15. Earnings Per Common Unit

Prior to the reorganization and the initial public offering in May 2012, Carlyle’s business was conducted through a large number of entities as to which there was no single holding entity, but which were separately owned by the senior Carlyle professionals, CalPERS, and Mubadala. There was no single capital structure upon which to calculate historical earnings per common unit information. Accordingly, earnings per common unit information has not been presented for historical periods prior to the reorganization and initial public offering.

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


	For the Period from May 8, 2012
	Through December 31, 2012
	Basic		Diluted
The Carlyle Group L.P. weighted-average common units outstanding		42,562,928		42,562,928
Unvested deferred restricted common units		—		2,207,816
Contingently issuable Carlyle Holdings Partnership units		—		1,488,563
Weighted-average vested Carlyle Holdings Partnership units		—		205,215,204
Unvested Carlyle Holdings Partnership units		—		8,224,476

Weighted-average common units outstanding		42,562,928		259,698,987

The weighted-average common units outstanding of The Carlyle Group L.P. includes vested deferred restricted common units for which issuance of the related common units is deferred until May 2013.

The Partnership applies the treasury stock method to determine the dilutive weighted-average common units represented by the unvested deferred restricted common units.

Included in the determination of dilutive weighted-average common units are contingently issuable Carlyle Holdings partnership units associated with the Claren Road and Vermillion acquisitions. For purposes of determining the dilutive weighted-average common units, it is assumed that December 31, 2012 represents the end of the contingency period and the “if-converted” method is applied to the Carlyle Holdings partnership units issuable therefrom.

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 treasury 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, for the period from May 8, 2012 through December 31, 2012, the 205,215,204 and 8,224,476 of vested and unvested Carlyle Holdings partnership units were dilutive. As a result, the net income of non-controlling interests in Carlyle Holdings associated with this assumed exchange of $87.1 million for the period from May 8, 2012 through December 31, 2012 has been included in net income attributable to The Carlyle Group L.P. for purposes of the dilutive earnings per common unit calculation.

Basic and diluted net income per common unit are calculated as follows:


	For the Period from May 8, 2012
	Through December 31, 2012
	Basic		Diluted
Net income attributable to The Carlyle Group L.P.	$	20,300,000	$	20,300,000
Incremental net income from assumed exchange of Carlyle
Holdings partnership units		—		87,100,000

Total	$	20,300,000	$	107,400,000

Weighted-average common units outstanding		42,562,928		259,698,987

Net income per common unit	$	0.48	$	0.41