Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2013

Reportable Segments Financial Data

The following table presents the financial data for the Partnership’s four reportable segments as of and for the three months ended March 31, 2013:

	March 31, 2013 and the Three Months Then Ended
	Corporate Private Equity			Global Market Strategies		Real Assets			Solutions			Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	108.3		$	66.3	$	47.0		$	18.5		$	240.1
Portfolio advisory fees, net		4.1			0.2		0.3			—			4.6
Transaction fees, net		10.4			—		—			—			10.4
Total fund level fee revenues		122.8			66.5		47.3			18.5			255.1
Performance fees
Realized		212.3			24.1		11.0			1.5			248.9
Unrealized		207.6			64.3		49.5			21.3			342.7
Total performance fees		419.9			88.4		60.5			22.8			591.6
Investment income (loss)
Realized		1.8			1.9		(13.0	)		—			(9.3	)
Unrealized		2.8			5.1		4.5			(0.1	)		12.3
Total investment income		4.6			7.0		(8.5	)		(0.1	)		3.0
Interest and other income		1.0			1.1		0.3			—			2.4
Total revenues		548.3			163.0		99.6			41.2			852.1
Segment Expenses
Compensation and benefits
Direct base compensation		55.0			25.7		17.9			9.4			108.0
Indirect base compensation		20.0			4.8		7.5			1.3			33.6
Equity-based compensation		1.5			0.4		0.6			0.1			2.6
Performance fee related
Realized		101.6			9.7		(4.9	)		1.0			107.4
Unrealized		83.6			6.2		23.6			16.1			129.5
Total compensation and benefits		261.7			46.8		44.7			27.9			381.1
General, administrative, and other indirect expenses		39.0			9.5		10.4			3.4			62.3
Depreciation and amortization expense		3.5			1.2		1.1			0.5			6.3
Interest expense		4.9			1.5		1.6			0.5			8.5
Total expenses		309.1			59.0		57.8			32.3			458.2
Economic Net Income	$	239.2		$	104.0	$	41.8		$	8.9		$	393.9
Fee Related Earnings	$	(0.1	)	$	24.5	$	8.5		$	3.3		$	36.2
Net Performance Fees	$	234.7		$	72.5	$	41.8		$	5.7		$	354.7
Realized Net Performance Fees	$	110.7		$	14.4	$	15.9		$	0.5		$	141.5
Investment Income (Loss)	$	4.6		$	7.0	$	(8.5	)	$	(0.1	)	$	3.0
Distributable Earnings	$	112.4		$	40.8	$	11.4		$	3.8		$	168.4
Segment assets as of March 31, 2013	$	2,740.3		$	1,054.2	$	970.7		$	367.3		$	5,132.5

The following table presents the financial data for the Partnership’s four reportable segments for the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
	Corporate Private Equity		Global Market Strategies		Real Assets			Solutions		Total
	(Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees	$	123.9	$	48.6	$	36.6		$	16.3	$	225.4
Portfolio advisory fees, net		7.0		0.7		0.3			—		8.0
Transaction fees, net		1.6		—		1.1			—		2.7
Total fund level fee revenues		132.5		49.3		38.0			16.3		236.1
Performance fees
Realized		223.0		32.4		23.2			3.2		281.8
Unrealized		241.3		12.7		82.4			13.3		349.7
Total performance fees		464.3		45.1		105.6			16.5		631.5
Investment income
Realized		0.8		1.3		—			—		2.1
Unrealized		14.5		3.7		3.0			—		21.2
Total investment income		15.3		5.0		3.0			—		23.3
Interest and other income		1.4		0.6		0.4			0.2		2.6
Total revenues		613.5		100.0		147.0			33.0		893.5
Segment Expenses
Compensation and benefits
Direct base compensation		55.3		19.7		18.2			8.0		101.2
Indirect base compensation		20.8		4.9		6.4			1.0		33.1
Performance fee related
Realized		117.6		17.8		0.9			2.8		139.1
Unrealized		132.0		9.7		5.9			10.0		157.6
Total compensation and benefits		325.7		52.1		31.4			21.8		431.0
General, administrative, and other indirect expenses		34.8		7.3		11.7			1.6		55.4
Depreciation and amortization expense		3.2		0.8		1.0			0.2		5.2
Interest expense		5.9		1.7		1.9			0.3		9.8
Total expenses		369.6		61.9		46.0			23.9		501.4
Economic Net Income	$	243.9	$	38.1	$	101.0		$	9.1	$	392.1
Fee Related Earnings	$	13.9	$	15.5	$	(0.8	)	$	5.4	$	34.0
Net Performance Fees	$	214.7	$	17.6	$	98.8		$	3.7	$	334.8
Realized Net Performance Fees	$	105.4	$	14.6	$	22.3		$	0.4	$	142.7
Investment Income	$	15.3	$	5.0	$	3.0		$	—	$	23.3
Distributable Earnings	$	120.1	$	31.4	$	21.5		$	5.8	$	178.8

Total Segments to Partnership Income Before Provision for Taxes Reconciliation

The following table reconciles the Total Segments to the Partnership’s Income Before Provision for Taxes as of and for the three months ended March 31, 2013:

	Three Months Ended March 31, 2013
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated
	(Dollars in millions)
Revenues	$	852.1	$	268.4	$	24.5	(a)	$	1,145.0
Expenses	$	458.2	$	333.2	$	112.7	(b)	$	904.1
Other income	$	—	$	212.6	$	(1.1	) (c)	$	211.5
Economic net income	$	393.9	$	147.8	$	(89.3	) (d)	$	452.4
Total assets	$	5,132.5	$	27,609.9	$	(90.9	) (e)	$	32,651.5

The following table reconciles the Total Segments to the Partnership’s Income Before Provision for Taxes for the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
	Total Reportable Segments		Consolidated Funds		Reconciling Items			Carlyle Consolidated
	(Dollars in millions)
Revenues	$	893.5	$	211.5	$	5.9	(a)	$	1,110.9
Expenses	$	501.4	$	220.2	$	(244.4	) (b)	$	477.2
Other income	$	—	$	870.5	$	1.6	(c)	$	872.1
Economic net income	$	392.1	$	861.8	$	251.9	(d)	$	1,505.8

(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 investment in NGP Management that are included in operating captions or are excluded from the segment results, and adjustments to reflect the Partnership’s ownership interests in Claren Road, ESG, Vermillion and AlpInvest which were included in Revenues in the Partnership’s segment reporting.

(b) The Expenses adjustment represents the elimination of intercompany expenses of the Consolidated Funds payable to the Partnership, adjustments for partner compensation, adjustments related to expenses associated with the investment in NGP Management that are included in operating captions, charges and credits associated with Carlyle corporate actions and non-recurring items and adjustments to reflect the Partnership’s economic interests in Claren Road, ESG, Vermillion and AlpInvest as detailed below (Dollars in millions):

	Three Months Ended March 31,
	2013			2012
Partner compensation	$	—		$	(271.0	)
Equity-based compensation issued in conjuction with the initial public offering and strategic investments		52.1			—
Acquisition related charges and amortization of intangibles		62.5			24.1
Losses associated with debt refinancing activities		1.9			—
Other non-operating expenses		(2.4	)		(4.1	)
Severance and lease terminations		0.5			2.4
Non-Carlyle economic interests in acquired business		78.9			38.0
Other adjustments		0.9			(0.2	)
Elimination of expenses of Consolidated Funds		(81.7	)		(33.6	)
	$	112.7		$	(244.4	)

(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 March 31,
	2013			2012
Income before provision for income taxes	$	452.4		$	1,505.8
Adjustments:
Partner compensation (1)		—			(271.0	)
Equity-based compensation issued in conjuction with the initial public offering and strategic investments		52.1			—
Acquisition related charges and amortization of intangibles		62.5			24.1
Losses associated with debt refinancing activities		1.9			—
Other non-operating (income) expenses		(2.4	)		(4.1	)
Net income attributable to non-controlling interests in Consolidated entities		(168.0	)		(864.9	)
Provision for income taxes attributable to non-controlling interests in Consolidated entities		(6.0	)		—
Severance and lease terminations		0.5			2.4
Other adjustments		0.9			(0.2	)
Economic Net Income	$	393.9		$	392.1
Net performance fees (2)		354.7			334.8
Investment income (2)		3.0			23.3
Fee Related Earnings	$	36.2		$	34.0
Realized performance fees, net of related compensation		141.5			142.7
Investment income (loss) - realized		(9.3	)		2.1
Distributable Earnings	$	168.4		$	178.8

(1) Adjustments for partner compensation reflect amounts due to senior Carlyle professionals for compensation and performance fees allocated to them, which amounts were classified as distributions from partners’ capital in the consolidated financial statements for periods prior to the reorganization and initial public offering in May 2012.

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

	Three Months Ended March 31, 2013
	Carlyle Consolidated			Adjustments  (3)			Total Reportable Segments
	(Dollars in millions)
Performance fees
Realized	$	252.8		$	(3.9	)	$	248.9
Unrealized		389.6			(46.9	)		342.7
Total performance fees		642.4			(50.8	)		591.6
Performance fee related compensation expense
Realized		108.7			(1.3	)		107.4
Unrealized		195.0			(65.5	)		129.5
Total performance fee related compensation expense		303.7			(66.8	)		236.9
Net performance fees
Realized		144.1			(2.6	)		141.5
Unrealized		194.6			18.6			213.2
Total net performance fees	$	338.7		$	16.0		$	354.7
Investment income (loss)
Realized	$	(4.2	)	$	(5.1	)	$	(9.3	)
Unrealized		4.6			7.7			12.3
Total investment income (loss)	$	0.4		$	2.6		$	3.0

	Three Months Ended March 31, 2012
	Carlyle Consolidated			Adjustments  (3)			Total Reportable Segments
	(Dollars in millions)
Performance fees
Realized	$	280.6		$	1.2		$	281.8
Unrealized		360.2			(10.5	)		349.7
Total performance fees		640.8			(9.3	)		631.5
Performance fee related compensation expense
Realized		34.3			104.8			139.1
Unrealized		54.8			102.8			157.6
Total performance fee related compensation expense		89.1			207.6			296.7
Net performance fees
Realized		246.3			(103.6	)		142.7
Unrealized		305.4			(113.3	)		192.1
Total net performance fees	$	551.7		$	(216.9	)	$	334.8
Investment income (loss)
Realized	$	(0.8	)	$	2.9		$	2.1
Unrealized		22.3			(1.1	)		21.2
Total investment income (loss)	$	21.5		$	1.8		$	23.3

(3) Adjustments to performance fees and investment income (loss) relate to amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the segment results, and amounts attributable to non-controlling interests in consolidated entities, which were excluded from the segment results. Adjustments to investment income (loss) also include the reclassification of earnings for the investment in NGP Management to the appropriate operating captions for the segment results, and the exclusion of charges associated with the investment in NGP Management that are excluded from the segment results. Adjustments to performance fee related compensation expense relate to the inclusion of partner compensation in the segment results for periods prior to the reorganization and initial public offering in May 2012. Adjustments are also included in these financial statement captions to reflect the Partnership’s 55% economic interest in Claren Road, ESG and Vermillion and the Partnership’s 60% interest in AlpInvest in the segment results.

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

Expenses Adjustment Represents Elimination of Intercompany Expenses

(b) The Expenses adjustment represents the elimination of intercompany expenses of the Consolidated Funds payable to the Partnership, adjustments for partner compensation, adjustments related to expenses associated with the investment in NGP Management that are included in operating captions, charges and credits associated with Carlyle corporate actions and non-recurring items and adjustments to reflect the Partnership’s economic interests in Claren Road, ESG, Vermillion and AlpInvest as detailed below (Dollars in millions):

	Three Months Ended March 31,
	2013			2012
Partner compensation	$	—		$	(271.0	)
Equity-based compensation issued in conjuction with the initial public offering and strategic investments		52.1			—
Acquisition related charges and amortization of intangibles		62.5			24.1
Losses associated with debt refinancing activities		1.9			—
Other non-operating expenses		(2.4	)		(4.1	)
Severance and lease terminations		0.5			2.4
Non-Carlyle economic interests in acquired business		78.9			38.0
Other adjustments		0.9			(0.2	)
Elimination of expenses of Consolidated Funds		(81.7	)		(33.6	)
	$	112.7		$	(244.4	)

Reconciliation of Income Before Provision for Income Taxes

(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 March 31,
	2013			2012
Income before provision for income taxes	$	452.4		$	1,505.8
Adjustments:
Partner compensation(1)		—			(271.0	)
Equity-based compensation issued in conjuction with the initial public offering and strategic investments		52.1			—
Acquisition related charges and amortization of intangibles		62.5			24.1
Losses associated with debt refinancing activities		1.9			—
Other non-operating (income) expenses		(2.4	)		(4.1	)
Net income attributable to non-controlling interests in Consolidated entities		(168.0	)		(864.9	)
Provision for income taxes attributable to non-controlling interests in Consolidated entities		(6.0	)		—
Severance and lease terminations		0.5			2.4
Other adjustments		0.9			(0.2	)
Economic Net Income	$	393.9		$	392.1
Net performance fees(2)		354.7			334.8
Investment income(2)		3.0			23.3
Fee Related Earnings	$	36.2		$	34.0
Realized performance fees, net of related compensation		141.5			142.7
Investment income (loss) - realized		(9.3	)		2.1
Distributable Earnings	$	168.4		$	178.8

(1) Adjustments for partner compensation reflect amounts due to senior Carlyle professionals for compensation and performance fees allocated to them, which amounts were classified as distributions from partners’ capital in the consolidated financial statements for periods prior to the reorganization and initial public offering in May 2012.

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

Adjustments for Compensation and Performance Fees Allocated

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

	Three Months Ended March 31, 2013
	Carlyle Consolidated			Adjustments  (3)			Total Reportable Segments
	(Dollars in millions)
Performance fees
Realized	$	252.8		$	(3.9	)	$	248.9
Unrealized		389.6			(46.9	)		342.7
Total performance fees		642.4			(50.8	)		591.6
Performance fee related compensation expense
Realized		108.7			(1.3	)		107.4
Unrealized		195.0			(65.5	)		129.5
Total performance fee related compensation expense		303.7			(66.8	)		236.9
Net performance fees
Realized		144.1			(2.6	)		141.5
Unrealized		194.6			18.6			213.2
Total net performance fees	$	338.7		$	16.0		$	354.7
Investment income (loss)
Realized	$	(4.2	)	$	(5.1	)	$	(9.3	)
Unrealized		4.6			7.7			12.3
Total investment income (loss)	$	0.4		$	2.6		$	3.0

	Three Months Ended March 31, 2012
	Carlyle Consolidated			Adjustments  (3)			Total Reportable Segments
	(Dollars in millions)
Performance fees
Realized	$	280.6		$	1.2		$	281.8
Unrealized		360.2			(10.5	)		349.7
Total performance fees		640.8			(9.3	)		631.5
Performance fee related compensation expense
Realized		34.3			104.8			139.1
Unrealized		54.8			102.8			157.6
Total performance fee related compensation expense		89.1			207.6			296.7
Net performance fees
Realized		246.3			(103.6	)		142.7
Unrealized		305.4			(113.3	)		192.1
Total net performance fees	$	551.7		$	(216.9	)	$	334.8
Investment income (loss)
Realized	$	(0.8	)	$	2.9		$	2.1
Unrealized		22.3			(1.1	)		21.2
Total investment income (loss)	$	21.5		$	1.8		$	23.3

(3) Adjustments to performance fees and investment income (loss) relate to amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the segment results, and amounts attributable to non-controlling interests in consolidated entities, which were excluded from the segment results. Adjustments to investment income (loss) also include the reclassification of earnings for the investment in NGP Management to the appropriate operating captions for the segment results, and the exclusion of charges associated with the investment in NGP Management that are excluded from the segment results. Adjustments to performance fee related compensation expense relate to the inclusion of partner compensation in the segment results for periods prior to the reorganization and initial public offering in May 2012. Adjustments are also included in these financial statement captions to reflect the Partnership’s 55% economic interest in Claren Road, ESG and Vermillion and the Partnership’s 60% interest in AlpInvest in the segment results.

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