Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Provision for Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
	2012			2011			2010
	(Dollars in millions)
Current
Federal income tax	$	5.1		$	—		$	—
State and local income tax		7.8			7.2			6.0
Foreign income tax		34.1			27.8			15.4
Subtotal		47.0			35.0			21.4
Deferred
Federal income tax		(8.3	)		—			—
State and local income tax		(3.6	)		(2.5	)		—
Foreign income tax		5.3			(4.0	)		(1.1	)
Subtotal		(6.6	)		(6.5	)		(1.1	)
Total provision for income taxes	$	40.4		$	28.5		$	20.3

Summary of Tax Effects of Temporary Differences

A summary of the tax effects of the temporary differences is as follows:

	As of December 31,
	2012		2011
	(Dollars in millions)
Deferred tax assets
Net operating loss carry forward	$	—	$	0.4
Tax basis goodwill and intangibles		39.7		—
Depreciation and amortization		10.3		3.0
Deferred restricted common unit compensation		9.2		—
Accrued compensation		13.1		10.3
Other		9.1		4.3
Total deferred tax assets	$	81.4	$	18.0
Deferred tax liabilities
Intangible assets(a)	$	18.9	$	15.1
Unrealized appreciation on investments		54.4		33.0
Other		2.1		0.2
Total deferred tax liabilities	$	75.4	$	48.3
Net deferred tax assets (liabilities)	$	6.0	$	(30.3	)

(a) As of December 31, 2012, $14.3 million of deferred tax liabilities were offset and presented as a single deferred tax asset amount on the Partnership’s balance sheet.

Reconciliation of Provision for Income Taxes to the U.S Federal Tax Rate

The following table reconciles the provision for income taxes to the U.S. Federal statutory tax rate:

	Year Ended December 31,
	2012			2011			2010
Statutory U.S. federal income tax rate		35.00	%		35.00	%		35.00	%
Income passed through to common unitholders and non-controlling interest holders(b)		(34.58	%)		(32.72	%)		(33.89	%)
Unvested Carlyle Holdings partnership units		1.72	%		—			—
Foreign income taxes		(0.41	%)		(0.27	%)		(0.15	%)
State and local income taxes		0.20	%		0.40	%		0.41	%
Interest expense		(0.10	%)		—			—
Other adjustments		(0.17	%)		—			—
Effective income tax rate(c)		1.66	%		2.41	%		1.37	%

(b) The Partnership is organized as a series of pass through entities pursuant to the United States Internal Revenue Code. As such, the Partnership is not responsible for the tax liability due on certain income earned during the year. Such income is taxed at the unitholder and non-controlling interest holder level, and any income tax is the responsibility of the unitholders and is paid at that level.

(c) The effective income tax rate is calculated on Income (Loss) Before Provision (Benefit) for Taxes.