998.4
 €995.9
 €1,818.6
 1.8x 27% 26%
Main Fund III - Secondary Investments2006 €2,250.0
 €2,303.3
 €3,473.5
 1.5x 11% 10%
Main Fund IV - Secondary Investments2010 €1,859.1
 €1,916.6
 €3,228.5
 1.7x 20% 19%
Main Fund V - Secondary Investments2011 €4,272.8
 €3,612.5
 €5,402.0
 1.5x 22% 20%
Main Fund II - Co-Investments2003 €1,090.0
 €898.7
 €2,504.6
 2.8x 44% 42%
Main Fund III - Co-Investments2006 €2,760.0
 €2,738.1
 €3,764.2
 1.4x 5% 5%
Main Fund IV - Co-Investments2010 €1,475.0
 €1,328.7
 €3,461.1
 2.6x 24% 23%
Main Fund V - Co-Investments2012 €1,122.2
 €1,013.3
 €2,342.1
 2.3x 34% 31%
Main Fund II - Mezzanine Investments2004 €700.0
 €748.9
 €1,025.7
 1.4x 7% 7%
Main Fund III - Mezzanine Investments2006 €2,000.0
 €1,927.4
 €2,601.3
 1.3x 10% 9%
All Other Funds (9)Various   €1,958.7
 €2,706.6
 1.4x 14% 11%
Total Fully Committed Funds    €50,353.7
 €80,189.1
 1.6x 13% 12%
Funds in the Commitment Period (5)             
Main Fund VI - Secondary Investments2017 €4,203.7
 €597.7
 €629.5
 1.1x NM
 NM
Main Fund VI - Co-Investments2014 €1,114.6
 €912.4
 €1,270.8
 1.4x 22% 20%
Main Fund VII - Co-Investments2017 €2,254.3
 €149.5
 €148.9
 1.0x NM
 NM
All Other Funds (9)Various   €605.3
 €770.6
 1.3x 20% 16%
Total Funds in the Commitment Period    €2,264.9
 €2,819.8
 1.2x 21% 17%
TOTAL INVESTMENT SOLUTIONS    €52,618.6
 €83,008.9
 1.6x 13% 12%
TOTAL INVESTMENT SOLUTIONS (USD)(11)    $62,094.2
 $97,957.2
 1.6x    

Note: Investment Solutions Fund Performance excludes(1)Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments originated by the AlpInvest team. Excluded from the performance information shown are a) investments that were not originated by AlpInvest, b) Direct Investments, which was spun off from AlpInvest in 2005, and c) LP co-investment vehicles advised by AlpInvest. As of June 30, 2021, these excluded investments represent $2.5 billion of AUM at AlpInvest.
(2)Represents the original cost of investments since inception of the fund.
(3)To exclude the impact of Metropolitan Real Estate investment vehicles. AsFX, all foreign currency cash flows have been converted to the currency representing a majority of September 30, 2017, these investment vehicles had athe capital committed to the relevant fund at the reporting period spot rate.
(4)Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(5)Multiple of $1.2 billion.invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.


(1)

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(6)Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on investment contributions, distributions and unrealized value of the underlying funds, before management fees, expenses and carried interest at the AlpInvest level.
(7)Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value after management fees, expenses and carried interest. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a blended Net IRR that is below the preferred return hurdle for that fund.
(8)As used herein, ‘Main Funds’ are each comprised of (i) an anchor mandate(s) (i.e., generally the largest account(s) within a strategy’s investment program) and (ii) AlpInvest’s other advisory client mandates with investment periods that fall within the relevant investment periods under the mandate of the anchor mandate(s) (but do not overlap with more than one such investment period). AlpInvest’s commingled funds, AlpInvest Secondaries Fund VI (“ASF VI”), ASF VII and AlpInvest Co-Investment Fund VII (“ACF VII”) are part of the Main Funds. Mezzanine Main Funds include mezzanine investments across all strategies (i.e., Primary Funds, Secondaries, and Co-Investments).
(9)Aggregate includes Main Fund VII - Fund Investments, Main Fund VIII - Fund Investments, Main Fund IX - Fund Investments, Main Fund X - Fund Investments, Main Fund XI - Fund Investments, Main Fund XII - Fund Investments, Main Fund IV - Mezzanine Investments, Main Fund V - Mezzanine Investments, all ‘clean technology’ private equity investments, all strategic co-investment mandates that invest in co-investment opportunities arising out of an investor’s own separate private equity relationships and invitations, all strategic capital mandates, any state-focused investment mandates, and all other investors whose investments are not reflected in a Main Fund.
(10)For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful but is negative as of reporting period end.
(11)For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting period spot rate.
(12)Represents the net accrued performance fee balance/(giveback obligation) as of the current quarter end. Total Net Accrued Carry excludes approximately $1.1 million of net accrued carry which was retained as part of the sale of MRE on April 1, 2021.
(13)"Main Fund" entries represent a combination of a commingled fund and SMA vehicles which together comprise a "program" vintage. Indented lines shown for AlpInvest Secondaries Funds VII, VI, V and AlpInvest Co-Investment Funds VII and VIII reflect a breakout of the commingled fund, which is part of the larger program vintage.

Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments originated by the AlpInvest team. Excluded from the performance information shown are a) investments that were not originated by AlpInvest, and b) Direct Investments, which was spun off from AlpInvest in 2005. As of September 30, 2017, these excluded investments represent $0.3 billion of AUM at AlpInvest.
(2)
Represents the original cost of investments since inception of the fund.
(3)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried interest.
(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest, divided by cumulative invested capital.
(5)Fully Committed funds are past the expiration date of the commitment period as defined in the respective limited partnership agreement.
(6)Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value before management fees, expenses and carried interest.
(7)Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested capital based on contributions, distributions and unrealized value after management fees, expenses and carried interest.
(8)
To exclude the impact of FX, all foreign currency cash flows have been converted to EUR at the reporting period spot rate.

(9)
Aggregate includes Main Fund VII - Fund Investments, Main Fund VIII - Fund Investments, Main Fund I - Co-Investments, Main Fund I - Mezzanine Investments, Main Fund IV - Mezzanine Investments, Main Fund V - Mezzanine Investments, AlpInvest CleanTech Funds and funds which are not included as part of a main fund.
(10)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is negative as of reporting period end.
(11)
Represents the U.S. dollar equivalent balance translated at the spot rate as of period end.
Liquidity and Capital Resources

Historical Liquidity and Capital Resources
We have historically required limited capital resources to support the working capital and operating needs of our business. Our management fees have largely covered our operating costs and all realized performance fees,allocations, after covering the related compensation, are available for distribution to equityholders. Historically, approximatelyApproximately 95% – 97% of all capital commitments to our funds have beenare provided by our fund investors, with the remaining amount typically funded by Carlyle, our senior Carlyle professionals, advisors and other professionals.
Our Sources of Liquidity
We have multiple sources of liquidity to meet our capital needs, including cash on hand, annual cash flows, accumulated earnings and funds from our senior credit facility, including a term loan facility and a revolving credit facility with $750.0which has $775.0 million of available capacity as of SeptemberJune 30, 2017.2021. We believe these sources will be sufficient to fund our capital needs for at least the next twelve months. If we determine that market conditions are favorable after taking into account our liquidity requirements, including the amounts available under our senior credit facility, we may seek to issue and sell common units in a registered public offering or a privately negotiated transaction, or we may issue additional senior notes, other debt or preferred equity. In September 2017, we issued 16 million of our 5.875% Series A Preferred Units for net proceeds of $387.6 million.
Cash and cash equivalents. Cash and cash equivalents were approximately $1.4$1.6 billion at SeptemberJune 30, 2017.2021. However, a portion of this cash is allocated for specific business purposes, including, but not limited to, (i) performance allocations and incentive fee-related cash that has been received but not yet distributed as performance allocations and incentive fee-related compensation and amounts owed to non-controlling interests; (ii) proceeds received from realized investments that are allocable to non-controlling interests; and (iii) regulatory capital.
Corporate Treasury Investments. Corporate treasury investments were approximately $117.4 million at September 30, 2017. These 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.
After deducting cash amounts allocated to the specific requirements mentioned above, the remaining cash and cash equivalents, including corporate treasury investments, is approximately $1.3$1.4 billion as of SeptemberJune 30, 2017.2021. This remaining amount will be used towards our primary liquidity needs, as outlined in the next section. This amount does not take into consideration ordinary course of business payables and reserves for specific business purposes.


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Senior Revolving Credit Facility. The On February 11, 2019, the Company entered into an amendment and restatement of its senior credit facility includes $25.0 million in a term loan and $750.0 million in a revolving credit facility. The term loan andcapacity under the revolving credit facility is $775.0 million and is scheduled to mature on May 5, 2020.February 11, 2024. Principal amounts outstanding under the amended term loan and restated 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 0.75%0.50%, or (b) at LIBOR plus an applicable margin not to exceed 1.75% (2.49%1.50% per annum (1.35% at SeptemberJune 30, 2017)2021). As of June 30, 2021, there was no balance outstanding under the senior revolving credit facility.
The senior revolving credit facility is unsecured. We are required to maintain management fee earning assets (as defined in the amended and restated senior revolving credit facility) of at least $65.3$75.0 billion and a total leverage ratio of less than 3.0 to 1.0, in each case, tested on a quarterly basis. Non-compliance with any of the financial or non-financial covenants without cure or waiver would constitute an event of default under the senior revolving credit facility. An event of default resulting from a breach of certain financial or non-financial covenants may result, at the option of the lenders, in an acceleration of the principal and interest outstanding, and a termination of the senior revolving credit facility. The senior credit facility also contains other customary events of default, including

defaults based on events of bankruptcy and insolvency, nonpayment of principal, interest or fees when due, breach of specified covenants, change in control and material inaccuracy of representations and warranties.
Our balance sheet at September 30, 2017 reflects $25.0Global Credit Revolving Credit Facility. In December 2018, certain subsidiaries of the Company established a $250.0 million revolving line of credit, primarily intended to support certain lending activities within the Global Credit segment. The credit facility includes a $125.0 million line of credit with a one-year term, which was amended in December 2020 to extend its maturity to December 2021, and a $125.0 million line of credit with a three-year term. Principal amounts outstanding under our senior creditthe facility comprisedaccrue interest, at the option of $25.0 millionthe borrowers, either (a) at an alternate base rate plus applicable margin not to exceed 1.00%, or (b) at the Eurocurrency rate plus an applicable margin not to exceed 2.00%. As of term loanJune 30, 2021, there was no balance outstanding. On April 6, 2017, we borrowed $250 millionoutstanding under the revolving credit facility of our senior credit facility. This amount was repaid in full on June 2, 2017.
CLO Term Loans.Borrowings. For certain of our CLOs, the PartnershipCompany finances a portion of its investment in the CLOs through the proceeds received from term loans and other financing arrangements with financial institutions.institutions or other financing arrangements. The Partnership'sCompany’s outstanding CLO term loans consist of the following (Dollars in millions):

Formation Date Borrowing
Outstanding
September 30, 2017		  Borrowing
Outstanding
December 31, 2016		  
Maturity Date (1)
 Interest Rate as of
September 30, 2017		 
October 3, 2013 $—
(2) $13.2
(2) September 28, 2018 NA(3)
June 7, 2016 20.6
  20.6
  July 15, 2027 3.10%(4)
February 28, 2017 73.0
  —
  September 21, 2029 2.33%(5)
April 19, 2017 22.8
  —
  April 22, 2031 3.24%(6) (12)
June 28, 2017 23.1
  —
  July 22, 2031 3.25%(7) (12)
July 20, 2017 24.4
  —
  April 21, 2027 2.84%(8) (12)
August 2, 2017 22.8
  —
  July 23, 2029 3.10%(9) (12)
August 2, 2017 20.6
  —
  August 3, 2022 1.75%(10)
August 14, 2017 22.6
  —
  August 15, 2030 3.16%(11) (12)
  $229.9
  $33.8
      

(1)    Maturity date is earlier of date indicated or the date that the CLO is dissolved.
(2)    Original borrowing of €12.6 million.
(3) Note paid off in the third quarter of 2017.
(4)Incurs interest at the weighted average rate of the underlying senior notes. Interest income on the underlying collateral approximated the amount of interest expense and was not significant for the three and nine months ended September 30, 2017 and 2016.
(5)Original borrowing of €61.8 million; incurs interest at EURIBOR plus applicable margins as defined in the agreement.
(6)Incurs interest at LIBOR plus 1.932%.
(7)Incurs interest at LIBOR plus 1.923%.
(8)Incurs interest at LIBOR plus 1.536%.
(9)Incurs interest at LIBOR plus 1.808%.
(10)Original borrowing of €17.4 million; incurs interest at LIBOR plus 1.75% and has full recourse to the Partnership.
(11)Incurs interest at LIBOR plus 1.848%.
(12)Term loan issued under master credit agreement.

borrowings were $210.0 million and $356.1 million at June 30, 2021 and December 31, 2020, respectively. The CLO term loansborrowings are secured by the Partnership'sCompany’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.
European CLO Financing.On February 28, 2017, a subsidiary As of June 30, 2021, $191.0 million of these borrowings are secured by investments attributable to The Carlyle Group Inc. See Note 5 of the Partnership entered into a financing agreement with severalunaudited condensed consolidated financial institutions under which these financial institutions provided a €61.8 million term loan ($73.0 million at September 30, 2017) to the Partnership. This term loan is secured by the Partnership’s investmentsstatements included in the retained notes in certain European CLOs that were formed in 2014 and 2015. This term loan will maturethis Quarterly Report on the earlier of September 21, 2029 or the date that the certain EuropeanForm 10-Q for more information on our CLO retained notes have been redeemed. The Partnership may prepay the term loan in whole or in part at any time after the third yearborrowings.
Senior Notes. Certain indirect finance subsidiaries of the date of issuance without penalty. Prepayment of the term loan within the first three years will incur a penalty based on the prepayment amount. Interest on this term loan accrues at EURIBOR plus applicable margins (2.33% at September 30, 2017).

Master Credit Agreement - Term Loans. In January 2017, the Partnership entered into a master credit agreement with a financial institution under which the financial institution expects to provide term loans to the Partnership for the Partnership to purchase eligible interests in CLOs. This agreement will terminate in January 2020. Any term loan to beCompany have issued under this master credit agreement will be secured by the Partnership’s investment in the respective CLO as well as any senior

management fee and subordinated management fee payable by each CLO. Any term loan will bear interest at LIBOR plus a weighted average spread and an applicable margin. Interest will be due quarterly.
3.875% Senior Notes. In January 2013, Carlyle Holdings Finance L.L.C., an indirect finance subsidiary of the Partnership, issued $500.0 million of 3.875% senior notes, due February 1, 2023 at 99.966% of par. Intereston which interest is payable semi-annually, on February 1 and August 1, beginning August 1, 2013.as discussed below. The senior notes are unsecured and unsubordinated obligations of Carlyle Holdings Finance L.L.C.the respective subsidiary and are fully and unconditionally guaranteed, jointly and severally, by The Carlyle Group L.P.the Company and each of the Carlyle Holdings partnerships. The indentureindentures governing each of the senior notes containscontain customary covenants that, among other things, limit Carlyle Holdings Finance L.L.C.the issuers’ and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The notes also contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the notes. If a change of control repurchase event occurs, the notes are subject to repurchase at the repurchase price as set forth in the notes.
3.500% Senior Notes. In September 2019, Carlyle Finance Subsidiary L.L.C. issued $425.0 million of 3.500% senior notes due September 19, 2029 at 99.841% of par.
5.650% Senior Notes. In September 2018, Carlyle Finance L.L.C. issued $350.0 million of 5.650% senior notes due September 15, 2048 at 99.914% of par.
3.875% Senior Notes. In January 2013, Carlyle Holdings Finance L.L.C. issued $500.0 million of 3.875% senior notes due February 1, 2023 at 99.966% of par. In September 2018, we completed a tender offer to purchase $250.0 million in aggregate principal amount of these notes. As of June 30, 2021, $250.0 million of these notes remain outstanding.
5.625% Senior Notes.Notes. In March 2013, Carlyle Holdings II Finance L.L.C., an indirect finance subsidiary of the Partnership, issued $400.0 million of 5.625% Senior Notessenior notes due March 30, 2043 at 99.583% of par. Interest is payable semi-annually onIn March 302014, an additional $200.0 million of these notes were issued at 104.315% of par and September 30, beginning September 30, 2013.are treated as a single class with the already outstanding $400.0 million aggregate principal amount of these notes.
Subordinated Notes. In May 2021, Carlyle Finance L.L.C. issued $435.0 million aggregate principal amount of 4.625% subordinated notes due May 15, 2061. 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 unsubordinatedsubordinated obligations of Carlyle Holdings II Finance L.L.C.the issuer and are fully and unconditionally guaranteed, jointly and severally, on a subordinated basis, by The Carlyle Group L.P. andthe Company, each of the Carlyle Holdings partnerships.partnerships, and CG Subsidiary Holdings L.L.C., an indirect subsidiary of the Company. The indentureindentures governing the subordinated notes contains contain


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customary covenants and financial restrictions that, among other things, limit Carlyle Holdings Finance II L.L.C.the issuers’ and the guarantors’ ability, subject to certain exceptions, to incur indebtedness ranking on a parity with the subordinated notes or indebtedness ranking junior to the subordinated notes secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all of their assets. The subordinated notes also contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in part, at any time and from time to time on or after June 15, 2026, prior to their stated maturity, at the make-wholea redemption price set forthequal 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 to no longer be deductible in the notes. IfU.S., a change“Tax Redemption Event”, the subordinated notes may be redeemed, in whole, but not in part, within 120 days of control repurchasethe occurrence of such event occurs, the notes are subjectat a redemption price equal to repurchase at the repurchase price as set forth in the notes.

In March 2014, Carlyle Holdings II Finance L.L.C. issued $200.0 million of 5.625% Senior Notes due March 30, 2043 at 104.315% of par. These notes were issued as additional 5.625% Senior Notes due March 30, 2043 and are treated as a single class with the already outstanding $400.0 million aggregatetheir principal amount plus accrued and unpaid interest to, but excluding, the date of these senior notes.
Promissory Notes. On January 1, 2016,redemption. In addition, the Partnership issued a $120.0 million promissory note to BNRI as a result of a contingent consideration arrangement entered into in 2012 between the Partnership and BNRI as part of the Partnership's strategic investment in NGP (see Notes 5 and 7 to the unaudited condensed consolidated financial statements). Interest on the promissory note accrues at the three month LIBOR plus 2.50% (3.83% at September 30, 2017). The Partnershipsubordinated notes may prepay the promissory notebe redeemed, in whole, orbut not in part, at any time without penalty. The promissory note is scheduledprior to mature on January 1, 2022. In December 2016, the Partnership repurchased $11.2 millionMay 15, 2026, within 90 days of the promissory note.
Additionally, in June 2017, as part ofrating agencies determining that the settlement with investors in two commodities investment vehicles managed by an affiliate of the Partnership (discussed in Note 9Subordinated Notes should no longer receive partial equity treatment pursuant to the unaudited condensed consolidated financial statements)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 Partnership issued a seriesdate of promissory notes, aggregating to $53.9 million, to the investors of these commodities investment vehicles. Interest on these promissory notes accrues at the three month LIBOR plus 2% (3.33% at September 30, 2017). The Partnership may prepay these promissory notes in whole or in part at any time without penalty. These promissory notes are scheduled to mature on July 15, 2019.redemption.
Obligations of CLOs. Loans payable of the Consolidated Funds represent amounts due to holders of debt securities issued by the CLOs. We are not liable for any loans payable of the CLOs. Several of the CLOs issued preferred shares representing the most subordinated interest, however these tranches are mandatorily redeemable upon the maturity dates of the senior secured loans payable, and as a result have been classified as liabilities under U.S. GAAP, and are included in loans payable of Consolidated Funds in our unaudited condensed consolidated balance sheets.
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 consists of cash and cash equivalents, corporate loans, corporate bonds and other securities.
Preferred Units. On September 13, 2017, we issued 16 million of our Preferred Units for net proceeds of approximately $387.6 million. We plan to use these proceeds for general corporate purposes, including to fund investments. Distributions on the Preferred Units are discretionary and non-cumulative. The Preferred Units may be redeemed at our option, in whole or in

part, at any time on or after September 15, 2022 at a price of $25 per Preferred Unit, plus declared and unpaid distributions. In addition, the Preferred Units may be redeemed at our option prior to September 15, 2022, upon the occurrence of change of control, tax redemption or rating agency events. Holders of the Preferred Units will generally have no voting rights and have none of the voting rights given to holders of our common units, except as otherwise provided in Carlyle's limited partnership agreement. Holders of the Preferred Units have no right to require the redemption of the Preferred Units and the Preferred Units do not have a maturity date. See Note 14 of our unaudited condensed consolidated financial statements for more information.
Realized performance fee revenue.Performance Allocation Revenues. Another source of liquidity we may use to meet our capital needs is the realized performance fee revenueallocation revenues generated by our investment funds. Carried interest isPerformance allocations are generally realized when an underlying investment is profitably disposed of and the fund'sfund’s cumulative returns are in excess of the preferred return. For certain funds, carried interest isperformance allocations are realized once all invested capital and expenses have been returned to the fund’s investors and the fund’s cumulative returns are in excess of the preferred return. Incentive fees earned on our CLO vehicles generally are paid upon the dissolution of such vehicles.

Our accrued performance feesallocations by segment as of SeptemberJune 30, 2017,2021, gross and net of accrued giveback obligations, are set forth below:
Asset ClassAccrued
Performance Allocations		Accrued
Giveback
Obligation		Net Accrued
Performance
Revenues
 (Dollars in millions)
Global Private Equity$6,679.7 $(18.4)$6,661.3 
Global Credit231.9 (2.6)229.3 
Investment Solutions (1)
1,234.3 — 1,234.3 
Total$8,145.9 $(21.0)$8,124.9 
Plus: Accrued performance allocations from NGP Carry Funds1.1 
Less: Accrued performance allocation-related compensation(4,043.8)
Less: Deferred taxes on certain foreign accrued performance allocations(62.3)
Less: Net accrued performance allocations attributable to non-controlling interests in consolidated entities(14.5)
Net accrued performance revenues before timing differences4,005.4 
Less/Plus: Timing differences between the period when accrued performance allocations are realized
   and the period they are collected/distributed		1.2 
Net accrued performance revenues attributable to The Carlyle Group Inc.$4,006.6 
(1) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.


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Asset Class
Accrued
Performance
Fees
 
Accrued
Giveback
Obligation
 
Net Accrued
Performance
Fees
 (Dollars in millions)
Corporate Private Equity$2,130.9
 $(9.8) $2,121.1
Real Assets624.3
 (57.8) 566.5
Global Market Strategies84.9
 —
 84.9
Investment Solutions658.5
 —
 658.5
Total$3,498.6
 $(67.6) $3,431.0
Plus: Accrued performance fees from NGP 107.4
Less: Accrued performance fee-related compensation (1,803.8)
Plus: Receivable for giveback obligations from current and former employees 3.4
Less: Deferred taxes on accrued performance fees (65.6)
Less: Net accrued performance fees attributable to non-controlling interests in consolidated entities 1.8
Net accrued performance fees before timing differences 1,674.2
Less/Plus: Timing differences between the period when accrued performance fees are realized and the period they are collected/distributed (177.2)
Net accrued performance fees attributable to Carlyle Holdings $1,497.0
As of September 30, 2017, theThe net accrued performance feesrevenues attributable to The Carlyle Holdings,Group Inc., excluding realized amounts, related to our carry funds and our other vehicles as of June 30, 2021, as well as the carry fund appreciation (depreciation), is set forth below by segment were as follows (dollars(Dollars in millions):
Corporate Private Equity: 
     Buyout$928.9
     Growth Capital38.1
Total Corporate Private Equity967.0
Real Assets: 
     Real Estate303.9
     Natural Resources134.8
     Legacy Energy(16.0)
     Total Real Assets422.7
Global Market Strategies44.6
Investment Solutions62.7
Net accrued performance fees attributable to Carlyle Holdings$1,497.0
Carry Fund Appreciation/(Depreciation)(1)
Net Accrued
Performance Revenues
Quarter-to-DateYear-to-DateLast Twelve Months
Q2 2020Q2 2021Q2 2020Q2 2021Q2 2020Q2 2021
Overall Carry Fund Appreciation/(Depreciation)5 %11 %(3)%25 %1 %43 %
Global Private Equity(2):
$3,631.6 
Corporate Private Equity13 %12 %3 %28 %7 %51 %3,213.2 
Real Estate2 %11 %1 %15 %6 %24 %376.3 
Natural Resources3 %9 %(19)%17 %(23)%23 %45.7 
Global Credit Carry Funds8 %8 %(13)%16 %(17)%32 %123.6 
Investment Solutions Carry Funds (3)
(6)%12 %(4)%28 %3 %47 %251.4 
Net Accrued Performance Revenues$4,006.6 

(1) Appreciation/(Depreciation) represents unrealized gain/(loss) for the period on a total return basis before fees and expenses. The percentage of return is calculated as: ending remaining investment fair market value plus net investment outflow (sales proceeds minus net purchases) minus beginning remaining investment fair market value divided by beginning remaining investment fair market value. Amounts are fund only, and do not include coinvestments.
(2) Includes $3.6 million of net accrued clawback from our Legacy Energy funds.
(3) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.
Realized investment income.Principal Investment Income. Another source of liquidity we may use to meet our capital needs is the realized principal investment income generated by our equity method investments and other principal investments. InvestmentPrincipal investment income is realized when we redeem all or a portion of our investment or when we receive or are due cash income, such as dividends or distributions. Certain of the investments attributable to The Carlyle HoldingsGroup Inc. (excluding certain general partner interests, strategic investments, and investments in certain CLOs) may be sold at our discretion as a source of liquidity. During the three months ended June 30, 2021, we sold approximately $142.5 million of investments in U.S. CLOs and used the proceeds to repay outstanding CLO borrowings (see Note 5 to the condensed consolidated financial statements).
Investments as of June 30, 2021 consist of the following:
Investments in Carlyle Funds
Investments
in NGP(1)
Total
(Dollars in millions)
Investments, excluding performance allocations$2,121.5 $374.9 $2,496.4 
Less: Amounts attributable to non-controlling interests in consolidated entities(233.3)— (233.3)
Plus: Investments in Consolidated Funds, eliminated in consolidation161.4 — 161.4 
Less: Strategic equity method investments in NGP Management— (373.8)(373.8)
Less: Investment in NGP general partners - accrued performance allocations— (1.1)(1.1)
Total investments attributable to The Carlyle Group Inc., exclusive of NGP Management$2,049.6 $— $2,049.6 
(1) See Note 4 to our unaudited condensed consolidated financial statements.


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Our investments as of June 30, 2021, can be further attributed as follows (Dollars in millions):
Investments in Carlyle Funds, excluding CLOs:
Global Private Equity funds(1)
$807.0 
Global Credit funds (2)
742.1 
Investment Solutions funds (3)
63.9 
Total investments in Carlyle Funds, excluding CLOs1,613.0 
Investments in CLOs345.7 
Other investments90.9 
Total investments attributable to The Carlyle Group Inc.2,049.6 
CLO loans and other borrowings attributable to The Carlyle Group Inc. (4)
(191.0)
Total investments attributable to The Carlyle Group Inc., net of CLO loans and other borrowings$1,858.6 
(1) Excludes our strategic equity method investment in NGP Management and investments in NGP general partners - accrued performance allocations.
(2) Includes the Company’s investment in Fortitude Re, which was contributed to Carlyle FRL, a Carlyle-affiliated investment fund, in June 2020 as discussed in Note 4 to the consolidated financial statements. This investment has a carrying value of $613.3 million as of June 30, 2021.
(3) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.  As a result, amounts presented may not include the impact of economic activity in the current quarter.
(4) Of the $210.0 million in total CLO borrowings as of June 30, 2021 and as disclosed in Note 5 to the consolidated financial statements, $191.0 million are collateralized by investments attributable to The Carlyle Group Inc. The remaining $19.0 million in total CLO borrowings are collateralized by investments attributable to non-controlling interests.
Our Liquidity Needs
We generally use our working capital and cash flows to invest in growth initiatives, service our debt, fund the working capital needs of our business and investment funds and pay distributionsdividends to our unitholders.common stockholders.

In the future, we expect that our primary liquidity needs will be to:
•provide capital to facilitate the growth of our existing business lines;

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

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

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

•fund the capital investments of Carlyle in our funds;

•fund capital expenditures;

•repay borrowings and related interest costs and expenses;

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

•pay income taxes;taxes, including corporate income taxes following the Conversion;

make distributions•pay dividends to our common and preferred unitholders and the holders of the Carlyle Holdings partnership unitsstockholders in accordance with our distributiondividend policy, and;

•make installment payments under the deferred obligation to former holders of Carlyle Holdings partnership units,
     which were exchanged in the Conversion, and;
•repurchase our units.common stock.
Preferred Unit Distributions. Distributions on


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Common Stockholder Dividends. Our intention is to pay dividends to holders of our common stock in an amount of $0.25 per share of common stock ($1.00 per share annually), subject to the Preferred Units, when and if declared, will be payable quarterly on the 15th daydiscretion of March, June, September and December of each year, beginning December 15, 2017.   Distributions on the Preferred Units are discretionary and non-cumulative. Theour Board of Directors and compliance with applicable law. For U.S. federal income tax purposes, any dividends we pay following the Conversion generally will be treated as qualified dividend income (generally taxable to U.S. individual stockholders at capital gain rates) paid by a domestic corporation to the extent paid out of our general partner has declared a quarterly distributionor current or accumulated earnings and profits, as determined for U.S. federal income tax purposes, with any excess dividends treated as return of $0.375347 per Preferred Unitcapital to holders of record at the close of business on December 1, 2017, payable on December 15, 2017. The first distribution on the Preferred Units is calculated based on the date of original issuance.
Common Unit Distributions. With respect to distribution year 2017, the Board of Directors of our general partner has declared a distribution to common unitholders totaling approximately $104.3 million, or $1.08 per common unit, consisting of (i) $0.56 per common unit in respectextent of the third quarter of 2017, which is payable on November 16, 2017 to common unitholders of record on November 10, 2017, (ii) $0.42 per common unit in respect of the second quarter of 2017, which was paid in August 2017, and (ii) $0.10 per common unit in respect of the first quarter of 2017, which was paid in May 2017.
With respect to distribution year 2016, through November 2016, we paid cumulative distributions of approximately $117.3 million to common unitholders, consisting of (i) $0.26 per common unit in respect of the first quarter of 2016, which was paid in May 2016, (ii) $0.63 per common unit in respect of the second quarter of 2016, which was paid in August 2016, and (iii) $0.50 per common unit in respect of the third quarter of 2016, which was paid in November 2016.

Distributions to common unitholders paid during the nine months ended September 30, 2017 totaled $63.0 million, representing the amount paid in February 2017 of $0.16 per common unit in respect of the fourth quarter of 2016, the amount paid in May 2017 of $0.10 per common unit in respect of the first quarter of 2017, and the amount paid in August 2017 of $0.42 per common unit in respect of the second quarter of 2017. Distributions to common unitholders paid during the nine months ended September 30, 2016 totaled $98.5 million, representing the amount paid in March 2016 of $0.29 per common unit in

respect of the fourth quarter of 2015, the amount paid in May 2016 of $0.26 per common unit in respect of the first quarter of 2016, and the amount paid in August 2016 of $0.50 per common unit in respect of the second quarter of 2016.
It is Carlyle’s intention to cause Carlyle Holdings to make quarterly distributions to its partners, includingstockholder’s basis. The Carlyle Group L.P.’s wholly owned subsidiaries, that will enable The Carlyle Group L.P. to pay a quarterly distribution of approximately 75% of Distributable Earnings Attributable to Common Unitholders for the quarter. “Distributable Earnings Attributable to Common Unitholders” refers to The Carlyle Group L.P.'s share of Distributable Earnings, after an implied provision for current corporate income taxes (other than corporate income taxes attributable to The Carlyle Group L.P.) and preferred unit distributions, net of corporate income taxes attributable to The Carlyle Group L.P. and amounts payable under the tax receivable agreement. Carlyle’s general partner may adjust the distribution for amounts determined to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and its funds or to comply with applicable law or any of its financing agreements, or to provide for future cash requirements such as tax-related payments, giveback obligations and distributions to unitholders for any ensuing quarter. The amount to be distributed could also be adjusted upward in any one quarter.
Notwithstanding the foregoing, the declaration and payment of any distributionsdividends to holders of our common stock will be at the sole discretion of our general partner, whichBoard of Directors, and our dividend policy may change our distribution policybe changed at any time. Our general partner will take into account general economic and business conditions, our strategic plans and prospects, our business and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions and obligations, legal, tax and regulatory restrictions, other constraints on
With respect to distribution year 2021, the paymentBoard of distributions by usDirectors has declared a dividend to our common unitholdersstockholders totaling approximately $178.0 million, or by our subsidiaries to us, and such other factors as our general partner may deem relevant.
Because our wholly owned subsidiaries must pay taxes and make payments under the tax receivable agreement, the amounts ultimately distributed by us to our common unitholders are expected to be less, on a$0.50 per unit basis, than the amounts distributed by the Carlyle Holdings partnerships to the other limited partnersshare, consisting of the Carlyle Holdings partnershipsfollowing:
Common Stock Dividends - Dividend Year 2021
QuarterDividend per Common ShareDividend to Common StockholdersRecord DatePayment Date
(Dollars in millions, except per share data)
Q1 2021$0.25 $88.7 May 11, 2021May 19, 2021
Q2 20210.25 89.3 August 10, 2021August 17, 2021
Total$0.50 $178.0 

With respect to distribution year 2020, the Board of Directors declared cumulative dividends to common stockholders totaling approximately $352.6 million, consisting of the following:
Common Stock Dividends - Dividend Year 2020
QuarterDividend per Common ShareDividend to Common StockholdersRecord DatePayment Date
(Dollars in millions, except per share data)
Q1 2020$0.25 $87.2 May 12, 2020May 19, 2020
Q2 20200.25 88.3 August 11, 2020August 18, 2020
Q3 20200.25 88.4 November 10, 2020November 17, 2020
Q4 20200.25 88.7 February 16, 2021February 23, 2021
Total$1.00 $352.6 

Dividends to common stockholders paid during the six months ended June 30, 2021 totaled $177.4 million, including the amount paid in February 2021 of $0.25 per common share in respect of their Carlyle Holdings partnership units.the fourth quarter of 2020. Dividends to common stockholders paid during the six months ended June 30, 2020 totaled $174.6 million, including the amount paid in February 2020 of $0.25 per common share in respect of the fourth quarter of 2019.
Fund commitments. Commitments. Generally, we intend to have Carlyle commit to fund approximately 1%0.75% of the capital commitments to our future carry funds, although we may elect to invest additional amounts in funds focused on new investment areas. We may, from time to time, exercise our right to purchase additional interests in our investment funds that become available in the ordinary course of their operations. We expect our senior Carlyle professionals and employees to continue to make significant capital contributions to our funds based on their existing commitments, and to make capital commitments to future funds consistent with the level of their historical commitments. We also intend to make investments in our open-end funds and our CLO vehicles. Our investments in our U.S. and European CLO vehicles will comply with the risk retention rules as discussed in “Risk Retention Rules” later in this section.



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Since our inception through SeptemberJune 30, 2017,2021, we and our senior Carlyle professionals, operating executives and other professionals have invested or committed to invest in or alongside our funds. Approximately 3% to 5% of all capital commitments to our funds are funded collectively by us and our senior Carlyle professionals, operating executives and other professionals. The current unfunded commitment of Carlyle and our senior Carlyle professionals, operating executives and other professionals to our investment funds as of SeptemberJune 30, 2017,2021, consisted of the following:following (Dollars in millions):
Asset Class
Unfunded
Commitment
 (Dollars in millions)
Corporate Private Equity$1,190.1
Real Assets900.6
Global Market Strategies573.9
Investment Solutions165.5
Total$2,830.1
Asset ClassUnfunded
Commitment
Global Private Equity$2,701.4 
Global Credit346.6 
Investment Solutions301.2 
Total$3,349.2 
A substantial majority of the remaining commitments are expected to be funded by senior Carlyle professionals, operating executives and other professionals through our internal co-investment program. Of the $2.8$3.3 billion of unfunded commitments, approximately $2.5$2.8 billion is subscribed individually by senior Carlyle professionals, operating executives and other professionals, with the balance funded directly by the Partnership.Company.

Investments as of September 30, 2017 consist of the following (dollars in millions):
Investments$1,480.9
Less: Amounts attributable to non-controlling interests in consolidated entities(340.3)
Less: Strategic equity method investments in NGP Management(396.5)
Less: Investment in NGP accrued performance fees(107.4)
Investments excluding non-controlling interests and NGP636.7
Plus: investments in Consolidated Funds, eliminated in consolidation199.0
Total investments attributable to Carlyle Holdings, exclusive of NGP Management$835.7
Of the $835.7 million of total investments, approximately $229.9 million are financed with loans (see Sources of Liquidity earlier in this section). The financing of our CLO investments within the last year has caused our total investments to increase at a faster rate than in prior periods. We expect this trend to continue in the near term.
Repurchase Program. In February 2016,December 2018, the Board of Directors of the general partner of the Partnership authorized the repurchase of up to $200 million of common unitsstock and/or Carlyle Holdings units. Under this unitIn connection with the Conversion, in January 2020 our Board of Directors re-authorized the repurchase program units may be repurchasedwith regard to our common stock. In February 2021, the Board of Directors replenished the repurchase program to its limit of $200 million of common stock in aggregate from its maximum remaining repurchase amount of $139.1 million. This program authorizes the repurchase of shares of common stock from time to time in open market transactions, in privately negotiated transactions or otherwise. We expect thatDuring the majority of the repurchases under this program will be done via open market transactions. No units will be repurchased from our executive officers under this program. The timing and actual number of common units and/or Carlyle Holdings units repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This unit repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. For the ninesix months ended SeptemberJune 30, 2017,2021, we have paid an aggregate of $0.2$25.0 million to repurchase and retire 14,190 unitsapproximately 0.6 million shares of common stock with all of the repurchases done via open market and brokered transactions. Since inceptionAs of June 30, 2021, $175.0 million of repurchase capacity remains under the program, we have paid an aggregate of $59.1 million to repurchase and retire 3,695,889 units.program.
Cash Flows

The significant captions and amounts from our consolidated statements of cash flows which include the effects of our Consolidated Funds and CLOs in accordance with U.S. GAAP are summarized below.
 Six Months Ended June 30,
 20212020
 (Dollars in millions)
Statements of Cash Flows Data
Net cash provided by (used in) operating activities, including investments in Carlyle funds$595.3 $(76.9)
Net cash used in investing activities(11.7)(23.7)
Net cash provided by (used in) financing activities69.7 (160.0)
Effect of foreign exchange rate changes(25.7)(8.4)
Net change in cash, cash equivalents and restricted cash$627.6 $(269.0)

 Nine Months Ended September 30,
 2017 2016
 (Dollars in millions)
Statements of Cash Flows Data   
Net cash provided by operating activities$571.8
 $127.5
Net cash used in investing activities(22.4) (11.5)
Net cash provided by (used in) financing activities73.7
 (73.3)
Effect of foreign exchange rate changes61.7
 9.1
Net change in cash and cash equivalents$684.8
 $51.8
Net Cash Provided by (Used In) Operating Activities. Net cash provided by (used in) operating activities includes the investment activity of our Consolidated Funds. Excluding this activity, net cash provided by operating activities was primarily driven by our earnings in the respective periods after adjusting for significant non-cash activity, including non-cash performance allocations and incentive fees, the related non-cash performance allocations and incentive fee related compensation, non-cash equity-based compensation, and depreciation, amortization and impairments, all of which are included in earnings.
Cash flows from operating activities during the six months ended June 30, 2021 and 2020, excluding the activities of our Consolidated Funds, were $580.7 million and $61.8 million, respectively. Operating cash inflows primarily include the receipt of management fees, and realized performance allocations and incentive fees, while operating cash outflows primarily include payments for operating expenses, including compensation and general, administrative, and other expenses. During both the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, net cash provided by operating activities primarily included the receipt of management fees and realized performance allocations and incentive fees, totaling approximately $1.7$1.4 billion and $1.8$1.1 billion, respectively. These inflows were offset by payments for compensation and general, administrative and other expenses of approximately $1.3$0.7 billion for both the ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.


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Cash used to purchase investments as well as the proceeds from the sale of such investments are also reflected in our operating activities as investments are a normal part of our operating activities. During the ninesix months ended SeptemberJune 30,

2017, 2021, investment proceeds were $297.7$398.2 million while investment purchases were $412.4$103.4 million. During the ninesix months ended SeptemberJune 30, 2016,2020, investment proceeds were $219.7$166.2 million as compared to purchases of $218.6$244.2 million.
The net cash provided by operating activities for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 also reflects the investment activity of our Consolidated Funds. For the ninesix months ended SeptemberJune 30, 2017,2021, purchases of investments by the Consolidated Funds were $2,129.7$2,700.4 million, while proceeds from the sales and settlements of investments by the Consolidated Funds were $2,135.6$2,426.9 million. For the ninesix months ended SeptemberJune 30, 2016,2020, purchases of investments by the Consolidated Funds were $1,707.8$1,046.4 million, while proceeds from the sales and settlements of investments by the Consolidated Funds were $873.9$1,088.6 million.
Net Cash Used In Investing Activities. Our investing activities generally reflect cash used for acquisitions, fixed assets and software for internal use, and changes in restricted cash.use. For the ninesix months ended SeptemberJune 30, 2017,2021, cash used in investing activities principally reflects purchases of fixed assets.assets, partially offset by proceeds received from the sale of MRE of $5.9 million. Purchases of fixed assets were $26.0$17.6 million and $13.3$23.7 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively.
Net Cash Used inProvided by (Used in) Financing Activities. Financing Net cash provided by (used in) financing activities are a net source of cash induring the ninesix months ended SeptemberJune 30, 20172021 and a net use2020, excluding the activities of cash inour Consolidated Funds, was $68.5 million and $(293.5) million, respectively. During the ninesix months ended SeptemberJune 30, 2016.
For2021, the nine months ended September 30, 2017, the PartnershipCompany received net proceeds of $387.6$484.2 million from the issuance of preferred units. See Note 14subordinated notes, and made $141.8 million of net repayments on borrowings used to finance a portion of our investments in the unaudited condensed consolidated financial statements for more information onCLOs. We made no borrowings or repayments under the preferred units.
revolving credit facilities during the six months ended June 30, 2021. For the ninesix months ended SeptemberJune 30, 2017,2020, the PartnershipCompany received net proceeds of $202.6$263.8 million from borrowings and made $295.6 million in repayments under the issuancerevolving credit facilities. The Company also paid $68.8 million in both January 2020 and 2021, representing the first and second annual installments of various CLO term loans. See Note 7the deferred consideration payable to former Carlyle Holdings unitholders in connection with the unaudited condensed consolidated financial statements for more information on these term loans.Conversion.
DistributionsDividends paid to our common unitholdersstockholders were $63.0$177.4 million and $98.5$174.6 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively. Distributions to the non-controlling interest holders in Carlyle Holdings were $163.1The Company paid $25.0 million and $300.9$26.4 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, to repurchase and retire 0.6 million and 1.1 million shares, respectively.
The net borrowings (payments) borrowings on loans payable by our Consolidated Funds during the ninesix months ended SeptemberJune 30, 20172021 and 20162020 were $(312.7)$(15.9) million and $339.7$134.6 million, respectively. Contributions from non-controlling interest holders were $87.7$44.4 million and $75.3$14.0 million for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, respectively, which relate primarily to contributions from the non-controlling interest holders in Consolidated Funds. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, distributions to non-controlling interest holders were $74.0$42.9 million and $87.3$35.2 million, respectively, which relate primarily to distributions to the non-Carlyle interests in majority-owned subsidiaries.
Our Balance Sheet
Total assets were $11.7$19.6 billion at SeptemberJune 30, 2017,2021, an increase of $1.7$4.0 billion from December 31, 2016.2020. The increase in total assets was primarily attributable to increasesa $3.3 billion increase in accruedinvestments, including performance fees, cashallocation and cash equivalents and investments of $1,017.5 million, $684.8 million, and $373.9 million, respectively. These increases were partially offset by a decreasean increase in cash and cash equivalents held at Consolidated Funds of $566.1$0.6 billion. The increase in investments, including performance allocations, was largely driven by appreciation across our portfolio. The increase in cash was primarily due to the issuance of $500 million in subordinated notes and the deconsolidation inreceipt of management fees and realized performance revenues, partially offset by the three months ended September 2017payment of deferred consideration related to our acquisition of Carlyle Aviation Partners, payment of the total assetssecond installment of deferred consideration to the real estate VIE of $176.9 million.former Carlyle Holdings unitholders, and payments for bonuses and payroll, dividends and income taxes. Cash and cash equivalents including corporate treasury investments, were approximately $1.5$1.6 billion and $1.0 billion at both SeptemberJune 30, 20172021 and December 31, 2016.2020, respectively.
Total liabilities were $8.9$15.0 billion at SeptemberJune 30, 2017,2021, an increase of $0.4$2.3 billion from December 31, 2016.2020. The increase in liabilities was primarily attributable to increasesan increase in accrued compensation and benefits andof $1.3 billion due to the corresponding increase in accrued performance allocations as well as an increase in debt obligations of $513.3$336.6 million and $250.4driven by the issuance of $500 million respectively. These increases werein subordinated notes, partially offset by decreases in other liabilitiesthe repayment of Consolidated Funds and the deconsolidation in the three months ended September 2017 of the liabilities of the real estate VIE of $161.6 million and $203.9 million, respectively, from December 31, 2016 to September 30, 2017.our U.S. CLO term loans.
The assets and liabilities of the Consolidated Funds are generally held within separate legal entities and, as a result, the assets of the Consolidated Funds are not available to meet our liquidity requirements and similarly the liabilities of the Consolidated Funds are non-recourse to us. For example, as previously discussed, the CLO term loans generally are secured by the Partnership'sCompany’s investment in the CLO, have a general unsecured interest in the Carlyle entity that manages the CLO, and do not have recourse to any other Carlyle entity.


Our balance sheet without the effect of the Consolidated Funds can be seen in Note 1816 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. At SeptemberJune 30, 2017,2021, our total assets without the


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effect of the Consolidated Funds were $7.4$13.3 billion, including cash and cash equivalents including corporate treasury investments, of $1.5$1.6 billion and net accrued performance feesrevenues of $1.5$4.0 billion.

Unconsolidated Entities
Our corporate private equity funds and certainCertain of our real estate funds have entered into lines of credit secured by their investors’ unpaid capital commitments or by a pledge of the equity of the underlying investment. These lines of credit are used primarily to reduce the overall number of capital calls to investors or for working capital needs. In certain instances, however, they may be used for other investment related activities, including serving as bridge financing for investments. The degree of leverage employed varies among our funds.

Off-balance Sheet Arrangements
In the normal course of business, we enter into various off-balance sheet arrangements including sponsoring and owning limited or general partner interests in consolidated and non-consolidated funds, entering into derivative transactions, entering into operating leases and entering into guarantee arrangements. We also have ongoing capital commitment arrangements with certain of our consolidated and non-consolidated funds. We do not have any other off-balance sheet arrangements that would require us to fund losses or guarantee target returns to investors in any of our other investment funds.
In June 2021, the Company entered into agreements with financial institutions pursuant to which it provided the guarantee for revolving credit facilities of an investment fund that is actively fundraising in Global Private Equity segment. The maximum aggregate amount available under the facilities is $2.0 billion. These facilities expire upon the earlier of six months or at such time that the investment fund enters into a subscription credit facility with a maximum capacity of at least $2.0 billion. The Company has not funded any amounts under this guarantee to date, and believes the likelihood of any material funding to be remote.
For further information regarding our off-balance sheet arrangements, see Note 2 and Note 97 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.



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Contractual Obligations
The following table sets forth information relating to our contractual obligations as of SeptemberJune 30, 20172021 on a consolidated basis and on a basis excluding the obligations of the Consolidated Funds:
Jul. 1, 2021 to
Dec. 31, 2021		2022-20232024-2025ThereafterTotal
 (Dollars in millions)
Debt obligations (1)$— $271.2 $16.6 $2,047.2 $2,335.0 
Interest payable (2)54.3 202.7 191.8 1,912.8 2,361.6 
Other consideration (3)1.6 196.4 83.8 — 281.8 
Operating lease obligations (4)27.8 121.3 106.8 397.9 653.8 
Capital commitments to Carlyle funds (5)3,353.5 — — — 3,353.5 
Tax receivable agreement payments (6)— 23.1 6.3 68.6 98.0 
Loans payable of Consolidated Funds (7)44.3 175.7 175.9 5,908.6 6,304.5 
Unfunded commitments of the CLOs (8)4.7 — — — 4.7 
Consolidated contractual obligations3,486.2 990.4 581.2 10,335.1 15,392.9 
Loans payable of Consolidated Funds (7)(44.3)(175.7)(175.9)(5,908.6)(6,304.5)
Capital commitments to Carlyle funds (5)(2,819.3)— — — (2,819.3)
Unfunded commitments of the CLOs (8)(4.7)— — — (4.7)
Carlyle Operating Entities contractual obligations$617.9 $814.7 $405.3 $4,426.5 $6,264.4 
(1)The table above assumes that no prepayments are made on the senior notes and that the outstanding balance, if any, on the senior credit facility is repaid on the maturity date of the senior credit facility, which is February 11, 2024. The CLO term loans are included in the table above based on the earlier of the stated maturity date or the date the CLO is expected to be dissolved. See Note 5 to the unaudited condensed consolidated financial statements for the various maturity dates of the CLO term loans and senior notes.
 
October 1, 2017 to
December 31, 2017
 2018-2019 2020-2021 Thereafter Total
 (Dollars in millions)
Debt obligations (including senior notes)(a)
$6.7
 $47.2
 $133.8
 $1,329.9
 $1,517.6
Interest payable(b)
16.6
 132.3
 128.0
 771.9
 1,048.8
Contingent cash and other consideration(c)
8.5
 65.7
 3.3
 —
 77.5
Operating lease obligations(d)
12.6
 96.0
 90.4
 334.6
 533.6
Capital commitments to Carlyle funds(e)
2,830.1
 —
 —
 —
 2,830.1
Tax receivable agreement payments(f)
—
 1.4
 26.0
 128.5
 155.9
Loans payable of Consolidated Funds(g)
20.5
 162.8
 163.0
 4,371.4
 4,717.7
Unfunded commitments of the CLOs(h)
0.2
 —
 —
 —
 0.2
Consolidated contractual obligations2,895.2
 505.4
 544.5
 6,936.3
 10,881.4
Loans payable of Consolidated Funds(g)
(20.5) (162.8) (163.0) (4,371.4) (4,717.7)
Capital commitments to Carlyle funds(e)
(2,480.2) —
 —
 —
 (2,480.2)
Unfunded commitments of the CLOs(h)
(0.2) —
 —
 —
 (0.2)
Carlyle Operating Entities contractual obligations$394.3
 $342.6
 $381.5
 $2,564.9
 $3,683.3
(2)The interest rates on the debt obligations as of June 30, 2021 consist of: 3.500% on $425.0 million of senior notes, 5.650% on $350.0 million of senior notes, 3.875% on $250.0 million of senior notes, 5.625% on $600.0 million of senior notes, 4.625% on $500.0 million of subordinated notes, 3.875% on $250.0 million under the revolving credit facility, and a range of approximately 1.36% to 8.11% for our CLO term loans. Interest payments assume that no prepayments are made and loans are held until maturity with the exception of the CLO term loans, which are based on the earlier of the stated maturity date or the date the CLO is expected to be dissolved.
(3)These obligations represent our estimate of amounts to be paid on the contingent cash obligations associated with our acquisition of Carlyle Aviation Partners and other obligations, as well as the deferred payment obligations described below. In connection with the Conversion, former holders of Carlyle Holdings partnership units will receive cash payments aggregating to approximately $344 million, which is equivalent to $1.50 per Carlyle Holdings partnership unit exchanged in the Conversion, payable in five annual installments of $0.30, the second of which occurred during the first quarter of 2021. The payment obligations are unsecured obligations of the Company or a subsidiary thereof, subordinated in right of payment to indebtedness of the Company and its subsidiaries, and do not bear interest.
(a)The table above assumes that no prepayments are made on the CLO term loans, promissory notes or senior notes and that the outstanding balance on the revolving credit facility term loan is repaid on the maturity date of the senior credit facility, which is May 5, 2020. See Note 7 to the unaudited condensed consolidated financial statements for the various maturity dates of the CLO term loans, promissory notes and senior notes.
(b)The interest rate on the debt obligations as of September 30, 2017 consist of: 3.875% on $500.0 million of senior notes, 5.625% on $600.0 million of senior notes, approximately 2.49% on $25.0 million remaining term loan under our senior credit facility, a range of approximately 1.75% to 3.25% for our CLO term loans, approximately 3.83% on $108.8 million of our NGP promissory note and approximately 3.33% on $53.9 million of our settlement promissory notes. Interest payments assume that no prepayments are made and loans are held until maturity.
(c)These obligations represent our estimate of amounts to be paid on the contingent cash and other consideration obligations associated with our business acquisitions, strategic investment in NGP Management, payments related to the acquisition of secondary interests in Carlyle funds and other obligations.

(4)We lease office space in various countries around the world and maintain our headquarters in Washington, D.C., where we entered into an amended non-cancelable lease agreement expiring on March 31, 2030. We entered into a new non-cancelable lease agreement expiring in 2036 for new office space in New York City. Our office leases in other locations expire in various years through 2032. The amounts in this table represent the minimum lease payments required over the term of the lease.
(d)We lease office space in various countries around the world and maintain our headquarters in Washington, D.C., where we lease our primary office space under a non-cancelable lease agreement expiring on July 31, 2026. Our office leases in other locations expire in various years from 2017 through 2032. The amounts in this table represent the minimum lease payments required over the term of the lease.
(e)These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These amounts are generally due on demand and are therefore presented in the less than one year category. A substantial majority of these investments is expected to be funded by senior Carlyle professionals and other professionals through our internal co-investment program. Of the $2.8 billion of unfunded commitments, approximately $2.5 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Partnership.
(f)Represents obligations by the Partnership’s corporate taxpayers to make payments under the tax receivable agreement. Holders of partnership units in Carlyle Holdings may exchange their Carlyle Holdings partnership units for common units in The Carlyle Group L.P. on a one-for-one basis. These exchanges may reduce the amount of tax that the corporate taxpayers would be required to pay in the future. The corporate taxpayers will pay to the limited partner of Carlyle Holdings making the exchange 85% of the amount of cash savings that the corporate taxpayers realize upon an exchange. See “Tax Receivable Agreement” below.
(g)These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles. These obligations include interest to be paid on debt securities issued by the consolidated CLO vehicles. Interest payments assume that no prepayments are made and loans are held until maturity. For debt securities with rights only to the residual value of the CLO and no stated interest, no interest payments were included in this calculation. Interest payments on variable-rate debt securities are based on interest rates in effect as of September 30, 2017, at spreads to market rates pursuant to the debt agreements, and range from 0.78% to 8.91%.
(h)These obligations represent commitments of the CLOs to fund certain investments. These amounts are generally due on demand and are therefore presented in the less than one year category.
(5)These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These amounts are generally due on demand and are therefore presented in the less than one year category. A substantial majority of these investments is expected to be funded by senior Carlyle professionals and other professionals through our internal co-investment program. Of the $3.3 billion of unfunded commitments, approximately $2.8 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Company.
(6)In connection with our initial public offering, we entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships whereby we agreed to pay such limited partners 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. From and after the consummation of the Conversion, former holders of Carlyle Holdings partnership units do not have any rights to payments under the tax receivable agreement except for payment obligations pre-existing at the time of the Conversion with respect to exchanges that occurred prior to the Conversion. These obligations are more than offset by the future cash tax savings that we are expected to realize.
(7)These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles. These obligations include interest to be paid on debt securities issued by the consolidated CLO vehicles. Interest payments assume that no prepayments are made and loans are held until maturity. For debt securities with rights only to the residual value of the CLO and no stated interest, no interest payments were included in this calculation. Interest payments on variable-rate debt securities are based on interest rates in effect as of June 30, 2021, at spreads to market rates pursuant to the debt agreements, and range from 0.30% to 8.76%.
(8)These obligations represent commitments of the CLOs to fund certain investments. These amounts are generally due on demand and are therefore presented in the less than one year category.
Excluded from the table above are liabilities for uncertain tax positions of $17.7$25.1 million at SeptemberJune 30, 20172021 as we are unable to estimate when such amounts may be paid.


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Contingent Cash Payments For Business Acquisitions and Strategic Investments
We have certain contingent cash obligations associated with our acquisition of Carlyle Aviation Partners and our strategic investment in Fortitude Re. For our acquisition of Carlyle Aviation Partners, the contingent cash payments relate to an earn-out of up to $150.0 million that is payable upon the achievement of certain revenue and earnings performance targets during 2020 through 2025, which are accounted for as compensation expense. We accrue the compensation liability over the service period. If earned, payments would be made in the year following the performance year to which the payments relate. In March 2021, we paid $49.9 million related to the Carlyle Aviation Partners earn-out for the performance period ended December 31, 2020.
For our strategic investment in Fortitude Re, the contingent cash payments relate to performance-based contingent cash consideration payable to Carlyle FRL for further payment to AIG following December 31, 2023. Based on the terms of the underlying contracts, the maximum amount that could be paid from contingent cash obligations associated with the acquisition of Carlyle Aviation Partners and the strategic investment in Fortitude Re as of June 30, 2021 is $195.1 million versus the amounts recognized on the balance sheet of $119.3 million.
Risk Retention Rules
The Dodd-Frank Act requires sponsors of asset-backed securities, including CLOs,We will continue to retain at least 5% ofcomply with the credit risk related to the assets that underlie asset-backed securities (referred to herein as the U.S. Risk Retention Rules). The U.S. Risk Retention Rules became effective on December 24, 2016 and apply to sponsors of CLOs issued thereafter. As a sponsor ofretention rules governing CLOs issued in Europe for which we currently comply with similar risk retention rules that have been in place since 2014. To comply with the U.S. Risk Retention Rules, we expect that we will contribute approximately $750 million to new CLOs issued over the next five years. Our contribution to the new CLOs will be funded throughare a varietysponsor, which require a combination of sources, including direct fundingcapital from the Partnership, fundingour balance sheet, commitments from senior Carlyle professionals, funding fromand/or third party investors, and limited recourse borrowing. The allocation of funding sources, and therefore the amount of capital required from the Partnership, will be determined in the future.

For additional information related to the U.S. Risk Retention Rules, see “—Regulatory changes in the United States could adversely affect our business and the possibility of increased regulatory focus could result in additional burdens and expenses on our business” within Item 1A of our 2016 Annual Report on Form 10-K.

financing.
Guarantees
See Note 97 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for information related to all of our material guarantees.
Indemnifications
In many of our service contracts, we agree to indemnify the third-party service provider under certain circumstances. The terms of the indemnities vary from contract to contract, and the amount of indemnification liability, if any, cannot be determined and has not been included in the table above or recorded in our unaudited condensed consolidated financial statements as of SeptemberJune 30, 2017.2021.

Tax Receivable Agreement
Holders of partnership units in Carlyle Holdings (other than The Carlyle Group L.P.’s wholly-owned subsidiaries), subject to the vesting and minimum retained ownership requirements and transfer restrictions applicable to such holders as set forth in the partnership agreements of the Carlyle Holdings partnerships, may (subject to the terms of the exchange agreement) exchange their Carlyle Holdings partnership units for The Carlyle Group L.P. common units on a one-for-one basis. A Carlyle Holdings limited partner must exchange one partnership unit in each of the three Carlyle Holdings partnerships to effect an exchange for a common unit. The exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Carlyle Holdings. These increases in tax basis may increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of tax that Carlyle Holdings I GP Inc. and any other corporate taxpayers would

otherwise be required to pay in the future, although the IRS may challenge all or part of that tax basis increase, and a court could sustain such a challenge.
We have entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships that will provide for the payment by the corporate taxpayers to such parties of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the corporate taxpayers realize as a result of these increases in tax basis and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. This payment obligation is an obligation of the corporate taxpayers and not of Carlyle Holdings. While the actual increase in tax basis, as well as the amount and timing of any payments under this agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of our common units at the time of the exchange, the extent to which such exchanges are taxable and the amount and timing of our income, we expect that as a result of the size of the transfers and increases in the tax basis of the tangible and intangible assets of Carlyle Holdings, the payments that we may make under the tax receivable agreement will be substantial.
See Note 2 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information related to our tax receivable agreement.

Contingent Obligations (Giveback)
Carried interest is ultimately realized when: (1) an underlying investment is profitably disposed of, (2) certain costs borne by the limited partner investors have been reimbursed, (3) the fund's cumulative returns are in excess of the preferred return, and (4) we have decided to collect carry rather than return additional capital to limited partner investors. Realized carried interest may be required to be returned by us in future periods if the funds' investment values decline below certain levels. When the fair value of a fund's investments remains constant or falls below certain return hurdles, previously recognized performance fees are reversed.

See Note 9 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information related to our contingent obligations (giveback).

Other Contingencies
In the ordinary course of business, we are a party to litigation, investigations, inquiries, employment-related matters, disputes and other potential claims. We discuss certain of these matters in Note 97 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Carlyle Common Units and Carlyle Holdings Partnership UnitsStock
A rollforward of theour common stock outstanding Carlyle Group L.P. common units and Carlyle Holdings partnership units from December 31, 20162020 through SeptemberJune 30, 20172021 is as follows:
Shares as of December 31, 2020Shares
Issued		Shares
Forfeited		Shares Repurchased / RetiredShares as of June 30, 2021
The Carlyle Group Inc. common shares353,520,576 1,571,706 — (630,133)354,462,149 
 Units as of December 31, 2016 Units Issued - DRUs Units
Forfeited		 Units
Exchanged		 Units Repurchased / Retired Units as of September 30, 2017
The Carlyle Group L.P.
common units		84,610,951
 8,408,673
 —
 4,800,473
 (14,190) 97,805,907
Carlyle Holdings
partnership units		241,847,796
 —
 (437,314) (4,800,473) —
 236,610,009
Total326,458,747
 8,408,673
 (437,314) —
 (14,190) 334,415,916
Shares of The Carlyle Group L.P.Inc. common unitsstock issued during the period from December 31, 20162020 through SeptemberJune 30, 20172021 relate to the vesting of the Partnership’s deferredCompany’s restricted commonstock units during the ninesix months ended SeptemberJune 30, 2017. Further, The Carlyle Group L.P. common units in the table above includes 7,782 common units that the Partnership is expected to acquire from Carlyle Holdings in future periods upon the vesting of certain of the Partnership’s unvested common units associated with the acquisition of the remaining 40% equity interest in AlpInvest in August 2013.
The Carlyle Holdings partnership units forfeited during the period from December 31, 2016 through September 30, 2017 relate to unvested Carlyle Holdings partnership units that were forfeited when the holder ceased to provide services to the Partnership.

The Carlyle Holdings partnership units exchanged relate to the exchange of Carlyle Holdings partnership units held by NGP and certain limited partners for common units on a one-for-one basis. Beginning with the second quarter of 2017, senior Carlyle professionals can exchange their Carlyle Holdings partnership units for common units on a quarterly basis, subject to the terms of the Exchange Agreement. We intend to facilitate an orderly exchange process to seek to minimize the impact on the trading price of our common units. During the three and nine months ended September 30, 2017, senior Carlyle professionals exchanged approximately 1.6 million and 4.6 million, respectively, of their Carlyle Holdings partnership units for common units.
The Carlyle Group L.P. common units and Carlyle Holdings partnership units repurchased during the period from December 31, 2016 through September 30, 2017 relate to units repurchased and subsequently retired as part of our unit repurchase program that was initiated in February 2016.2021.
The total unitsshares as of SeptemberJune 30, 20172021 as shown above exclude approximately 0.52.9 million common unitsshares in connection with the vesting of deferred restricted commonstock units subsequent to SeptemberJune 30, 20172021 that will participate in the common unitholder distributionshareholder dividend that will be paid in November 2017.August 17, 2021.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Our primary exposure to market risk is related to our role as general partner or investment advisor to our investment funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees, performanceincentive fees and investment income.income, including performance allocations. Although our investment funds share many common themes, each of our alternative asset management asset classes runs its own investment and risk management processes, subject to our overall risk tolerance and philosophy. The investment process of our investment funds involves a comprehensive due diligence approach, including review of reputation of shareholders and management, company size and sensitivity of cash flow


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generation, business sector and competitive risks, portfolio fit, exit risks and other key factors highlighted by the deal team. Key investment decisions are subject to approval by both the fund-level managing directors, as well as the investment committee, which is generally comprised of one or more of the three founding partners, one “sector” head, one or more operating executives and senior investment professionals associated with that particular fund. Once an investment in a portfolio company has been made, our fund teams closely monitor the performance of the portfolio company, generally through frequent contact with management and the receipt of financial and management reports.
There was no material change in our market risks during the three months ended SeptemberJune 30, 2017.2021. For additional information, refer to our Annual Report on Form 10-K for the year ended December 31, 2016.2020.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our co-principalprincipal executive officersofficer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Our management, with the participation of our co-principalprincipal executive officersofficer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our co-principalprincipal executive officersofficer and principal financial officer concluded that, as of the end of the period covered by this report, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.


Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended SeptemberJune 30, 20172021 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.



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PART II - OTHER INFORMATION
 
Item 1.     Legal Proceedings
The information required with respect to this item can be found under “Legal Matters” in Note 9,7, Commitments and Contingencies, of the notes to the Partnership’sCompany’s unaudited condensed consolidated financial statements contained in this quarterly report, and such information is incorporated by reference into this Item 1.
Item 1A. Risk Factors
For a discussion of our potential risks and uncertainties, see the information under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which is accessible on the SEC’s website at sec.gov.2020.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities

The following table sets forth repurchases of our common stock during the three months ended June 30, 2021 for the periods indicated:
Period(a) Total number of shares
purchased		(b) Average price paid per share(c) Total number of shares purchased as part of publicly announced plans or programs(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
(Dollars in millions, except unit and per unit data)
April 1, 2021 to April 30, 2021 (1)— $— — $190.0 
May 1, 2021 to May 31, 2021 (1)(2)349,961 $42.86 349,961 $175.0 
June 1, 2021 to June 30, 2021 (1)— $— — $175.0 
Total349,961 349,961 

(1)In February 2016, theDecember 2018, our Board of Directors of the general partner of the Partnership authorized the repurchase of up to $200 million of common unitsstock and/or Carlyle Holdings units. Under this unitIn January 2020 our Board of Directors re-authorized the December 2018 repurchase program which was publicly announced onwith regard to our common stock, and in February 10, 2016, units may be repurchased from time2021, our Board of Directors replenished the repurchase program to timeits limit of $200 million of common stock in open market transactions, in privately negotiated transactions or otherwise. We expect that the majority of repurchases under this program will be done via open market transactions. No units will be repurchased from our executive officers under this program.aggregate. The timing and actual number of shares of common units and/or Carlyle Holdings unitsstock repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This unitshare repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During
(2)All of the three months ended September 30, 2017, no unitsshares of common stock purchased during this period were repurchased. As of September 30, 2017, we had approximately $141 millionpurchased in remaining authorization under the unit repurchase program.open market and brokered transactions and were subsequently retired.

Item 3.     Defaults Upon Senior Securities
Not applicable.
Item 4.     Mine Safety Disclosures
Not applicable.
Item 5.     Other Information

Not applicable.
None.







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Item 6.     Exhibits
The following is a list of all exhibits filed or furnished as part of this report:
Exhibit No.Description
Exhibit No.Description
3.1
3.2
3.3
4.1
10.14.2
4.3
4.4
10.1+
10.222 *

10.331.1 *

10.4
Amendment No. 2 to Exchange Agreement, dated as of September 13, 2017, among Carlyle Holdings I L.P., Carlyle Holdings II L.P. and Carlyle Holdings III L.P., related to the Exchange Agreement, dated as of May 2, 2012, among Carlyle Group Management L.L.C., The Carlyle Group L.P., Carlyle Holdings I GP Inc., Carlyle Holdings II GP L.L.C., Carlyle Holdings II Sub L.L.C., Carlyle Holdings III GP L.P., Carlyle Holdings I L.P., Carlyle Holdings II L.P., Carlyle Holdings III L.P. and the limited partners of each of Carlyle Holdings I L.P., Carlyle Holdings II L.P. and Carlyle Holdings III L.P. (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K (File No. 001-35538) filed with the SEC on September 13, 2017).
31.1 *
Certification of the co-principalprincipal executive officer pursuant to Rule 13a – 14(a).
31.2 *
31.3 *
Certification of the co-principal executive officer pursuant to Rule 13a – 14(a).
31.4 *
Certification of the principal financial officer pursuant to Rule 13a – 14(a).
32.1 *
32.2 *
32.3 *
Certification of the co-principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4 *
Certification of the principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1101.INS
Second Amended and Restated Agreement of Limited Liability Company ofInline XBRL Instance Document - the General Partner ofInstance Document does not appear in the Registrant (incorporated by reference to Exhibit 99.1 toInteractive Data File because its XBRL tags are embedded within the Registrant's Current Report on Form 8-K (File No. 001-35538) filed with the SEC on September 13, 2017).
Inline XBRL document.
101.INS101.SCHXBRL Instance Document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.

*104Filed herewith.The cover page from The Carlyle Group Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Inline XBRL (included within the Exhibit 101 attachments).
*Filed herewith.
+Management contract or compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.



127

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
The Carlyle Group L.P.Inc.
Date: July 29, 2021By:
Carlyle Group Management L.L.C.,
its general partner
Date: October 31, 2017By:/s/ Curtis L. Buser
Name:Curtis L. Buser
Title:Chief Financial Officer
(Principal Financial Officer and Authorized Officer)



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