EX-99.1 2 d435296dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

 

LOGO

For Immediate Release

November 8, 2012

 

The Carlyle Group Announces Third Quarter 2012 Earnings Results

 

   

$0.63 per common unit in Distributable Earnings in Q3 2012, $0.91 per common unit in Distributable Earnings since The Carlyle Group IPO

 

   

$5.1 billion of carry fund realizations in Q3 2012 continues strong pace of exit activity, with $11.9 billion in realized proceeds year to date

 

   

$3.4 billion in new capital raised during Q3 2012 and $9.4 billion in new capital raised year to date

 

   

$1.6 billion in carry fund equity invested in Q3 2012 with more than $4.0 billion in additional equity committed to transactions expected to close in upcoming quarters

 

   

Quarterly distribution of $0.16 per unit declared for common unitholders

 

   

U.S. GAAP net income attributable to The Carlyle Group L.P. of $19 million, or $0.40 per common unit on a fully diluted basis for Q3 2012

Washington, DC – Global alternative asset manager The Carlyle Group L.P. (NASDAQ: CG), today reported its unaudited third quarter 2012 results.

David M. Rubenstein, Co-Chief Executive Officer of Carlyle, said, “Every component of the Carlyle engine is running strong. Third quarter fundraising was solid, our investment pace was active, portfolio valuations were up and we generated substantial cash returns for our fund investors. These returns drove robust distributable earnings for the third quarter. Additionally, this quarter we raised $3.4 billion in fresh capital, reflective of strong investor confidence in our global model and investment performance.”

William E. Conway, Jr., Co-Chief Executive Officer of Carlyle, said, “Our purpose is to invest wisely and create value for our fund investors, which in turn benefits our public investors, and we worked hard at each this quarter. Our active third quarter is a culmination of several factors, including the scope of our global operation, various tactical advantages we had, strong capital markets and many months and years of work. We believe that the United States, Europe and emerging markets – from Brazil to Turkey to China – are great places to invest right now.”

 

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U.S. GAAP results for Q3 2012 included income before provision for income taxes of $603 million and net income attributable to the public unitholders through The Carlyle Group L.P. of $19 million, or net income per common unit of $0.40 on a fully diluted basis. For Q3 2011, Carlyle was still a private partnership, and the net loss before provision for income taxes was $(619) million. For Q3 2012, total revenue was $859 million, compared with revenue of $(60) million in Q3 2011. Total balance sheet assets were $30.0 billion as of September 30, 2012 compared with $24.7 billion as of December 31, 2011.

 

Third Quarter Distribution

The Board of Directors has declared a quarterly distribution of $0.16 per common unit to holders of record at the close of business on November 19, 2012, payable on November 30, 2012. Since the pricing of its IPO on May 2, 2012, Carlyle has announced $0.27 per common unit in distributions to public unitholders.

Carlyle intends to distribute $0.16 per full quarter to common unitholders for each of the first three quarters of the calendar year, and to announce a year-end catch-up distribution in its fourth quarter earnings release. As noted in Carlyle’s Registration Statement on Form S-1, Carlyle intends to make the year-end catch-up distribution in an amount that, taken together with the other quarterly distributions, represents substantially all of its Distributable Earnings in excess of the amount determined by the General Partner 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. Carlyle anticipates that the aggregate amount of its distributions for most years will be less than its total Distributable Earnings for that year. The declaration and payment of any distribution is at the sole discretion of the General Partner, which may change the distribution policy at any time.

 

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The Carlyle Engine

Carlyle evaluates the performance of its business on four key metrics, known as the Carlyle engine (funds raised, equity invested, fund valuations and realized proceeds for fund investors). The table below highlights the results of those metrics for Q3 2012, as well as on a year-to-date (YTD) and last twelve months (LTM) basis.

 

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During Q3 2012, Carlyle generated net realized proceeds of $5.1 billion from 117 different investments across 34 carry funds in its portfolio. Carlyle deployed $1.6 billion of equity in Q3 2012 in 86 new or follow on investments across 24 carry funds. In addition, Carlyle has committed to invest more than $4.0 billion in equity across 10 transactions that were announced in Q3 2012 and are expected to close in upcoming quarters.

 

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Carlyle All Segment Results for Third Quarter 2012

 

 

Distributable Earnings (DE): $206 million

 

  ¡    

Pre-tax Distributable Earnings of $206 million equated to $0.63 per common unit on a post-tax basis. Distributable Earnings increased 79% from Q2 2012 primarily due to period-over-period changes in our realized net performance fees. On an LTM basis, Distributable Earnings are $748 million compared to $752 million over the prior 12-month period.

 

  ¡    

Fee-Related Earnings of $46 million increased 28% from Q2 2012 due to declines in operating expenses. On an LTM basis, Fee-Related Earnings declined 14% compared to the prior 12-month period.

 

  ¡    

Realized Net Performance Fees of $156 million increased 106% from Q2 2012. For the current quarter, our revenues were positively impacted by public equity exits in China Pacific Life, Kinder Morgan, Dunkin Brands, and SS&C, as well as multiple private company sales. On an LTM basis, realized net performance fees are $591 million, up 7% from the prior 12-month period.

 

  ¡    

Realized Investment Income of $5 million increased slightly from Q2 2012.

 

 

Economic Net Income (ENI): $219 million

 

  ¡    

Economic Net Income of $219 million in Q3 2012 compared to an Economic Net Loss of ($57) million in Q2 2012. On an after-tax basis, Carlyle generated $0.66 in ENI per unit. On an LTM basis, ENI decreased 34% compared to the prior 12-month period due to significant portfolio appreciation over the period following the financial crisis.

 

  ¡    

ENI was positively impacted in Q3 2012 by 3% appreciation in Carlyle’s carry fund portfolio, which excludes structured credit, hedge funds and Fund of Funds Solutions vehicles. The fund appreciation was driven by increases in Buyout, Real Estate and Global Market Strategies carry funds, offset by a decline in Energy funds, and flat performance in Growth funds.

 

  ¡    

The public carry fund portfolio increased 8% in Q3 2012 while our private carry fund portfolio increased 1%.

 

All Segments   Period        LTM        % Change

 

 

 

 

 

$ in millions, except where
noted
    3Q2011     4Q2011   1Q2012   2Q2012     3Q2012      4Q11 - 3Q12     QoQ     YoY   YTD  
 

 

 

Revenues

  (263)   666   894   61   584   2,204   851%   322%   4%  

 

Expenses

  (72)   411   501   119   365   1,397   208%   608%   9%  

 

Economic Net Income

  (191)   254   392   (57)   219   808   482%   214%   (4%)  

 

Fee-Related Earnings

  37   14   34   36   46   129   28%   24%   7%  

 

Net Performance Fees

  (223)   223   335   (107)   165   616   254%   174%   (4%)  

 

Realized Net Performance Fees

  194   216   143   76   156   591   106%   (20%)   (19%)  

 

Distributable Earnings

  244   247   179   115   206   748   79%   (15%)   (19%)  

 

 

Total Assets Under Management ($ billion)

  148.6   147.0   159.2   156.2   157.4     1%   6%  

 

Fee-Earning Assets Under Management ($ billion)

  112.6   111.0   117.0   112.0   115.1     3%   2%  

 

                   

Note: Totals may not sum due to rounding.

 

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Assets Under Management and Remaining Fair Value of Capital

 

 

Total Assets Under Management: $157.4 billion

 

  ¡    

Changes versus Q2 2012: Market appreciation (+$2.9 billion), new capital commitments (+$2.4 billion), foreign exchange impact (+$847 million), changes in par value of CLO collateral (+$506 million), hedge fund net subscriptions (+$379 million) and net distributions (-$5.5 billion).

 

  ¡    

Increases versus year-end 2011 were primarily due to fundraising, portfolio appreciation, increases in Global Market Strategies due to CLO creation, new carry funds, and acquisitions. The increases across Carlyle were offset by significant levels of distributions to fund investors.

 

  ¡    

Total Dry Powder of $39.4 billion, comprised of Corporate Private Equity ($15.6 billion), Global Market Strategies ($1.3 billion), Real Assets ($7.0 billion), and Fund of Funds Solutions ($15.5 billion).

 

 

Fee-Earning Assets Under Management: $115.1 billion

 

  ¡    

Changes versus Q2 2012: Fee earning asset inflows (+$3.8 billion), foreign exchange impact (+$679 million), hedge fund net subscriptions (+$407 million), change in the par value of CLO collateral (+$171 million), and net distributions and outflows (-$1.7 billion).

 

  ¡    

Carlyle Partners VI will not increase Fee-Earning AUM until the predecessor fund (Carlyle Partners V) is substantially invested, which is expected to occur in the first half of 2013.

 

 

Remaining Fair Value of Capital (carry funds only): $62 billion

 

  ¡    

Changes versus Q2 2012: Equity invested (+$1.6 billion), distributions (-$4.8 billion) and market appreciation (3%).

 

  ¡    

Current MOIC of remaining fair value of capital: 1.2x.

 

  ¡    

Remaining fair value of capital in the ground in investments made in 2008 or earlier: 51%.

 

  ¡    

AUM in-carry ratio as of the end of Q3 2012: 68%.

 

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Non-GAAP Operating Results

 

Carlyle’s non-GAAP results for Q3 2012 are provided in the table below:

 

$ in millions, except unit and per unit amounts       

 

Economic Net income

   Q3 2012   

 

 

 

Economic Net Income (pre-tax)

     $ 218.5     

 

Less: Provision for income taxes (1)

     14.9     
  

 

 

 

Economic Net Income, After Taxes

     $ 203.6     
  

 

 

 

 

Fully diluted units (in millions)

     307.7     

 

Economic Net Income, After Taxes per Adjusted Unit

     $ 0.66     

 

Distributable Earnings

      

 

 

 

Distributable Earnings

     $ 206.3     

 

Less: Estimated foreign, state, and local taxes (2)

     10.6     
  

 

 

 

Distributable Earnings, After Taxes

     $ 195.7     
  

 

 

 

 

Allocating Distributable Earnings for only public unitholders of The Carlyle Group L.P.

  

 

Distributable Earnings to The Carlyle Group L.P.

     $ 27.8     

 

Less: Estimated current corporate income taxes (3)

     0.7     
  

 

 

 

Distributable Earnings to The Carlyle Group L.P. net of corporate income taxes

     $                 27.1     
  

 

 

 

 

Units in public float (in millions)

     43.2     

 

Distributable Earnings, net, per The Carlyle Group L.P. common unit outstanding

     $ 0.63     

 

 

 

(1) Represents the implied provision for income taxes that was calculated using a similar methodology applied in calculating the tax provision for The Carlyle Group L.P., without any reduction for noncontrolling interests.

 

(2) Represents the implied provision for current income taxes that was calculated using a similar methodology applied in calculating the current tax provision for The Carlyle Group L.P., without any reduction for noncontrolling interests.

 

(3) Represents current corporate income taxes payable upon distributable earnings allocated to Carlyle Holdings I GP Inc.

 

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Corporate Private Equity (CPE)

 

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Distributable Earnings (DE): $145 million. The following components impacted Distributable Earnings in Q3 2012:

 

  ¡    

Fee Related Earnings of $19 million increased 88% from Q2 2012 due to higher fee revenue and lower operating expenses.

 

  ¡    

Realized Net Performance Fees of $126 million increased $76 million from Q2 2012 as realizations in CPE funds were robust in Q3 2012.

 

  ¡    

Realized Investment Income of ($0.2) million compared to $1.5 million in Q2 2012.

 

 

Economic Net Income (ENI): $177 million

 

  ¡    

Economic Net Income of $177 million was up from a loss of ($65) million in Q2 2012.

 

  ¡    

CPE carry funds valuations increased 5% in Q3 2012, and 12% year-to-date, which drove positive Economic Net Income in the CPE segment, compared to a portfolio value decline of 2% and 6%, respectively, in Q2 2012 and Q3 2011.

 

  ¡    

Net Performance Fees of $159 million compared to a loss of ($80) million in Q2 2012, driven by an increase in CPE carry fund valuations in Q3 2012 versus a decrease in Q2 2012.

 

 

Assets Under Management (AUM): $53.2 billion

 

  ¡    

Total AUM increased 1% versus Q2 2012 while Fee-Earning AUM of $36.9 billion was relatively flat versus $37.1 billion at the end of Q2 2012.

 

  ¡    

Funds Raised of $2.0 billion was driven by the second closing of Carlyle Partners VI, as well as closings in our U.S. mid-market buyout fund, and various coinvestments. Year-to-date, funds raised of $4.8 billion compares to $1.3 billion for the same period in 2011.

 

Corporate Private Equity   Period        LTM        % Change

 

 

 

 

 

$ in millions, except where noted     3Q2011     4Q2011   1Q2012   2Q2012     3Q2012      4Q11 - 3Q12     QoQ     YoY   YTD  
 

 

 

 

 

 

 

Economic Net Income

  (185)   162   244   (65)   177   518   375%   196%   1%  

 

 

Net Performance Fees

  (186)   152   215   (80)   159   446   300%   186%   13%  

 

 

Realized Net Performance Fees

  157   130   105   50   126   411   154%   (20%)   (16%)  

 

 

Distributable Earnings

  173   134   120   61   145   460   136%   (16%)   (25%)  

 

 

Total Assets Under Management ($ in billions)

  51.0   51.1   53.3   52.5   53.2     1%   4%  

 

 

Fee-Earning Assets Under Management ($ in billions)

  38.6   38.0   37.8   37.1   36.9     (0%)   (4%)  

 

                   

Note: Totals may not sum due to rounding.

 

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Global Market Strategies (GMS)

 

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Distributable Earnings (DE): $28 million. The following components impacted Distributable Earnings in Q3 2012:

 

  ¡    

Fee Related Earnings of $22 million increased 12% compared to Q2 2012 as operating expenses declined in the quarter.

 

  ¡    

Realized Net Performance Fees of $1 million were flat with Q2 2012.

 

  ¡    

Realized Investment Income of $5 million increased from $3 million in Q2 2012.

 

 

Economic Net Income (ENI): $36 million

 

  ¡    

Economic Net Income of $36 million increased 13% from $32 million in Q2 2012, and was positively impacted by 2% appreciation in GMS carry funds.

 

  ¡    

Net Performance Fees of $8 million were up 86% compared to Q2 2012.

 

 

Assets Under Management (AUM): $30.1 billion

 

  ¡    

Total AUM increased 4% versus Q2 2012 while Fee-Earning AUM of $28.5 billion increased 3% versus Q2 2012.

 

  ¡    

Hedge Fund net inflows continued to be strong, with $379 million in Q3 2012 and $1.7 billion in year-to-date net subscriptions, resulting in total hedge fund AUM of $9.8 billion.

 

  ¡    

Raised a third new Collateralized Loan Obligation (CLO) in 2012 with $615 million in assets.

 

  ¡    

GMS Carry Fund AUM ended the quarter at $3.5 billion.

 

  ¡    

Total Structured Credit AUM ended the quarter at $16.9 billion.

 

  ¡    

On October 1, 2012, Carlyle acquired a 55% ownership position in Vermillion Asset Management, a commodities focused investment manager with $2.2 billion in AUM as of September 30, 2012, which will be reflected in Carlyle’s Q4 2012 results and AUM.

 

Global Markets Strategies   Period   LTM   % Change

 

 

 

 

 

$ in millions, except AUM where
noted
   3Q2011    4Q2011   1Q2012   2Q2012    3Q2012       4Q11 - 3Q12    QoQ   YoY   YTD  
 

 

 

 

 

 

 

Economic Net Income

  34   22   38   32   36   128   13%   5%   (24%)  

 

 

Net Performance Fees

  11   3   18   4   8   33   86%   (23%)   (56%)  

 

 

Realized Net Performance Fees

  7   67   15   1   1   83   17%   (90%)   (68%)  

 

 

Distributable Earnings

  32   90   31   23   28   173   18%   (15%)   (20%)  

 

 

Total Assets Under Management ($ in billions)

  23.0   24.5   28.3   29.0   30.1     4%   31%  

 

 

Fee-Earning Assets Under Management ($ in billions)

  21.4   23.2   26.8   27.7   28.5     3%   33%  

 

                   

 

Funds Raised, excluding hedge funds ($ in billions)

  0.8   0.0   0.7   0.8   0.8   2.3   4%   6%  

 

Hedge Fund Net Inflows ($ in billions)

  0.5   0.8   0.7   0.7   0.4   2.6   (41%)   (23%)  

 

                   

 

Note: Totals may not sum due to rounding. Funds Raised excludes the impact of acquisitions.

 

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Real Assets (RA)

 

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Distributable Earnings (DE): $31 million. The following components impacted Distributable Earnings in Q3 2012:

 

  ¡    

Fee Related Earnings of $1 million declined from $3 million in Q2 2012.

 

  ¡    

Realized Net Performance Fees of $29 million increased 15% compared to Q2 2012, primarily due to realizations in the Energy funds.

 

  ¡    

Realized Investment Income of $0.2 million was up $0.5 million versus Q2 2012.

 

 

Economic Net Income (ENI): $2 million

 

  ¡    

Economic Net Income of $2 million compared to a loss of ($29) million in Q2 2012, as carry fund valuations were flat in Q3 2012 versus a decline of 3% in Q2 2012.

 

  ¡    

During Q3 2012, combined Real Estate and Infrastructure fund valuations increased 5% while Energy fund valuations declined 3%.

 

  ¡    

Net Performance Fees of ($4) million compared to ($33) million in Q2 2012, with the variance driven by mixed portfolio performance during Q3 2012, compared with fund declines in Q2 2012.

 

 

Assets Under Management (AUM): $29.5 billion

 

  ¡    

Total AUM declined 2% versus Q2 2012, largely due to distributions of $1.3 billion and flat carry fund performance, while Fee-Earning AUM of $19.6 billion was largely flat versus Q2 2012.

 

Real Assets   Period   LTM   % Change

 

 

 

 

 

$ in millions, except where
noted
   3Q2011    4Q2011   1Q2012   2Q2012     3Q2012       4Q11 - 3Q12        QoQ       YoY       YTD    
 

 

 

 

 

 

 

Economic Net Income

  (48)   64   101   (29)   2   138   106%   103%   (8%)

 

 

Net Performance Fees

  (47)   67   99   (33)   (4)   130   89%   92%   (21%)  

 

 

Realized Net Performance Fees

  27   17   22   26   29   94   15%   10%   6%

 

 

Distributable Earnings

  27   14   22   28   31   94   10%   14%   14%

 

 

Total Assets Under Management ($ in billions)

  30.4   30.7   32.2   30.0   29.5     (2%)   (3%)  

 

 

Fee-Earning Assets Under Management ($ in billions)

  22.4   22.2   22.8   19.5   19.6     0%   (13%)  

 

                   

 

Note: Totals may not sum due to rounding.

 

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Fund of Funds Solutions (FoF)

 

 

Distributable Earnings (DE): $3 million.

 

  ¡    

Fee Related Earnings of $3 million increased 15% compared to Q2 2012.

 

 

Economic Net Income (ENI): $4 million was flat compared with Q2 2012.

 

 

Assets Under Management (AUM): $44.6 billion

 

  ¡    

Total AUM was flat versus Q2 2012 while Fee-Earning AUM of $30.2 billion increased 9% versus Q2 2012.

 

  ¡    

The increase in fee-earning AUM in Q3 2012 is attributable to the initiation of fees on several 2012 mandates that made their first investment during the quarter and began charging fees on total investor commitments.

 

 

Fund of Funds Solutions   Period   LTM   % Change

 

 

 

 

 

$ in millions, except where noted    3Q2011      4Q2011     1Q2012     2Q2012      3Q2012     4Q11 - 3Q12      QoQ     YoY     YTD  
 

 

 

 

 

 

Economic Net Income

  7   6   9   4   4   23   (8%)   (49%)   N.A.

 

Net Performance Fees

  (1)   1   4   1   1   6   (54%)   200%   N.A.

 

Realized Net Performance Fees

  4   3   0   0   0   4   200%   (92%)   N.A.

 

Distributable Earnings

  12   9   6   3   3   21   21%   (71%)   N.A.

 

 

Total Assets Under Management ($ in billions)

  44.2   40.7   45.4   44.6   44.6     (0%)   1%   N.A.

 

Fee-Earning Assets Under Management ($ in billions)

  30.2   27.7   29.5   27.6   30.2     9%   (0%)   N.A.

 

                   

Note: Carlyle acquired a 60% ownership interest in AlpInvest on July 1, 2011. Totals may not sum due to rounding.

 

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Balance Sheet Highlights

The amounts presented below exclude the effect of U.S. GAAP consolidation eliminations on investments and accrued performance fees as well as cash and debt associated with Carlyle’s consolidated funds. All data is as of September 30, 2012.

 

 

Cash and Cash Equivalents of $769 million.

 

 

On-balance-sheet investments attributable to unitholders of $216 million.

 

 

Net Accrued Performance Fees attributable to unitholders of $1,189 million. These performance fees are comprised of Gross Accrued Performance Fees of $2,155 million less $86 million in accrued giveback obligation and $880 million in accrued performance fee compensation and non-controlling interest.

 

 

Loans payable of $500 million.

 

 

Carlyle has an undrawn $750 million revolving credit line.

 

Conference Call

Carlyle will host a conference call on November 8, 2012 at 8:00 a.m. EST to discuss Q3 2012 results and industry trends. Immediately following the prepared remarks, there will be a Question and Answer session for analysts and investors.

Analysts and institutional investors may listen to the call by dialing +1-800-850-2903 (international +1-253-237-1169) and mentioning “The Carlyle Group third quarter 2012 Results Conference Call”. The conference call will be webcast simultaneously to the public through a link on the investor relations section of The Carlyle Group web site at ir.carlyle.com. An archived replay of the webcast also will be available shortly after the live event.

 

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About The Carlyle Group

The Carlyle Group is a global alternative asset manager with $157 billion of assets under management in 101 active funds and 63 fund of funds vehicles as of September 30, 2012. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Fund of Funds Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has developed expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,300 people in 32 offices across six continents. www.carlyle.com

Contacts:

Public Market Investor Relations:   Media:
Daniel Harris   Chris Ullman

Managing Director, Head of Public Market

Investor Relations

 

Managing Director, Director of Global

Communications

Phone: 212-813-4527   Phone: 202-729-5385
daniel.harris@carlyle.com   christopher.ullman@carlyle.com

 

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Forward Looking Statements

This press release 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 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. These statements are subject to risks, uncertainties and assumptions, including those described under the section entitled “Risk Factors” in our prospectus dated May 2, 2012, filed with the SEC pursuant to Rule 424(b) of the Securities Act on May 4, 2012, 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 release and in our 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.

This release does not constitute an offer for any Carlyle fund.

 

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The Carlyle Group L.P.

GAAP Statement of Operations (Unaudited)

 

    Three Months Ended        Nine Months Ended  
    Sept 30,
2012
    Sept 30,
2011
       Sept 30,
2012
        Sept 30,    
2011
 
    (Dollars in millions, except unit and per unit data)  

Revenues

          

Fund management fees

    $ 239.8          $ 236.0             $ 714.1          $ 683.2     

Performance fees

          

Realized

    291.4          375.2             688.7          870.1     

Unrealized

    64.9          (859.1)            88.0          (133.6)    
 

 

 

   

 

 

      

 

 

   

 

 

 

Total performance fees

    356.3          (483.9)            776.7          736.5     

Investment income (loss)

          

Realized

    9.8          7.5             11.4          50.3     

Unrealized

    0.4          (12.9)            27.3          6.3     
 

 

 

   

 

 

      

 

 

   

 

 

 

Total investment income (loss)

    10.2          (5.4)            38.7          56.6     

Interest and other income

    4.5          2.5             9.9          15.6     

Interest and other income of Consolidated Funds

    247.7          191.2             678.4          521.6     
 

 

 

   

 

 

      

 

 

   

 

 

 

Total revenues

    858.5          (59.6)            2,217.8          2,013.5     

Expenses

          

Compensation and benefits

          

Base compensation

    177.0          101.9             433.0          277.2     

Equity-based compensation

    53.2          -                 147.4          -         

Performance fee related

          

Realized

    121.9          51.4             188.3          136.2     

Unrealized

    41.5          (139.5)            (1.4)         (81.7)    
 

 

 

   

 

 

      

 

 

   

 

 

 

Total compensation and benefits

    393.6          13.8             767.3          331.7     

General, administrative and other expenses

    92.9          80.4             268.1          224.7     

Interest

    4.0          15.7             20.6          48.5     

Interest and other expenses of Consolidated Funds

    204.1          99.1             568.1          290.0     

Other non-operating expenses

    10.3          9.4             6.9          30.0     
 

 

 

   

 

 

      

 

 

   

 

 

 

Total expenses

    704.9          218.4             1,631.0          924.9     

Other income (loss)

          

Net investment gains (losses) of Consolidated Funds

    448.9          (341.2)            1,707.6          (618.2)    
 

 

 

   

 

 

      

 

 

   

 

 

 

Income (Loss) before provision for income taxes

    602.5          (619.2)            2,294.4          470.4     

Provision for income taxes

    5.5          12.9             27.8          25.7     
 

 

 

   

 

 

      

 

 

   

 

 

 

Net income (loss)

    597.0          (632.1)            2,266.6          444.7     

Net income (loss) attributable to non-controlling interests in consolidated entities

    485.4          (282.3)            1,708.2          (473.4)    
 

 

 

   

 

 

      

 

 

   

 

 

 

Net income (loss) attributable to Carlyle Holdings

    111.6          $     (349.8)            558.4          $     918.1     
   

 

 

        

 

 

 

Net income attributable to non-controlling interests in Carlyle Holdings

    93.0               550.1       
 

 

 

        

 

 

   

Net income attributable to The Carlyle Group L.P.

    $ 18.6               $ 8.3       
 

 

 

        

 

 

   

Net income attributable to The Carlyle Group L.P. per common unit

          

Basic

    $ 0.43               $ 0.20       
 

 

 

        

 

 

   

Diluted(1)

    $ 0.40               $ 0.15       
 

 

 

        

 

 

   

Weighted-average common units

          

Basic

    43,235,336               42,097,973       
 

 

 

        

 

 

   

Diluted

    46,939,751               255,300,460       
 

 

 

        

 

 

   

(1) - Included in net income attributable to The Carlyle Group L.P. per common unit on a fully diluted basis is incremental net income from the assumed exchange of Carlyle Holdings partnership units of $31.1 million for the nine months ended September 30, 2012.

 

Page  |  14


Total Segment Information (Unaudited)

The following table sets forth information in the format used by management when making resource deployment decisions and in assessing the performance of our segments. The information below is the aggregate results of our four segments.

 

    Three Months Ended     Twelve Months Ended  
    Sept 30,
2012
    Sept 30,
2011
    June 30,
2012
    Sept 30,
2012
    Sept 30,
2011
 
    (Dollars in millions)  

Segment Revenues

         

Fund level fee revenues

         

Fund management fees

    $ 233.9          $ 234.4          $ 235.0          $ 914.9          $ 843.0     

Portfolio advisory fees, net

    4.6          7.5          7.0          25.3          38.3     

Transaction fees, net

    7.2          5.4          3.7          23.5          44.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    245.7          247.3          245.7          963.7          926.1     

Performance fees

         

Realized

    276.4          387.4          110.3          1,083.1          1,061.1     

Unrealized

    49.0          (894.7)         (311.1)         84.2          809.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    325.4          (507.3)         (200.8)         1,167.3          1,870.4     

Investment income (loss)

         

Realized

    4.6          13.0          4.0          27.9          51.7     

Unrealized

    3.8          (17.6)         10.0          35.4          34.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income (loss)

    8.4          (4.6)         14.0          63.3          86.5     

Interest and other income

    4.4          1.4          2.5          10.1          20.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    583.9          (263.2)         61.4          2,204.4          2,903.9     

Segment Expenses

         

Compensation and benefits

         

Direct base compensation

    97.9          107.2          105.8          405.9          390.9     

Indirect base compensation

    32.9          34.8          36.2          135.1          128.7     

Equity-based compensation

    0.6          -              0.6          1.2          -         

Performance fee related

         

Realized

    120.2          193.2          34.5          492.0          511.2     

Unrealized

    40.6          (477.2)         (128.6)         59.8          371.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    292.2          (142.0)         48.5          1,094.0          1,402.2     

General, administrative, and other indirect expenses

    68.5          55.0          64.0          269.4          226.1     

Interest expense

    4.7          15.1          6.1          33.4          50.7     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    365.4          (71.9)         118.6          1,396.8          1,679.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income (Loss)

    $     218.5          $     (191.3)         $ (57.2)         $       807.6          $     1,224.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

    $ 45.5          $ 36.6          $ 35.5          $ 128.8          $ 150.6     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

    $ 164.6          $ (223.3)         $     (106.7)         $ 615.5          $ 987.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

    $ 156.2          $ 194.2          $ 75.8          $ 591.1          $ 549.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income (Loss)

    $ 8.4          $ (4.6)         $ 14.0          $ 63.3          $ 86.5     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

    $ 206.3          $ 243.8          $ 115.3          $ 747.8          $ 752.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  15


Total Segment Information (Unaudited), cont

 

    Three Months Ended  
                                  Sept 30, 2012 vs.  
                                   Sept 30, 2011       Jun 30, 2012   
      Sept 30,  
2011
      Dec 31,  
2011
      Mar 31,  
2012
      Jun 30,  
2012
      Sept 30,  
2012
    $     $  
Economic Net Income,   (Dollars in millions)  

Total Segments

             

Revenues

             

Segment fee revenues

             

Fund management fees

   $ 234.4         $ 220.6         $ 225.4         $ 235.0         $ 233.9         $ (0.5)        $ (1.1)    

Portfolio advisory fees, net

    7.5          5.7          8.0          7.0          4.6          (2.9)         (2.4)    

Transaction fees, net

    5.4          9.9          2.7          3.7          7.2          1.8          3.5     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    247.3          236.2          236.1          245.7          245.7          (1.6)         -         

Performance fees

             

Realized

    387.4          414.6          281.8          110.3          276.4          (111.0)         166.1     

Unrealized

    (894.7)         (3.4)         349.7          (311.1)         49.0          943.7          360.1     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    (507.3)         411.2          631.5          (200.8)         325.4          832.7          526.2     

Investment income

             

Realized

    13.0          17.2          2.1          4.0          4.6          (8.4)         0.6     

Unrealized

    (17.6)         0.4          21.2          10.0          3.8          21.4          (6.2)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    (4.6)         17.6          23.3          14.0          8.4          13.0          (5.6)    

Interest and other income

    1.4          0.6          2.6          2.5          4.4          3.0          1.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    (263.2)         665.6          893.5          61.4          583.9          847.1          522.5     

Expenses

             

Compensation and benefits

             

Direct base compensation

    107.2          101.0          101.2          105.8          97.9          (9.3)          (7.9)    

Indirect base compensation

    34.8          32.9          33.1          36.2          32.9          (1.9)          (3.3)    

Equity-based compensation

    -              -              -              0.6          0.6          0.6          -         

Performance fee related

             

Realized

    193.2          198.2          139.1          34.5          120.2          (73.0)         85.7     

Unrealized

    (477.2)         (9.8)         157.6          (128.6)         40.6          517.8          169.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    (142.0)         322.3          431.0          48.5          292.2          434.2          243.7     

General, administrative, and other indirect expenses

    55.0          76.3          60.6          64.0          68.5          13.5          4.5     

Interest expense

    15.1          12.8          9.8          6.1          4.7          (10.4)         (1.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    (71.9)         411.4          501.4          118.6          365.4          437.3          246.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income (Loss)

   $ (191.3)        $ 254.2         $ 392.1         $ (57.2)        $ 218.5         $ 409.8         $ 275.7     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

   $ 36.6         $ 13.8         $ 34.0         $ 35.5         $ 45.5         $ 8.9         $ 10.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

   $ (223.3)        $ 222.8         $ 334.8         $ (106.7)        $ 164.6         $ 387.9         $ 271.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

   $ 194.2         $ 216.4         $ 142.7         $ 75.8         $ 156.2         $ (38.0)        $ 80.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income (Loss)

   $ (4.6)        $ 17.6         $ 23.3         $ 14.0         $ 8.4         $ 13.0         $ (5.6)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

   $ 243.8         $ 247.4         $ 178.8         $ 115.3         $ 206.3         $ (37.5)        $ 91.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  16


Corporate Private Equity Segment Results (Unaudited)

 

 

 

    Three Months Ended  
                                  Sept 30, 2012 vs.  
                                   Sept 30, 2011       Jun 30, 2012   
      Sept 30,  
2011
      Dec 31,  
2011
      Mar 31,  
2012
      Jun 30,  
2012
      Sept 30,  
2012
    $     $  
Corporate Private Equity   (Dollars in millions)  

Revenues

             

Segment fee revenues

             

Fund management fees

   $ 128.1         $ 123.6         $ 123.9         $ 124.0         $ 124.8         $ (3.3)        $ 0.8     

Portfolio advisory fees, net

    4.8          4.3          7.0          4.9          3.1          (1.7)         (1.8)    

Transaction fees, net

    3.8          8.3          1.6          1.6          6.2          2.4          4.6     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    136.7          136.2          132.5          130.5          134.1          (2.6)         3.6     

Performance fees

             

Realized

    333.0          262.2          223.0          80.6          241.4          (91.6)         160.8     

Unrealized

    (787.2)         79.7          241.3          (269.7)         72.8          860.0          342.5     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    (454.2)         341.9          464.3          (189.1)         314.2          768.4          503.3     

Investment income

             

Realized

    8.1          8.1          0.8          1.5          (0.2)         (8.3)         (1.7)    

Unrealized

    (14.8)         5.9          14.5          3.7          (1.0)         13.8          (4.7)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    (6.7)         14.0          15.3          5.2          (1.2)         5.5          (6.4)    

Interest and other income

    0.3          1.1          1.4          1.6          3.4          3.1          1.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    (323.9)         493.2          613.5          (51.8)         450.5          774.4          502.3     

Expenses

             

Compensation and benefits

             

Direct base compensation

    62.8          63.9          55.3          54.8          56.2          (6.6)         1.4     

Indirect base compensation

    24.1          23.7          20.8          24.1          19.9          (4.2)         (4.2)    

Equity-based compensation

    -              -              -              0.4          0.4          0.4          -         

Performance fee related

             

Realized

    176.2          131.9          117.6          31.0          115.6          (60.6)         84.6     

Unrealized

    (444.2)         58.0          132.0          (140.3)         39.2          483.4          179.5     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    (181.1)         277.5          325.7          (30.0)         231.3          412.4          261.3     

General, administrative, and other indirect expenses

    32.4          46.5          38.0          39.2          39.5          7.1          0.3     

Interest expense

    9.8          7.5          5.9          3.5          2.5          (7.3)         (1.0)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    (138.9)         331.5          369.6          12.7          273.3          412.2          260.6     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income (Loss)

   $ (185.0)        $ 161.7         $ 243.9         $ (64.5)        $ 177.2         $ 362.2         $ 241.7     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

   $ 7.9         $ (4.3)        $ 13.9         $ 10.1         $ 19.0         $ 11.1         $ 8.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

   $ (186.2)        $ 152.0         $ 214.7         $ (79.8)        $ 159.4         $ 345.6         $ 239.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

   $ 156.8         $ 130.3         $ 105.4         $ 49.6         $ 125.8         $ (31.0)        $ 76.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income (Loss)

   $ (6.7)        $ 14.0         $ 15.3         $ 5.2         $ (1.2)        $ 5.5         $ (6.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

   $ 172.8         $ 134.1         $ 120.1         $ 61.2         $ 144.6         $ (28.2)        $ 83.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  17


Global Market Strategies Segment Results (Unaudited)

 

 

    Three Months Ended  
                                  Sept 30, 2012 vs.  
        Sept 30,    
2011
        Dec 31,    
2011
        Mar 31,    
2012
        Jun 30,    
2012
        Sept 30,    
2012
      Sept 30, 2011         Jun 30, 2012    
             

 

$

   

 

$

 
Global Market Strategies   (Dollars in millions)  

Revenues

             

Segment fee revenues

             

Fund management fees

    $ 50.4          $ 44.9          $ 48.6          $ 59.5          $ 58.2          $ 7.8          $ (1.3)    

Portfolio advisory fees, net

    0.8          0.8          0.7          0.5          0.8          -              0.3     

Transaction fees, net

    -              -              -              -              0.3          0.3          0.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    51.2          45.7          49.3          60.0          59.3          8.1          (0.7)    

Performance fees

             

Realized

    6.1          108.5          32.4          1.3          0.9          (5.2)         (0.4)    

Unrealized

    (6.8)         (101.0)         12.7          4.0          5.7          12.5          1.7     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    (0.7)         7.5          45.1          5.3          6.6          7.3          1.3     

Investment income

             

Realized

    3.1          9.3          1.3          2.8          4.6          1.5          1.8     

Unrealized

    (2.1)         (4.7)         3.7          4.8          0.8          2.9          (4.0)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    1.0          4.6          5.0          7.6          5.4          4.4          (2.2)    

Interest and other income

    1.4          (0.4)         0.6          0.4          0.5          (0.9)         0.1     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    52.9          57.4          100.0          73.3          71.8          18.9          (1.5)    

Expenses

             

Compensation and benefits

             

Direct base compensation

    16.9          13.9          19.7          25.2          17.4          0.5          (7.8)    

Indirect base compensation

    4.0          3.9          4.9          4.5          5.9          1.9          1.4     

Equity-based compensation

    -              -              -              0.1          -              -              (0.1)    

Performance fee related

             

Realized

    (0.7)         41.8          17.8          0.7          0.2          0.9          (0.5)    

Unrealized

    (10.7)         (37.5)         9.7          0.2          (1.8)         8.9          (2.0)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    9.5          22.1          52.1          30.7          21.7          12.2          (9.0)    

General, administrative, and other indirect expenses

    6.8          10.1          8.1          9.7          12.8          6.0          3.1     

Interest expense

    2.4          3.0          1.7          0.9          1.3          (1.1)         0.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    18.7          35.2          61.9          41.3          35.8          17.1          (5.5)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income

    $ 34.2          $ 22.2          $ 38.1          $ 32.0          $ 36.0          $ 1.8          $ 4.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

    $ 22.5          $ 14.4          $ 15.5          $ 20.0          $ 22.4          $ (0.1)         $ 2.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

    $ 10.7          $ 3.2          $ 17.6          $ 4.4          $ 8.2          $ (2.5)         $ 3.8     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

    $ 6.8          $ 66.7          $ 14.6          $ 0.6          $ 0.7          $ (6.1)         $ 0.1     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income

    $ 1.0          $ 4.6          $ 5.0          $ 7.6          $ 5.4          $ 4.4          $ (2.2)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

    $ 32.4          $ 90.4          $ 31.4          $ 23.4          $ 27.7          $ (4.7)         $ 4.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  18


Real Assets Segment Results (Unaudited)

 

 

 

    Three Months Ended  
                                  Sept 30, 2012 vs.  
                                    Sept 30, 2011         Jun 30, 2012    
        Sept 30,    
2011
        Dec 31,    
2011
        Mar 31,    
2012
        Jun 30,    
2012
        Sept 30,    
2012
    $     $  
Real Assets                     (Dollars in millions)              

Revenues

             

Segment fee revenues

             

Fund management fees

    $ 37.2          $ 35.8          $ 36.6          $ 34.1          $ 34.4          $ (2.8)         $ 0.3     

Portfolio advisory fees, net

    1.9          0.6          0.3          1.6          0.7          (1.2)         (0.9)    

Transaction fees, net

    1.6          1.6          1.1          2.1          0.7          (0.9)         (1.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    40.7          38.0          38.0          37.8          35.8          (4.9)         (2.0)    

Performance fees

             

Realized

    29.1          16.9          23.2          27.0          31.9          2.8          4.9     

Unrealized

    (78.2)         50.8          82.4          (56.0)         (27.7)         50.5          28.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    (49.1)         67.7          105.6          (29.0)         4.2          53.3          33.2     

Investment income

             

Realized

    1.8          (0.2)         -              (0.3)         0.2          (1.6)         0.5     

Unrealized

    (0.7)         (0.8)         3.0          1.5          4.0          4.7          2.5     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    1.1          (1.0)         3.0          1.2          4.2          3.1          3.0     

Interest and other income

    (0.5)         (0.2)         0.4          0.4          0.4          0.9          -         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    (7.8)         104.5          147.0          10.4          44.6          52.4          34.2     

Expenses

             

Compensation and benefits

             

Direct base compensation

    19.4          17.0          18.2          16.9          16.1          (3.3)         (0.8)    

Indirect base compensation

    6.7          5.3          6.4          5.6          5.7          (1.0)         0.1     

Equity-based compensation

    -              -              -              0.1          0.2          0.2          0.1     

Performance fee related

             

Realized

    2.4          0.3          0.9          1.5          2.5          0.1          1.0     

Unrealized

    (4.3)         0.5          5.9          2.1          5.3          9.6          3.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    24.2          23.1          31.4          26.2          29.8          5.6          3.6     

General, administrative, and other indirect expenses

    12.8          15.2          12.7          11.8          12.5          (0.3)         0.7     

Interest expense

    2.9          2.3          1.9          1.1          0.7          (2.2)         (0.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    39.9          40.6          46.0          39.1          43.0          3.1          3.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income (Loss)

    $ (47.7)         $ 63.9          $ 101.0          $ (28.7)         $ 1.6          $ 49.3          $ 30.3     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

    $ (1.6)         $ (2.0)         $ (0.8)         $ 2.7          $ 1.0          $ 2.6          $ (1.7)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

    $ (47.2)         $ 66.9          $ 98.8          $ (32.6)         $ (3.6)         $ 43.6          $ 29.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

    $ 26.7          $ 16.6          $ 22.3          $ 25.5          $ 29.4          $ 2.7          $ 3.9     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income (Loss)

    $ 1.1          $ (1.0)         $ 3.0          $ 1.2          $ 4.2          $ 3.1          $ 3.0     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

    $ 26.9          $ 14.4          $ 21.5          $ 27.9          $ 30.6          $ 3.7          $ 2.7     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  19


Fund of Funds Solutions Segment Results (Unaudited)

 

 

    Three Months Ended  
                                  Sept 30, 2012 vs.  
        Sept 30,    
2011
        Dec 31,    
2011
        Mar 31,    
2012
        Jun 30,    
2012
        Sept 30,    
2012
      Sept 30, 2011         Jun 30, 2012    
             

 

$

   

 

$

 
Fund of Funds Solutions   (Dollars in millions)  

Revenues

             

Segment fee revenues

             

Fund management fees

    $ 18.7          $ 16.3          $ 16.3          $ 17.4          $ 16.5          $ (2.2)         $ (0.9)    

Portfolio advisory fees, net

    -              -              -              -              -              -              -         

Transaction fees, net

    -              -              -              -              -              -              -         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee revenues

    18.7          16.3          16.3          17.4          16.5          (2.2)         (0.9)    

Performance fees

             

Realized

    19.2          27.0          3.2          1.4          2.2          (17.0)         0.8     

Unrealized

    (22.5)         (32.9)         13.3          10.6          (1.8)         20.7          (12.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total performance fees

    (3.3)         (5.9)         16.5          12.0          0.4          3.7          (11.6)    

Investment income

             

Realized

    -              -              -              -              -              -              -         

Unrealized

    -              -              -              -              -              -              -         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    -              -              -              -              -              -              -         

Interest and other income

    0.2          0.1          0.2          0.1          0.1          (0.1)         -         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    15.6          10.5          33.0          29.5          17.0          1.4          (12.5)    

Expenses

             

Compensation and benefits

             

Direct base compensation

    8.1          6.2          8.0          8.9          8.2          0.1          (0.7)    

Indirect base compensation

    -              -              1.0          2.0          1.4          1.4          (0.6)    

Equity-based compensation

    -              -              -              -              -              -              -         

Performance fee related

             

Realized

    15.3          24.2          2.8          1.3          1.9          (13.4)         0.6     

Unrealized

    (18.0)         (30.8)         10.0          9.4          (2.1)         15.9          (11.5)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

    5.4          (0.4)         21.8          21.6          9.4          4.0          (12.2)    

General, administrative, and other indirect expenses

    3.0          4.5          1.8          3.3          3.7          0.7          0.4     

Interest expense

    -              -              0.3          0.6          0.2          0.2          (0.4)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    8.4         4.1          23.9          25.5          13.3          4.9          (12.2)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Economic Net Income

    $ 7.2          $ 6.4          $ 9.1          $ 4.0          $ 3.7          $ (3.5)         $ (0.3)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fee Related Earnings

    $ 7.8          $ 5.7          $ 5.4          $ 2.7          $ 3.1          $ (4.7)         $ 0.4     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Performance Fees

    $ (0.6)         $ 0.7          $ 3.7          $ 1.3          $ 0.6          $ 1.2          $ (0.7)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized Net Performance Fees

    $ 3.9          $ 2.8          $ 0.4          $ 0.1          $ 0.3          $ (3.6)         $ 0.2     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment Income

    $ -              $ -              $ -              $ -              $ -              $ -              $ -         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributable Earnings

    $ 11.7          $ 8.5          $ 5.8          $ 2.8          $ 3.4          $ (8.3)         $ 0.6     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page  |  20


Total Assets Under Management Roll Forward (Unaudited)

 

 

 

    Corporate Private Equity     Global Market Strategies (8)     Real Assets     Fund of Funds (7)     Total  
(USD in millions)   Available
Capital
    Fair Value
of Capital
    Total
AUM
    Available
Capital
    Fair Value
of Capital
    Total
AUM
    Available
Capital
    Fair Value
of Capital
    Total
AUM
    Available
Capital
    Fair Value
of Capital
    Total
AUM
    Available
Capital
    Fair Value
of Capital
    Total
AUM
 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

  Balance, As of June 30, 2012

   $ 15,292        $ 37,232        $ 52,524         $ 1,281        $ 27,765        $ 29,046         $ 7,059        $ 22,945        $ 30,004         $ 16,368        $ 28,216        $ 44,584         $ 40,000        $ 116,158        $ 156,158     

Acquisitions

    -              -              -              -              -              -              -              -              -              -              -              -              -              -              -            

Commitments (1)

    2,048          -              2,048          222          -              222          132          -              132          (30)         -              (30)         2,345          -              2,345     

Capital Called, net (2)

    (1,858)         1,725          (133)         (249)         229          (20)         (690)         637          (53)         (1,154)         1,044          (110)         (3,951)         3,635          (316)    

Distributions (3)

    52          (3,411)         (3,359)         23          (45)         (22)         523          (1,262)         (739)         125          (1,484)         (1,359)         723          (6,202)         (5,479)    

Subscriptions, net of
Redemptions (4)

    -              -              -              -              379          379          -              -              -              -              -              -              -              379          379     

Changes in CLO
collateral balances

    -              -              -              -              506          506          -              -              -              -              -              -              -              506          506     

Market Appreciation/
(Depreciation) (5)

    -              1,868          1,868          -              (89)         (89)         -              50          50          -              1,069          1,069          -              2,898          2,898     

Foreign exchange (6)

    42          181          223          -              109          109          13          76          89          209          217          426          264          583          847     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

  Balance, As of September 30,
2012

   $ 15,576        $ 37,595        $ 53,171         $ 1,277        $ 28,854        $ 30,131         $ 7,037        $ 22,446        $ 29,483         $ 15,518        $ 29,062        $ 44,580         $ 39,381        $ 117,957        $ 157,338     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                                

  Balance, As of December 31,
2011

   $ 13,328        $ 37,737        $ 51,065         $ 1,079        $ 23,434        $ 24,513         $ 8,278        $ 22,394        $ 30,672         $ 14,840        $ 25,879        $ 40,719         $ 37,525        $ 109,444        $ 146,969     

Acquisitions

    -              -              -              -              2,903          2,903          -              -              -              -              -              -              -              2,903          2,903     

Commitments (1)

    4,636          -              4,636          636          -              636          273          -              273          3,253          -              3,253          8,771          -              8,771     

Capital Called, net (2)

    (2,851)         2,486          (365)         (480)         432          (48)         (2,458)         2,442          (16)         (2,868)         2,901          33          (8,657)         8,261          (396)    

Distributions (3)

    476          (6,981)         (6,505)         42          (545)         (503)         948          (3,915)         (2,967)         295          (4,285)         (3,990)         1,761          (15,726)         (13,965)    

Subscriptions, net of
Redemptions (4)

    -              -              -              -              1,748          1,748          -              -              -              -              -              -              -              1,748          1,748     

Changes in CLO
collateral balances

    -              -              -              -              864          864          -              -              -              -              -              -              -              864          864     

Market Appreciation/
(Depreciation) (5)

    -              4,383          4,383          -              150          150          -              1,496          1,496          -              3,996          3,996          -              10,025          10,025     

Foreign exchange (6)

    (13)         (30)         (43)         -              (132)         (132)         (4)         29          25          (2)         571          569          (19)         438          419     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

  Balance, As of September 30,
2012

   $ 15,576        $ 37,595        $ 53,171         $ 1,277        $ 28,854        $ 30,131         $ 7,037        $ 22,446        $ 29,483         $ 15,518        $ 29,062        $ 44,580         $ 39,381        $ 117,957        $ 157,338     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1) Represents capital raised by our carry funds and fund of funds vehicles, net of expired available capital.

(2) Represents capital called by our carry funds and fund of funds vehicles, net of fund fees and expenses. Equity Invested 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 fund of funds vehicles, 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 and open-end structured credit funds.

(5) Market Appreciation/(Depreciation) represents realized and unrealized gains (losses) on portfolio investments and 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. 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.

(7) The fair market values for AlpInvest primary fund investments and secondary investment funds are based on the latest available valuations of the underlying limited partnership interests (in most cases as of June 30, 2012) as provided by their general partners, plus the net cash flows since the latest valuation, up to September 30, 2012.

(8) Ending balance is comprised of approximately $16.9 billion from our structured credit funds (including $0.1 billion of Available Capital), $9.8 billion in our hedge funds, and $3.5 billion (including $1.2 billion of Available Capital) in our carry funds.

 

Page  |  21


Fee Earning Assets Under Management Roll Forward (Unaudited)

 

 

 

     For the Three Months Ended September 30, 2012  
(USD in millions)        Corporate  
Private
Equity
     Global
Market
  Strategies  
       Real Assets  
(6)
     Fund of
Funds
  Solutions  
       Total    
  

 

 

 

Fee-Earning AUM

              

Balance, Beginning of Period

     $ 37,129         $ 27,740         $ 19,528         $ 27,576         $ 111,973     

Acquisitions

     -             -             -             -             -       

Inflows, including Commitments(1)

     285           203           327           2,945           3,760     

Outflows, including Distributions(2)

     (669)          (46)          (347)          (674)          (1,736)    

Subscriptions, net of Redemptions (3)

     -             407           -             -             407     

Changes in CLO collateral balances

     -             171           -             -             171     

Market Appreciation/(Depreciation) (4)

     -             (131)          -             1           (130)    

Foreign exchange and other (5)

     202           106           63           308           679     
  

 

 

 

Balance, End of Period

     $       36,947         $       28,450         $       19,571         $       30,156         $       115,124     
  

 

 

 

 

<
     For the Nine Months Ended September 30, 2012  
(USD in millions)        Corporate  
Private
Equity
     Global
Market
  Strategies  
       Real Assets  
(6)
     Fund of
Funds
  Solutions  
       Total    
  

 

 

 

Fee-Earning AUM

              

Balance, Beginning of Period

     $ 37,996         $ 23,186         $ 22,172         $ 27,671         $ 111,025     

Acquisitions

     -             2,866           -             -             2,866     

Inflows, including Commitments(1)

     698           705           1,504           6,143           9,050     

Outflows, including Distributions(2)

     (1,707)          (428)          (4,126)          (4,291)          (10,552)    

Subscriptions, net of Redemptions (3)

     -             1,778           -