Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

The provision for income taxes consists of the following:



	Year Ended December 31,
	2015			2014			2013
	(Dollars in millions)
Current
Federal income tax	$	0.7		$	3.2		$	2.2
State and local income tax	4.9			8.2			5.2
Foreign income tax	27.4			54.1			44.0
Subtotal	33.0			65.5			51.4
Deferred
Federal income tax	(36.7		)	(5.2		)	(1.5		)
State and local income tax	(2.6		)	2.9			8.7
Foreign income tax	8.4			13.6			37.6
Subtotal	(30.9		)	11.3			44.8
Total provision for income taxes	$	2.1		$	76.8		$	96.2

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



	As of December 31,
	2015			2014
	(Dollars in millions)
Deferred tax assets
Federal foreign tax credit	$	7.7		$	3.8
State net operating loss carry forwards	0.5			3.6
Tax basis goodwill and intangibles	154.1			99.4
Depreciation and amortization	58.2			38.6
Deferred restricted common unit compensation	12.9			12.6
Accrued compensation	28.3			37.6
Other	5.2			0.6
Deferred tax assets before valuation allowance	266.9			196.2
Valuation allowance	(14.1		)	(29.7		)
Total deferred tax assets	$	252.8		$	166.5
Deferred tax liabilities ⁽¹⁾
Intangible assets	$	7.8		$	19.4
Unrealized appreciation on investments	126.3			126.3
Other	2.8			2.0
Total deferred tax liabilities	$	136.9		$	147.7
Net deferred tax assets (liabilities)	$	115.9		$	18.8


(1)	As of December 31, 2015 and 2014, $33.4 million and $35.5 million, respectively, of deferred tax liabilities were offset and presented as a single deferred tax asset amount on the Partnership’s balance sheet.

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



	Year Ended December 31,
	2015		2014		2013
Statutory U.S. federal income tax rate	35.00	%	35.00	%	35.00	%
Income passed through to common unitholders and non-controlling interest holders⁽¹⁾	(37.24	)%	(28.56	)%	(29.23	)%
Unvested Carlyle Holdings partnership units	1.87	%	2.92	%	2.03	%
Foreign income taxes	(1.78	)%	(1.90	)%	(1.88	)%
State and local income taxes	4.13	%	0.25	%	0.17	%
Valuation allowance establishment impacting provision for income taxes	(3.88	)%	0.43	%	1.50	%
Other adjustments	2.42	%	(0.40	)%	(0.93	)%
Effective income tax rate⁽²⁾	0.52	%	7.74	%	6.66	%


(1)	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.


(2)	The effective income tax rate is calculated on income before provision for income taxes.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of penalties and interest, is as follows:



	As of December 31,
	2015			2014
	(Dollars in millions)
Balance at January 1	$	13.8		$	9.3
Additions based on tax positions related to current year	—			3.7
(Reductions) additions for tax positions of prior years	(0.6		)	3.3
Reductions due to lapse of statute of limitations	—			(2.5		)
Balance at December 31	$	13.2		$	13.8