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MarketScreener Homepage  >  Equities  >  Nasdaq  >  The Carlyle Group Inc.    CG

THE CARLYLE GROUP INC.

(CG)
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CARLYLE : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

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02/12/2020 | 04:27pm EDT
On January 1, 2020, we completed our conversion from a Delaware limited
partnership named The Carlyle Group L.P. into a Delaware corporation named The
Carlyle Group Inc. Pursuant to the Conversion, at the specified effective time
on January 1, 2020, each common unit of The Carlyle Group L.P. outstanding
immediately prior to the effective time converted into one share of common stock
of The Carlyle Group Inc. and each special voting unit and general partner unit
was canceled for no consideration. In addition, holders of the partnership units
in Carlyle Holdings I L.P., Carlyle Holdings II L.P., and Carlyle Holdings III
L.P. exchanged such units for an equivalent number of shares of common stock and
certain other restructuring steps occurred (the conversion, together with such
restructuring steps and related transactions, the "Conversion").
Unless the context suggests otherwise, references in this report to "Carlyle,"
the "Company," "we," "us" and "our" refer (i) prior to the consummation of the
Conversion to The Carlyle Group L.P. and its consolidated subsidiaries and (ii)
from and after the consummation of the Conversion to The Carlyle Group Inc. and
its consolidated subsidiaries. References to our common stock in periods prior
to the Conversion refer to the common units of The Carlyle Group L.P.
The following discussion should be read in conjunction with the consolidated
financial statements and the related notes included in this Annual Report on
Form 10-K.
Overview
We conduct our operations through four reportable segments: Corporate Private
Equity, Real Assets, Global Credit, and Investment Solutions.

•            Corporate Private Equity - Our Corporate Private Equity segment
             advises our 25 buyout and 10 middle market and growth capital funds,
             which seek a wide variety of investments of different sizes and
             growth potentials. As of December 31, 2019, our Corporate Private
             Equity segment had more than $86 billion in AUM and

approximately

             $62 billion in Fee-earning AUM.



•            Real Assets - Our Real Assets segment advises our 10 U.S. and
             internationally focused real estate funds, our five

infrastructure

             funds, our two international energy funds, as well as our three
             Legacy Energy funds. The segment also includes three NGP Predecessor
             Funds and four NGP Carry Funds advised by NGP. As of December 31,
             2019, our Real Assets segment had more than $43 billion in AUM and
             more than $33 billion in Fee-earning AUM.



•            Global Credit - Our Global Credit segment advises a group of 64
             funds that pursue investment strategies including loans and
             structured credit, direct lending, opportunistic credit, distressed
             credit, and aircraft financing and servicing. As of December 31,
             2019, our Global Credit segment had more than $49 billion in AUM and
             approximately $38 billion in Fee-earning AUM.



•            Investment Solutions - Our Investment Solutions segment advises
             global private equity and real estate fund of funds programs and
             related co-investment and secondary activities across 248 fund
             vehicles. As of December 31, 2019, our Investment Solutions segment
             had more than $45 billion in AUM and more than $28 billion in
             Fee-earning AUM.


We earn management fees pursuant to contractual arrangements with the investment
funds that we manage and fees for transaction advisory and oversight services
provided to portfolio companies of these funds. We also typically receive a
performance fee from an investment fund, which may be either an incentive fee or
a special residual allocation of income, which we refer to as a carried
interest, in the event that specified investment returns are achieved by the
fund. Under U.S. generally accepted accounting principles ("U.S. GAAP"), we are
required to consolidate some of the investment funds that we advise. However,
for segment reporting purposes, we present revenues and expenses on a basis that
deconsolidates these investment funds. Accordingly, our segment revenues
primarily consist of fund management and related advisory fees and other income,
realized performance revenues (consisting of incentive fees and carried interest
allocations), realized principal investment income, including realized gains on
our investments in our funds and other trading securities, as well as interest
income. Our segment expenses primarily consist of cash compensation and benefits
expenses, including salaries, bonuses, and realized performance payment
arrangements, and general and administrative expenses. While our segment
expenses include depreciation and interest expense, our segment expenses exclude
acquisition-related charges and amortization of intangibles and impairment.
Refer to Note 17 to the consolidated financial statements included in this
Annual Report on Form 10-K for

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more information on the differences between our financial results reported
pursuant to U.S. GAAP and our financial results for segment reporting purposes.
Trends Affecting our Business
Market expectations for global economic growth continued to moderate into the
fourth quarter of 2019. In the U.S., growth decelerated relative to 2018 due to
weakness in the industrial sector, business spending, and exports. Although at a
more moderate pace than 2018, during 2019 and into early 2020 the economy
continued to grow due to a housing sector rebound driven by lower mortgage rates
tied to three Federal Reserve rate cuts during 2019, and strong consumption
growth due to low unemployment, robust real wage growth and generally solid
household balance sheets during the year. The softness in business spending
during 2019 and continuing into early 2020 appears to be attributable to a
combination of weak corporate earnings, heightened "late-cycle" fears among
business managers and ongoing geopolitical tensions. Rising compensation and
input costs have led to a decline in operating margins, while a strong dollar
continues to weigh on the domestic value of foreign sales and earnings.
In China, official data indicate real GDP grew by 6% over the course of 2019,
unchanged from the third quarter. The deceleration in growth relative to prior
periods was driven by ongoing softness in exports, housing and manufacturing.
Data over the course of 2019 highlights the degree to which the costs of the
trade dispute have negatively affected the overall global economy. In its
January 2020 update to the World Economic Outlook, the International Monetary
Fund estimates that global growth amounted to just 2.9% in 2019 and that the
bulk of the slowdown from 4% growth at the start of 2018 can be attributed to
weak global trade. Trends in manufacturing surveys, sentiment indices, and
long-term yields all closely tracked the fall in global trade volumes throughout
the year. Since the global trade system is based on integrated, cross-border
value chains, negative effects in one part of the network quickly spread to the
rest.
Geopolitical uncertainty, trade frictions, and other downside risks continue to
exert a significant impact on the overall economy into early 2020. Although
investors' optimism rose in the immediate aftermath of the finalization of the
"Phase-One" trade agreement between the U.S. and China (the S&P 500, MSCI
ACWI-All Cap, EuroStoxx 600 and Shanghai Composite each rose 8.5%, 8.6%, 5.8%,
and 5.0%, respectively, in the fourth quarter, bringing 2019 returns into the
double digits across indices), sentiment has shifted once more in light of new
concerns. The global market exuberance of the fourth quarter was likely due to
investor hopes for a rebound in growth after the easing of trade tensions,
particularly in China. The rapid proliferation of the Novel Coronavirus,
however, threatens such a rebound, and highlights the fragility of the macro
economy. From December 31 through January 31, 2020, the Hang Seng Index fell
nearly 7%. Brent crude spot prices fell nearly 16% in January 2020 on fears that
virus containment efforts will choke off demand. In the U.S., valuations remain
high, as prices belie underlying fundamentals. Earnings for companies in the S&P
500 declined year-over-year in each of the first three quarters of 2019, and are
estimated to have risen just 0.7% in the fourth quarter. If the growth that
investors anticipate fails to materialize, or if the expected stabilization in
trade does not come to fruition, equity markets may react in kind.
The global monetary policy easing cycle that characterized the first three
quarters of 2019 appears to have significantly slowed, with most (but not all)
central banks on hold for now. The reserve management purchases and repurchase
operations that the Federal Reserve initiated in the third quarter of 2019
continued into the fourth quarter and into early 2020, successfully preventing a
repeat of the money market volatility experienced in September 2019. Based on
guidance from the Federal Reserve, it is anticipated that reserve management
purchases will continue into at least the second quarter of 2020. Persistent
downside misses to inflation targets over the past decade, and low future
inflation expectations, have prompted monetary policymakers in the U.S. and
Europe to shift their focus towards a review of longer-term monetary policy
strategy. United States corporate bond yields across the credit spectrum fell
roughly 135 basis points in 2019, led by high yield bonds, which fell 256 basis
points during the year. Even yields on the lowest-rated high yield debt, which
had risen throughout the second and third quarters of 2019 and into the fourth
quarter reversed course and ended the year down 177 basis points.
A lower-for-longer interest rate environment and high levels of
negative-yielding debt are raising concerns about traditional fixed-income
investment funds' abilities to weather future shocks and the International
Monetary Fund estimates that one-sixth of all fixed-income fund assets would
experience a liquidity shortfall in the case of a significant redemption event.
Although the broader investment environment is challenging given high
valuations, low yields, and downside risks to growth, the alternative asset
industry enjoys significant tailwinds as private capital continues to displace
public listings. Over the past 20 years, the number of U.S. initial public
offerings has dropped by 75%-from more than 500 per year in the mid-1990s to
just 110 in 2019, as the entrepreneurs, founders, and management teams of
small-to-medium sized businesses generally prefer to raise private capital
rather than public capital. At the end of last year, there were more than 8,200
private-equity backed companies in the U.S. relative to fewer than 3,500
publicly-listed businesses, a dramatic turnaround from 20 years earlier when
listed companies were four-times as numerous. We observe similar trends across
much of the rest of the world, particularly Europe. The decline in public
listings, the pullback in bank lending and intermediation, and the persistently

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low yield environment have contributed to a doubling of private credit AUM over
the past six years. We believe there is still significant room for more growth
ahead, as total private credit AUM today, despite this doubling, is equal to
just one-third ($750 billion) of private companies' likely borrowing volumes
over the next three to five years (roughly $2.7 trillion; based on current
levels of private equity dry powder and average leverage ratios).

Our overall carry fund portfolio generally lagged the performance of large cap
U.S. stocks, while exceeding returns on the small- and mid-cap indices in 2019.
Our Corporate Private Equity funds appreciated by 3% in the fourth quarter and
8% over the last twelve months. Our Real Asset funds were flat during the fourth
quarter and appreciated 3% over the last twelve months, as strong appreciation
in our real estate funds of 16% over 2019 was dampened by weakness in certain
energy funds, in particular those with significant investments in upstream
companies and/or publicly traded companies. Investment Solutions appreciation
was 1% in the fourth quarter and 15% for the year, driven by strong investment
performance in our AlpInvest funds. While slowing global growth and volatile
market conditions could impact valuations in the short-term, we believe our
existing portfolio of assets is high-quality and well-diversified by fund,
industry sector, asset class, and region.

We raised $3.3 billion of new capital in the fourth quarter, and $19.3 billion
over the last year, exceeding our four-year $100 billion fundraising target by
almost $10 billion. We expect that our fundraising pace in 2020 will be similar
to 2019, with fundraising for the next vintage of our large buyout and real
estate funds anticipated to begin in late 2021 or early 2022. During the interim
periods, we expect fundraising to drive modest Fee-earning AUM growth. Growth in
our Global Credit and Investment Solutions segments is expected to be partially
offset by downward pressure in our Corporate Private Equity and Real Assets
segments where exit activity may temporarily outpace new fundraising.
During the fourth quarter, our carry funds invested $7.1 billion in new or
follow-on transactions that we have been working on for several months, and have
invested approximately $21.3 billion over the last year, a pace generally
consistent with recent years but higher than our long-term average as our larger
platform supports greater capital deployment. In our Global Credit segment,
there were $3.0 billion gross originations in our Direct Lending business.
Overall, the investment environment remains challenging and competitive. While
levels of dry powder generally remain high across the private equity industry,
we have seen an increase in potential investment opportunities. Our available
capital level is consistent with the lifecycle stage of our most recent vintage
of funds and our rate of capital investment continues to be steady. We generated
$5.1 billion in realized proceeds from our carry funds in the fourth quarter,
and $19.9 billion over the last twelve months, which is below our exit pace in
recent years. At this time, we expect that exit activity and net realized
performance revenues will begin to rebound in 2020.
Over the course of 2019 and continuing into 2020 there has been an increasing
level of public discourse, debate and media coverage regarding the appropriate
extent of regulation and oversight of the financial industry, including
investment firms, as well as the tax treatment of certain investments and income
generated from such investments. We anticipate that such active debate and media
coverage will continue to increase in connection with the 2020 U.S. election
cycle as financial proposals are put forth by potential U.S. presidential and
Congressional candidates.

Recent Transactions
On January 1, 2020, we completed the conversion of The Carlyle Group L.P. from a
Delaware limited partnership to a Delaware corporation named The Carlyle Group
Inc. See "-Conversion to a Corporation" below.
Dividends
In February 2020, the Board of Directors declared a quarterly distribution of
$0.25 per common share to common stockholders of record at the close of business
on February 18, 2020, payable on February 25, 2020.
Conversion to a Corporation
On January 1, 2020, we completed our conversion from a Delaware limited
partnership named The Carlyle Group L.P. (the "Partnership") into a Delaware
corporation named The Carlyle Group Inc. (the "Corporation"). Pursuant to the
Conversion, at the specified effective time on January 1, 2020, (i) each common
unit of the Partnership outstanding immediately prior to the effective time
converted into one issued and outstanding, fully paid and nonassessable share of
common stock, (ii) each special voting unit of the Partnership outstanding
immediately prior to the effective time was canceled for no consideration and
the former holder(s) thereof ceased to have any rights with respect thereto and
(iii) each general partner unit of the Partnership outstanding immediately prior
to the effective time was canceled for no consideration and the former holder(s)
thereof ceased to have any rights with respect thereto, in each case without any
action required on the part of the Partnership, the Corporation, any holder of
any Partnership interest or any other person. In addition, holders of
partnership

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units in Carlyle Holdings I L.P., Carlyle Holdings II L.P. and Carlyle Holdings
III L.P. exchanged such units for an equivalent number of shares of common stock
of the Corporation and certain other restructuring steps occurred (the
conversion, together with such restructuring steps and related transactions, the
"Conversion").
The Conversion is expected to qualify for the non-recognition of gain or loss to
our former common unitholders for U.S. federal income tax purposes. The
application of the non-recognition rules to non-U.S. common unitholders in the
context of the Conversion is dependent on local tax requirements. All former
common unitholders should consult their own advisers as to the consequences of
the Conversion to them. Final Schedule K-1s will be issued in respect of our
final taxable period as a limited partnership. Following the Conversion,
dividends will be reported to stockholders on Form 1099-DIV. We believe this
change will simplify our stockholders' tax reporting obligations. For U.S.
federal income tax purposes, any dividends we pay following the Conversion
generally will be treated as qualified dividend income (generally taxable to
U.S. individual stockholders at capital gain rates) paid by a domestic
corporation to the extent paid out of our current or accumulated earnings and
profits, as determined for U.S. federal income tax purposes, with any excess
dividends treated as return of capital to the extent of the stockholder's basis.
Prior to the Conversion, we recorded significant non-controlling interests in
Carlyle Holdings related to the ownership interests of the limited partners of
the Carlyle Holdings partnerships. The Company, through wholly-owned
subsidiaries, was the sole general partner of Carlyle Holdings. Accordingly, the
Company consolidated the financial position and results of operations of Carlyle
Holdings into its consolidated financial statements. In the Conversion, the
limited partners of the Carlyle Holdings partnerships exchanged their Carlyle
Holdings partnership units for an equivalent number of shares of common stock of
The Carlyle Group Inc. As a result, in periods following Conversion, the
consolidated balance sheet of The Carlyle Group Inc. will not reflect any
non-controlling interests in Carlyle Holdings. In addition, we expect that our
provision for income taxes in periods following the Conversion will be greater
than in periods prior to the Conversion because following the Conversion, all of
our income before the provision for income taxes will be subject to U.S. federal
(and state and local) corporate income taxes. See "Part 1. Item 1A. Risk
Factors-Following the Conversion, we expect to pay more corporate income taxes
than we would have as a limited partnership." For these reasons, our results in
periods following the Conversion may not be comparable to our results in periods
prior to the Conversion.
For additional information about the Conversion, see "Part 1. Item 1.
Business-Organizational Structure," "Part II. Item 8. Note 10-Related Party
Transactions," "Part II. Item 8. Note 11-Income Taxes," "Part III. Certain
Relationships and Related Transactions, and Director Independence" and the
unaudited pro forma condensed financial information filed as Exhibit 99.1
hereto.
Key Financial Measures
Our key financial measures are discussed in the following pages. Additional
information regarding these key financial measures and our other significant
accounting policies can be found in Note 2 to the consolidated financial
statements included in this Annual Report on Form 10-K.
Revenues
On January 1, 2018, we adopted ASU 2014-9, Revenue from Contracts with Customers
(Topic 606) ("ASU 2014-9"). Upon adoption, certain performance revenues that
represent a performance-based capital allocation from fund limited partners to
us are now accounted for as earnings from financial assets and included as a
component of investment income (loss). We also are entitled to receive
performance-based incentive fees pursuant to management contracts from certain
of our Global Credit funds when the return on assets under management exceeds
certain benchmark returns or other performance targets. These fees are recorded
as incentive fees in our consolidated statements of operations. See Note 2 to
the financial statements for more information on our adoption of ASU 2014-9.
Revenues primarily consist of fund management fees, incentive fees, investment
income (including performance allocations, realized and unrealized gains of our
investments in our funds and other principal investments), as well as interest
and other income.
Fund Management Fees. Fund management fees include management fees and
transaction and portfolio advisory fees. We earn management fees for advisory
services we provide to funds in which we hold a general partner interest or with
which we have an investment advisory or investment management agreement.
Additionally, management fees include catch-up management fees, which are
episodic in nature and represent management fees charged to fund investors in
subsequent closings of a fund which apply to the time period between the fee
initiation date and the subsequent closing date.
Management fees attributable to Carlyle Partners VII, L.P. ("CP VII"), our
seventh U.S. buyout fund with approximately $17.5 billion of Fee-earning AUM as
of December 31, 2019, was 17% and 13% of total management fees

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recognized during the years ended December 31, 2019 and 2018, respectively.
Management fees attributable to Carlyle Partners VI, L.P. ("CP VI"), our sixth
U.S. buyout fund with approximately $9.1 billion of Fee-earning AUM as of
December 31, 2019, were approximately 5%, 8%, and 16% of total management fees
recognized during the years ended December 31, 2019, 2018 and 2017,
respectively. No other fund generated over 10% of total management fees in the
periods presented.
Fund management fees exclude the reimbursement of any partnership expenses paid
by the Company on behalf of the Carlyle funds pursuant to the limited
partnership agreements, including amounts related to the pursuit of actual,
proposed, or unconsummated investments, professional fees, expenses associated
with the acquisition, holding and disposition of investments, and other fund
administrative expenses.
Transaction and Portfolio Advisory Fees. Transaction and portfolio advisory fees
are fees we receive for the transaction and portfolio advisory services we
provide to our portfolio companies, as well as underwriting fees from our loan
syndication and capital markets business, Carlyle Capital Solutions. When
covered by separate contractual agreements, we recognize transaction and
portfolio advisory fees for these services when the service has been provided
and collection is reasonably assured. We are required to offset our fund
management fees earned by a percentage of the transaction and advisory fees
earned, which we refer to as the "rebate offsets." Historically, such rebate
offset percentages generally approximated 80% of the fund's portion of the
transaction and advisory fees earned. However, the percentage of transaction and
portfolio advisory fees we share with our investors on our recent vintage funds
has generally increased from 80% to 100% of the fund's portion of the
transaction and portfolio advisory fees earned, such that a larger share of the
transaction fee revenue we retain is driven by co-investment activity. The
recognition of transaction fees and portfolio advisory fees can be volatile as
they are primarily generated by investment activity within our funds, and
therefore are impacted by our investment pace. Underwriting fees include gains,
losses and fees arising from securities offerings in which we participate in the
underwriter syndicate.
Incentive Fees. Incentive fees consist of performance-based incentive
arrangements pursuant to management contracts, primarily from certain of our
Global Credit funds, when the return on assets under management exceeds certain
benchmark returns or other performance targets. In such arrangements, incentive
fees are recognized when the performance benchmark has been achieved.
Investment Income. Investment income consists of our performance allocations as
well as the realized and unrealized gains and losses resulting from our equity
method investments and other principal investments.
Performance allocations consist principally of the performance-based capital
allocation from fund limited partners to us, commonly referred to as carried
interest, from certain of our investment funds, which we refer to as the "carry
funds." Carried interest revenue is recognized by Carlyle upon appreciation of
the valuation of our funds' investments above certain return hurdles as set
forth in each respective partnership agreement and is based on the amount that
would be due to us pursuant to the fund partnership agreement at each period end
as if the funds were liquidated at such date. Accordingly, the amount of carried
interest recognized as performance allocations reflects our share of the fair
value gains and losses of the associated funds' underlying investments measured
at their then-current fair values relative to the fair values as of the end of
the prior period. As a result, the performance allocations earned in an
applicable reporting period are not indicative of any future period, as fair
values are based on conditions prevalent as of the reporting date. Refer to " -
Trends Affecting our Business" for further discussion.
In addition to the performance allocations from our Corporate Private Equity and
Real Assets funds and most of our closed-end carry funds in the Global Credit
segment, we are also entitled to receive performance allocations from our
Investment Solutions, Carlyle Aviation and NGP Carry Funds. The timing of
performance allocations realizations for these funds is typically later than in
our other carry funds based on the terms of such arrangements.
Our performance allocations are generated by a diverse set of funds with
different vintages, geographic concentration, investment strategies and industry
specialties. For an explanation of the fund acronyms used throughout this
Management's Discussion and Analysis of Financial Condition and Results of
Operations section, see "Item 1. Business - Our Family of Funds."

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Performance allocations in excess of 10% of the total for the years ended December 31, 2019, 2018 and 2017 were generated from the following funds:

                        Year Ended December 31,
         2019                     2018                    2017
                         (Dollars in millions)
   CP VI    $   154.2       CP VI   $   162.5       CP VI   $   649.1
   CRP V        154.9      CRP VII      131.8      CAP IV       312.7
 Alpinvest
  Co - &
 Secondary
Investments
 2006-2008       83.5      CEP IV        77.9       CP V        311.4
  CEP IV       (119.0 )    CIEP I        74.5
                            CP V         68.4
                           CAP IV      (245.7 )
                            CRP V       (67.7 )


No other fund generated over 10% of performance allocations in the periods
presented above.
Under our arrangements with the historical owners and management team of
AlpInvest, we generally do not retain any carried interest in respect of the
historical investments and commitments to our fund vehicles that existed as of
July 1, 2011 (including any options to increase any such commitments exercised
after such date). We are entitled to 15% of the carried interest in respect of
commitments from the historical owners of AlpInvest for the period between 2011
and 2020 and 40% of the carried interest in respect of all other commitments
(including all future commitments from third parties). In certain instances,
carried interest associated with the AlpInvest fund vehicles is subject to
entity level income taxes in the Netherlands.
Realized carried interest may be clawed back or given back to the fund if the
fund's investment values decline below certain return hurdles, which vary from
fund to fund. When the fair value of a fund's investments remains constant or
falls below certain return hurdles, previously recognized performance
allocations are reversed. In all cases, each investment fund is considered
separately in evaluating carried interest and potential giveback obligations.
For any given period, performance allocations revenue on our statement of
operations may include reversals of previously recognized performance
allocations due to a decrease in the value of a particular fund that results in
a decrease of cumulative performance allocations earned to date. Since fund
return hurdles are cumulative, previously recognized performance allocations
also may be reversed in a period of appreciation that is lower than the
particular fund's hurdle rate. For the years ended December 31, 2019, 2018, and
2017, the reversals of performance allocations were $215.8 million, $364.4
million and $74.2 million, respectively. Additionally, unrealized performance
allocations reverse when performance allocations are realized, and unrealized
performance allocations can be negative if the amount of realized performance
allocations exceed total performance allocations generated in the period.
As of December 31, 2019, accrued performance allocations and accrued giveback
obligations were approximately $3.9 billion and $22.2 million, respectively.
Each balance assumes a hypothetical liquidation of the funds' investments at
December 31, 2019 at their then current fair values. These assets and
liabilities will continue to fluctuate in accordance with the fair values of the
fund investments until they are realized. As of December 31, 2019, approximately
$14.1 million of the accrued giveback obligation is the responsibility of
various current and former senior Carlyle professionals and other limited
partners of the Carlyle Holdings partnerships, and the net accrued giveback
obligation attributable to Carlyle Holdings is $8.1 million. The Company uses
"net accrued performance revenues" to refer to the aggregation of the accrued
performance allocations and incentive fees net of (i) accrued giveback
obligations, (ii) accrued performance allocations and incentive fee-related
compensation, (iii) performance allocations and incentive fee-related tax
obligations, and (iv) accrued performance allocations and incentive fees
attributable to non-controlling interests and excludes any net accrued
performance allocations and incentive fees that have been realized but will be
collected in subsequent periods. The net accrued performance revenues as of
December 31, 2019 are $1.7 billion.
In addition, realized performance allocations may be reversed in future periods
to the extent that such amounts become subject to a giveback obligation. If at
December 31, 2019, all investments held by our carry funds were deemed
worthless, a possibility that management views as remote, the amount of realized
and previously distributed performance allocations subject to potential giveback
would be approximately $0.4 billion, on an after-tax basis where applicable. See
the related discussion of "Contingent Obligations (Giveback)" within "-
Liquidity and Capital Resources."

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The following table summarizes the total amount of aggregate giveback
obligations that we have realized since Carlyle's inception. Given various
current and former senior Carlyle professionals and other limited partners of
the Carlyle Holdings partnerships are responsible for paying the majority of the
realized giveback obligation, the table below also summarizes the amount that
was attributable to Carlyle Holdings:
                                              Inception through December 31, 2019
                                                                  Giveback Attributable to
                                         Total Giveback               Carlyle Holdings
                                                     (Dollars in millions)
Various Legacy Energy Funds        $                   155.2     $                    55.0
All other Carlyle Funds                                 56.9                           0.6
Aggregate giveback since inception $                   212.1     $          

55.6



The amounts above include $40.6 million attributable to Legacy Energy Fund IV
that was realized during the year ended December 31, 2019, of which $19.9
million was attributable to Carlyle Holdings.
The funding for employee obligations and givebacks related to carry realized
pre-IPO is primarily through a collection of employee receivables related to
giveback obligations and from non-controlling interests for their portion of the
obligation. The realization of giveback obligations for the Company's portion of
such obligations reduces Distributable Earnings in the period realized. Further,
each individual recipient of realized carried interest typically signs a
guarantee agreement or partnership agreement that personally obligates such
person to return his/her pro rata share of any amounts of realized carried
interest previously distributed that are later clawed back. Accordingly, carried
interest as performance allocation compensation is subject to return to the
Company in the event a giveback obligation is funded. Generally, the actual
giveback liability, if any, does not become due until the end of a fund's life.
Each investment fund is considered separately in evaluating carried interest and
potential giveback obligations. As a result, performance allocations within
funds will continue to fluctuate primarily due to certain investments within
each fund constituting a material portion of the carry in that fund.
Additionally, the fair value of investments in our funds may have substantial
fluctuations from period to period.
In addition, in our discussion of our non-GAAP results, we use the term
"realized net performance revenues" to refer to realized performance allocations
and incentive fees from our funds, net of the portion allocated to our
investment professionals, if any, and certain tax expenses associated with
carried interest attributable to certain partners and employees, which are
reflected as realized performance allocations and incentive fees related
compensation expense. See "- Non-GAAP Financial Measures" for the amount of
realized performance revenues recognized each period. See "- Segment Analysis"
for the realized performance revenues by segment and related discussion for each
period.
Investment income also represents the unrealized and realized gains and losses
on our principal investments, including our investments in Carlyle funds that
are not consolidated, as well as any interest and other income. Investment
income (loss) also includes the related amortization of the basis difference
between the carrying value of our investment and our share of the underlying net
assets of the investee, as well as the compensation expense associated with
compensatory arrangements provided by us to employees of our equity method
investee, as it relates to our investments in NGP. Principal investment income
also includes our share of earnings from our strategic investment in Fortitude
Re. Realized principal investment income (loss) is recorded when we redeem all
or a portion of our investment or when we receive or are due cash income, such
as dividends or distributions. A realized principal investment loss is also
recorded when an investment is deemed to be worthless. Unrealized principal
investment income (loss) results from changes in the fair value of the
underlying investment, as well as the reversal of previously recognized
unrealized gains (losses) at the time an investment is realized.
Fair Value Measurement. U.S. GAAP establishes a hierarchal disclosure framework
which ranks the observability of market price inputs used in measuring financial
instruments at fair value. The observability of inputs is impacted by a number
of factors, including the type of financial instrument, the characteristics
specific to the financial instrument and the state of the marketplace, including
the existence and transparency of transactions between market participants.
Financial instruments with readily available quoted prices, or for which fair
value can be measured from quoted prices in active markets, will generally have
a higher degree of market price observability and a lesser degree of judgment
applied in determining fair value.

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The table below summarizes the valuation of investments and other financial instruments included within our AUM, by segment and fair value hierarchy levels, as of December 31, 2019:

                                                         As of December 31, 2019
                              Corporate
                               Private                                             Investment
                               Equity        Real Assets       Global

Credit Solutions Total

                                                          (Dollars in millions)
Consolidated Results
Level I                     $     1,761$      2,476     $           176     $      1,912$    6,325
Level II                            356               (6 )             1,792              108          2,250
Level III                        51,821           25,594              39,485           29,667        146,567
Fair Value of Investments        53,938           28,064              41,453           31,687        155,142
Available Capital                32,491           15,291               7,959           13,559         69,300
Total AUM                   $    86,429$     43,355$        49,412$     45,246$  224,442


Interest and Other Income of Consolidated Funds. Interest and other income of
Consolidated Funds primarily represents the interest earned on CLO assets. The
Consolidated Funds are not the same entities in all periods presented. The
Consolidated Funds in future periods may change due to changes in fund terms,
formation of new funds, and terminations of funds.
Revenue of a Real Estate VIE. Revenue of a real estate VIE consists of revenue
generated by Urbplan, which primarily is revenue earned for land development
services using the completed contract method and investment income earned on
Urbplan's investments. Under the completed contract method of revenue
recognition, revenue is not recognized until the period in which the land
development services contract is completed, which can cause volatility from
period to period based on which contracts are completed. Urbplan was
deconsolidated from the Company's financial results during 2017 as a result of
the Company disposing of its interests in Urbplan in a transaction in which a
third party acquired operational control and all of the economic interests in
Urbplan (see Note 16 to the consolidated financial statements).
Net Investment Gains of Consolidated Funds. Net investment gains of Consolidated
Funds measures the change in the difference in fair value between the assets and
the liabilities of the Consolidated Funds. A gain (loss) indicates that the fair
value of the assets of the Consolidated Funds appreciated more (less), or
depreciated less (more), than the fair value of the liabilities of the
Consolidated Funds. A gain or loss is not necessarily indicative of the
investment performance of the Consolidated Funds and does not impact the
management or incentive fees received by Carlyle for its management of the
Consolidated Funds. The portion of the net investment gains (losses) of
Consolidated Funds attributable to the limited partner investors is allocated to
non-controlling interests. Therefore a gain or loss is not expected to have a
material impact on the revenues or profitability of the Company. Moreover,
although the assets of the Consolidated Funds are consolidated onto our balance
sheet pursuant to U.S. GAAP, ultimately we do not have recourse to such assets
and such liabilities are generally non-recourse to us. Therefore, a gain or loss
from the Consolidated Funds generally does not impact the assets available to
our equity holders.
Expenses
Compensation and Benefits. Compensation includes salaries, bonuses, equity-based
compensation, and performance payment arrangements. Bonuses are accrued over the
service period to which they relate.
We recognize as compensation expense the portion of performance allocations and
incentive fees that are due to our employees, senior Carlyle professionals,
advisors, and operating executives in a manner consistent with how we recognize
the performance allocations and incentive fee revenue. These amounts are
accounted for as compensation expense in conjunction with the related
performance allocations and incentive fee revenue and, until paid, are
recognized as a component of the accrued compensation and benefits liability.
Compensation in respect of performance allocations and incentive fees is paid
when the related performance allocations and incentive fees are realized, and
not when such performance allocations and incentive fees are accrued. The funds
do not have a uniform allocation of performance allocations and incentive fees
to our employees, senior Carlyle professionals and operating executives.
Therefore, for any given period, the ratio of performance allocations and
incentive fee compensation to performance allocations and incentive fee revenue
may vary based on the funds generating the performance allocations and incentive
fee revenue for that period and their particular allocation percentages.

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In addition, we have implemented various equity-based compensation arrangements
that require senior Carlyle professionals and other employees to vest ownership
of a portion of their equity interests over a service period of generally six
months to three and a half years, which under U.S. GAAP will result in
compensation charges over current and future periods. Further, in order to
recruit and retain existing and future senior Carlyle professionals and other
employees, we have implemented additional equity-based compensation programs
that have resulted in increases to our equity-based compensation expenses in
2017 and 2018. However, we intend to grant fewer equity awards to employees than
we have previously. For example, in 2018 and 2019, we granted approximately
13.3 million and 6.7 million stock awards (restricted stock units and other
awards), respectively, and expect to grant fewer than 5.0 million stock awards
in 2020. Compensation charges associated with all equity-based compensation
grants are excluded from Fee Related Earnings and Distributable Earnings.
We may hire additional individuals and overall compensation levels may
correspondingly increase, which could result in an increase in compensation and
benefits expense. As a result of acquisitions, we have charges associated with
contingent consideration taking the form of earn-outs and profit participation,
some of which are reflected as compensation expense.
General, Administrative and Other Expenses. General, administrative, and other
expenses include occupancy and equipment expenses and other expenses, which
consist principally of professional fees, including those related to our global
regulatory compliance program, external costs of fundraising, travel and related
expenses, communications and information services, depreciation and amortization
(including intangible asset amortization and impairment) and foreign currency
transactions. We expect that general, administrative and other expenses will
vary due to infrequently occurring or unusual items, such as impairment of
intangible assets and expenses or insurance recoveries associated with
litigation and contingencies. Also, in periods of significant fundraising, to
the extent that we use third parties to assist in our fundraising efforts, our
general, administrative and other expenses may increase accordingly.
Additionally, we anticipate that general, administrative and other expenses will
fluctuate from period to period due to the impact of foreign exchange.
We also could incur additional expenses in the future related to our
acquisitions including amortization of acquired intangibles and earn-outs to
equity holders. As discussed in Note 6 to the consolidated financial statements,
we evaluate our intangible assets (including goodwill) for impairment and could
record additional impairment losses in future periods.
Interest and Other Expenses of Consolidated Funds. The interest and other
expenses of Consolidated Funds consist primarily of interest expenses related
primarily to our CLO loans, professional fees and other third-party expenses.
Interest and Other Expenses of a Real Estate VIE and Loss on Deconsolidation.
Interest and other expenses of a real estate VIE and loss on deconsolidation
reflects the loss recognized in 2017 as a result of the Company disposing of its
interests in Urbplan in a transaction in which a third party acquired
operational control and all of the economic interests in Urbplan, which resulted
in the deconsolidation of Urbplan from the Company's financial results (see Note
16 to the consolidated financial statements). This line item also includes
expenses incurred by Urbplan prior to deconsolidation, consisting primarily of
interest expense, general and administrative expenses, impairment charges,
compensation and benefits, and costs associated with land development services.
Also included in this caption is the change in our estimate of the fair value of
Urbplan's loans payable.

Income Taxes. Prior to the Conversion, the Carlyle Holdings partnerships and
their subsidiaries primarily operated as pass-through entities for U.S. income
tax purposes and recorded a provision for state and local income taxes for
certain entities based on applicable laws and a provision for foreign income
taxes for certain foreign entities. In addition, Carlyle Holdings I GP Inc. was
subject to U.S. income taxes on only a portion of our income or loss. Depending
on the sources of our taxable income or loss, our income tax provision or
benefit can vary significantly from period to period. Following the Conversion,
we expect to pay more corporate income taxes than we would have as a limited
partnership.
Income taxes for foreign entities are accounted for using the asset and
liability method of accounting. Under this method, deferred tax assets and
liabilities are recognized for the expected future tax consequences of
differences between the carrying amounts of assets and liabilities and their
respective tax basis, using currently enacted tax rates. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period in which the change is enacted. Deferred tax assets are reduced by a
valuation allowance when it is more likely than not that some or all of the
deferred tax assets will not be realized.

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In the normal course of business, we are subject to examination by federal and
certain state, local and foreign tax regulators. As of December 31, 2019, our
U.S. federal income tax returns for the years 2016 through 2018 are open under
the normal three-year statute of limitations and therefore subject to
examination. State and local tax returns are generally subject to audit from
2014 to 2018. Foreign tax returns are generally subject to audit from 2011 to
2018. Certain of our affiliates are currently under audit by federal, state and
foreign tax authorities.
Non-controlling Interests in Consolidated Entities. Non-controlling interests in
consolidated entities represent the component of equity in consolidated entities
not held by us. These interests are adjusted for general partner allocations.
Prior to the Conversion, we recorded significant non-controlling interests in
Carlyle Holdings relating to the ownership interests of the limited partners of
the Carlyle Holdings partnerships. The Company, through wholly owned
subsidiaries, was the sole general partner of Carlyle Holdings. Accordingly, the
Company consolidated the financial position and results of operations of Carlyle
Holdings into its financial statements, and the other ownership interests in
Carlyle Holdings are reflected as a non-controlling interest in the Company's
financial statements. As described above under "-Conversion to a
Corporation-Conversion Steps," the limited partners of the Carlyle Holdings
partnerships exchanged their Carlyle Holdings partnership units for an
equivalent number of shares of common stock of The Carlyle Group Inc. as part of
the Conversion. As a result, following the Conversion the consolidated balance
sheet of The Carlyle Group Inc. will not reflect any non-controlling interests
in Carlyle Holdings.
Earnings Per Common Unit. We compute earnings per common unit in accordance with
ASC 260, Earnings Per Share. Basic earnings per common unit is calculated by
dividing net income (loss) attributable to the common units of the Company by
the weighted average number of common units outstanding for the period. Diluted
earnings per common unit reflects the assumed conversion of all dilutive
securities.  We apply the "if-converted" method to the Carlyle Holdings
partnership units to determine the dilutive weighted-average common units
outstanding. Subsequent to the Conversion, we will only have a single class of
stock and therefore, the "if-converted" method will no longer be applied in our
computation of diluted earnings per share.
Non-GAAP Financial Measures
Distributable Earnings. Distributable Earnings, or "DE", is a key performance
benchmark used in our industry and is evaluated regularly by management in
making resource deployment and compensation decisions, and in assessing the
performance of our four segments. We also use DE in our budgeting, forecasting,
and the overall management of our segments. We believe that reporting DE is
helpful to understanding our business and that investors should review the same
supplemental financial measure that management uses to analyze our segment
performance. DE is intended to show the amount of net realized earnings without
the effects of consolidation of the Consolidated Funds. DE is derived from our
segment reported results and is an additional measure to assess performance.
Distributable Earnings differs from income (loss) before provision for income
taxes computed in accordance with U.S. GAAP in that it includes certain tax
expenses associated with performance revenues (comprised of performance
allocations and incentive fees), and does not include unrealized performance
allocations and related compensation expense, unrealized principal investment
income, equity-based compensation expense, net income (loss) attributable to
non-Carlyle interest in consolidated entities, or charges (credits) related to
Carlyle corporate actions and non-recurring items. Charges (credits) related to
Carlyle corporate actions and non-recurring items include: charges associated
with acquisitions or strategic investments, changes in the tax receivable
agreement liability, corporate conversion costs, amortization and any impairment
charges associated with acquired intangible assets, transaction costs associated
with acquisitions, charges associated with earnouts and contingent consideration
including gains and losses associated with the estimated fair value of
contingent consideration issued in conjunction with acquisitions or strategic
investments, impairment charges associated with lease right-of-use assets, gains
and losses from the retirement of debt, charges associated with contract
terminations and employee severance. We believe the inclusion or exclusion of
these items provides investors with a meaningful indication of our core
operating performance. This measure supplements and should be considered in
addition to and not in lieu of the results of operations discussed further under
"-Consolidated Results of Operations" prepared in accordance with U.S. GAAP.
Fee Related Earnings. Fee Related Earnings, or "FRE", is a component of DE and
is used to assess the ability of the business to cover direct base compensation
and operating expenses from total fee revenues. FRE differs from income (loss)
before provision for income taxes computed in accordance with U.S. GAAP in that
it adjusts for the items included in the calculation of DE and also adjusts DE
to exclude net realized performance revenues, realized principal investment
income from investments in Carlyle funds, net interest (interest income less
interest expense), and certain general, administrative and other expenses when
the timing of any future payment is uncertain.

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Operating Metrics
We monitor certain operating metrics that are common to the asset management
industry.
Fee-earning Assets under Management
Fee-earning assets under management or Fee-earning AUM refers to the assets we
manage or advise from which we derive recurring fund management fees. Our
Fee-earning AUM is generally based on one of the following, once fees have been
activated:
(a)       the amount of limited partner capital commitments, generally for carry
          funds where the original investment period has not expired, for
          AlpInvest carry funds during the commitment fee period and for
          Metropolitan carry funds during the weighted-average investment period
          of the underlying funds (see "Fee-earning AUM based on capital
          commitments" in the table below for the amount of this component at
          each period);


(b)       the remaining amount of limited partner invested capital at cost,

generally for carry funds and certain co-investment vehicles where the

          original investment period has expired, Metropolitan carry funds after
          the expiration of the weighted-average investment period of the
          underlying funds, and one of our business development companies (see
          "Fee-earning AUM based on invested capital" in the table below for the
          amount of this component at each period);


(c)       the amount of aggregate fee-earning collateral balance at par of our
          CLOs and other securitization vehicles, as defined in the fund

indentures (typically exclusive of equities and defaulted positions) as

          of the quarterly cut-off date;


(d)       the external investor portion of the net asset value of our hedge fund

and fund of hedge funds vehicles (pre redemptions and subscriptions),

          as well as certain carry funds (see "Fee-earning AUM based on net asset
          value" in the table below for the amount of this component at each
          period);

(e) the gross assets (including assets acquired with leverage), excluding

cash and cash equivalents, of one of our business development companies

          and certain carry funds (see "Fee-earning AUM based on lower of cost or
          fair value and other" in the table below for the amount of this
          component at each period); and


(f)       the lower of cost or fair value of invested capital, generally for
          AlpInvest carry funds where the commitment fee period has expired and
          certain carry funds where the investment period has expired, (see
          "Fee-earning AUM based on lower of cost or fair value and other" in the
          table below for the amount of this component at each period).


The table below details Fee-earning AUM by its respective components at each
period.
                                                             As of December 31,
                                                     2019           2018           2017
Consolidated Results                                       (Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments (1) $   72,059$   70,032$   58,618
Fee-earning AUM based on invested capital (2)        41,639         43,369  

24,263

Fee-earning AUM based on collateral balances, at
par (3)                                              24,887         22,921  

18,625

Fee-earning AUM based on net asset value (4) 4,531 3,288

1,776

Fee-earning AUM based on lower of cost or fair
value and other (5)                                  17,941         19,942  

21,313

Balance, End of Period (6) (7)                   $  161,057$  159,552

$ 124,595

(1) Reflects limited partner capital commitments where the original investment

      period, weighted-average investment period, or commitment fee period has
      not expired.

(2) Reflects limited partner invested capital at cost and includes amounts

      committed to or reserved for investments for certain Real Assets and
      Investment Solutions funds.


(3)   Represents the amount of aggregate Fee-earning collateral balances and
      principal balances, at par, for our CLOs/structured products.


(4)   Reflects the net asset value (pre-redemptions and subscriptions) of our
      hedge funds, mutual fund and fund of hedge funds vehicles, as well as
      certain other carry funds.

(5) Includes funds with fees based on gross asset value.

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(6)   Energy III, Energy IV, and Renew II (collectively, the "Legacy Energy
      Funds") are managed with Riverstone Holdings LLC and its affiliates.
      Affiliates of both Carlyle and Riverstone act as investment advisers to

each of the Legacy Energy Funds. Carlyle has a minority representation on

the management committees of Energy IV and Renew II. Carlyle and Riverstone

each hold half of the seats on the management committees of Energy III, but

the investment period for this fund has expired and the remaining

investments in such fund are being disposed of in the ordinary course of

business. As of December 31, 2019, the Legacy Energy Funds had, in the

aggregate, approximately $2.6 billion in AUM and $2.5 billion in

Fee-earning AUM. We are no longer raising capital for the Legacy Energy

      Funds and expect these balances to continue to decrease over time as the
      funds wind down.

(7) Ending balance excludes $8.5 billion of pending Fee-earning AUM for which

fees have not yet been activated.




The table below provides the period to period rollforward of Fee-earning AUM.
                                              Year Ended December 31,
                                         2019          2018          2017
Consolidated Results                           (Dollars in millions)
Fee-earning AUM Rollforward
Balance, Beginning of Period          $ 159,552$ 124,595$ 114,994
Inflows (1)                              16,460        50,164        22,679
Outflows (including realizations) (2)   (15,293 )     (13,486 )     (17,949 )
Market Activity & Other (3)               1,115            62           243
Foreign Exchange (4)                       (777 )      (1,783 )       4,628
Balance, End of Period                $ 161,057$ 159,552$ 124,595



(1)   Inflows represents limited partner capital raised by our carry funds or

separately managed accounts for which management fees based on commitments

were activated during the period, the fee-earning commitments invested in

      vehicles for which management fees are based on invested capital, the
      fee-earning collateral balance of new CLO issuances, as well as gross
      subscriptions in our vehicles for which management fees are based on net
      asset value. Inflows exclude fundraising amounts during the period for

which fees have not yet been activated, which are referenced as Pending

Fee-earning AUM. Inflows also includes $4.1 billion of fee-earning Carlyle

      Aviation Partners (formerly Apollo Aviation Group) assets which were
      acquired in a transaction that closed in December 2018.


(2)   Outflows represents the impact of realizations from vehicles with

management fees based on remaining invested capital at cost or fair value,

changes in basis for funds where the investment period, weighted-average

investment period or commitment fee period has expired during the period,

reductions for funds that are no longer calling for fees, gross redemptions

in our open-ended funds, and runoff of CLO collateral balances.

Distributions for funds earning management fees based on commitments during

the period do not affect Fee-earning AUM.

(3) Market Activity & Other represents realized and unrealized gains (losses)

on portfolio investments in our carry funds based on the lower of cost or

fair value and net asset value, as well as activity of funds with fees

based on gross asset value.

(4) Foreign Exchange 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.



Refer to "- Segment Analysis" for a detailed discussion by segment of the
activity affecting Fee-earning AUM for each of the periods presented by segment.
Assets under Management
"Assets under management" or "AUM" refers to the assets we manage or advise. Our
AUM equals the sum of the following:
(a) the aggregate fair value of our carry funds and related co-investment
vehicles, NGP Predecessor Funds and separately managed accounts, plus the
capital that Carlyle is entitled to call from investors in those funds and
vehicles (including Carlyle commitments to those funds and vehicles and those of
senior Carlyle professionals and employees) pursuant to the terms of their
capital commitments to those funds and vehicles;
(b)   the amount of aggregate collateral balance and principal cash at par or

aggregate principal amount of the notes of our CLOs and other structured

      products (inclusive of all positions);



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(c) the net asset value of our hedge fund and fund of hedge funds vehicles (pre

redemptions and subscriptions), as well as certain carry funds; and

(d) the gross assets (including assets acquired with leverage) of our business

development companies, plus the capital that Carlyle is entitled to call

from investors in those vehicles pursuant to the terms of their capital

commitments to those vehicles.




We include in our calculation of AUM and Fee-earning AUM certain energy and
renewable resources funds that we jointly advise with Riverstone Holdings L.L.C.
("Riverstone") and the NGP Energy Funds that are advised by NGP.
For most of our carry funds, total AUM includes the fair value of the capital
invested, whereas Fee-earning AUM includes the amount of capital commitments or
the remaining amount of invested capital, depending on whether the original
investment period for the fund has expired. As such, Fee-earning AUM may be
greater than total AUM when the aggregate fair value of the remaining
investments is less than the cost of those investments.
Our calculations of AUM and Fee-earning AUM may differ from the calculations of
other asset managers. As a result, these measures may not be comparable to
similar measures presented by other asset managers. In addition, our calculation
of AUM (but not Fee-earning AUM) includes uncalled commitments to, and the fair
value of invested capital in, our investment funds from Carlyle and our
personnel, regardless of whether such commitments or invested capital are
subject to management fees or performance allocations. Our calculations of AUM
or Fee-earning AUM are not based on any definition of AUM or Fee-earning AUM
that is set forth in the agreements governing the investment funds that we
manage or advise.
We generally use Fee-earning AUM as a metric to measure changes in the assets
from which we earn recurring management fees. Total AUM tends to be a better
measure of our investment and fundraising performance as it reflects investments
at fair value plus available capital.
Available Capital
"Available Capital" refers to the amount of capital commitments available to be
called for investments, which may be reduced for equity invested that is funded
via a fund credit facility and expected to be called from investors at a later
date, plus any additional assets/liabilities at the fund level other than active
investments. Amounts previously called may be added back to available capital
following certain distributions. "Expired Available Capital" occurs when a fund
has passed the investment and follow-on periods and can no longer invest capital
into new or existing deals. Any remaining Available Capital, typically a result
of either recycled distributions or specific reserves established for the
follow-on period that are not drawn, can only be called for fees and expenses
and is therefore removed from the Total AUM calculation.
The table below provides the period to period rollforward of Total AUM.

                                              Year Ended December 31,
                                         2019          2018          2017
                                               (Dollars in millions)
Consolidated Results
Total AUM Rollforward
Balance, Beginning of Period          $ 216,470$ 195,061$ 157,607
Inflows (1)                              19,970        38,701        42,853
Outflows (including realizations) (2)   (20,187 )     (24,760 )     (28,840 )
Market Activity & Other (3)               9,146        10,337        16,943
Foreign Exchange (4)                       (957 )      (2,869 )       6,498
Balance, End of Period                $ 224,442$ 216,470$ 195,061



(1)   Inflows reflects the impact of gross fundraising during the period. For
      funds or vehicles denominated in foreign currencies, this reflects

translation at the average quarterly rate, while the separately reported

Fundraising metric is translated at the spot rate for each individual

closing. New CLO warehouse assets are recognized as an inflow to AUM, while

corresponding fundraising will not be recognized until CLO issuance.

Inflows also includes $5.8 billion of Carlyle Aviation Partners (formerly

      Apollo Aviation Group) assets which were acquired in a transaction that
      closed in December 2018.



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(2) Outflows includes distributions net of recallable or recyclable amounts in

our carry funds, related co-investment vehicles, separately managed

accounts and the NGP Predecessor Funds, gross redemptions in our open-ended

funds, runoff of CLO collateral balances and the expiration of available

capital.

(3) Market Activity & Other generally represents realized and unrealized gains

(losses) on portfolio investments in our carry funds and related

co-investment vehicles, the NGP Predecessor Funds and separately managed

accounts, as well as the net impact of fees, expenses and non-investment

income, change in gross asset value for our business development companies

      and other changes in AUM.


(4)   Foreign Exchange 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.



The table below presents the change in appreciation on portfolio investments of
our carry funds. Please refer to "- Segment Analysis" for a detailed discussion
by segment of the activity affecting Total AUM for each of the periods
presented.
         Carlyle Portfolio Appreciation (1,2) vs. Major Equity Indices
                       [[Image Removed: imgp103no1.jpg]]

(1) Corporate Private Equity, Real Assets, and Global Credit carry funds only,

excluding external co-investment.

(2) For Carlyle returns, "Appreciation/Depreciation" represents realized and

unrealized gain / loss for the period on a total return basis before fees

and expenses. The percentage of return is calculated as the sum of ending

remaining investment fair market value ("FMV") and net investment outflow

(sales proceeds less net purchases) less beginning remaining investment FMV

      divided by beginning remaining investment FMV.


(3)   In the Corporate Private Equity, Real Assets, and Global Credit carry
      funds, public investments made up 6% of remaining fair value at

December 31, 2019 and 7% of remaining fair value at December 31, 2018. For

Q4 2019, public investments depreciated 7% while private investments

appreciated 2%, compared to 27% public depreciation and 1% private

depreciation for Q4 2018. For YTD 2019, public investments depreciated 4%

      while private investments appreciated 7%, compared to 19% public
      depreciation and 9% private appreciation for the comparable prior YTD
      period. Public portfolio includes initial public offerings ("IPO") that

occurred in the quarter. Investments may be reported as private in quarters

      prior to the IPO quarter.


(4)   The MSCI ACWI - All Cap Index represents the performance of the MSCI All

Country World Index across all market capitalization sizes of the global

equity market. There are significant differences between the types of

securities and assets typically acquired by our carry funds and the

investments covered by the MSCI All Country World Index. Specifically, our

carry funds may make investments in securities and other assets that have a

greater degree of risk and volatility, and less liquidity, than those

securities included in the MSCI All Country World Index. Moreover,

investors in the securities included in the MSCI All Country World Index

may not be subject to the management fees, carried interest or expenses to

which investors in our carry funds are typically subject. Comparisons

between the our carry fund appreciation and the MSCI All Country World

Index are included for informational purposes only.




Consolidation of Certain Carlyle Funds
The Company consolidates all entities that it controls either through a majority
voting interest or as the primary beneficiary of variable interest entities,
which are collectively referred to as the Consolidated Funds in our consolidated
financial statements.

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As of December 31, 2019, our Consolidated Funds represent approximately 2% of
our AUM; 1% of our fund management fees; and less than 1% of our investment
income for the year ended December 31, 2019.
We are not required under the consolidation guidance to consolidate in our
financial statements most of the investment funds we advise. However, we
consolidate certain CLOs that we advise. As of December 31, 2019, our
consolidated CLOs held approximately $5.2 billion of total assets and comprised
substantially all of the assets and loans payable of the Consolidated Funds. The
assets and liabilities of the Consolidated Funds are generally held within
separate legal entities and, as a result, the liabilities of the Consolidated
Funds are non-recourse to us.
Generally, the consolidation of the Consolidated Funds has a gross-up effect on
our assets, liabilities and cash flows but has no net effect on the net income
attributable to the Company and partners' capital. The majority of the net
economic ownership interests of the Consolidated Funds are reflected as
non-controlling interests in consolidated entities in the consolidated financial
statements. Because only a small portion of our funds are consolidated, the
performance of the Consolidated Funds is not necessarily consistent with or
representative of the combined performance trends of all of our funds.
For further information on our consolidation policy and the consolidation of
certain funds, see Note 2 to the consolidated financial statements included in
this Annual Report on Form 10-K.

Consolidated Results of Operations
The following table and discussion sets forth information regarding our
consolidated results of operations for the years ended December 31, 2019, 2018
and 2017. Our consolidated financial statements have been prepared on
substantially the same basis for all historical periods presented; however, the
consolidated funds are not the same entities in all periods shown due to changes
in U.S. GAAP, changes in fund terms and the creation and termination of funds.
As further described above, the consolidation of these funds primarily had the
impact of increasing interest and other income of Consolidated Funds, interest
and other expenses of Consolidated Funds, and net investment gains of
Consolidated Funds in the year that the fund is initially consolidated. The
consolidation of these funds had no effect on net income attributable to the
Company for the periods presented.

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                                                                Year Ended December 31,
                                                      2019                   2018               2017
                                                  (Dollars in millions, except unit and per unit data)
Revenues
Fund management fees                           $        1,476.2$        1,272.0$    1,026.9
Incentive fees                                             35.9                   30.2             35.3
Investment income (loss)
Performance allocations                                   799.1                  622.9          2,058.6
Principal investment income                               769.3                  186.3            232.0
Total investment income                                 1,568.4                  809.2          2,290.6
Interest and other income                                  97.3                  101.3             36.7
Interest and other income of Consolidated
Funds                                                     199.2                  214.5            177.7
Revenue of a real estate VIE                                  -                      -            109.0
Total revenues                                          3,377.0                2,427.2          3,676.2
Expenses
Compensation and benefits
Cash-based compensation                                   833.4                  746.7            652.7
Equity-based compensation                                 140.0                  239.9            320.3
Performance allocations and incentive fee
related compensation                                      436.7                  376.3            988.3
Total compensation and benefits                         1,410.1                1,362.9          1,961.3
General, administrative, and other expenses               494.4                  460.7            276.8
Interest                                                   82.1                   82.2             65.5
Interest and other expenses of Consolidated
Funds                                                     131.8                  164.6            197.6
Interest and other expenses of a real estate
VIE and loss on deconsolidation                               -                      -            202.5
Other non-operating expenses (income)                       1.3                    1.1            (71.4 )
Total expenses                                          2,119.7                2,071.5          2,632.3
Other income
Net investment gains (losses) of Consolidated
Funds                                                     (23.9 )                  4.5             88.4
Income before provision for income taxes                1,233.4                  360.2          1,132.3
Provision for income taxes                                 49.0                   31.3            124.9
Net income                                              1,184.4                  328.9          1,007.4
Net income attributable to non-controlling
interests in consolidated entities                         36.6                   33.9             72.5
Net income attributable to Carlyle Holdings             1,147.8                  295.0            934.9
Net income attributable to non-controlling
interests in Carlyle Holdings                             766.9                  178.5            690.8
Net income attributable to The Carlyle Group
L.P.                                                      380.9                  116.5            244.1
Net income attributable to Series A Preferred
Unitholders                                                19.1                   23.6              6.0
Series A Preferred Units redemption premium                16.5                      -                -
Net income attributable to The Carlyle Group
L.P. common unitholders                        $          345.3       $           92.9     $      238.1
Net income attributable to The Carlyle Group
L.P. per common unit
Basic                                          $           3.05       $           0.89     $       2.58
Diluted                                        $           2.82       $           0.82     $       2.38
Weighted-average common units
Basic                                               113,082,733            104,198,089       92,136,959
Diluted                                             122,632,889            113,389,443      100,082,548



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Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 and Year
Ended December 31, 2018 Compared to Year Ended December 31, 2017.
Revenues
Total revenues increased $949.8 million, or 39%, for the year ended December 31,
2019 as compared to 2018 and decreased $1.2 billion, or 34%, for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the changes in total revenues for the years ended December 31,
2019 and 2018:
                                                           Year Ended December 31,
                                                            2019             2018
                                                            (Dollars in millions)
Total Revenues, prior year                             $    2,427.2$   3,676.2
Increases (Decreases):
Increase in fund management fees                              204.2         

245.1

Increase (decrease) in incentive fees                           5.7         

(5.1 ) Increase (decrease) in investment income, including performance allocations

                                       759.2         

(1,481.4 ) (Decrease) increase in interest and other income of Consolidated Funds

                                            (15.3 )       

36.8

Decrease in revenue of a real estate VIE                          -           (109.0 )
(Decrease) increase in interest and other income               (4.0 )           64.6
Total increase (decrease)                                     949.8         (1,249.0 )
Total Revenues, current year                           $    3,377.0$   2,427.2

Fund Management Fees. Fund management fees increased $204.2 million, or 16%, for the year ended December 31, 2019 as compared to 2018, and increased $245.1 million, or 24%, for the year ended December 31, 2018 as compared to 2017, primarily due to the following:

                                                            Year Ended December 31,
                                                            2019               2018
                                                             (Dollars in millions)

Higher management fees from the commencement of the $ 319.0 $

344.3

investment period for certain newly raised funds
Lower management fees resulting from the change in           (127.6 )           (117.3 )
basis for earning management fees from commitments to
invested capital for certain funds and from
distributions from funds whose management fees are
based on invested capital
Increase in catch-up management fees from subsequent           10.5         

13.9

closes of funds that are in the fundraising period (Lower) higher transaction and portfolio advisory fees (1.4 )

10.2

All other changes                                               3.7               (6.0 )
Total increase in fund management fees                 $      204.2       $ 

245.1



Fund management fees include transaction and portfolio advisory fees, net of
rebate offsets, of $49.1 million, $50.5 million, and $43.6 million for the years
ended December 31, 2019, 2018 and 2017, respectively. The increase for the year
ended December 31, 2018 as compared to 2017 was driven by certain significant
transactions in our Corporate Private Equity funds which closed in the fourth
quarter of 2018.
Investment Income. Investment income increased $759.2 million for the year ended
December 31, 2019 as compared to 2018, and decreased $1.5 billion for the year
ended December 31, 2018 as compared to 2017, primarily due to the following:

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                                                             Year Ended December 31,
                                                               2019             2018
                                                              (Dollars in millions)
Increase (decrease) in performance allocations, excluding $     176.2$ (1,435.7 )
NGP
Decrease in investment income from NGP, which includes         (162.1 )     

(44.8 ) performance allocations from the investments in NGP Increase (decrease) in investment income from our buyout 8.2

            (45.7 )
and growth funds
(Decrease) increase in gains on foreign currency hedges          (0.6 )     

9.4

Increase (decrease) in investment income from our real            7.3             (5.3 )
assets funds, excluding NGP
Increase from settlement of CEREP I tax matter in 2019           71.5       

-

Decrease in investment income from our distressed debt           (7.3 )          (11.0 )
funds and energy mezzanine funds
Decrease in investment income from our CLOs                      (2.6 )           (6.2 )
Increase in income from Fortitude Re                            665.0       

57.9

All other changes                                                 3.6       

-

Total increase (decrease) in investment income            $     759.2

$ (1,481.4 )



The Company's earnings from its investment in Fortitude Re for the years ended
December 31, 2019 and 2018 was $722.9 million and $57.9 million, respectively,
which represents 19.9% of Fortitude Re's estimated net income for the respective
periods. These amounts are inclusive of $582.0 million and $46.2 million of
unrealized gains, respectively, resulting from changes in the fair value of
embedded derivatives related to certain reinsurance contracts included in
Fortitude Re's U.S. GAAP financial statements. Modified coinsurance is subject
to the general accounting principles for hedging, specifically the guidance
originally issued as Derivatives Implementation Group Issue No. B36: Embedded
Derivatives: Modified Coinsurance Agreements and Debt Instruments That
Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related
to the Creditworthiness of the Obligor under Those Instruments ("DIG B36"). The
significant increase in fair value on the embedded derivatives during the year
is primarily a result of a narrowing of credit spreads during the period.
In November 2019, we signed an agreement for a Carlyle-affiliated investment
fund to acquire an additional stake in Fortitude Re, which is expected to close
in mid-2020. At closing, the Company will transfer its stake in Fortitude Re to
the investment fund, and our investment will become an ownership interest in the
fund. At that time, we will record our investment at the net asset value of our
interest in the fund, which we expect to be lower than our current carrying
value primarily due to these unrealized gains on embedded derivatives.
Cumulative unrealized gains on embedded derivatives from the date of our
investment through December 31, 2019 were $628.2 million.
Performance Allocations. Performance allocations increased $176.2 million for
the year ended December 31, 2019 compared to 2018 and decreased $1.4 billion for
the year ended December 31, 2018 as compared to 2017. Performance allocations by
segment for the years ended December 31, 2019, 2018 and 2017 comprised the
following:
                                   Year Ended December 31,
                                2019        2018        2017
                                    (Dollars in millions)
Corporate Private Equity      $  248.8$ 291.4$ 1,629.6
Real Assets                      301.6      148.4        265.2
Global Credit                     38.5        9.1         21.3
Investment Solutions             210.2      174.0        142.5

Total performance allocations $ 799.1$ 622.9$ 2,058.6

Total carry fund appreciation 9% 9% 20%



Approximately $273.6 million of our performance allocations for the year ended
December 31, 2019 were related to CP VI, CRP V, Alpinvest Co - & Secondary
Investments 2006-2008 and CEP IV, while approximately $201.7 million of our
performance allocations for the year ended December 31, 2018 were related to CP
VI, CRP VII, CEP IV, CIEP I, CP V, CAP

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IV and CRP V, and approximately $1.3 billion of our performance allocations for
the year ended December 31, 2017 were related to CP VI, CAP IV and CP V.
Expectations for global economic growth have moderated significantly since the
beginning of 2019, with decelerated growth in the U.S. relative to 2018 due to
weakness in the industrial sector, business spending, and exports. Geopolitical
uncertainty and trade frictions continued to exert a significant impact on the
world economy, though investor optimism has risen substantially with the
finalization of the "Phase-One" trade agreement between the U.S. and China in
January 2020. Our overall carry fund portfolio generally lagged the performance
of large cap U.S. stocks, while exceeding returns on the small- and mid-cap
indices. Our Corporate Private Equity funds appreciated by 3% in the fourth
quarter and 8% over the last twelve months. Our Real Asset funds were flat
during the fourth quarter and appreciated 3% over the last twelve months, as
strong appreciation in our real estate funds of 16% over 2019 was dampened by
weakness in certain energy funds, in particular those with significant
investments in upstream companies and/or publicly traded companies. Global
Credit carry funds were down 1% in the fourth quarter but appreciated 1% for the
year. Investment Solutions appreciation was 1% in the fourth quarter and 15% for
the year, driven by strong investment performance in our AlpInvest funds. While
slowing global growth and volatile market conditions could impact valuations in
the short-term, we believe our existing portfolio of assets is high-quality and
well-diversified by fund, industry sector, asset class, and region.
In addition, incentive fees from Consolidated Funds decreased $1.1 million for
the year ended December 31, 2019 as compared to 2018, and decreased $1.3 million
for the year ended December 31, 2018 as compared to 2017. These fees eliminate
upon consolidation.
Interest and Other Income. Interest and other income decreased $4.0 million for
the year ended December 31, 2019 as compared to 2018 and increased $64.6 million
for the year ended December 31, 2018 as compared to 2017. The decrease for the
year ended December 31, 2019 was primarily as a result of decreased interest
income related to corporate treasury investments, partially offset by the
reimbursement of certain costs incurred on behalf of Carlyle funds. The increase
in 2018 reflected an increase in interest income related to our CLOs and certain
money market accounts, as well as the Company's adoption of the revenue
recognition standard, ASU 2014-09, on January 1, 2018. As part of the adoption,
the reimbursement of certain costs incurred on behalf of Carlyle funds,
primarily travel and entertainment costs, that were previously presented net in
our audited consolidated statements of operations are presented gross beginning
on January 1, 2018. For the year ended December 31, 2018, these costs were
approximately $29.3 million and are presented in interest and other income and
general, administrative and other expenses in our audited consolidated
statements of operations. See Note 2 to our audited consolidated financial
statements for more information on the adoption of the revenue recognition
standard.
Interest and Other Income of Consolidated Funds.  Our CLOs generate interest
income primarily from investments in bonds and loans inclusive of amortization
of discounts and generate other income from consent and amendment fees.
Substantially all interest and other income of the CLOs and other consolidated
funds together with interest expense of our CLOs and net investment gains of
Consolidated Funds is attributable to the related funds' limited partners or CLO
investors. Accordingly, such amounts have no material impact on net income
attributable to the Company.
Interest and other income of consolidated funds decreased $15.3 million for the
year ended December 31, 2019 as compared to 2018, and increased $36.8 million
for the year ended December 31, 2018 as compared to 2017. Substantially all of
the variance in interest and other income of Consolidated Funds for both periods
relates to interest income from CLOs.

Revenue of a Real Estate VIE. Revenue of a real estate VIE was $109.0 million in 2017 which was recorded prior to the deconsolidation of the real estate VIE during the third quarter of 2017. See Note 16 for more information.

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Expenses

Total expenses increased $48.2 million for the year ended December 31, 2019 as
compared to 2018, and decreased $560.8 million for the year ended December 31,
2018 as compared to 2017. The following table provides the components of the
changes in total expenses for the year ended December 31, 2019 and 2018:
                                                       Year Ended December 31,
                                                        2019             2018
                                                        (Dollars in millions)
Total Expenses, prior year                         $    2,071.5$   2,632.3
Increases (Decreases):
Increase (decrease) in total compensation and
benefits                                                   47.2           (598.4 )
Increase in general, administrative and other
expenses                                                   33.7            

183.9

Decrease in interest and other expenses of
Consolidated Funds                                        (32.8 )          (33.0 )
Decrease in interest and other expenses of a real             -           (202.5 )
estate VIE and loss on deconsolidation
Decrease in other non-operating income                      0.2             72.5
  All other changes                                        (0.1 )           16.7
Total increase (decrease)                                  48.2           (560.8 )
Total Expenses, current year                       $    2,119.7$   2,071.5



Total Compensation and Benefits. Total compensation and benefits increased $47.2
million for the year ended December 31, 2019 as compared to 2018, and decreased
$598.4 million for the year ended December 31, 2018 as compared to 2017, due to
the following:
                                                     Year Ended December 31,
                                                     2019               2018
                                                      (Dollars in millions)
Increase in cash-based compensation and
benefits                                        $       86.7       $        

94.0

Decrease in equity-based compensation                  (99.9 )             (80.4 )
Increase (decrease) in performance allocations
and incentive fee related compensation                  60.4              (612.0 )
Total increase (decrease) in total compensation
and benefits                                    $       47.2$      (598.4 )

Cash-based compensation and benefits. Cash-based compensation and benefits increased $86.7 million, or 12%, for the year ended December 31, 2019 as compared to 2018, and increased $94.0 million, or 14%, for the year ended December 31, 2018 as compared to 2017, primarily due to the following:

                                                            Year Ended December 31,
                                                             2019             2018
                                                             (Dollars in millions)
Increase in headcount and bonuses                       $        36.0     $ 

94.0

Increase associated with the Carlyle Aviation Partners
acquisition:
Compensation and benefits                                        20.2               -
Contingent earnout                                               30.5               -

Total increase in base compensation and benefits $ 86.7 $

94.0



Equity-based compensation. Equity-based compensation decreased $99.9 million, or
42%, for the year ended December 31, 2019 as compared to 2018. The decrease in
equity-based compensation from 2018 to 2019 was due primarily to to the timing
of the last vesting of awards in May 2018 related to our initial public offering
in 2012 and lower rate of ongoing grants of restricted stock units during 2019.

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Equity-based compensation decreased $80.4 million, or 25%, for the year ended
December 31, 2018 as compared to 2017. The decrease in equity-based compensation
from 2017 to 2018 was due primarily to the timing of the last vesting of awards
in May 2018 related to our initial public offering in 2012. This decrease was
partially offset by the ongoing grants of restricted stock units to new and
existing employees during 2017 and 2018.
Performance allocations and incentive fee related compensation expense.
Performance allocations and incentive fee related compensation expense increased
$60.4 million for the year ended December 31, 2019 as compared to 2018 and
decreased $612.0 million for the year ended December 31, 2018 as compared to
2017. Performance allocations and incentive fee related compensation expense as
a percentage of performance allocations and incentive fee was 52%, 58%, and 48%
in the years ended December 31, 2019, 2018 and 2017, respectively. Performance
allocations and incentive fee related compensation as a percentage of
performance allocations and incentive fees fluctuates depending on the mix of
funds contributing to performance allocations and incentive fees in a given
period. For our largest segment, Corporate Private Equity, our performance
allocations and incentive fee related compensation expense as a percentage of
performance allocations is generally around 45%. Performance allocations from
our Investment Solutions segment pay a higher ratio of performance allocations
as compensation, primarily as a result of the terms of our acquisition of
AlpInvest. Conversely, performance allocations from the Legacy Energy funds in
our Real Assets segment are primarily allocated to Carlyle because the
investment teams for the Legacy Energy funds are employed by Riverstone and not
Carlyle.
General, Administrative and Other Expenses. General, administrative and other
expenses increased $33.7 million for the year ended December 31, 2019 as
compared to 2018, and increased $183.9 million for the year ended December 31,
2018 as compared to 2017, primarily due to:
                                                            Year Ended December 31,
                                                            2019               2018
                                                             (Dollars in millions)

Certain costs incurred on behalf of Carlyle funds, primarily travel and entertainment costs, that are now presented on a gross basis as a result of the adoption of the new revenue recognition standard (See Note 2 to the consolidated financial statements)

                 $          -       $ 

29.3

Lower expenses for litigation and contingencies(1)                -             (119.2 )
Higher (lower) intangible asset amortization                    5.5               (0.2 )
Higher depreciation and amortization                           13.1         

5.8

Decrease in net insurance proceeds recognized for
certain legal matters                                          31.5         

180.8

Lease assignment and termination costs                        (66.9 )       

66.9

Higher professional fees, including corporate
conversion costs                                               41.4         

7.0

(Lower) higher external fundraising costs                     (34.3 )       

22.6

Foreign exchange adjustments(2)                                23.2         

2.1

Other changes                                                  20.2         

(11.2 ) Total increase in general, administrative and other expenses

                                               $       33.7       $ 

183.9



(1) For the year ended December 31, 2018 compared to the year ended December 31,
2017, this reflects the $144 million of commodities charges in 2017 as well as
the $25 million reversal of the CCC litigation contingent reserve. See Note 9 to
the consolidated financial statements for more information on our legal matters.
(2) For the year ended December 31, 2019 compared to the year ended December 31,
2018, foreign exchange adjustments is primarily driven by the revaluation in our
European CLOs investments.
Interest and Other Expenses of Consolidated Funds. Interest and other expenses
of Consolidated Funds decreased $32.8 million for the year ended December 31,
2019 as compared to 2018 and decreased $33.0 million for the year ended
December 31, 2018 as compared to 2017. The decreases are primarily due to lower
interest expense on the consolidated CLOs.
The CLOs incur interest expense on their loans payable and incur other expenses
consisting of trustee fees, rating agency fees and professional fees.
Substantially all interest and other income of our CLOs together with interest
expense of our CLOs and net investment gains of Consolidated Funds is
attributable to the related funds' limited partners or CLO investors.
Accordingly, such amounts have no material impact on net income attributable to
the Company.

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Interest and Other Expenses of a Real Estate VIE and Loss on Deconsolidation.
The Company disposed of its interest in UrbPlan and deconsolidated the VIE in
the third quarter of 2017. See Note 16 to the consolidated financial statements
for more information on the disposal transaction.
Other Non-operating Expenses (Income). For the year ended December 31, 2017,
this caption includes the impact of the enacted tax reform legislation on our
tax receivable agreement liability, which was reduced by $71.5 million. See Note
11 to the consolidated financial statements for more information on the enacted
tax reform legislation. In addition, for the years ended December 31, 2019, 2018
and 2017, this caption primarily represents the change in the fair value of
contingent consideration associated with the Company's acquisitions.

Net Investment Gains (Losses) of Consolidated Funds
For the years ended December 31, 2019, 2018 and 2017 net investment gains of
Consolidated Funds was $23.9 million, $4.5 million, and $88.4 million,
respectively, comprised of the activity of the consolidated CLOs and certain
other funds. For the consolidated CLOs, the amount reflects the net gain or loss
on the fair value adjustment of both the assets and liabilities. The components
of net investment gains of consolidated funds for the respective periods are:
                                                         Year Ended December 31,
                                                  2019             2018            2017
                                                          (Dollars in millions)
Losses attributable to other consolidated
funds                                        $      (14.2 )$       (4.9 )$     (54.0 )
Net (depreciation) appreciation of CLOs              (4.7 )         (103.9 )          81.0
Total (losses) gains                                (18.9 )         (108.8 )          27.0
(Losses) gains from liabilities of CLOs              (5.0 )          113.3  

61.4

Total net investment (losses) gains of
Consolidated Funds                           $      (23.9 )$        4.5

$ 88.4



The gains/losses on the liabilities of the CLOs reflect the fair value
adjustment on the debt of the CLOs. For the years ended December 31, 2019, 2018
and 2017, the unrealized investment gains/losses primarily include the
appreciation/depreciation of consolidated CLO investments in loans and bonds.
Net Income Attributable to Non-controlling Interests in Consolidated Entities
Net income attributable to non-controlling interests in consolidated entities
was $36.6 million, $33.9 million, and $72.5 million for the years ended December
31, 2019, 2018 and 2017, respectively. These amounts are primarily attributable
to the net earnings of the Consolidated Funds for each period, which are
substantially all allocated to the related funds' limited partners or CLO
investors. The net income (loss) of our Consolidated Funds, after eliminations,
was $10.0 million, $(5.3) million, and $12.0 million for the years ended
December 31, 2019, 2018 and 2017, respectively.
Net income attributable to non-controlling interests in consolidated entities
also includes net income attributable to non-controlling interests in carried
interest, giveback obligations, and cash held for carried interest
distributions, as well as the allocation of Urbplan's net losses that are
attributable to non-controlling interests (for the year ended December 31,
2017).
Net Income (Loss) Attributable to The Carlyle Group L.P. Common Unitholders
The net income attributable to The Carlyle Group L.P. common unitholders was
$345.3 million, $92.9 million, and $238.1 million for the years ended December
31, 2019, 2018 and 2017, respectively. Prior to the Conversion, the Company was
allocated a portion of the monthly net income (loss) attributable to Carlyle
Holdings based on the Company's ownership in Carlyle Holdings (which was
approximately 34%, 32%, and 30% as of December 31, 2019, 2018 and 2017,
respectively). Net income or loss attributable to the Company also included 100%
of the net income or loss attributable to the Company's wholly owned taxable
subsidiary, Carlyle Holdings I GP Inc., which was $(4.5) million, $15.8 million,
and $(30.3) million for the years ended December 31, 2019, 2018 and 2017,
respectively. As a result, prior to the Conversion, the total net income or loss
attributable to the Company has varied as a percentage of the net income or loss
attributable to Carlyle Holdings. In addition, net income attributable to The
Carlyle Group L.P. common unitholders for the year ended December 31, 2019 was
reduced by the Series A preferred units ("Preferred Units") redemption premium.
Net income attributable to The Carlyle Group L.P. common unitholders per basic
common unit was $3.05, $0.89, and $2.58 for the years ended December 31, 2019,
2018 and 2017, respectively. Net income (loss) attributable to The Carlyle Group
L.P. common unitholders per diluted common unit was $2.82, $0.82, and $2.38 for
the years ended December 31, 2019, 2018 and 2017, respectively.

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Non-GAAP Financial Measures
The following tables set forth information in the format used by management when
making resource deployment decisions and in assessing performance of our
segments. These non-GAAP financial measures are presented for the years ended
December 31, 2019, 2018 and 2017. Our Non-GAAP financial measures exclude the
effects of unrealized performance allocations net of related compensation
expense, unrealized principal investment income, consolidated funds,
acquisition-related items including amortization and any impairment charges of
acquired intangible assets and contingent consideration taking the form of
earn-outs, charges associated with equity-based compensation, changes in the tax
receivable agreement liability, corporate actions and infrequently occurring or
unusual events.
The following table shows our total segment Distributable Earnings, or "DE", and
Fee Related Earnings, or "FRE", for the years ended December 31, 2019, 2018 and
2017.
                                                       Year Ended December 31,
                                                   2019         2018         2017
                                                        (Dollars in millions)
Total Segment Revenues                          $ 2,110.1$ 2,185.9$ 2,216.2
Total Segment Expenses                            1,463.5      1,512.0      1,546.2
(=) Distributable Earnings                      $   646.6$   673.9$   670.0
(-) Realized Net Performance Revenues               164.1        319.7      

552.6

(-) Realized Principal Investment Income (Loss) 87.0 48.1

  (25.8 )
(+) Net Interest                                     57.3         44.3         48.8
(=) Fee Related Earnings                        $   452.8$   350.4$   192.0

The following table sets forth our total segment revenues for the years ended December 31, 2019, 2018 and 2017.

                                              Year Ended December 31,
                                          2019         2018         2017
                                               (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees                   $ 1,570.9$ 1,361.8$ 1,081.0

Portfolio advisory fees, net and other 22.2 31.1 32.1 Transaction fees, net

                       31.3         32.1         26.9
Total fund level fee revenues            1,624.4      1,425.0      1,140.0
Realized performance revenues              374.3        682.4      1,085.3
Realized principal investment income        87.0         48.1        (25.8 )
Interest income                             24.4         30.4         16.7
Total Segment Revenues                 $ 2,110.1$ 2,185.9$ 2,216.2




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The following table sets forth our total segment expenses for the years ended December 31, 2019, 2018 and 2017.

                                                           Year Ended December 31,
                                                        2019         2018         2017
                                                            (Dollars in millions)
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits                 $   792.1$   740.7$   658.0
Realized performance revenues related compensation       210.2        362.7 

532.7

Total compensation and benefits                        1,002.3      1,103.4 

1,190.7

General, administrative, and other indirect expenses 331.3 298.8

258.9

Depreciation and amortization expense                     48.2         35.1         31.1
Interest expense                                          81.7         74.7         65.5
Total Segment Expenses                               $ 1,463.5$ 1,512.0$ 1,546.2

Income before provision for income taxes is the GAAP financial measure most comparable to Distributable Earnings and Fee Related Earnings. The following table is a reconciliation of income before provision for income taxes to Distributable Earnings and to Fee Related Earnings.

                                                        Year Ended December 31,
                                                 2019            2018            2017
                                                         (Dollars in millions)

Income before provision for income taxes $ 1,233.4$ 360.2

  $   1,132.3
Adjustments:
Net unrealized performance revenues                (42.3 )          50.2          (625.2 )
Unrealized principal investment income (1)        (590.9 )         (48.8 )         (73.0 )
Adjusted unrealized principal investment
income from investment in Fortitude Re (1)        (140.9 )         (11.7 )             -
Equity-based compensation (2)                      151.5           252.2    

365.1

Acquisition related charges, including
amortization of intangibles and impairment          52.0            22.3    

35.7

Other non-operating (income) expense (3)             1.3             1.1           (71.4 )
Tax expense associated with performance
revenues                                           (14.3 )          (1.5 )          (9.2 )
Net (income) loss attributable to
non-controlling interests in consolidated
entities                                           (36.6 )         (33.9 )         (72.5 )
Reserve for litigation and contingencies               -               -           (25.0 )
Lease assignment and termination costs                 -            66.9               -
Debt extinguishment costs                            0.1             7.8               -
Corporate conversion costs, severance and
other adjustments                                   33.3             9.1    

13.2

Distributable Earnings                             646.6           673.9    

670.0

Realized net performance revenues, net of
related compensation (4)                           164.1           319.7    

552.6

Realized principal investment income (loss)
(4)                                                 87.0            48.1           (25.8 )
Net interest                                        57.3            44.3            48.8
Fee Related Earnings                         $     452.8$     350.4$     192.0



(1)   Adjustments to unrealized principal investment income are inclusive of
      $582.0 million and $46.2 million of unrealized gains, respectively,

resulting from changes in the fair value of embedded derivatives related to

certain reinsurance contracts included in Fortitude Re's U.S. GAAP

financial statements. Adjusted unrealized principal investment income from

the investment in Fortitude Re represents 19.9% of Fortitude Re's estimated

      net income for the respective periods, excluding the unrealized gains
      related to embedded derivatives.


(2)   Equity-based compensation for the years ended December 31, 2019, 2018 and

2017 includes amounts presented in principal investment income and general,

administrative and other expenses in our U.S. GAAP statement of operations.




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(3)   Included in other non-operating (income) expense for the year ended

December 31, 2017 is a $71.5 million adjustment for the revaluation of the

tax receivable agreement liability as result of the passage of the Tax Cuts

and Jobs Act of 2017.

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


                                                         Year Ended December 31, 2019
                                                                                          Total
                                                 Carlyle                               Reportable
                                               Consolidated       

Adjustments(5) Segments

                                                             (Dollars in 

millions)

Performance revenues                       $       799.1$       (424.8 )$       374.3
Performance revenues related compensation
expense                                            436.7                  (226.5 )           210.2
Net performance revenues                   $       362.4$       (198.3 )$       164.1
Principal investment income (loss)         $       769.3$       (682.3 )$        87.0

                                                         Year Ended December 31, 2018
                                                                                          Total
                                                 Carlyle                               Reportable
                                               Consolidated        Adjustments(5)       Segments
                                                             (Dollars in millions)
Performance revenues                       $       622.9          $         59.5     $       682.4
Performance revenues related compensation
expense                                            376.3                   (13.6 )           362.7
Net performance revenues                   $       246.6          $         73.1     $       319.7
Principal investment income (loss)         $       186.3$       (138.2 )$        48.1


                                                        Year Ended December 31, 2017
                                                                                       Total
                                                Carlyle                             Reportable
                                             Consolidated       Adjustments(5)       Segments
                                                           (Dollars in millions)
Performance revenues                       $       2,058.6$       (973.3 )$     1,085.3
Performance revenues related compensation
expense                                              988.3             (455.6 )           532.7
Net performance revenues                   $       1,070.3     $       

(517.7 ) $ 552.6 Principal investment income (loss) $ 232.0 $ (257.8 )$ (25.8 )

(5) Adjustments to performance revenues and principal investment income (loss)

relate to (i) unrealized performance allocations net of related

compensation expense and unrealized principal investment income, which are

excluded from our Non-GAAP results, (ii) amounts earned from the

Consolidated Funds, which were eliminated in the U.S. GAAP consolidation

but were included in the Non-GAAP results, (iii) amounts attributable to

non-controlling interests in consolidated entities, which were excluded

from the Non-GAAP results, (iv) the reclassification of NGP performance

revenues, which are included in investment income in the U.S. GAAP

financial statements, (v) the reclassification of certain incentive fees

from business development companies, which are included in fund management

fees in the Non-GAAP results, and (vi) the reclassification of certain tax

expenses associated with performance revenues. Adjustments to principal

investment income (loss) also include the reclassification of earnings for

the investment in NGP Management and its affiliates to the appropriate

operating captions for the Non-GAAP results, the exclusion of charges

associated with the investment in NGP Management and its affiliates that

are excluded from the Non-GAAP results (see Note 5 to our consolidated

      financial statements), adjustments to reflect the Company's share of
      Urbplan net losses, until Urbplan was deconsolidated during 2017, as
      investment losses for the Non-GAAP results.



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Distributable Earnings for our reportable segments is as follows:

                               Year Ended December 31,
                             2019          2018       2017
                                (Dollars in millions)
Corporate Private Equity $   296.8$ 350.4$ 487.9
Real Assets                  282.6         207.1       24.8
Global Credit                 48.4          77.5      126.9
Investment Solutions          18.8          38.9       30.4
Total                    $   646.6$ 673.9$ 670.0



Segment Analysis
Discussed below is our DE and FRE for our segments for the periods presented.
Our segment information is reflected in the manner used by our senior management
to make operating and compensation decisions, assess performance and allocate
resources.
For segment reporting purposes, revenues and expenses are presented on a basis
that deconsolidates our Consolidated Funds. As a result, segment revenues from
management fees, realized performance revenues and realized principal investment
income (loss) are different than those presented on a consolidated U.S. GAAP
basis because these revenues recognized in certain segments are received from
Consolidated Funds and are eliminated in consolidation when presented on a
consolidated U.S. GAAP basis. Furthermore, segment expenses are different than
related amounts presented on a consolidated U.S. GAAP basis due to the exclusion
of fund expenses that are paid by the Consolidated Funds.


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Corporate Private Equity
The following table presents our results of operations for our Corporate Private
Equity segment:
                                                           Year Ended December 31,
                                                        2019         2018        2017
                                                            (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees                                 $   767.8$  634.1$  471.0
Portfolio advisory fees, net and other                    15.8         21.1 

21.2

Transaction fees, net                                     12.7         26.7 

22.4

Total fund level fee revenues                            796.3        681.9 

514.6

Realized performance revenues                            121.7        415.9 

831.5

Realized principal investment income (loss)               (3.3 )       26.6        25.4
Interest income                                            6.0          9.3         5.5
Total revenues                                           920.7      1,133.7     1,377.0
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits                     371.7        373.2 

340.7

Realized performance revenues related compensation 54.7 195.3

372.9

Total compensation and benefits                          426.4        568.5 

713.6

General, administrative, and other indirect expenses 140.8 167.6

132.3

Depreciation and amortization expense                     23.1         17.3        15.3
Interest expense                                          33.6         29.9        27.9
Total expenses                                           623.9        783.3       889.1
(=) Distributable Earnings                           $   296.8$  350.4$  487.9
(-) Realized Net Performance Revenues                     67.0        220.6 

458.6

(-) Realized Principal Investment Income (Loss)           (3.3 )       26.6        25.4
(+) Net Interest                                          27.6         20.6        22.4
(=) Fee Related Earnings                             $   260.7$  123.8$   26.3




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Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 and Year Ended December 31, 2018 Compared to Year Ended December 31, 2017


Distributable Earnings
Distributable earnings decreased $53.6 million for the year ended December 31,
2019 as compared to 2018, and decreased $137.5 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the changes in distributable earnings for the years ended December
31, 2019 and 2018:
                                                       Year Ended December 31,
                                                       2019               2018
                                                        (Dollars in millions)
Distributable earnings, prior year                $      350.4       $      

487.9

Increases (decreases):
Increase in fee related earnings                         136.9              

97.5

Decrease in realized net performance revenues           (153.6 )           (238.0 )
(Decrease) increase in realized principal
investment income                                        (29.9 )            

1.2

(Increase) decrease in net interest                       (7.0 )            

1.8

Total decrease                                           (53.6 )           (137.5 )
Distributable earnings, current year              $      296.8       $      

350.4




Realized Net Performance Revenues. Realized net performance revenues decreased
$153.6 million for the year ended December 31, 2019 as compared to 2018, and
decreased $238.0 million for the year ended December 31, 2018 as compared to
2017. Our prior generations of carry funds have exited substantial parts of
their portfolios, and our newer funds, while accruing carry, are not yet
producing cash carry. Realized net performance revenues decreased in 2019 as
realized proceeds from our funds declined to $5.0 billion from $8.8 billion in
2018. Specifically, the decrease in realized net performance revenues for the
year ended December 31, 2019 as compared to 2018 was due to lower performance
revenue realizations from our U.S., Europe and Asia buyout funds in carry in
2019 compared to 2018. Our 2019 exit pace was below the exit pace in recent
years, however at this time, we expect that exit activity and net realized
performance revenues will begin to rebound in 2020.

The decrease in realized net performance revenues for the year ended
December 31, 2018 as compared to 2017 was primarily due to lower performance
revenue realizations from our U.S buyout funds in carry in 2018 compared to
2017, partially offset by higher realizations from our Europe and Asia buyout
funds in 2018 as compared to 2017.
Realized net performance revenues were primarily generated by the following
funds for the years ended December 31, 2019, 2018 and 2017, respectively:
   Year Ended December 31,
  2019       2018      2017
CETP III     CP V      CP V
CAP III    CEP III    CGFSP I
CGFSP II   CAP III    CAP III
CETP II    CETP III   CEP III
  CP V                CETP II



  Realized Principal Investment Income. Realized principal investment income
decreased $29.9 million for the year ended December 31, 2019 as compared to 2018
and increased $1.2 million for the year ended December 31, 2018 as compared to
2017. The decrease in realized principal investment income for the year ended
December 31, 2019 as compared to 2018 was primarily due to realized losses in
2019 in CP VI and CEP IV compared to realized gains in 2018 in CP VI, CEP III
and CAP IV.




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Fee Related Earnings

Fee related earnings increased $136.9 million for the year ended December 31,
2019 as compared to 2018, and increased $97.5 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the change in fee related earnings for the years ended December
31, 2019 and 2018:
                                                            Year Ended December 31,
                                                            2019               2018
                                                             (Dollars in millions)
Fee related earnings, prior year                       $      123.8       $ 

26.3

Increases (decreases):
Increase in fee revenues                                      114.4         

167.3

Decrease (increase) in cash-based compensation                  1.5              (32.5 )
Decrease (increase) in general, administrative and
other indirect expenses                                        26.8              (35.3 )
  All other changes                                            (5.8 )             (2.0 )
Total increase                                                136.9               97.5
Fee related earnings, current year                     $      260.7       $ 

123.8



  Fee Revenues. Total fee revenues increased $114.4 million for the year ended
December 31, 2019 as compared to 2018 and increased $167.3 million for the year
ended December 31, 2018 as compared to 2017, due to the following:
                                                 Year Ended December 31,
                                                  2019             2018
                                                  (Dollars in millions)
Higher fund management fees                  $     133.7$     163.1
(Lower) higher transaction fees                    (14.0 )             4.3
Lower portfolio advisory fees, net and other        (5.3 )            (0.1 )
Total increase in fee revenues               $     114.4$     167.3


The increase in fund management fees for the year ended December 31, 2019 as
compared to 2018 was primarily due to the activation of management fees during
the second quarter of 2018 on our seventh U.S. buyout fund ("CP VII") and our
fifth Asia buyout fund ("CAP V"), as well as activation of management fees
during the fourth quarter of 2018 on our fifth Europe buyout fund ("CEP V") and
during the third quarter of 2019 on our fourth Europe technology fund ("CETP
IV"). These increases were partially offset by lower fee rates and a lower basis
for CP VI, CAP IV, CEP IV, and CETP III as they exited the investment period.
The increase in fund management fees for the year ended December 31, 2018 as
compared to 2017 was primarily due to the activation of management fees during
the fourth quarter of 2018 on CEP V as well as activation of management fees
during the second quarter of 2018 on CP VII and CAP V. These increases were
partially offset by a lower fee rate and lower assets under management from sale
of investments for CP V, as well as the step-down of effective fee rates on CP
VI and CAP IV as they exit the investment period.
The weighted average management fee rate increased from 1.22% at December 31,
2018 to 1.26% at December 31, 2019. The increase in the weighted average
management fee rate was driven by new fee-paying commitments with higher rates
primarily in CETP IV and CEP V. Fee-earning AUM was $61.7 billion and $62.4
billion as of December 31, 2019 and 2018, respectively, reflecting a decrease of
$0.7 billion.
The weighted average management fee rate decreased from 1.31% at December 31,
2017 to 1.22% at December 31, 2018. The decrease in the weighted average
management fee rate was driven by the step-down of effective fee rates for our
funds outside the investment period. This was partially offset by the activation
of newly raised Fee-earning AUM primarily in our buyout funds which earn higher
rates. Fee-earning AUM was $62.4 billion and $35.6 billion as of December 31,
2018 and 2017, respectively, reflecting an increase of $26.8 billion.


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The decrease in transaction fees for the year ended December 31, 2019 as
compared to 2018 resulted primarily from transaction fees related to significant
investments by our U.S. buyout funds and one significant investment in our Asia
buyout funds in 2018, partially offset by transaction fees in one of our Japan
buyout funds in 2019.

The increase in transaction fees for the year ended December 31, 2018 as compared to 2017 was primarily from significant investments by our U.S. buyout funds in 2018.


Cash-based compensation and benefits expense. Cash-based compensation and
benefits expense increased $32.5 million, or 10%, for the year ended
December 31, 2018 as compared to 2017, primarily due to increased headcount and
higher cash bonuses in 2018, partially offset by lower compensation costs
related to fundraising activities.
General, administrative and other indirect expenses. General, administrative and
other indirect expenses decreased $26.8 million for the year ended December 31,
2019 as compared to 2018, primarily due lower external costs associated with
fundraising activities of approximately $33.3 million, partially offset by
higher professional fees.
General, administrative and other indirect expenses increased $35.3 million for
the year ended December 31, 2018 as compared to 2017 primarily due to higher
professional fees and higher external costs associated with fundraising
activities, partially offset by positive foreign currency adjustments in the
year ended December 31, 2018 as compared to 2017.

Fee-earning AUM as of and for each of the Three Years in the Period Ended
December 31, 2019
Fee-earning AUM is presented below for each period together with the components
of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each
period.
                                                          As of December 31,
                                                 2019            2018            2017
                                                         (Dollars in millions)
Corporate Private Equity
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments $    38,470$    36,222$    25,809
Fee-earning AUM based on invested capital         20,958          23,737    

7,675

Fee-earning AUM based on lower of cost or
fair value and other                               2,232           2,399    

2,100

Total Fee-earning AUM                        $    61,660$    62,358$    35,584
Weighted Average Management Fee Rates (2)
All Funds                                           1.26 %          1.22 %          1.31 %
Funds in Investment Period                          1.47 %          1.46 %          1.44 %


(1) For additional information concerning the components of Fee-earning AUM,

see "-Fee-earning Assets under Management."

(2) Represents the aggregate effective management fee rate of each fund in the

      segment, weighted by each fund's Fee-earning AUM, as of the end of each
      period presented.



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The table below provides the period to period rollforward of Fee-earning AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Corporate Private Equity
Fee-earning AUM Rollforward
Balance, Beginning of Period          $    62,358$  35,584$ 36,327
Inflows (1)                                 3,470          31,485        2,086
Outflows (including realizations) (2)      (3,835 )        (4,405 )     (3,692 )
Market Activity & Other (3)                  (111 )            11            5
Foreign Exchange (4)                         (222 )          (317 )        858
Balance, End of Period                $    61,660$  62,358$ 35,584



(1)   Inflows represents limited partner capital raised by our carry funds or

separately managed accounts for which management fees based on commitments

were activated during the period, and the fee-earning commitments invested

      in vehicles for which management fees are based on invested capital.
      Inflows exclude fundraising amounts during the period for which fees have
      not yet been activated, which are referenced as Pending Fee-earning AUM.


(2)   Outflows represents the impact of realizations from vehicles with

management fees based on remaining invested capital at cost or fair value,

changes in basis for funds where the investment period, weighted-average

investment period or commitment fee period has expired during the period,

and reductions for funds that are no longer calling for fees. Realizations

for funds earning management fees based on commitments during the period do

not affect Fee-earning AUM.

(3) Market Activity & Other represents realized and unrealized gains (losses)

on portfolio investments in our carry funds based on the lower of cost or

fair value.

(4) Foreign Exchange 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.



Fee-earning AUM was $61.7 billion at December 31, 2019, a decrease of $0.7
billion, or 1%, compared to $62.4 billion at December 31, 2018. This was driven
by outflows of $3.8 billion which were principally a result of dispositions in
CP VI and CEP III, as well as distributions in other funds outside of their
investment period. Partially offsetting this were inflows of $3.5 billion
primarily related to the activation of management fees in CETP IV and new
fee-paying commitments raised in CEP V. Investment and distribution activity by
funds still in the investment period does not impact Fee-earning AUM as these
funds are based on commitments.
Fee-earning AUM was $62.4 billion at December 31, 2018, an increase of $26.8
billion, or 75%, compared to $35.6 billion at December 31, 2017. This was driven
by inflows of $31.5 billion primarily related to the activation of management
fees in CP VII and new fee-paying commitments raised in CEP V and CAP V.
Partially offsetting the increase were outflows of $4.4 billion which were
principally a result of basis step-downs in CP VI and CEP IV, as well as
distributions in other funds outside of their investment period.
Fee-earning AUM was $35.6 billion at December 31, 2017, a decrease of $0.7
billion, or 2%, compared to $36.3 billion at December 31, 2016. This was driven
by outflows of $3.7 billion which were principally a result of distributions
from CP V and other buyout funds outside of their investment period. This
decrease was partially offset by inflows of $2.1 billion primarily related to
equity invested by CGP which charges management fees based on invested capital,
as well as new fee-paying commitments raised in CGFSP III. Also offsetting the
decrease were $0.9 billion of foreign exchange gains from the translation of our
Euro-denominated Europe buyout and growth funds to USD for reporting purposes.

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Total AUM as of and for each of the Three Years in the Period Ended December 31,
2019
The table below provides the period to period rollforward of Total AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Corporate Private Equity
Total AUM Rollforward
Balance, Beginning of Period          $    80,759$  72,558$ 50,864
Inflows (1)                                 7,474          16,878       20,544
Outflows (including realizations) (2)      (4,361 )        (9,253 )     (9,707 )
Market Activity & Other (3)                 2,869           1,258        9,713
Foreign Exchange (4)                         (312 )          (682 )      1,144
Balance, End of Period                $    86,429$  80,759$ 72,558



(1)   Inflows reflects the impact of gross fundraising during the period. For
      funds or vehicles denominated in foreign currencies, this reflects

translation at the average quarterly rate, while the separately reported

      Fundraising metric is translated at the spot rate for each individual
      closing.

(2) Outflows includes distributions net of recallable or recyclable amounts in

our carry funds, related co-investment vehicles and separately managed

accounts, as well as the expiration of available capital.

(3) Market Activity & Other generally represents realized and unrealized gains

(losses) on portfolio investments in our carry funds, related co-investment

vehicles and separately managed accounts, as well as the impact of fees,

      expenses and non-investment income, and other changes in AUM.


(4)   Foreign Exchange 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.



Total AUM was $86.4 billion at December 31, 2019, an increase of $5.6 billion,
or 7%, compared to $80.8 billion at December 31, 2018. This increase was driven
by $7.5 billion of inflows primarily due to fundraising in CJP IV, CGP II, and
CETP IV. Also contributing to this increase was market appreciation of $2.9
billion. The carry funds driving appreciation for the period included $0.9
billion attributable to CP VI, $0.5 billion attributable to CP VII, and $0.4
billion attributable to CAP V. Partially offsetting the increase were $4.4
billion of outflows driven primarily by distributions in our U.S., Asia, and
Europe buyout funds.
Total AUM was $80.8 billion at December 31, 2018, an increase of $8.2 billion,
or 11%, compared to $72.6 billion at December 31, 2017. This increase was driven
by $16.9 billion of inflows primarily due to fundraising in CP VII, CEP V, and
CAP V. Also contributing to this increase was market appreciation and other
activity of $1.3 billion due to appreciation in our carry funds partially offset
by the impact of management fees and expenses. The carry funds driving
appreciation for the period included $1.0 billion attributable to CP VI, $0.5
billion attributable to CEP IV, and $0.4 billion attributable to CP V. Partially
offsetting the increase were $9.3 billion of outflows driven primarily by
distributions in our U.S., Asia, and Europe buyout funds.
Total AUM was $72.6 billion at December 31, 2017, an increase of $21.7 billion,
or 43%, compared to $50.9 billion at December 31, 2016. This increase was driven
by $20.5 billion of inflows primarily due to fundraising in CP VII, CAP V, and
CGFSP III. Also contributing to this increase was market appreciation and other
activity of $9.7 billion. The carry funds driving appreciation for the period
included $2.8 billion attributable to CP VI, $1.7 billion attributable to CP V,
and $1.5 billion attributable to CAP IV. Partially offsetting this increase were
$9.7 billion of outflows driven primarily by distributions in CP V, CEP III, and
various other buyout funds.
Fund Performance Metrics
Fund performance information for our investment funds that generally have at
least $1.0 billion in capital commitments, cumulative equity invested or total
value as of December 31, 2019, which we refer to as our "significant funds," is
included throughout this discussion and analysis to facilitate an understanding
of our results of operations for the periods presented. The fund return
information reflected in this discussion and analysis is not indicative of the
performance of The Carlyle Group Inc. and is also not necessarily indicative of
the future performance of any particular fund. An investment in The

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Carlyle Group Inc. is not an investment in any of our funds. There can be no
assurance that any of our funds or our other existing and future funds will
achieve similar returns. See "Item 1A. Risk Factors - Risks Related to Our
Business Operations - The historical returns attributable to our funds,
including those presented in this report, should not be considered as indicative
of the future results of our funds or of our future results or of any returns
expected on an investment in our common stock."
The following tables reflect the performance of our significant funds in our
Corporate Private Equity business. See "Item 1. Business - Our Family of Funds"
for a legend of the fund acronyms listed below.
                                                                                                TOTAL INVESTMENTS                                                 REALIZED/PARTIALLY REALIZED INVESTMENTS(6)
                                                                                             As of December 31, 2019                                                      As of December 31, 2019
                                                                                                                                                     LTM
                      Fund    Original                 Cumulative                                                                                  Realized       Cumulative         Total               Gross
                     Vintage Investment   Committed     Invested      Realized    Remaining Fair          Gross IRR  Net IRR       In Accrued       Carry          Invested          Fair                 IRR
                       (1)   Period End    Capital     Capital(2)     Value(3)       Value(4)     MOIC(5)  (8)(16)   (9)(16) 
Carry/(Clawback)(10)   (11)         Capital(2)       Value(12)   MOIC(5)  (8)(16)
Corporate
Private Equity                                      (Reported in Local Currency, in Millions)                                                                     (Reported in Local Currency, in Millions)
Fully Invested/Committed Funds(7)
CP IV                 2005       Dec-10 $   7,850.0$   7,612.6$  17,777.3$       247.2    2.4x       16 %       13 %          X              X       $        7,612.6$  18,024.5    2.4x      16 %
CP V                  2007       May-13 $  13,719.7$  13,190.9$  25,750.0$     2,241.1    2.1x       18 %       14 %          X              X       $       10,777.9$  26,500.6    2.5x      24 %
CP VI                 2014       May-18 $  13,000.0$  12,874.2$   5,925.3$    13,311.0    1.5x       14 %       10 %          X                      $        3,080.0$   5,026.5    1.6x      18 %
CEP II                2003       Sep-08 €   1,805.4   €   2,048.4   €   4,113.3   €        15.2    2.0x       36 %       20 %          X              X       €        1,888.9   €   4,120.6    2.2x      43 %
CEP III               2007       Dec-12 €   5,294.9   €   5,155.5   €  10,982.2   €       531.3    2.2x       19 %       14 %          X              X       €        4,533.6   €  11,250.3    2.5x      21 %
CEP IV                2014       Aug-19 €   3,669.5   €   3,710.4   € 

1,220.3 € 3,697.1 1.3x 13 % 8 % X

              €          645.9   €     828.4    1.3x      11 %
CAP III               2008       May-14 $   2,551.6$   2,543.2$   4,416.5$       268.3    1.8x       17 %       11 %          X              X       $        2,149.0$   4,416.7    2.1x      19 %
CAP IV                2014       Nov-18 $   3,880.4$   3,966.8$   1,729.8$     3,838.5    1.4x       13 %        8 %          X                      $          831.8   $   1,629.2    2.0x      21 %
CJP II                2006       Jul-12 ¥ 165,600.0   ¥ 141,866.7   ¥ 205,301.1   ¥     1,800.0    1.5x        7 %        3 %                                 ¥      134,666.7   ¥ 203,831.2    1.5x       7 %
CGFSP I               2008       Sep-14 $   1,100.2$   1,080.7$   2,434.2$        51.1    2.3x       20 %       14 %          X              X       $        1,080.7$   2,485.3    2.3x      20 %
CGFSP II              2013       Dec-17 $   1,000.0$     942.7$     897.5$       747.4    1.7x       22 %       15 %          X              X       $          406.5   $     801.0    2.0x      28 %
CEOF I                2011       May-17 $   1,119.1$   1,173.1$   1,265.9$       527.8    1.5x       13 %        9 %          X                      $          419.9   $   1,043.2    2.5x      37 %
CETP III              2014       May-20 €     656.6   €     568.3   €     664.8   €       553.2    2.1x       40 %       25 %          X              X       €          160.5   €     664.8    4.1x      54 %
CAGP IV               2008       Jun-14 $   1,041.4$     954.1$   1,076.5$       210.5    1.3x        8 %        3 %                       

$ 589.8 $ 1,010.4 1.7x 13 % All Other Active Funds,

               Various                          $  11,185.9$  11,779.8$     5,600.6    1.6x       12 %        9 %                                 $        6,190.1$  11,686.7    1.9x      15 %
Coinvestments and
SMAs(13)
Fully Realized
Funds,               Various                          $  15,366.1$  41,031.4   $         8.5    2.7x       33 %       29 %                                 $       15,366.1$  41,039.9    2.7x      33 %
Coinvestments and
SMAs(14)
Total Fully Invested/Committed Funds                  $  85,089.9$ 135,041.5$    32,454.7    2.0x       26 %       18 %                                 $       57,861.8$ 134,477.1    2.3x      27 %
Funds in the Investment Period(7)
CP VII                2018       May-24 $  18,510.0$   7,881.2$      39.2$     8,185.4    1.0x       NM         NM
CEP V                 2018       Oct-24 €   6,416.4   €   1,399.2   €       8.0   €     1,448.9    1.0x       NM         NM
CAP V                 2018       Jun-24 $   6,554.2$   1,144.8$     275.0$     1,234.2    1.3x       NM         NM
CGP                   2015       Dec-20 $   3,588.0$   2,799.8$     186.7$     3,025.7    1.1x        5 %        4 %          X
CJP III               2013       Feb-20 ¥ 119,505.1   ¥  91,191.7   ¥  65,897.2   ¥   114,380.4    2.0x       25 %       16 %          X
CGFSP III             2018       Dec-23 $   1,004.6$     375.0$       2.4$       478.7    1.3x       NM         NM
CEOF II               2015       Mar-21 $   2,400.0$   2,046.2$     160.7$     2,070.7    1.1x        5 %      Neg
CETP IV               2019       Jul-25 €   1,350.0   €      84.0   € 

- € 84.0 1.0x NM NM All Other Funds, Coinvestments and Various

                          $   3,669.6$     531.1$     3,908.2    1.2x       NM         NM
SMAs(15)
Total Funds in the Investment Period                  $  20,421.9$   1,810.9$    21,677.5    1.2x       12 %        5 %                       

$ 519.4 $ 1,401.2 2.7x 38 % TOTAL CORPORATE PRIVATE EQUITY(17)

                    $ 105,511.8$ 136,852.4$    54,132.2    1.8x       26 %       18 %                                 $       58,381.2$ 135,878.3    2.3x      27 %


(1) The data presented herein that provides "inception to date" performance

      results of our segments relates to the period following the formation of
      the first fund within each segment. For our Corporate Private Equity
      segment our first fund was formed in 1990.

(2) Represents the original cost of investments since inception of the fund.

(3) Represents all realized proceeds since inception of the fund.

(4) Represents remaining fair value, before management fees, expenses and

carried interest, and may include remaining escrow values for realized

      investments.



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(5) Multiple of invested capital ("MOIC") represents total fair value, before

      management fees, expenses and carried interest, divided by cumulative
      invested capital.


(6)   An investment is considered realized when the investment fund has
      completely exited, and ceases to own an interest in, the investment. An
      investment is considered partially realized when the total amount of
      proceeds received in respect of such investment, including dividends,
      interest or other distributions and/or return of capital, represents at
      least 85% of invested capital and such investment is not yet fully

realized. Because part of our value creation strategy involves pursuing

best exit alternatives, we believe information regarding Realized/Partially

Realized MOIC and Gross IRR, when considered together with the other

investment performance metrics presented, provides investors with

meaningful information regarding our investment performance by removing the

impact of investments where significant realization activity has not yet

occurred. Realized/Partially Realized MOIC and Gross IRR have limitations

      as measures of investment performance, and should not be considered in
      isolation. Such limitations include the fact that these measures do not

include the performance of earlier stage and other investments that do not

satisfy the criteria provided above. The exclusion of such investments will

have a positive impact on Realized/Partially Realized MOIC and Gross IRR in

      instances when the MOIC and Gross IRR in respect of such investments are
      less than the aggregate MOIC and Gross IRR. Our measurements of
      Realized/Partially Realized MOIC and Gross IRR may not be comparable to
      those of other companies that use similarly titled measures. We do not

present Realized/Partially Realized performance information separately for

funds that are still in the investment period because of the relatively

insignificant level of realizations for funds of this type. However, to the

extent such funds have had realizations, they are included in the

Realized/Partially Realized performance information presented for Total

Corporate Private Equity.

(7) Fully Invested funds are past the expiration date of the investment period

as defined in the respective limited partnership agreement. In instances

where a successor fund has had its first capital call, the predecessor fund

      is categorized as fully invested.


(8)   Gross Internal Rate of Return ("Gross IRR") represents the annualized IRR
      for the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value before management fees,

      expenses and carried interest.


(9)   Net Internal Rate of Return ("Net IRR") represents the annualized IRR for
      the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value after management fees,

expenses and carried interest. Fund level IRRs are based on aggregate

Limited Partner cash flows, and this blended return may differ from that of

      individual Limited Partners. As a result, certain funds may generate
      accrued performance revenues with a blended Net IRR that is below the
      preferred return hurdle for that fund.

(10) Fund has a net accrued performance fee balance/(giveback obligation) as of

the current quarter end, driven by a significant portion of the fund's

asset base.

(11) Fund has generated realized net performance fees/(realized giveback) in the

last twelve months.

(12) Represents all realized proceeds combined with remaining fair value, before

management fees, expenses and carried interest.

(13) Aggregate includes the following funds, as well as related co-investments,

separately managed accounts (SMA's), and certain other stand-alone

investments arranged by us: CUSGF III, CVP II, MENA, CCI, CSSAF I, CSABF,

and CPF.

(14) Aggregate includes the following funds, as well as related co-investments,

separately managed accounts (SMAs), and certain other stand-alone

investments arranged by us: CP I, CP II, CP III, CEP I, CAP I, CAP II, CBPF

      I, CJP I, CMG, CVP I, CEVP I, CETP I, CETP II, CAVP I, CAVP II, CAGP III
      and Mexico.

(15) Aggregate includes the following funds, as well as related co-investments,

      separately managed accounts (SMAs), and certain other stand-alone
      investments arranged by us: CAGP V and CBPF II.

(16) For funds marked "NM," IRR may be positive or negative, but is considered

not meaningful because of the limited time since initial investment and

early stage of capital deployment. For funds marked "Neg," IRR is negative

      as of reporting period end.


(17)  For purposes of aggregation, funds that report in foreign currency have
      been converted to U.S. dollars at the reporting period spot rate.






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Real Assets
For purposes of presenting our results of operations for this segment, our
earnings from our investments in NGP are presented in the respective operating
captions and the net income or loss from Urbplan allocable to the Company (after
consideration of amounts allocable to non-controlling interests) is presented
within principal investment income. We disposed of our interests in Urbplan in a
transaction in which a third party acquired operational control and all of the
economic interests in Urbplan in 2017 (see Note 16 to our consolidated financial
statements). The following table presents our results of operations for our Real
Assets segment:

                                                          Year Ended December 31,
                                                        2019        2018       2017
                                                           (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees                                 $   338.8$ 317.9$ 263.6
Portfolio advisory fees, net and other                     1.7        4.5   

3.0

Transaction fees, net                                      8.7        4.4   

4.5

Total fund level fee revenues                            349.2      326.8   

271.1

Realized performance revenues                            180.1      150.3   

92.0

Realized principal investment income (loss)               76.6       13.5      (63.2 )
Interest income                                            2.7        4.4        3.0
Total revenues                                           608.6      495.0      302.9
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits                     138.9      135.1   

128.1

Realized performance revenues related compensation 90.5 66.6

41.6

Total compensation and benefits                          229.4      201.7   

169.7

General, administrative, and other indirect expenses 74.4 64.1

84.3

Depreciation and amortization expense                      9.0        6.8        7.1
Interest expense                                          13.2       15.3       17.0
Total expenses                                           326.0      287.9      278.1
(=) Distributable Earnings                           $   282.6$ 207.1$  24.8
(-) Realized Net Performance Revenues                     89.6       83.7   

50.4

(-) Realized Principal Investment Income (Loss)           76.6       13.5      (63.2 )
(+) Net Interest                                          10.5       10.9       14.0
(=) Fee Related Earnings                             $   126.9$ 120.8$  51.6




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Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 and Year Ended December 31, 2018 Compared to Year Ended December 31, 2017


Distributable Earnings
Distributable earnings increased $75.5 million for the year ended December 31,
2019 as compared to 2018 and increased $182.3 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the change in distributable earnings for the years ended December
31, 2019 and 2018:
                                                      Year Ended December 31,
                                                          2019               2018
                                                       (Dollars in millions)
Distributable earnings, prior year               $      207.1$  24.8
Increases (decreases):
Increase in fee related earnings                          6.1               

69.2

Increase in realized net performance revenues             5.9               

33.3

Increase in realized principal investment income         63.1                 76.7
Decrease in net interest                                  0.4                  3.1
Total increase                                           75.5                182.3
Distributable earnings, current year             $      282.6

$ 207.1




Realized Net Performance Revenues. Realized net performance revenues increased
$5.9 million for the year ended December 31, 2019 as compared to 2018, and
increased $33.3 million for the year ended December 31, 2018 as compared to
2017. The increase in realized net performance revenues for the year ended
December 31, 2019 as compared to 2018 was primarily due to higher realizations
on our U.S. real estate funds, partially offset by $19 million of realized
clawback on Riverstone Legacy Energy Fund IV. The increase in realized net
performance revenues for the year ended December 31, 2018 as compared to the
year ended December 31, 2017 was primarily due to higher realizations on our
U.S. real estate funds. Realized net performance revenues were primarily
generated by the following funds for the years ended December 31, 2019, 2018 and
2017, respectively:
        Year Ended December 31,
        2019            2018      2017
      CRP VII          CRP VII   CRP VI
       CRP V           CRP III   CPOCP
        CPI            CRP VI
Energy IV (clawback)
      CRP III
       CRP VI



Realized Principal Investment Income (Loss). Realized principal investment
income increased $63.1 million for the year ended December 31, 2019 as compared
to 2018, and increased $76.7 million for the year ended December 31, 2018 as
compared to 2017. The increase in realized principal investment income for the
year ended December 31, 2019 as compared to 2018 primarily relates to the
recovery of $71.5 million from the final resolution of French Tax litigation
concerning a European real estate fund, which reversed a portion of an
investment loss recognized in 2015 (see Note 9 of our consolidated financial
statements for more information on this matter).

The increase in realized principal investment income for the year ended December 31, 2018 as compared to 2017 primarily relates to relates to the absence in 2018 of a $65.0 million realized principal investment loss in 2017 associated with the disposal of our interests in Urbplan. Additionally, we recognized higher realized principal investment income related to our investments in U.S. real estate funds in 2018.

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Fee Related Earnings
Fee related earnings increased $6.1 million for the year ended December 31, 2019
as compared to 2018 and increased $69.2 million for the year ended December 31,
2018 as compared to 2017. The following table provides the components of the
change in fee related earnings for the years ended December 31, 2019 and 2018:
                                                         Year Ended December 31,
                                                         2019               2018
                                                          (Dollars in millions)
Fee related earnings, prior year                    $      120.8       $    

51.6

Increases (decreases):
Increase in fee revenues                                    22.4            

55.7

Increase in cash-based compensation                         (3.8 )          

(7.0 ) (Increase) decrease in general, administrative and other indirect expenses

                                    (10.3 )          

20.2

Decrease in interest expense                                 2.1                1.7
  All other changes                                         (4.3 )             (1.4 )
Total increase                                               6.1               69.2
Fee related earnings, current year                  $      126.9       $    

120.8

Fee Revenues. Total fee revenues increased $22.4 million for the year ended December 31, 2019 as compared to 2018 and increased $55.7 million for the year ended December 31, 2018 as compared to 2017, due to the following:

                                                          Year Ended December 31,
                                                           2019             2018
                                                           (Dollars in millions)
Higher fund management fees                           $      20.9$      54.3
Higher (lower) transaction fees                               4.3              (0.1 )
(Lower) higher portfolio advisory fees, net and other        (2.8 )         

1.5

Total increase in fee revenues                        $      22.4       $   

55.7




The increase in fund management fees for the year ended December 31, 2019 as
compared to 2018 primarily reflects the increased management fees from CGI, CIEP
II, CPI and NGP XII, partially offset by lower management fees from CRP VII,
CIEP I, CEREP III and CRP V. Management fees also increased as a result of $26.4
million in catch-up management fees for subsequent closes in 2019 for CGI and
NGP XII.

The increase in fund management fees for the year ended December 31, 2018 as
compared to 2017 primarily reflects increased management fees from our eighth
U.S. real estate fund ("CRP VIII"), as well as from NGP XII. Management fees
also increased as a result of $16.0 million in catch-up management fees for
subsequent closes in 2018 for CGI, NGP XII and CRP VIII.

The total weighted average management fee rate increased to 1.25% at
December 31, 2019 from 1.22% at December 31, 2018 primarily due to the
activation of new fee-paying commitments raised in CIEP II and CGIOF with higher
effective rates than the December 31, 2018 segment weighted average. The
weighted average management fee rate for funds in the investment period
decreased to 1.28% at December 31, 2019 from 1.32% at December 31, 2018
primarily due to the step-down of CIEP I to a lower fee rate and basis, and the
aforementioned new fee-paying commitments raised in CIEP II and CGIOF with lower
fee rates than the CIEP I commitments they effectively replaced.

The total weighted average management fee rate increased to 1.22% at
December 31, 2018 from 1.20% at December 31, 2017 primarily due to new
fee-paying commitments raised in NGP XII and CGIOF with higher effective rates.
The weighted average management fee rate for funds in the investment period
decreased to 1.32% at December 31, 2018 from 1.35% at December 31, 2017
primarily due to effective rates for newer funds in the investment period being
lower than their predecessors.



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The increase in transaction fees for the year ended December 31, 2019 as compared to 2018 resulted primarily from transaction fees related to significant investments in one of our international energy funds in 2019.

Cash-based compensation and benefits expense. Cash-based compensation and benefits expense increased $3.8 million for the year ended December 31, 2019 as compared to 2018 primarily due to higher cash bonuses in 2019 versus 2018.


  Cash-based compensation and benefits expense increased $7.0 million for the
year ended December 31, 2018 as compared to 2017 primarily due to an increase in
headcount and higher cash bonuses in 2018 versus 2017, partially offset by lower
compensation associated with fundraising activities of $4.1 million.
General, administrative and other indirect expenses. General, administrative and
other indirect expenses increased $10.3 million for the year ended December 31,
2019 as compared to 2018, primarily due to increased professional fees.
General, administrative and other indirect expenses decreased $20.2 million for
the year ended December 31, 2018 as compared to 2017, primarily due to a
decrease in external costs associated with fundraising activities of $6.7
million related to CRP VIII, a positive impact in foreign currency adjustments
recorded in 2018 compared to 2017 and a decrease in legal costs.


Fee-earning AUM as of and for each of the Three Years in the Period Ended
December 31, 2019
Fee-earning AUM is presented below for each period together with the components
of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each
period.
                                                             As of December 31,
                                                     2019           2018           2017
                                                           (Dollars in millions)
Real Assets
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments     $   16,432$   15,052$   16,453
Fee-earning AUM based on invested capital (2)        14,054         16,090  

13,901

Fee-earning AUM based on net asset value              2,308          1,479  

892

Fee-earning AUM based on lower of cost or fair
value and other (3)                                     357            356  

353

Total Fee-earning AUM (4)                        $   33,151$   32,977$   31,599
Weighted Average Management Fee Rates (5)
All Funds                                              1.25 %         1.22 %         1.20 %
Funds in Investment Period                             1.28 %         1.32 %         1.35 %


(1) For additional information concerning the components of Fee-earning AUM,

See "-Fee-earning Assets under Management."

(2) Includes amounts committed to or reserved for investments for certain real

estate funds.

(3) Includes certain funds that are calculated on gross asset value.

(4) Energy III, Energy IV, and Renew II (collectively, the "Legacy Energy

Funds"), are managed with Riverstone Holdings LLC and its affiliates.

Affiliates of both Carlyle and Riverstone act as investment advisers to

each of the Legacy Energy Funds. With the exception of Energy IV and Renew

II, where Carlyle has a minority representation on the funds' management

      committees, management of each of the Legacy Energy Funds is vested in
      committees with equal representation by Carlyle and Riverstone, and the
      consent of representatives of both Carlyle and Riverstone is required for

investment decisions. As of December 31, 2019, the Legacy Energy Funds had,

in the aggregate, approximately $2.6 billion in AUM and $2.5 billion in

Fee-earning AUM. NGP IX or in the case of NGP M&R and NGP ETP II, certain

affiliated entities (collectively, the "NGP Predecessor Funds") and NGP X,

NGP GAP, NGP XI, and NGP XII (referred to herein as, the "NGP Carry Funds",

collectively with the NGP Predecessor Funds, the "NGP Energy Funds"), are

managed by NGP Energy Capital Management ("NGP"). As of December 31, 2019,

the NGP Energy Funds had, in the aggregate, approximately $11.4 billion in

      AUM and $11.4 billion in Fee-earning AUM.



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(5) Represents the aggregate effective management fee rate of each fund in the

      segment, weighted by each fund's Fee-earning AUM, as of the end of each
      period presented. Calculation reflects Carlyle's 10% and 55% interest in

management fees earned by the Legacy Energy funds and the NGP Energy Funds,

      respectively.



The table below provides the period to period rollforward of Fee-earning AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Real Assets
Fee-earning AUM Rollforward
Balance, Beginning of Period          $    32,977$  31,599$ 27,487
Inflows (1)                                 4,845           4,408        8,812
Outflows (including realizations) (2)      (4,756 )        (2,818 )     (4,925 )
Market Activity & Other (3)                   102            (128 )        106
Foreign Exchange (4)                          (17 )           (84 )        119
Balance, End of Period                $    33,151$  32,977$ 31,599



(1)   Inflows represents limited partner capital raised by our carry funds or

separately managed accounts for which management fees based on commitments

were activated during the period, the fee-earning commitments invested in

vehicles for which management fees are based on invested capital, and gross

      subscriptions in open-ended vehicles with management fees based on net
      asset value. Inflows exclude fundraising amounts during the period for

which fees have not yet been activated, which are referenced as Pending

      Fee-earning AUM.


(2)   Outflows represents the impact of realizations from vehicles with

management fees based on remaining invested capital at cost or fair value,

changes in basis for funds where the investment period, weighted-average

investment period or commitment fee period has expired during the period,

reductions for funds that are no longer calling for fees, and gross

redemptions in open-ended vehicles with management fees based on net asset

value. Realizations for funds earning management fees based on commitments

during the period do not affect Fee-earning AUM.

(3) Market Activity & Other represents realized and unrealized gains (losses)

on portfolio investments in our carry funds based on the lower of cost or

fair value and net asset value.

(4) Foreign Exchange 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.



Fee-earning AUM was $33.2 billion at December 31, 2019, an increase of $0.2
billion, or 1%, compared to $33.0 billion at December 31, 2018. The increase was
driven by inflows of $4.8 billion primarily related to new fee-paying
commitments raised in CIEP II and CGIOF, as well as capital invested by CPI.
This was offset by outflows of $4.8 billion primarily related to distributions
in our U.S. Real Estate, NGP Energy, and Legacy Energy funds, as well as a fee
basis step-down in CIEP I. Investment and distribution activity by funds still
in the original investment period do not impact Fee-earning AUM as these funds
are based on commitments and not invested capital.
Fee-earning AUM was $33.0 billion at December 31, 2018, an increase of $1.4
billion, or 4%, compared to $31.6 billion at December 31, 2017. The increase was
driven by inflows of $4.4 billion primarily related to new fee-paying
commitments raised in NGP XII, CRP VIII, CER, and CGIOF, as well as capital
invested by CPI. This was partially offset by outflows of $2.8 billion primarily
related to distributions in our U.S. Real Estate, NGP Energy, and Legacy Energy
funds.
Fee-earning AUM was $31.6 billion at December 31, 2017, an increase of $4.1
billion, or 15%, compared to $27.5 billion at December 31, 2016. The increase
was driven by inflows of $8.8 billion primarily related to new fee-paying
commitments raised in CRP VIII and NGP XII. This was partially offset by
outflows of $4.9 billion primarily related to distributions in our Legacy
Energy, U.S. Real Estate, and NGP Energy funds.



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Total AUM as of and for each of the Three Years in the Period Ended December 31,
2019
The table below provides the period to period rollforward of Total AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Real Assets
Total AUM Rollforward
Balance, Beginning of Period          $    45,640$  42,888$ 34,252
Inflows (1)                                 3,189           5,698       10,205
Outflows (including realizations) (2)      (5,543 )        (4,879 )     (4,950 )
Market Activity & Other (3)                    79           2,080        3,269
Foreign Exchange (4)                          (10 )          (147 )        112
Balance, End of Period                $    43,355$  45,640$ 42,888



(1)   Inflows reflects the impact of gross fundraising during the period. For
      funds or vehicles denominated in foreign currencies, this reflects

translation at the average quarterly rate, while the separately reported

      Fundraising metric is translated at the spot rate for each individual
      closing.

(2) Outflows includes distributions net of recallable or recyclable amounts in

our carry funds, related co-investment vehicles, separately managed

accounts and the NGP Predecessor Funds, gross redemptions in our open-ended

funds, and the expiration of available capital.

(3) Market Activity & Other generally represents realized and unrealized gains

(losses) on portfolio investments in our carry funds and related

co-investment vehicles, the NGP Predecessor Funds and separately managed

accounts, as well as the net impact of fees, expenses and non-investment

      income, and other changes in AUM.


(4)   Foreign Exchange 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.

(5) Includes expiring available capital, the impact of capital calls for fees

and expenses and other changes in AUM.



Total AUM was $43.4 billion at December 31, 2019, a decrease of $2.2 billion, or
5%, compared to $45.6 billion at December 31, 2018. This increase was driven by
$5.5 billion of outflows primarily due to distributions in our U.S. Real Estate,
NGP Energy, and Legacy Energy funds. This was partially offset by $3.2 billion
of inflows primarily attributable to fundraising in CGIOF, CIEP II, CPI, and NGP
XII.
Total AUM was $45.6 billion at December 31, 2018, an increase of $2.7 billion,
or 6%, compared to $42.9 billion at December 31, 2017. This increase was driven
by $5.7 billion of inflows primarily attributable to fundraising in CIEP II, NGP
XII, CPI, CGIOF, and CER. Also driving the increase was $2.1 billion of market
and other activity including appreciation of $0.7 billion attributable to CRP
VII, $0.5 billion attributable to CIEP I, and $0.2 billion attributable to NGP
XI. Partially offsetting the increase were $4.9 billion of outflows primarily
due to distributions in our U.S. Real Estate, Legacy Energy, and NGP Energy
funds.
Total AUM was $42.9 billion at December 31, 2017, an increase of $8.6 billion,
or 25%, compared to $34.3 billion at December 31, 2016. This increase was driven
by $10.2 billion of inflows primarily attributable to fundraising in CRP VIII,
NGP XII, and CPI. Also driving the increase was $3.3 billion of market and other
activity including appreciation of $1.2 billion attributable to NGP XI, $0.5
billion attributable to CRP VII, and $0.3 billion attributable to CIEP I.
Partially offsetting the increase were $5.0 billion of outflows primarily due to
distributions in our U.S. Real Estate, Legacy Energy, and Europe Real Estate
funds.

Fund Performance Metrics
Fund performance information for our investment funds that have at least
$1.0 billion in capital commitments, cumulative equity invested or total value
as of December 31, 2019 and excluding the NGP Predecessor Funds, which we refer
to as our "significant funds," is generally included throughout this discussion
and analysis to facilitate an understanding of our results of operations for the
periods presented. The fund return information reflected in this discussion and
analysis is not indicative of the performance of The Carlyle Group Inc. and is
also not necessarily indicative of the future performance of any particular
fund. An investment in The Carlyle Group Inc. is not an investment in any of our
funds. There can be no assurance

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that any of our funds or our other existing and future funds will achieve
similar returns. See "Item 1A. Risk Factors - Risks Related to Our Business
Operations - The historical returns attributable to our funds, including those
presented in this report, should not be considered as indicative of the future
results of our funds or of our future results or of any returns expected on an
investment in our common stock."
The following tables reflect the performance of our significant funds in our
Real Assets business. See "Business - Our Family of Funds" for a legend of the
fund acronyms listed below.
                                                                                            TOTAL INVESTMENTS                                                REALIZED/PARTIALLY REALIZED INVESTMENTS(6)
                                                                                         As of December 31, 2019                                                     As of December 31, 2019
                                                                                                                                                 LTM
                   Fund    Original                Cumulative                                                                                  Realized      Cumulative        Total               Gross
                  Vintage Investment  Committed     Invested      Realized   Remaining Fair         Gross IRR   Net IRR        In Accrued       Carry         Invested          Fair                IRR
                    (1)   Period End   Capital     Capital(2)     Value(3)      Value(4)    MOIC(5)  (8)(16)    (9)(16)   Carry/(Clawback)(10)   (11)        Capital(2)      Value(12)   MOIC(5)  (8)(16)
Real Assets                                      (Reported in Local Currency, in Millions)                                                                   (Reported in Local Currency, in Millions)
Fully Invested/Committed Funds(7)
CRP III            2000       May-05 $    564.1$     522.5$  1,585.3$      283.8    3.6x       44 %       30 %            X              X       $         522.5   $  1,869.1    3.6x      44 %
CRP IV             2004       Dec-09 $    950.0$   1,260.5$  1,708.0$      287.2    1.6x        7 %        4 %                                   $       1,203.5$  1,972.4    1.6x       7 %
CRP V              2006       Nov-11 $  3,000.0$   3,370.8$  5,055.6$      829.2    1.7x       12 %        9 %            X              X       $       3,248.7$  5,766.7    1.8x      13 %
CRP VI             2010       Mar-16 $  2,340.0$   2,155.2$  3,587.9$      359.0    1.8x       27 %       19 %            X              X       $       1,705.4$  3,452.7    2.0x      32 %
CRP VII            2014       Mar-19 $  4,161.6$   3,704.7$  3,402.6$    2,453.6    1.6x       21 %       13 %            X              X       $       1,835.9$  3,311.3    1.8x      26 %
CEREP III          2007       May-11 €  2,229.5   €   2,052.6   €  2,362.2   €      116.5    1.2x        4 %        1 %                                   €       1,911.5   €  2,384.5    1.2x       5 %
CIEP I             2013       Sep-19 $  2,500.0$   2,288.5$    860.6$    2,624.5    1.5x       24 %       13 %            X                      $         665.4   $  1,480.1    2.2x      27 %
NGP X              2012       May-17 $  3,586.0$   3,302.7$  2,953.7$      788.2    1.1x        4 %        1 %                                   $       2,018.0$  2,904.6    1.4x      15 %
NGP XI             2014       Oct-19 $  5,325.0$   4,695.3$  1,570.4$    4,345.4    1.3x       10 %        7 %                                   $       1,353.8$  1,538.8    1.1x      34 %
Energy III         2005       Oct-11 $  3,800.0$   3,569.7$  5,248.6$      231.8    1.5x        9 %        6 %                                   $       3,152.1$  5,044.9    1.6x      11 %
Energy IV          2007       Dec-13 $  5,979.1$   6,373.2$  6,778.2$    1,009.8    1.2x        6 %        2 %                          (X)      $       5,606.4$  7,014.0    1.3x       8 %
Renew II           2008       May-14 $  3,417.5$   2,833.5$  2,930.9$    1,174.0    1.4x        7 %        4 %           (X)                     $       2,376.5$  3,008.2    1.3x       5 %
All Other
Active Funds,     Various                         $   5,385.5$  6,556.2$    2,618.0    1.7x        9 %        8 %                                   $       3,567.4$  6,715.2    1.8x      11 %
Coinvestments
and SMAs(13)
Fully Realized
Funds,            Various                         $   7,816.9$ 10,641.1$       13.1    1.4x       18 %        9 %                                   $       7,816.9$ 10,654.2    1.4x      19 %
Coinvestments
and SMAs(14)
Total Fully Invested/Committed Funds              $  49,583.6$ 55,531.3$   17,148.5    1.5x       12 %        7 %                                   $      37,218.8$ 57,409.6    1.5x      14 %
Funds in the Investment Period(7)
CRP VIII           2017       May-22 $  5,505.1$   2,022.3$     90.8$    2,186.9    1.1x       NM         NM
NGP XII            2017       Jul-22 $  4,277.6$   1,777.7$      0.1$    1,894.7    1.1x       NM         NM
CIEP II            2019       Apr-25 $  1,754.5$     399.8   $        -   $      407.3    1.0x       NM         NM
CPP II             2014       Apr-21 $  1,526.7$   1,098.2$    292.1$    1,121.9    1.3x       13 %        7 %
CPI                2016          n/a $  2,540.3$   2,326.0$    408.2$    2,339.8    1.2x       14 %       11 %            X              X
CGIOF              2018       Sep-23 $  2,201.4$     153.4$     28.8$      143.8    1.1x       NM         NM
All Other
Funds,            Various                         $   1,792.8$     62.2$    1,916.7    1.1x       NM         NM
Coinvestments
and SMAs(15)
Total Funds in the Investment Period              $   9,570.3$    882.2$   10,011.1    1.1x       12 %        5 %                                   $         142.4   $    252.4    1.8x      NM
TOTAL REAL ASSETS(17)                             $  59,153.9$ 56,413.4$   27,159.5    1.4x       12 %        7 %                                   $      37,361.3$ 57,662.0    1.5x      14 %


(1) The data presented herein that provides "inception to date" performance

results of our segments relates to the period following the formation of

the first fund within each segment. For our Real Assets segment our first

fund was formed in 1997.

(2) Represents the original cost of investments since inception of the fund.

(3) Represents all realized proceeds since inception of the fund.

(4) Represents remaining fair value, before management fees, expenses and

carried interest, and may include remaining escrow values for realized

investments.

(5) Multiple of invested capital ("MOIC") represents total fair value, before

      management fees, expenses and carried interest, divided by cumulative
      invested capital.


(6)   An investment is considered realized when the investment fund has
      completely exited, and ceases to own an interest in, the investment. An
      investment is considered partially realized when the total amount of
      proceeds received in respect of such investment, including dividends,
      interest or other distributions and/or return of capital, represents at
      least 85% of



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invested capital and such investment is not yet fully realized. Because part of
our value creation strategy involves pursuing best exit alternatives, we believe
information regarding Realized/Partially Realized MOIC and Gross IRR, when
considered together with the other investment performance metrics presented,
provides investors with meaningful information regarding our investment
performance by removing the impact of investments where significant realization
activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR
have limitations as measures of investment performance, and should not be
considered in isolation. Such limitations include the fact that these measures
do not include the performance of earlier stage and other investments that do
not satisfy the criteria provided above. The exclusion of such investments will
have a positive impact on Realized/Partially Realized MOIC and Gross IRR in
instances when the MOIC and Gross IRR in respect of such investments are less
than the aggregate MOIC and Gross IRR. Our measurements of Realized/Partially
Realized MOIC and Gross IRR may not be comparable to those of other companies
that use similarly titled measures. We do not present Realized/Partially
Realized performance information separately for funds that are still in the
investment period because of the relatively insignificant level of realizations
for funds of this type. However, to the extent such funds have had realizations,
they are included in the Realized/Partially Realized performance information
presented for Total Real Assets.
(7)   Fully Invested funds are past the expiration date of the investment period

as defined in the respective limited partnership agreement. In instances

where a successor fund has had its first capital call, the predecessor fund

      is categorized as fully invested.


(8)   Gross Internal Rate of Return ("Gross IRR") represents the annualized IRR
      for the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value before management fees,

      expenses and carried interest.


(9)   Net Internal Rate of Return ("Net IRR") represents the annualized IRR for
      the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value after management fees,

expenses and carried interest. Fund level IRRs are based on aggregate

Limited Partner cash flows, and this blended return may differ from that of

      individual Limited Partners. As a result, certain funds may generate
      accrued performance revenues with a blended Net IRR that is below the
      preferred return hurdle for that fund.

(10) Fund has a net accrued performance fee balance/(giveback obligation) as of

the current quarter end, driven by a significant portion of the fund's

asset base.

(11) Fund has generated realized net performance fees/(realized giveback) in the

last twelve months.

(12) Represents all realized proceeds combined with remaining fair value, before

management fees, expenses and carried interest.

(13) Aggregate includes the following funds, as well as related co-investments,

      separately managed accounts (SMAs), and certain other stand-alone
      investments arranged by us: NGP GAP and CPOCP.


(14)  Aggregate includes the following funds: CRP I, CRP II, CRCP I, CAREP I,
      CAREP II, CEREP I, CEREP II, Energy I, Energy II, Renew I, and CIP.


(15)  Aggregate includes CCR, CRSEF, and CER. Return is not considered
      meaningful, as the investment period commenced in October 2016 for CCR,
      December 2019 for CRSEF, and December 2017 for CER.

(16) For funds marked "NM," IRR may be positive or negative, but is considered

not meaningful because of the limited time since initial investment and

early stage of capital deployment. For funds marked "Neg," IRR is negative

      as of reporting period end.


(17)  For purposes of aggregation, funds that report in foreign currency have
      been converted to U.S. dollars at the reporting period spot rate.



















Global Credit
We continue to invest in growing our Global Credit business, and in the near to
midterm this segment will incur additional expenses to build a more diversified
business and raise additional capital.
The following table presents our results of operations for our Global Credit
segment:
                                                           Year Ended December 31,
                                                         2019          2018       2017
                                                            (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees                                 $   307.2$ 243.0$ 191.5
Portfolio advisory fees, net and other                     4.7           5.1        7.5
Transaction fees, net                                      9.9           1.0          -
Total fund level fee revenues                            321.8         249.1      199.0
Realized performance revenues                              1.8           9.8       75.4
Realized principal investment income                      12.0           7.9       11.9
Interest income                                           14.2          15.3        7.1
Total revenues                                           349.8         282.1      293.4
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits                     185.2         140.4      104.5
Realized performance revenues related compensation         0.4           4.5       35.0
Total compensation and benefits                          185.6         144.9      139.5
General, administrative, and other indirect expenses      78.9          30.5        7.4
Depreciation and amortization expense                      9.9           6.3        5.1
Interest expense                                          27.0          22.9       14.5
Total expenses                                           301.4         204.6      166.5
(=) Distributable Earnings                           $    48.4$  77.5$ 126.9
(-) Realized Net Performance Revenues                      1.4           5.3       40.4
(-) Realized Principal Investment Income                  12.0           7.9       11.9
(+) Net Interest                                          12.8           7.6        7.4
(=) Fee Related Earnings                             $    47.8$  71.9$  82.0




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Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 and Year Ended December 31, 2018 Compared to Year Ended December 31, 2017


Distributable Earnings
Distributable earnings decreased $29.1 million for the year ended December 31,
2019 as compared to 2018, and decreased $49.4 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the changes in distributable earnings for the years ended December
31, 2019 and 2018:
                                                     Year Ended December 31,
                                                     2019               2018
                                                      (Dollars in millions)
Distributable earnings, prior year              $       77.5       $      

126.9

Increases (decreases):
Decrease in fee related earnings                       (24.1 )            (10.1 )
Decrease in realized net performance revenues           (3.9 )            (35.1 )
Increase (decrease) in realized principal
investment income                                        4.1               (4.0 )
Increase in net interest                                (5.2 )             (0.2 )
Total decrease                                         (29.1 )            (49.4 )
Distributable earnings, current year            $       48.4       $       

77.5




Realized Net Performance Revenues. Realized net performance revenues decreased
$3.9 million for the year ended December 31, 2019 as compared to 2018 and
decreased $35.1 million for the year ended December 31, 2018 as compared to
2017. The majority of realized net performance revenues was generated by our
distressed debt carry funds and our business development companies in 2018 and
2017.

Realized Principal Investment Income. Realized principal investment income
increased $4.1 million for the year ended December 31, 2019 as compared to 2018
and decreased $4.0 million for the year ended December 31, 2018 as compared to
2017. The increase in realized principal investment income for the year ended
December 31, 2019 as compared to 2018 was primarily due to higher dividends from
our Interval Fund in 2019. The decrease in realized principal investment income
for the year ended December 31, 2018 as compared to 2017 was primarily due to
realized losses on investments in one of our energy mezzanine funds.

Fee Related Earnings
Fee related earnings decreased $24.1 million for the year ended December 31,
2019 as compared to 2018, and decreased $10.1 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the change in fee related earnings for the years ended December
31, 2019 and 2018:
                                                         Year Ended December 31,
                                                         2019               2018
                                                          (Dollars in millions)
Fee related earnings, prior year                    $       71.9       $    

82.0

Increases (Decreases):
Increase in fee revenues                                    72.7            

50.1

Increase in cash-based compensation                        (44.8 )            (35.9 )
Increase in general, administrative and other
indirect expenses                                          (48.4 )            (23.1 )
  All other changes                                         (3.6 )             (1.2 )
Total decrease                                             (24.1 )            (10.1 )
Fee related earnings, current year                  $       47.8       $    

71.9

Fee Revenues. Total fee revenues increased $72.7 million for the year ended December 31, 2019 as compared to 2018 and increased $50.1 million for the year ended December 31, 2018 as compared to 2017, due to the following:

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                                                 Year Ended December 31,
                                                  2019             2018
                                                  (Dollars in millions)
Higher fund management fees                  $      64.2$      51.5
Higher transaction fees                              8.9               1.0
Lower portfolio advisory fees, net and other        (0.4 )            (2.4 )
Total increase in fee revenues               $      72.7$      50.1


The increase in fund management fees for the year ended December 31, 2019 as
compared to 2018 was primarily driven by management fees from Carlyle Aviation
Partners, which was acquired in December 2018, management fees from CLOs that
originated in 2018 and 2019, as well as increased management fees from our
direct lending platform.
The increase in fund management fees for the year ended December 31, 2018 as
compared to 2017 was primarily due to an increase in fund management fees from
CLOs that originated in 2017 and 2018 as well as increased management fees from
our direct lending platform.
The weighted average management fee rate on our carry funds decreased from 1.23%
at December 31, 2018 to 1.20% at December 31, 2019 primarily due to the
step-down of the fee rate and basis in CEMOF II.
The weighted average management fee rate on our carry funds decreased from 1.35%
at December 31, 2017 to 1.23% at December 31, 2018 primarily due to new funds
raised or acquired with lower effective fee rates.

The increase in transaction fees for for the year ended December 31, 2019 as
compared to 2018 resulted primarily from underwriting fees related to CCS in
2019.

Cash-based compensation and benefits expense. Cash-based compensation and
benefits expense increased $44.8 million for the year ended December 31, 2019 as
compared to 2018 primarily due to the Carlyle Aviation Partners acquisition, as
well as increased headcount and higher cash bonuses.

Cash-based compensation and benefits expense increased $35.9 million for the year ended December 31, 2018 as compared to 2017 primarily due to increased headcount and higher cash bonuses.


We expect that as we add new talent to our growing Global Credit business, our
cash-based compensation and benefits expense will increase. However, as this
strategy raises incremental capital, we expect positive impact from additional
fee revenue to more than offset our increased compensation levels.
General, administrative and other indirect expenses. General, administrative and
other indirect expenses increased $48.4 million for the year ended December 31,
2019 as compared to 2018 and increased $23.1 million for the year ended
December 31, 2018 as compared to 2017, primarily due to the following:
                                                             Year Ended December 31,
                                                             2019                2018
                                                              (Dollars in millions)
Decrease in insurance recoveries related to litigation $           -       $         35.3
Decrease in legal costs related to commodities(1)                  -               (144.2 )
Decrease in insurance recovery related to
commodities(2)                                                  31.5        

145.5

Decrease in external costs associated with fundraising
activities                                                      (1.7 )               (5.7 )
All other changes (3)                                           18.6                 (7.8 )
Total increase                                         $        48.4       $         23.1


(1) For the year ended December 31, 2018 compared to the year ended December 31,
2017, this reflects the $144.2 million of commodities charges in 2017.
(2) For the year ended December 31, 2018 compared to the year ended December 31,
2017, this reflects $31.5 million of insurance proceeds as compared to $177.0
million of insurance proceeds in 2017.

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(3) For the year ended December 31, 2019 compared to the year ended December 31,
2018, this reflects increases due to the Carlyle Aviation Partners.
Fee-earning AUM as of and for each of the Three Years in the Period Ended
December 31, 2019
Fee-earning AUM is presented below for each period together with the components
of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components at each
period.
                                                              As of December 31,
                                                        2019         2018         2017
                                                            (Dollars in millions)
Global Credit
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments         $  4,727$  7,403$  5,026
Fee-earning AUM based on invested capital               4,509        1,885  

1,457

Fee-earning AUM based on collateral balances, at par 24,887 22,921

18,625

Fee-earning AUM based on net asset value                1,561          867  

42

Fee-earning AUM based on other (2)                      2,178        2,076  

2,112

Total Fee-earning AUM                                $ 37,862$ 35,152$ 27,262
Weighted Average Management Fee Rates (3)
All Funds, excluding CLOs                                1.20 %       1.23 %       1.35 %



(1)   For additional information concerning the components of Fee-earning AUM,
      see "-Fee-earning Assets under Management."

(2) Includes funds with fees based on gross asset value.

(3) Represents the aggregate effective management fee rate for carry funds and

hedge funds, weighted by each fund's Fee-earning AUM, as of the end of each

period presented. Management fees for CLOs are based on the total par

amount of the assets (collateral) and principal balance of the notes in the

fund and are not calculated as a percentage of equity and are therefore not

included.



The table below provides the period to period rollforward of Fee-earning AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Global Credit
Fee-earning AUM Rollforward
Balance, Beginning of Period          $    35,152$  27,262$ 24,126
Inflows (1)                                 4,437           9,179        5,547
Outflows (including realizations) (2)      (2,663 )        (1,228 )     (3,556 )
Market Activity & Other (3)                 1,067             253          363
Foreign Exchange (4)                         (131 )          (314 )        782
Balance, End of Period                $    37,862$  35,152$ 27,262



(1)   Inflows represents limited partner capital raised by our carry funds or

separately managed accounts for which management fees based on commitments

were activated during the period, the fee-earning commitments invested in

      vehicles for which management fees are based on invested capital, the
      fee-earning collateral balance of new CLO issuances, as well as gross
      subscriptions in our vehicles for which management fees are based on net
      asset value. Inflows exclude fundraising amounts during the period for

which fees have not yet been activated, which are referenced as Pending

Fee-earning AUM. This also includes $4.1 billion of fee-earning Carlyle

      Aviation Partners (formerly Apollo Aviation Group) assets which were
      acquired in a transaction that closed in December 2018.


(2)   Outflows represents the impact of realizations from vehicles with

management fees based on remaining invested capital at cost or fair value,

changes in basis for funds where the investment period, weighted-average

investment period or commitment fee period has expired during the period,

      reductions for funds that are no longer calling for fees, gross



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redemptions in our open-ended funds, and runoff of CLO collateral balances.
Realizations for funds earning management fees based on commitments during the
period do not affect Fee-earning AUM.
(3)   Market Activity & Other represents realized and unrealized gains (losses)

on portfolio investments in funds or vehicles based on the lower of cost or

fair value or net asset value, as well as activity of funds with fees based

      on gross asset value.


(4)   Foreign Exchange 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.



Fee-earning AUM was $37.9 billion at December 31, 2019, an increase of $2.7
billion, or 8%, compared to $35.2 billion at December 31, 2018. Driving the
increase were inflows of $4.4 billion primarily attributable to new fee-paying
capital raised in our U.S. and Europe CLO's and follow-on closes in CCOF, as
well as $1.1 billion of market and other activity primarily related to increases
in gross asset value in our BDC's and securitization vehicles. Partially
offsetting the increase were $2.7 billion of outflows primarily related to a fee
basis step-down in CEMOF II and runoff of our CLO collateral balances.
Distributions from carry funds still in the investment period do not impact
Fee-earning AUM as these funds are based on commitments and not invested
capital.
Fee-earning AUM was $35.2 billion at December 31, 2018, an increase of $7.9
billion, or 29%, compared to $27.3 billion at December 31, 2017. Driving the
increase were inflows of $9.2 billion primarily attributable to the acquisition
of Carlyle Aviation Partners and new fee-paying capital raised in our U.S. and
Europe CLO's. Partially offsetting the increase were $1.2 billion of outflows
primarily related to runoff of our CLO collateral balances as well as
distributions from carry funds outside the investment period.
Fee-earning AUM was $27.3 billion at December 31, 2017, an increase of $3.2
billion, or 13%, compared to $24.1 billion at December 31, 2016. Driving the
increase were inflows of $5.5 billion primarily attributable to new fee-paying
capital raised in our U.S. and Europe CLO's and new fee-paying commitments
raised in CSP IV. Also driving the increase was foreign exchange activity of
$0.8 billion related the translation of our Euro-denominated CLO Fee-earning AUM
to USD for reporting purposes. Partially offsetting the increase were $3.6
billion of outflows primarily related to runoff of our CLO collateral balances
as well as distributions from carry funds outside the investment period.

Total AUM as of and for each of the Three Years in the Period Ended December 31,
2019
The table below provides the period to period rollforward of Total AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Global Credit
Total AUM Rollforward
Balance, Beginning of Period          $    44,417$  33,324$ 29,399
Inflows (1)                                 6,338          12,062        6,618
Outflows (including realizations) (2)      (2,396 )        (1,148 )     (4,040 )
Market Activity & Other (3)                 1,190             511          516
Foreign Exchange (4)                         (137 )          (332 )        831
Balance, End of Period                $    49,412$  44,417$ 33,324



(1)   Inflows reflects the impact of gross fundraising during the period. For
      funds or vehicles denominated in foreign currencies, this reflects

translation at the average quarterly rate, while the separately reported

Fundraising metric is translated at the spot rate for each individual

closing. New CLO warehouse assets are recognized as an inflow to AUM, while

corresponding fundraising will not be recognized until CLO issuance.

Inflows also includes $5.8 billion of Carlyle Aviation Partners (formerly

      Apollo Aviation Group) assets which were acquired in a transaction that
      closed in December 2018.

(2) Outflows includes distributions net of recallable or recyclable amounts in

our carry funds, related co-investment vehicles, and separately managed

      accounts, gross redemptions in our open-ended funds, runoff of CLO
      collateral balances, and the expiration of available capital.

(3) Market Activity & Other generally represents realized and unrealized gains

(losses) on portfolio investments in our carry funds, related co-investment

vehicles, and separately managed accounts, as well as the impact of fees,

      expenses



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and non-investment income, change in gross asset value for our business development companies and other changes in AUM. (4) Foreign Exchange 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.



Total AUM was $49.4 billion at December 31, 2019, an increase of $5.0 billion,
or 11%, compared to $44.4 billion at December 31, 2018. This was driven by $6.3
billion of inflows primarily due to new U.S. and Europe CLO issuances, as well
as additional closes in CCOF. Also driving the increase was market and other
activity of $1.2 billion, the majority of which was attributable to increases in
the gross asset value of our BDC's and securitization vehicles. Partially
offsetting the increase were outflows of $2.4 billion primarily related to
distributions in our Energy Credit and Aviation funds, as well as CLO run-off.
Total AUM was $44.4 billion at December 31, 2018, an increase of $11.1 billion,
or 33%, compared to $33.3 billion at December 31, 2017. This was driven by $12.1
billion of inflows primarily due to the acquisition of Carlyle Aviation
Partners, as well as new U.S. and Europe CLO issuances and additional closes in
our second BDC. Partially offsetting the increase were outflows of $1.1 billion
primarily related to CLO run-off and distributions in our Global Credit carry
funds.
Total AUM was $33.3 billion at December 31, 2017, an increase of $3.9 billion,
or 13%, compared to $29.4 billion at December 31, 2016. This was driven by $6.6
billion of inflows primarily due to new U.S. and Europe CLO issuances, as well
as fundraising in CSC and CCOF. Also contributing to the increase were foreign
exchange gains of $0.8 billion attributable to our Euro-denominated CLO's.
Partially offsetting the increase were outflows of $4.0 billion primarily
related to CLO run-off and distributions in our Global Credit carry funds.
Fund Performance Metrics
Fund performance information for certain of our Global Credit Funds is included
throughout this discussion and analysis to facilitate an understanding of our
results of operations for the periods presented. The fund return information
reflected in this discussion and analysis is not indicative of the performance
of The Carlyle Group Inc. and is also not necessarily indicative of the future
performance of any particular fund. An investment in The Carlyle Group Inc. is
not an investment in any of our funds. There can be no assurance that any of our
funds or our other existing and future funds will achieve similar returns. See
"Item 1A. Risk Factors - Risks Related to Our Business Operations - The
historical returns attributable to our funds including those presented in this
report should not be considered as indicative of the future results of our funds
or of our future results or of any returns expected on an investment in our
common stock."

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The following table reflects the performance of certain funds in our Global
Credit business. These tables separately present funds that, as of the periods
presented, had at least $1.0 billion in capital commitments, cumulative equity
invested or total equity value. See "Business - Our Family of Funds" for a
legend of the fund acronyms listed below.
(Dollars in
millions)                                                                                             TOTAL INVESTMENTS
                                                                                                   As of December 31, 2019
                                  Original                 Cumulative                   Remaining                                     In Accrued      LTM Realized
Global Credit           Fund     Investment  Committed      Invested       Realized    Fair Value             Gross IRR   Net IRR  Carry/(Clawback) 

Carry/(Clawback)

(Carry Funds Only) Vintage (1) Period End Capital Capital (2) Value (3) (4) MOIC (5) (6) (12) (7) (12) (13)

(14)

Active Fully Invested/Committed Funds (8)
CSP II                  2007         Jun-11 $  1,352.3$     1,352.3$  2,430.8$      79.4       1.9x      17 %       12 %         X
CSP III                 2011         Aug-15 $    702.8$       702.8$    845.6$     274.9       1.6x      25 %       15 %         X
CEMOF I                 2011         Dec-15 $  1,382.5$     1,603.4$    860.0$     282.9       0.7x     Neg        Neg
CEMOF II                2015         Feb-20 $  2,819.2$     1,636.2$    537.0$   1,209.1       1.1x       5 %      Neg
All Other Active
Funds,                 Various                           $     1,993.2$  1,925.0$     637.5       1.3x      10 %        5 %
Coinvestments and
SMAs (9)
Fully Realized
Funds,                 Various                           $     1,312.1$  1,804.7   $         -       1.4x      12 %        7 %
Coinvestments and
SMAs (10)
Total Fully Invested/Committed Funds                     $     8,599.8$  8,403.2$   2,484.0       1.3x      10 %        4 %
Funds in the Investment Period (8)
CSP IV                  2016         Dec-20 $  2,500.0$     1,335.9$    506.0$   1,038.6       1.2x      NM         NM
CCOF                    2017         Jun-22 $  2,373.4$     1,336.8$    166.5$   1,295.4       1.1x      NM         NM           X
All Other Funds,
Coinvestments and      Various                           $     1,423.6   $ 

448.2 $ 1,182.2 1.1x NM NM SMAs (11) Total Funds in the Investment Period

                     $     4,096.3$  1,120.7$   3,516.2       1.1x      NM         NM
TOTAL Global                                             $    12,696.1$  9,523.9$   6,000.2       1.2x      11 %        5 %
Credit


(1) The data presented herein that provides "inception to date" performance

results of our segments relates to the period following the formation of

the first fund within each segment. For our Global Credit segment our first

      carry fund was formed in 2004.


(2)   Represents the original cost of investments net of investment level

recallable proceeds which is adjusted to reflect recyclability of invested

capital for the purpose of calculating the fund MOIC.

(3) Represents all realized proceeds since inception of the fund.

(4) Represents remaining fair value, before management fees, expenses and

carried interest, and may include remaining escrow values for realized

investments.

(5) Multiple of invested capital ("MOIC") represents total fair value, before

      management fees, expenses and carried interest, divided by cumulative
      invested capital.


(6)   Gross Internal Rate of Return ("Gross IRR") represents the annualized IRR
      for the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value before management fees,

      expenses and carried interest.


(7)   Net Internal Rate of Return ("Net IRR") represents the annualized IRR for
      the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value after management fees,

expenses and carried interest. Fund level IRRs are based on aggregate

Limited Partner cash flows, and this blended return may differ from that of

      individual Limited Partners. As a result, certain funds may generate
      accrued performance revenues with a blended Net IRR that is below the
      preferred return hurdle for that fund.

(8) Fully Invested funds are past the expiration date of the investment period

as defined in the respective limited partnership agreement. In instances

where a successor fund has had its first capital call, the predecessor fund

is categorized as fully invested.

(9) Aggregate includes the following funds, as well as related co-investments,

      separately managed accounts (SMAs), and certain other stand-alone
      investments arranged by us: SASOF II, SASOF III, and CASCOF.

(10) Aggregate includes the following funds, as well as related co-investments,

      separately managed accounts (SMAs), and certain other stand-alone
      investments arranged by us: CSP I, CMP I, and CMP II.

(11) Aggregate includes the following funds, as well as related co-investments,

      separately managed accounts (SMAs), and certain other stand-alone
      investments arranged by us: SASOF IV and CSC.

(12) For funds marked "NM," IRR may be positive or negative, but is considered

not meaningful because of the limited time since initial investment and

early stage of capital deployment. For funds marked "Neg," IRR is negative

      as of reporting period end.



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(13) Fund has a net accrued performance fee balance/(giveback obligation) as of

the current quarter end, driven by a significant portion of the fund's

asset base.

(14) Fund has generated realized net performance fees/(realized giveback) in the

      last twelve months.




Investment Solutions
The following table presents our results of operations for our Investment
Solutions segment:
                                                           Year Ended December 31,
                                                         2019          2018       2017
                                                            (Dollars in millions)
Segment Revenues
Fund level fee revenues
Fund management fees                                 $   157.1$ 166.8$ 154.9
Portfolio advisory fees, net and other                       -           0.4        0.4
Total fund level fee revenues                            157.1         167.2      155.3
Realized performance revenues                             70.7         106.4       86.4
Realized principal investment income                       1.7           0.1        0.1
Interest income                                            1.5           1.4        1.1
Total revenues                                           231.0         275.1      242.9
Segment Expenses
Compensation and benefits
Cash-based compensation and benefits                      96.3          92.0       84.7
Realized performance revenues related compensation        64.6          96.3       83.2
Total compensation and benefits                          160.9         188.3      167.9
General, administrative, and other indirect expenses      37.2          36.6       34.9
Depreciation and amortization expense                      6.2           4.7        3.6
Interest expense                                           7.9           6.6        6.1
Total expenses                                           212.2         236.2      212.5
(=) Distributable Earnings                           $    18.8$  38.9$  30.4
(-) Realized Net Performance Revenues                      6.1          10.1        3.2
(-) Realized Principal Investment Income                   1.7           0.1        0.1
(+) Net Interest                                           6.4           5.2        5.0
(=) Fee Related Earnings                             $    17.4$  33.9$  32.1




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Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 and Year Ended December 31, 2018 Compared to Year Ended December 31, 2017


Distributable Earnings
Distributable earnings decreased $20.1 million for the year ended December 31,
2019 as compared to 2018, and increased $8.5 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the change in distributable earnings for the years ended December
31, 2019 and 2018:
                                                   Year Ended December 31,
                                                   2019               2018
                                                    (Dollars in millions)
Distributable earnings, prior year            $       38.9       $       

30.4

Increases (decreases):
(Decrease) increase in fee related earnings          (16.5 )              

1.8

(Decrease) increase in realized net
performance revenues                                  (4.0 )              

6.9

Increase in realized principal investment
income                                                 1.6                  -
Increase in net interest                              (1.2 )             (0.2 )
Total (decrease) increase                            (20.1 )              8.5

Distributable earnings, current year $ 18.8$ 38.9



Realized Net Performance Revenues. Realized net performance revenues decreased
$4.0 million for the year ended December 31, 2019 as compared to 2018, and
increased $6.9 million for the year ended December 31, 2018 as compared to 2017.
Substantially all of the realized net performance revenues were generated from
the AlpInvest carry fund vehicles for the years ended December 31, 2019, 2018
and 2017. Performance revenues from our Investment Solutions segment pay a
higher ratio of performance revenues as compensation, primarily as a result of
the terms of our acquisition of AlpInvest.
Under our arrangements with the historical owners and management team of
AlpInvest, we generally do not retain any carried interest with respect to the
historical investments and commitments to our AlpInvest fund vehicles that
existed as of July 1, 2011 (including any options to increase any such
commitments exercised after such date). We are entitled to 15% of the carried
interest with respect to commitments from the historical owners of AlpInvest for
the period between 2011 and 2020, except in certain instances, and 40% of the
carried interest in respect of all other commitments (including all future
commitments from third parties).
As funds that have launched since our acquisition of AlpInvest in 2011 begin to
realize performance revenues, an increasing share of net realized performance
revenues will be for our benefit.
Fee Related Earnings
Fee related earnings decreased $16.5 million for the year ended December 31,
2019 as compared to 2018, and increased $1.8 million for the year ended
December 31, 2018 as compared to 2017. The following table provides the
components of the change in fee related earnings for the years ended December
31, 2019 and 2018:

                                                    Year Ended December 31,
                                                    2019               2018
                                                     (Dollars in millions)
Fee related earnings, prior year               $       33.9       $       

32.1

Increases (decreases):
(Decrease) increase in fee revenues                   (10.1 )             

11.9

Increase in cash-based compensation                    (4.3 )             (7.3 )
Increase in general, administrative and other
indirect expenses                                      (0.6 )             (1.7 )
  All other changes                                    (1.5 )             (1.1 )
Total (decrease) increase                             (16.5 )              1.8
Fee related earnings, current year             $       17.4$       33.9



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Fee Revenues. Total fee revenues decreased $10.1 million for the year ended
December 31, 2019 as compared to 2018, primarily due to decreased management
fees from our private equity fund vehicles and lower catch-up management fees on
our real estate fund-of-fund vehicles. In addition, realizations have outpaced
new fundraising, leading to lower Fee-earning AUM.

Total fee revenues increased $11.9 million for the year ended December 31, 2018
as compared to 2017, primarily due to ongoing fundraising efforts and increased
commitments from our private equity fund vehicles, as well as $4.6 million of
catch-up management fees in 2018 from our real estate fund-of-fund vehicles.

Cash-based compensation and benefits expense. Cash-based compensation and
benefits expense increased $4.3 million for the year ended December 31, 2019 as
compared to 2018, primarily due to an increase in headcount and 2019 cash
bonuses.
Cash-based compensation and benefits expense increased $7.3 million for the year
ended December 31, 2018 as compared to 2017, primarily due to an increase in
2018 cash bonuses.

General, administrative and other indirect expenses. General, administrative and
other indirect expenses increased $1.7 million for the year ended December 31,
2018 as compared to 2017, primarily due to higher professional fees, partially
offset by positive foreign currency adjustments.


Fee-earning AUM as of and for each of the Three Years Ended December 31, 2019
Fee-earning AUM is presented below for each period together with the components
of change during each respective period.
The table below breaks out Fee-earning AUM by its respective components during
the period.
                                                          As of December 31,
                                                 2019            2018            2017
                                                         (Dollars in millions)
Investment Solutions
Components of Fee-earning AUM (1)
Fee-earning AUM based on capital commitments $    12,430$    11,355$    11,330
Fee-earning AUM based on invested capital
(2)                                                2,118           1,657    

1,230

Fee-earning AUM based on net asset value             662             942    

842

Fee-earning AUM based on lower of cost or
fair market value                                 13,174          15,111          16,748
Total Fee-earning AUM                        $    28,384$    29,065$    30,150

(1) For additional information concerning the components of Fee-earning AUM,

see "-Fee-earning Assets under Management."

(2) Includes amounts committed to or reserved for certain AlpInvest and

       Metropolitan carry funds.


                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Investment Solutions
Fee-earning AUM Rollforward
Balance, Beginning of Period          $    29,065$  30,150$ 27,054
Inflows (1)                                 3,708           5,092        6,234
Outflows (including realizations) (2)      (4,039 )        (5,035 )     (5,776 )
Market Activity & Other (3)                    57             (74 )       (231 )
Foreign Exchange (4)                         (407 )        (1,068 )      2,869
Balance, End of Period                $    28,384$  29,065$ 30,150




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(1)   Inflows represents limited partner capital raised by our carry funds or

separately managed accounts for which management fees based on commitments

were activated during the period and the fee-earning commitments invested

      in vehicles for which management fees are based on invested capital.
      Inflows exclude fundraising amounts during the period for which fees have
      not yet been activated, which are referenced as Pending Fee-earning AUM.


(2)   Outflows represents the impact of realizations from vehicles with

management fees based on remaining invested capital at cost or fair value,

changes in basis for funds where the investment period, weighted-average

investment period or commitment fee period has expired during the period,

and reductions for funds that are no longer calling for fees. Distributions

for funds earning management fees based on commitments during the period do

not affect Fee-earning AUM.

(3) Market Activity & Other represents realized and unrealized gains (losses)

on portfolio investments in our carry funds based on the lower of cost or

fair value and net asset value.

(4) Foreign Exchange 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.



Fee-earning AUM was $28.4 billion at December 31, 2019, a decrease of $0.7
billion, or 2%, compared to $29.1 billion at December 31, 2018. This decrease
was driven by outflows of $4.0 billion primarily attributable to distributions
in our AlpInvest funds as well as $0.4 billion of foreign exchange activity
related to the translation of our AlpInvest Fee-earning AUM from EUR to USD.
Partially offsetting this decrease were inflows of $3.7 billion primarily
attributable to fundraising in our AlpInvest funds as well as capital deployed
in our AlpInvest funds which charge fees based on invested capital.
Distributions from funds still in the commitment or weighted-average investment
period do not impact Fee-earning AUM as these funds are based on commitments and
not invested capital. Increases in fair value may have an impact on Fee-earning
AUM for Investment Solutions as the management fees for many fully committed
funds are based on fair value or on the lower of cost or fair value of the
underlying investments.
Fee-earning AUM was $29.1 billion at December 31, 2018, a decrease of $1.1
billion, or 4%, compared to $30.2 billion at December 31, 2017. This decrease
was driven by outflows of $5.0 billion primarily attributable to distributions
in our AlpInvest funds as well as $1.1 billion of foreign exchange activity
related to the translation of our AlpInvest Fee-earning AUM from EUR to USD.
Partially offsetting this decrease were inflows of $5.1 billion primarily
attributable to fundraising in our AlpInvest and MRE funds.
Fee-earning AUM was $30.2 billion at December 31, 2017, an increase of $3.1
billion, or 11%, compared to $27.1 billion at December 31, 2016. This increase
was driven by inflows of $6.2 billion primarily related to the activation of
fee-paying mandates in our AlpInvest funds and $2.9 billion of foreign exchange
activity related to the translation of our AlpInvest Fee-earning AUM from EUR to
USD. Partially offsetting this increase were outflows of $5.8 billion primarily
attributable to distributions in our AlpInvest funds.
Total AUM as of and for each of the Three Years Ended December 31, 2019
The table below provides the period to period rollforward of Total AUM.
                                           Twelve Months Ended December 31,
                                           2019            2018          2017
                                                (Dollars in millions)
Investment Solutions
Total AUM Rollforward
Balance, Beginning of Period          $    45,654$  46,291$ 43,092
Inflows (1)                                 2,969           4,063        5,486
Outflows (including realizations) (2)      (7,887 )        (9,480 )    (10,143 )
Market Activity & Other (3)                 5,008           6,488        3,445
Foreign Exchange (4)                         (498 )        (1,708 )      4,411
Balance, End of Period                $    45,246$  45,654$ 46,291



(1)   Inflows reflects the impact of gross fundraising during the period. For
      funds or vehicles denominated in foreign currencies, this reflects

translation at the average quarterly rate, while the separately reported

      Fundraising metric is translated at the spot rate for each individual
      closing.



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(2) Outflows includes distributions in our carry funds, related co-investment

      vehicles and separately managed accounts, as well as the expiration of
      available capital.

(3) Market Activity & Other generally represents realized and unrealized gains

(losses) on portfolio investments in our carry funds, related co-investment

vehicles and separately managed accounts, the net impact of fees, expenses

and non-investment income, as well as other changes in AUM. The fair market

values for our Investment Solutions carry funds are based on the latest

available valuations of the underlying limited partnership interests (in

most cases as of September 30, 2018) as provided by their general partners,

      plus the net cash flows since the latest valuation, up to December 31,
      2019.


(4)   Foreign Exchange 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.



Total AUM was $45.2 billion as of December 31, 2019, a decrease of $0.5 billion,
or 1%, compared to $45.7 billion as of December 31, 2018. Driving this decrease
were $7.9 billion of outflows primarily due to distributions in our AlpInvest
funds and $0.5 billion of foreign exchange losses related to the translation of
our AlpInvest AUM from EUR to USD. Offsetting the decrease were $3.0 billion of
inflows from new commitments raised in our AlpInvest and MRE funds, and $5.0
billion of market and other activity. Market appreciation was driven by 15%
appreciation in our AlpInvest funds and 3% appreciation in our MRE funds.
Total AUM was $45.7 billion as of December 31, 2018, a decrease of $0.6 billion,
or 1%, compared to $46.3 billion as of December 31, 2017. Driving this decrease
were $9.5 billion of outflows primarily due to distributions in our AlpInvest
funds and $1.7 billion of foreign exchange losses related to the translation of
our AlpInvest AUM from EUR to USD. Offsetting the decrease were $4.1 billion of
inflows from new commitments raised in our AlpInvest and MRE funds, and $6.5
billion of market and other activity. Market appreciation was driven by 19%
appreciation in our AlpInvest funds and 8% appreciation in our MRE funds.
Total AUM was $46.3 billion as of December 31, 2017, an increase of $3.2
billion, or 7%, compared to $43.1 billion as of December 31, 2016. This increase
was driven by $5.5 billion of inflows from new commitments raised primarily in
our AlpInvest funds, $4.4 billion of foreign exchange gains related to the
translation of our AlpInvest AUM from EUR to USD, and $3.4 billion of market and
other activity. Market appreciation was driven by 10% appreciation in our
AlpInvest funds and 12% appreciation in our MRE funds. Offsetting this increase
were $10.1 billion of outflows primarily due to distributions in our AlpInvest
funds.
Fund Performance Metrics
Fund performance information for our investment funds that have at least $1.0
billion in capital commitments, cumulative equity invested or total value as of
December 31, 2019, which we refer to as our "significant funds," is generally
included throughout this discussion and analysis to facilitate an understanding
of our results of operations for the periods presented. The fund return
information reflected in this discussion and analysis is not indicative of the
performance of The Carlyle Group Inc. and is also not necessarily indicative of
the future performance of any particular fund. An investment in The Carlyle
Group Inc. is not an investment in any of our funds. There can be no assurance
that any of our funds or our other existing and future funds will achieve
similar returns. See "Item 1A. Risk Factors-Risks Related to Our Business
Operations-The historical returns attributable to our funds, including those
presented in this report, should not be considered as indicative of the future
results of our funds or of our future results or of any returns expected on an
investment in our common stock."


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The following tables reflect the performance of our significant funds in our Investment Solutions business.

                                                                                       TOTAL INVESTMENTS
                                                                                    As of December 31, 2019
                                                      Cumulative
                                                       Invested                                                                     Net
                                                        Capital     

Realized Remaining Fair Total Fair MOIC Gross IRR Investment Solutions (1) Vintage Year Fund Size (2)(3) Value (3) Value Value (4) (5) IRR (7) (9) (8) (9)

                                                                           (Reported in Local Currency, in Millions)
AlpInvest
Fully Committed Funds
(6)
Main Fund I - Fund
Investments                    2000     €  5,174.6   €   4,347.8   € 

7,073.5 € 84.3 € 7,157.8 1.6x 12 % 11 % Main Fund II - Fund Investments

                    2003     €  4,545.0   €   4,935.6   €  

7,542.6 € 369.6 € 7,912.2 1.6x 10 % 9 % Main Fund III - Fund Investments

                    2005     € 11,500.0   €  13,198.4   €  

18,951.1 € 2,948.3 € 21,899.4 1.7x 10 % 10 % Main Fund IV - Fund Investments

                    2009     €  4,877.3   €   5,461.8   €  

6,386.8 € 3,594.0 € 9,980.8 1.8x 17 % 16 % Main Fund V - Fund Investments

                    2012     €  5,080.0   €   5,189.4   €  

2,822.9 € 5,238.8 € 8,061.7 1.6x 16 % 15 % Main Fund VI - Fund Investments

                    2015     €  1,106.4   €     871.0   €  

231.9 € 918.7 € 1,150.6 1.3x 17 % 16 % Main Fund II - Secondary Investments

                    2003     €    998.4   €   1,029.9   €  

1,865.9 € 16.4 € 1,882.3 1.8x 27 % 26 % Main Fund III - Secondary Investments 2006 € 2,250.0 € 2,415.0 €

3,634.2 € 71.1 € 3,705.3 1.5x 11 % 10 % Main Fund IV - Secondary Investments

                    2010     €  1,859.1   €   1,979.5   €   3,152.4   €      221.8   €   3,374.2    1.7x       19 %        18 %
Main Fund V - Secondary
Investments                    2011     €  4,272.8   €   4,177.7   €   4,919.5   €    1,894.7   €   6,814.2    1.6x       20 %        18 %
Main Fund III -
Co-Investments                 2006     €  2,760.0   €   2,858.3   €   3,634.6   €      564.1   €   4,198.7    1.5x        6 %         5 %
Main Fund IV -
Co-Investments                 2010     €  1,475.0   €   1,379.6   €   3,171.1   €      508.1   €   3,679.1    2.7x       23 %        22 %
Main Fund V -
Co-Investments                 2012     €  1,122.2   €   1,051.1   €   1,736.0   €    1,080.5   €   2,816.5    2.7x       30 %        28 %
Main Fund VI -
Co-Investments                 2014     €  1,114.6   €     955.8   € 

1,045.9 € 1,122.1 € 2,168.1 2.3x 29 % 27 % Main Fund II - Mezzanine Investments

                    2004     €    700.0   €     774.1   €  

1,060.6 € 12.1 € 1,072.7 1.4x 8 % 7 % Main Fund III - Mezzanine Investments 2006 € 2,000.0 € 2,025.9 €

2,545.0 € 192.8 € 2,737.7 1.4x 10 % 9 % All Other Active Funds (10)

                         Various                 €   2,420.1   €   

1,391.6 € 1,524.1 € 2,915.7 1.2x 5 % 4 % Fully Realized Funds Various

                 €   2,169.9   €   

4,899.7 € 1.2 € 4,900.9 2.3x 35 % 32 % Total Fully Committed Funds

                                                €  57,241.2   €  76,065.4   €   20,362.7   €  96,428.1    1.7x       13 %        12 %
Funds in the Commitment
Period (6)
Main Fund VI - Secondary
Investments                    2017     €  5,209.4   €   3,469.9   €     505.8   €    3,624.4   €   4,130.2    1.2x       17 %        13 %
Main Fund VII -
Co-investments                 2017     €  2,529.0   €   1,495.4   € 

54.2 € 1,607.5 € 1,661.6 1.1x 9 % 6 % All Other Funds (10) Various

                 €   1,566.2   €    

203.5 € 1,492.2 € 1,695.6 1.1x 9 % 7 % Total Funds in the Commitment Period

                 €   6,531.5   €    

763.4 € 6,724.0 € 7,487.4 1.1x 13 % 10 % TOTAL ALPINVEST

                                      €  63,772.6   €  

76,828.8 € 27,086.8 € 103,915.6 1.6x 13 % 12 % TOTAL ALPINVEST (USD) (11)

                           $  71,606.3   $  

86,266.4 $ 30,414.1 $ 116,680.4 1.6x



Metropolitan Real Estate
Active Fully Committed
Funds                        Various    $  2,720.0   $   2,538.7   $   

2,701.5 $ 665.6 $ 3,367.1 1.3x 7 % 5 % Fully Realized Funds Various $ 611.2 $ 588.7 $ 710.4 $ 0.5 $ 710.9 1.2x 4 % 2 % Total Fully Committed Funds (6)

                               $  3,331.2   $   3,127.5   $   

3,411.9 $ 666.1 $ 4,078.1 1.3x 6 % 4 % MRE Secondaries Fund II 2017 $ 1,162.5 $ 298.9 $ 60.1 $ 270.5 $ 330.6 1.1x NM NM All Other Funds in the Commitment Period

            Various    $    500.5   $     110.4   $       

7.7 $ 102.1 $ 109.7 1.0x NM NM Total Funds in the Commitment Period (6)

                                     $  1,663.0   $     409.4   $      

67.7 $ 372.6 $ 440.3 1.1x 9 % Neg TOTAL METROPOLITAN REAL ESTATE $ 4,994.2 $ 3,536.8 $ 3,479.7 $ 1,038.7 $ 4,518.4 1.3x 6 % 4 %

(1) Includes private equity and mezzanine primary fund investments, secondary

fund investments and co-investments originated by the AlpInvest team, as

well as real estate primary fund investments, secondary fund investments

       and co-investments originated by the Metropolitan Real Estate team.
       Excluded from the performance information shown are



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a) investments that were not originated by AlpInvest, b) Direct Investments,
which was spun off from AlpInvest in 2005, and (c) LP co-investment vehicles by
AlpInvest. As of December 31, 2019, these excluded investments represent $0.4
billion of AUM at AlpInvest.
(2) Represents the original cost of investments since inception of the fund.


(3) To exclude the impact of FX, all AlpInvest foreign currency cash flows

       have been converted to Euro at the reporting period spot rate.


(4)    Represents all realized proceeds combined with remaining fair value,
       before management fees, expenses and carried interest. To exclude the
       impact of FX, all AlpInvest foreign currency cash flows have been
       converted to Euro at the reporting period spot rate.

(5) Multiple of invested capital ("MOIC") represents total fair value, before

management fees, expenses and carried interest, divided by cumulative

       invested capital.


(6)    Fully Committed funds are past the expiration date of the commitment
       period as defined in the respective limited partnership agreement.

(7) Gross Internal Rate of Return ("Gross IRR") represents the annualized IRR

       for the period indicated on Limited Partner invested capital based on
       investment contributions, distributions and unrealized value of the
       underlying investments, before management fees, expenses and carried
       interest at the AlpInvest/Metropolitan Real Estate level.

(8) Net Internal Rate of Return ("Net IRR") represents the annualized IRR for

the period indicated on Limited Partner invested capital based on

contributions, distributions and unrealized value after management fees,

expenses and carried interest. Fund level IRRs are based on aggregate

Limited Partner cash flows, and this blended return may differ from that

of individual Limited Partners. As a result, certain funds may generate

       accrued performance revenues with a blended Net IRR that is below the
       preferred return hurdle for that fund.

(9) For funds marked "NM," IRR may be positive or negative, but is considered

not meaningful because of the limited time since initial investment and

early stage of capital deployment. For funds marked "Neg," IRR is negative

as of reporting period end.

(10) Aggregate includes Main Fund VII - Fund Investments, Main Fund VIII - Fund

Investments, Main Fund IX - Fund Investments, Main Fund X - Fund

Investments, Main Fund XI - Fund Investments, Main Fund I -

Co-Investments, Main Fund I - Mezzanine Investments, Main Fund IV -

Mezzanine Investments, Main Fund V - Mezzanine Investments, AlpInvest

       CleanTech Funds and funds which are not included as part of a main fund.


(11)   Represents the U.S. dollar equivalent balance translated at the spot rate
       as of period end.





Liquidity and Capital Resources

Historical Liquidity and Capital Resources


We have historically required limited capital resources to support the working
capital and operating needs of our business. Our management fees have largely
covered our operating costs and all realized performance allocations, after
covering the related compensation, are available for distribution to
equityholders. Historically, approximately 95% of all capital commitments to our
funds have been provided by our fund investors, with the remaining amount
typically funded by our senior Carlyle professionals, advisors and other
professionals.
Our Sources of Liquidity
We have multiple sources of liquidity to meet our capital needs, including cash
on hand, annual cash flows, accumulated earnings and funds from our senior
revolving credit facility, which has $775.0 million of available capacity as of
December 31, 2019. We believe these sources will be sufficient to fund our
capital needs for at least the next twelve months. If we determine that market
conditions are favorable after taking into account our liquidity requirements,
including the amounts available under our senior revolving credit facility, we
may seek to issue and sell shares of our common stock in a registered public
offering or a privately negotiated transaction, or we may issue additional
senior notes, other debt or preferred equity. In September 2019, we issued
$425.0 million of 3.500% senior notes due September 19, 2029 and used the net
proceeds from that issuance to redeem the Preferred Units outstanding.
Cash and cash equivalents. Cash and cash equivalents were approximately $793.4
million at December 31, 2019. However, a portion of this cash is allocated for
specific business purposes, including, but not limited to, (i) performance
allocations and incentive fee-related cash that has been received but not yet
distributed as performance allocations and

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incentive fee related compensation and amounts owed to non-controlling
interests; (ii) proceeds received from realized investments that are allocable
to non-controlling interests; and (iii) regulatory capital.
Corporate Treasury Investments. These investments represent investments in U.S.Treasury and government agency obligations, commercial paper, certificates of
deposit, other investment grade securities and other investments with original
maturities of greater than three months when purchased. There were no corporate
treasury investments as of December 31, 2019.
After deducting cash amounts allocated to the specific requirements mentioned
above, the remaining cash and cash equivalents is approximately $691 million as
of December 31, 2019. This remaining amount will be used towards our primary
liquidity needs, as outlined in the next section. This amount does not take into
consideration ordinary course of business payables and reserves for specific
business purposes.

Senior Revolving Credit Facility. On February 11, 2019, the Company entered into
an amendment and restatement of its senior revolving credit facility. In
connection with this amendment and restatement, the capacity under the revolving
credit facility was increased to $775.0 million, the term was extended to
February 11, 2024, and the $25.0 million term loan was repaid. Principal amounts
outstanding under the amended and restated revolving credit facility accrue
interest, at the option of the borrowers, either (a) at an alternate base rate
plus an applicable margin not to exceed 0.50% per annum, or (b) at LIBOR plus an
applicable margin not to exceed 1.50% per annum (3.01% at December 31, 2019).
The senior revolving credit facility is unsecured. Under the amended and
restated facility, we are required to maintain management fee earning assets (as
defined in the amended and restated senior revolving credit facility) of at
least $75.0 billion and a total leverage ratio of less than 3.0 to 1.0, in each
case, tested on a quarterly basis. Non-compliance with any of the financial or
non-financial covenants without cure or waiver would constitute an event of
default under the senior revolving credit facility. An event of default
resulting from a breach of certain financial or non-financial covenants may
result, at the option of the lenders, in an acceleration of the principal and
interest outstanding, and a termination of the senior revolving credit facility.
The senior revolving credit facility also contains other customary events of
default, including defaults based on events of bankruptcy and insolvency,
nonpayment of principal, interest or fees when due, breach of specified
covenants, change in control and material inaccuracy of representations and
warranties.
Global Credit Revolving Credit Facility. In December 2018, certain subsidiaries
of the Company established a $250.0 million revolving line of credit, primarily
intended to support certain lending activities within the Global Credit segment.
The credit facility includes a $125.0 million line of credit with a one-year
team, and a $125.0 million line of credit with a three-year term. The revolving
line of credit was extended by one year in December 2019. Principal amounts
outstanding under the facility accrue interest, at the option of the borrowers,
either (a) at an alternate base rate plus applicable margin not to exceed 1.00%,
or (b) at the Eurocurrency rate plus an applicable margin not to exceed 2.00%.
As of December 31, 2019, there was $35.8 million outstanding under this
facility.
CLO Borrowings. For certain of our CLOs, the Company finances a portion of its
investment in the CLOs through the proceeds received from term loans with
financial institutions. The Company's outstanding CLO term loans were $324.9
million and $309.9 million at December 31, 2019 and 2018, respectively. The CLO
term loans are secured by the Company's investments in the respective CLO, have
a general unsecured interest in the Carlyle entity that manages the CLO, and
generally do not have recourse to any other Carlyle entity. As of December 31,
2019, $306.9 million of these loans are secured by investments attributable to
Carlyle Holdings. See Note 7 of our financial statements for more information on
our CLO term loans.
Senior Notes. Certain indirect finance subsidiaries of the Company have issued
senior notes, on which interest is payable semi-annually, as discussed below.
The senior notes are unsecured and unsubordinated obligations of the respective
subsidiary and are fully and unconditionally guaranteed, jointly and severally,
by the Company and each of the Carlyle Holdings partnerships. The indentures
governing each of the senior notes contain customary covenants that, among other
things, limit the issuers' and the guarantors' ability, subject to certain
exceptions, to incur indebtedness secured by liens on voting stock or profit
participating equity interests of their subsidiaries or merge, consolidate or
sell, transfer or lease assets. The notes also contain customary events of
default. All or a portion of the notes may be redeemed at our option, in whole
or in part, at any time and from time to time, prior to their stated maturity,
at the make-whole redemption price set forth in the notes. If a change of
control repurchase event occurs, the notes are subject to repurchase at the
repurchase price as set forth in the notes.
3.500% Senior Notes. In September 2019, Carlyle Finance Subsidiary L.L.C. issued
$425.0 million of 3.500% senior notes due September 19, 2029 at 99.841% of par.

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5.650% Senior Notes. In September 2018, Carlyle Finance L.L.C. issued $350.0
million of 5.650% senior notes due September 15, 2048 at 99.914% of par.
3.875% Senior Notes. In January 2013, Carlyle Holdings Finance L.L.C. issued
$500.0 million of 3.875% senior notes due February 1, 2023 at 99.966% of par. In
September 2018, we completed a tender offer to purchase $250.0 million in
aggregate principal amount of these notes. As of December 31, 2019, $250.0
million of these notes remain outstanding.
5.625% Senior Notes. In March 2013, Carlyle Holdings II Finance L.L.C. issued
$400.0 million of 5.625% senior notes due March 30, 2043 at 99.583% of par. In
March 2014, an additional $200.0 million of these notes were issued at 104.315%
of par and are treated as a single class with the already outstanding $400.0
million aggregate principal amount of these notes.
Promissory Notes. On January 1, 2016, the Company issued a $120.0 million
promissory note to BNRI as a result of a contingent consideration arrangement
entered into in 2012 between the Company and BNRI as part of the Company's
strategic investment in NGP. Interest on the promissory note accrued at the
three month LIBOR plus 2.50%. The promissory note was scheduled to mature on
January 1, 2022. In December 2016, the Company repurchased $11.2 million of the
promissory note. In September 2018, the Company prepaid the $108.8 million
remaining balance outstanding under the promissory note, plus $1.2 million of
accrued but unpaid interest.
Additionally, in June 2017, as part of the settlement with investors in two
commodities investment vehicles managed by an affiliate of the Company
(discussed in Note 9 to the consolidated financial statements), the Company
issued a series of promissory notes, aggregating to $53.9 million, to the
investors of these commodities investment vehicles. Interest on these promissory
notes accrued at the three month LIBOR plus 2%. These promissory notes matured
on July 15, 2019 and were fully repaid as of that date.
Obligations of CLOs. Loans payable of the Consolidated Funds represent amounts
due to holders of debt securities issued by the CLOs. We are not liable for any
loans payable of the CLOs. Several of the CLOs issued preferred shares
representing the most subordinated interest, however these tranches are
mandatorily redeemable upon the maturity dates of the senior secured loans
payable, and as a result have been classified as liabilities under U.S. GAAP,
and are included in loans payable of Consolidated Funds in our consolidated
balance sheets. Loans payable of the CLOs are collateralized by the assets held
by the CLOs and the assets of one CLO may not be used to satisfy the liabilities
of another. This collateral consists of cash and cash equivalents, corporate
loans, corporate bonds and other securities.
Preferred Units. In September 2017, we issued 16 million of our Preferred Units
for net proceeds of approximately $387.5 million. In October 2019, we completed
the redemption of our Preferred Units for $25.339757 per unit, which is equal to
$25.25 per preferred unit plus declared and unpaid distributions to, but
excluding, the redemption date.
Realized Performance Allocation Revenues. Another source of liquidity we may use
to meet our capital needs is the realized performance allocation revenues
generated by our investment funds. Performance allocations are generally
realized when an underlying investment is profitably disposed of and the fund's
cumulative returns are in excess of the preferred return. For certain funds,
performance allocations are realized once all invested capital and expenses have
been returned to the fund's investors and the fund's cumulative returns are in
excess of the preferred return. Incentive fees earned on our CLO vehicles
generally are paid upon the dissolution of such vehicles.


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Our accrued performance allocations by segment as of December 31, 2019, gross and net of accrued giveback obligations, are set forth below:

                                                  Accrued               Accrued         Net Accrued
                                                Performance            Giveback         Performance
Asset Class                                     Allocations           Obligation         Revenues
                                                             (Dollars in millions)
Corporate Private Equity                   $            2,107.5     $        (5.0 )   $     2,102.5
Real Assets                                               764.4             (17.2 )           747.2
Global Credit                                             136.9                 -             136.9
Investment Solutions                                      846.8                 -             846.8
Total                                      $            3,855.6     $       (22.2 )   $     3,833.4
Plus: Accrued performance allocations from
NGP Carry Funds                                                                                   -
Less: Accrued performance allocation-related compensation                                  (2,038.2 )

Plus: Receivable for giveback obligations from current and former employees

                     1.4
Less: Deferred taxes on accrued performance allocations                                       (66.2 )

Less: Net accrued performance allocations attributable to non-controlling interests in consolidated entities

                                                                       (4.3 )
Net accrued performance revenues before timing differences                                  1,726.1

Less/Plus: Timing differences between the period when accrued performance revenues are realized and the period they are collected/distributed

                                     (6.0 )

Net accrued performance revenues attributable to Carlyle Holdings

$ 1,720.1



The net accrued performance revenues attributable to Carlyle Holdings, excluding
realized amounts, related to our carry funds and our other vehicles as of
December 31, 2019, as well as the carry fund appreciation (depreciation), is set
forth below by segment (Dollars in millions):
                                              Carry Fund

Appreciation/(Depreciation)(1)

                                                                                                Net Accrued
                                             FY 2017           FY 2018           FY 2019        Performance
                                                                                                  Revenues
Overall Carry Fund                             20%               9%                9%

Appreciation/(Depreciation)

Corporate Private Equity                       32%               5%                8%         $      1,138.8
Real Assets(2)                                 19%               5%                3%                  404.8
Real Estate                                    17%               8%                16%                 310.2
Natural Resources                              30%               6%               (5)%                  94.6
Global Credit Carry Funds                      11%               5%                1%                   75.1
Investment Solutions Carry Funds               10%               19%               15%                 101.4
Net Accrued Performance Revenues                                                              $      1,720.1


(1) Appreciation/(Depreciation) represents unrealized gain/(loss) for the period
on a total return basis before fees and expenses. The percentage of return is
calculated as: ending remaining investment fair market value plus net investment
outflow (sales proceeds minus net purchases) minus beginning remaining
investment fair market value divided by beginning remaining investment fair
market value. Amounts are fund only, and do not include coinvestments.
(2) Includes $2.7 million of net accrued clawback from our Legacy Energy funds.
Realized Principal Investment Income. Another source of liquidity we may use to
meet our capital needs is the realized principal investment income generated by
our equity method investments and other principal investments. Principal
investment income is realized when we redeem all or a portion of our investment
or when we receive or are due cash income, such as dividends or distributions.
Certain of the investments attributable to Carlyle Holdings (excluding certain
general partner interests, strategic investments, and investments in certain
CLOs) may be sold at our discretion as a source of liquidity.


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Investments as of December 31, 2019 consist of the following:

                                         Investments in      Investments in NGP      Investment in
                                          Carlyle Funds             (1)            Fortitude Re (1)        Total
                                                                   (Dollars in millions)
Investments, excluding performance
allocations                            $      1,364.3        $       383.6        $      1,200.9        $  2,948.8
Less: Amounts attributable to
non-controlling interests in
consolidated entities                          (303.1 )                  -                     -            (303.1 )
Plus: Investments in Consolidated
Funds, eliminated in
consolidation                                   178.3                    -                     -             178.3
Less: Strategic equity method
investments in NGP
Management                                          -               (383.6 )                   -            (383.6 )
Less: Mark-to-market gains associated
with strategic
equity method investment in Fortitude
Re                                                  -                    -                (628.2 )          (628.2 )
Total investments attributable to
Carlyle Holdings, exclusive of NGP
Management                             $      1,239.5        $           -  

$ 572.7 $ 1,812.2

(1) See Note 5 to our consolidated financial statements. Our investments as of December 31, 2019 can be further attributed as follows: Adjusted investment in Fortitude Re

                                  $   

572.7

Investments in Carlyle Funds, excluding CLOs:
Corporate Private Equity funds                                           398.7
Real Assets funds(1)                                                     200.4
Global Credit funds                                                       98.0
Investment Solutions funds                                                39.7
Total investments in Carlyle Funds, excluding CLOs                       736.8
Investments in CLOs                                                      455.7
Other investments                                                         47.0
Total investments attributable to Carlyle Holdings                     

1,812.2

CLO loans and other borrowings attributable to Carlyle Holdings (2) (342.7 ) Total investments attributable to Carlyle Holdings, net of CLO loans $ 1,469.5




(1) Excludes our strategic equity method investment in NGP Management and
investments in NGP general partners - accrued performance allocations.
(2) Of the $324.9 million in total CLO term loans outstanding as of December 31,
2019 and as disclosed in Note 7 to the consolidated financial statements, $306.9
million are collateralized by investments attributable to Carlyle Holdings. Also
includes $35.8 million of borrowings under a credit facility to fund Carlyle
Capital Solutions investments.
Our adjusted strategic equity method investment in Fortitude Re of $572.7
million includes $152.6 million of adjusted net income for the period from
closing through December 31, 2019, and excludes $628.2 million of unrealized
mark-to-market gains associated with our pro rata share of the changes in the
fair value of embedded derivatives related to certain reinsurance contracts
included in Fortitude Re's U.S. GAAP financial statements. Modified coinsurance
is subject to the general accounting principles for derivatives and hedging,
specifically the guidance originally issued as Derivatives Implementation Group
Issue No. B36: Embedded Derivatives: Modified Coinsurance Agreements and Debt
Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only
Partially Related to the Creditworthiness of the Obligor under Those Instruments
("DIG B36"). This guidance can cause significant volatility in earnings that is
not necessarily consistent with the underlying performance of Fortitude Re. We
believe it is meaningful to reflect our investment in Fortitude Re excluding the
effects of these fair value changes as these fluctuations are not considered by
Fortitude Re in assessing its performance, which is consistent with industry
practice when evaluating performance. During the years ended December 31, 2019
and 2018, our investment in Fortitude Re generated $140.9 million and $11.7
million of principal investment income, respectively, excluding the unrealized
market to market gains on embedded derivatives.

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Our Liquidity Needs
We generally use our working capital and cash flows to invest in growth
initiatives, service our debt, fund the working capital needs of our business
and investment funds and pay dividends to our common stockholders.
In the future, we expect that our primary liquidity needs will be to:

• provide capital to facilitate the growth of our existing business lines;

• provide capital to facilitate our expansion into new, complementary

          business lines, including acquisitions;


• pay operating expenses, including compensation and compliance costs and

other obligations as they arise;

• fund costs of litigation and contingencies, including related legal costs;

• fund the capital investments of Carlyle in our funds;

• fund capital expenditures;

• repay borrowings and related interest costs and expenses;



•         pay earnouts and contingent cash consideration associated with our
          acquisitions and strategic investments;


• pay income taxes, including corporate income taxes following the Conversion;



•         pay dividends to our common stockholders in accordance with our
          dividend policy,



•         make installment payments under the deferred obligation to former

holders of Carlyle Holdings partnership units, which were exchanged in

the Conversion, and;

• repurchase our common stock.




Preferred Unit Redemption. In October 2019, we completed the redemption of our
Preferred Units for $25.339757 per unit, which is equal to $25.25 per Preferred
Unit plus declared and unpaid distributions to, but excluding, the redemption
date.
Preferred Unit Distributions. With respect to distribution year 2019, the Board
of Directors declared a distribution to preferred unitholders totaling
approximately $19.1 million, or $1.191321 per preferred unit, consisting of the
following:
                                     Preferred Unit Distributions
 Distribution per       Distribution to
  Preferred Unit     Preferred Unitholders  Distribution Year     Record Date          Payment Date
$        0.367188   $                 5.9         2019           March 1, 2019        March 15, 2019
         0.367188                     5.9         2019            June 1, 2019        June 17, 2019
         0.367188                     5.9         2019         September 1, 2019    September 16, 2019
         0.089757                     1.4         2019          October 4, 2019      October 7, 2019
$        1.191321   $                19.1



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With respect to distribution year 2018, the Board of Directors declared a distribution to preferred unitholders totaling approximately $23.6 million, consisting of the following:

                                     Preferred Unit Distributions

Distribution per Distribution to

  Preferred Unit     Preferred Unitholders  Distribution Year     Record Date          Payment Date
$        0.367188   $                 5.9         2018           March 1, 2018        March 15, 2018
         0.367188                     5.9         2018            June 1, 2018        June 15, 2018
         0.367188                     5.9         2018         September 1, 2018    September 17, 2018
         0.367188                     5.9         2018          December 1, 2018    December 17, 2018
$        1.468752   $                23.6


Common Stockholder Dividends. Our dividend policy as a Corporation beginning
with the dividend payable to stockholders on February 25, 2020 is to pay
dividends in an initial amount of $0.25 per share of common stock ($1.00 per
share annually), subject to the discretion of our Board of Directors and
compliance with applicable law.
With respect to dividend year 2019, our Board of Directors has declared
cumulative dividends to common stockholders totaling approximately $194.8
million, or $1.18 per common share, consisting of the following:
                            Common Stock Dividends - Dividend Year 2019
             Dividend per Common    Dividend to Common
  Quarter           Share            Stockholders (1)         Record Date          Payment Date
  Q1 2019    $             0.19   $                21.0       May 13, 2019         May 20, 2019
  Q2 2019                  0.43                    49.9     August 12, 2019      August 19, 2019
  Q3 2019                  0.31                    36.5    November 12,

2019 November 19, 2019

  Q4 2019                  0.25                    87.4    February 18, 

2020 February 25, 2020

   Total     $             1.18   $               194.8


(1) The dividend to common stockholders for Q4 2019 reflects the exchange of all
Carlyle Holdings partnership
units to shares of common stock in The Carlyle Group Inc. in connection with the
Conversion on January 1, 2020.
With respect to distribution year 2018, our Board of Directors declared a
dividend of approximately $144.1 million to common stockholders, consisting of
the following:
                           Common Stock Dividends - Dividend Year 2018
             Dividend per Common   Dividend to Common
  Quarter           Share             Stockholders          Record Date          Payment Date
  Q1 2018    $             0.27   $              27.8       May 11, 2018         May 17, 2018
  Q2 2018                  0.22                  23.3     August 13, 2018      August 17, 2018
  Q3 2018                  0.42                  45.5    November 13, 2018    November 20, 2018
  Q4 2018                  0.43                  47.5    February 19, 2019    February 26, 2019
   Total     $             1.34   $             144.1



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With respect to distribution year 2017, our Board of Directors declared a dividend of approximately $137.6 million to common stockholders, consisting of the following:

                           Common Stock Dividends - Dividend Year 2017
             Dividend per Common   Dividend to Common
  Quarter           Share             Stockholders          Record Date          Payment Date
  Q1 2017    $             0.10   $               9.0       May 15, 2017         May 22, 2017
  Q2 2017                  0.42                  40.3     August 14, 2017      August 21, 2017
  Q3 2017                  0.56                  55.1    November 10, 2017    November 16, 2017
  Q4 2017                  0.33                  33.2    February 20, 2018    February 27, 2018
   Total     $             1.41   $             137.6


Fund Commitments. Generally, we intend to have Carlyle commit to fund
approximately 0.75% to 1% of the capital commitments to our future carry funds,
although we may elect to invest additional amounts in funds focused on new
investment areas. We may, from time to time, exercise our right to purchase
additional interests in our investment funds that become available in the
ordinary course of their operations. We expect our senior Carlyle professionals
and employees to continue to make significant capital contributions to our funds
based on their existing commitments, and to make capital commitments to future
funds consistent with the level of their historical commitments. We also intend
to make investments in our open-end funds and our CLO vehicles. Our investments
in our European CLO vehicles will comply with the risk retention rules as
discussed in "Risk Retention Rules" later in this section.

Since our inception through December 31, 2019, we and our senior Carlyle
professionals, operating executives and other professionals have invested or
committed to invest in or alongside our funds. Approximately 3% to 5% of all
capital commitments to our funds are funded collectively by us and our senior
Carlyle professionals, operating executives and other professionals.
The current unfunded commitment of Carlyle and our senior Carlyle professionals,
operating executives and other professionals to our investment funds as of
December 31, 2019, consisted of the following:
                                 Unfunded
Asset Class                     Commitment
                          (Dollars in millions)
Corporate Private Equity $               2,378.7
Real Assets                                972.2
Global Credit                              412.5
Investment Solutions                       100.5
Total                    $               3,863.9


A substantial majority of the remaining commitments are expected to be funded by
senior Carlyle professionals, operating executives and other professionals
through our internal co-investment program. Of the $3.9 billion of unfunded
commitments, approximately $3.3 billion is subscribed individually by senior
Carlyle professionals, operating executives and other professionals, with the
balance funded directly by the Company.
Repurchase Program. In December 2018, our Board of Directors authorized the
repurchase of up to $200 million of common stock and/or Carlyle Holdings units.
This program, which was effective January 1, 2019, authorized the repurchase of
shares of common stock from time to time in open market transactions, in
privately negotiated transactions or otherwise. As described below, we no longer
intend to make further purchases under this repurchase program. For the year
ended December 31, 2019, we paid an aggregate of $34.5 million to repurchase and
retire approximately 1.6 million units with all of the repurchases done via open
market brokered transactions.
In connection with the Conversion, in January 2020 our Board of Directors
re-authorized the December 2018 repurchase program, under which $165.5 million
is remaining as of December 31, 2019. Under the repurchase program, shares of
common stock may be repurchased from time to time in open market transactions,
in privately negotiated transactions or otherwise. The timing and actual number
of shares of common stock repurchased will depend on a variety of factors,
including

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legal requirements, price, economic and market conditions. The share repurchase
program may be suspended or discontinued at any time and does not have a
specified expiration date.
Cash Flows
The significant captions and amounts from our consolidated statements of cash
flows which include the effects of our Consolidated Funds and CLOs in accordance
with U.S. GAAP are summarized below.
                                                       Year Ended December 31,
                                                2019             2018             2017
                                                        (Dollars in millions)
Statements of Cash Flows Data
Net cash provided by (used in) operating
activities, including investments in
Carlyle funds and Fortitude Re             $      358.6     $     (343.5 )   $       (7.1 )
Net cash used in investing activities             (27.8 )          (99.1 )          (34.0 )
Net cash (used in) provided by financing
activities                                       (149.2 )           72.0    

318.6

Effect of foreign exchange rate change              8.1            (19.9 )  

67.3

Net change in cash, cash equivalents and
restricted cash                            $      189.7     $     (390.5 )  

$ 344.8



Net Cash Used in Operating Activities. Net cash used in operating activities was
primarily driven by our earnings in the respective periods after adjusting for
significant non-cash activity, including non-cash performance allocations and
incentive fees, the related non-cash performance allocations and incentive fee
related compensation, non-cash principal investment income, non-cash
equity-based compensation, and depreciation, amortization and impairments, all
of which are included in earnings.
Cash used to purchase investments as well as the proceeds from the sale of such
investments are reflected in our cash flows from operating activities as this
investment activity is a normal part of our operations. During the year ended
December 31, 2019, investment proceeds were $389.2 million while investment
purchases were $312.4 million. Investment proceeds in 2019 also included $71.5
million received from the resolution of French tax litigation. During the year
ended December 31, 2018, investment proceeds were $893.4 million while
investment purchases were $867.4 million, which included cash outflows of $393.8
million related to our investment in Fortitude Re. During the year ended
December 31, 2017, investment proceeds were $467.5 million while investment
purchases were $888.5 million, which included cash outflows of $404.8 million
and $263.4 million related to corporate treasury investments and investments in
CLOs, respectively.
Operating cash inflows primarily include the receipt of management fees and
realized performance allocations and incentive fees, while operating cash
outflows primarily include payments for operating expenses, including
compensation and general, administrative, and other expenses. During the years
ended December 31, 2019, 2018 and 2017, net cash provided by operating
activities primarily includes the receipt of management fees and realized
performance allocations and incentive fees, totaling approximately $1.9 billion,
$2.0 billion, and $2.1 billion, respectively. These inflows were partially
offset by payments for compensation and general, administrative, and other
expenses of approximately $1.6 billion, $1.7 billion, and $1.7 billion for the
years ended December 31, 2019, 2018 and 2017, respectively.
The net cash used in operating activities for the year ended December 31, 2019
also reflects the investment activity of our Consolidated Funds. For the year
ended December 31, 2019, proceeds from the sales and settlements of investments
by the Consolidated Funds were $2.1 billion, while purchases of investments by
the Consolidated Funds were $2.2 billion. For the year ended December 31, 2018,
proceeds from the sales and settlements of investments by the Consolidated Funds
were $2.7 billion, while purchases of investments by the Consolidated Funds were
$3.7 billion. For the year ended December 31, 2017, proceeds from the sales and
settlements of investments by the Consolidated Funds were $2.6 billion, while
purchases of investments by the Consolidated Funds were $2.9 billion.
Net Cash Used In Investing Activities. Our investing activities generally
reflect cash used for acquisitions and fixed assets and software for internal
use. Purchases of fixed assets were $27.8 million, $31.3 million and $34.0
million for the years ended December 31, 2019, 2018 and 2017, respectively.
During the year ended December 31, 2018, cash used in investing activities
principally reflects the acquisition of Carlyle Aviation Partners.
Net Cash Provided by Financing Activities. In 2019, we received net proceeds of
$420.6 million from the issuance of $425 million of 3.500% senior notes, and
$41.0 million from the issuance of various CLO borrowings, paid $405.4 million
to repurchase our outstanding Preferred Units, paid $34.5 million to repurchase
1.6 million units under our repurchase program

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and paid off a $25 million term loan. In 2018, we received net proceeds of
$345.7 million from the issuance of $350 million of 5.650% senior notes, paid
$255 million to repurchase $250 million of 3.875% senior note, and paid $108.8
million to prepay the remaining balance outstanding under a promissory note to
BNRI. In 2017, we received net proceeds of $387.5 million from the issuance of
preferred units and $265.6 million from the issuance of various CLO term loans.
Dividends to our common stockholders were $154.9 million, $129.8 million, and
$118.1 million for the years ended December 31, 2019, 2018 and 2017,
respectively. Distributions to the non-controlling interest holders in Carlyle
Holdings were $313.3 million, $288.8 million, and $295.6 million the years ended
December 31, 2019, 2018 and 2017, respectively. The net (payments) borrowings on
loans payable by our Consolidated Funds during the years ended December 31,
2019, 2018 and 2017 were $224.8 million, $818.0 million, and $147.2 million,
respectively. For the years ended December 31, 2019, 2018 and 2017,
contributions from non-controlling interest holders were $57.8 million, $31.3
million, and $119.2 million, respectively, which relate primarily to
contributions from the non-controlling interest holders in Consolidated Funds.
For the years ended December 31, 2019, 2018 and 2017, distributions to
non-controlling interest holders were $62.4 million, $105.2 million, and $118.0
million, respectively, which relate primarily to distributions to the
non-controlling interest holders in Consolidated Funds.

Our Balance Sheet
Total assets were $13.8 billion at December 31, 2019, an increase of $894.6
million from December 31, 2018. The increase in total assets was primarily
attributable to increases in investments, including accrued performance
allocations of $1.1 billion, driven in part by the increase in the carrying
value of our investment in Fortitude Re. The increase in total assets was also
attributable to the recognition of lease right-of-use assets, net of $203.8
million and an increase in cash and cash equivalents of $163.8 million.
Investments of consolidated funds decreased $279.3 million due to the
deconsolidation of two CLOs during the year ended, December 31, 2019, partially
offset by the consolidation of one CLO. Due from affiliates and other
receivables, net and cash and cash equivalents held at Consolidated Funds also
decreased by $167.2 million and $125.1 million, respectively.
Total liabilities were $10.8 billion at December 31, 2019, an increase of $761.3
million from December 31, 2018. The increase in liabilities was primarily
attributable to increases in debt obligations of $425.9 million (see Note 5), an
increase in due to affiliates of $368.1 million, an increase in lease
liabilities of $288.2 million and an increase in accrued compensation and
benefits of $274.2 million. These increases were partially offset by decreases
in other liabilities of Consolidated Funds of $294.0 million and a decrease in
loans payable of Consolidated Funds of $133.4 million from December 31, 2018 to
2019, driven by the deconsolidation of two CLOs during the year ended December
31, 2019.
The assets and liabilities of the Consolidated Funds are generally held within
separate legal entities and, as a result, the assets of the Consolidated Funds
are not available to meet our liquidity requirements and similarly the
liabilities of the Consolidated Funds are non-recourse to us. For example, as
previously discussed, the CLO term loans generally are secured by the Company's
investment in the CLO, have a general unsecured interest in the Carlyle entity
that manages the CLO, and do not have recourse to any other Carlyle entity.
Our balance sheet without the effect of the Consolidated Funds can be seen in
Note 20 to the consolidated financial statements included in this Annual Report
on Form 10-K. At December 31, 2019, our total assets were $8.8 billion,
including cash and cash equivalents and corporate treasury investments totaling
$793.4 million and net accrued performance revenues of $1.7 billion.
Unconsolidated Entities
Our corporate private equity funds and certain of our real estate funds have
entered into lines of credit secured by their investors' unpaid capital
commitments or by a pledge of the equity of the underlying investment. These
lines of credit are used primarily to reduce the overall number of capital calls
to investors or for working capital needs. In certain instances, however, they
may be used for other investment related activities, including serving as bridge
financing for investments. The degree of leverage employed varies among
portfolio companies.
Off-balance Sheet Arrangements
In the normal course of business, we enter into various off-balance sheet
arrangements including sponsoring and owning limited or general partner
interests in consolidated and non-consolidated funds, entering into derivative
transactions, entering into operating leases and entering into guarantee
arrangements. We also have ongoing capital commitment arrangements with certain
of our consolidated and non-consolidated funds. We do not have any other
off-balance sheet arrangements that would require us to fund losses or guarantee
target returns to investors in any of our other investment funds.

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For further information regarding our off-balance sheet arrangements, see Note 2
and Note 9 to the consolidated financial statements included in this Annual
Report on Form 10-K.
Contractual Obligations
The following table sets forth information relating to our contractual
obligations as of December 31, 2019 on a consolidated basis and on a basis
excluding the obligations of the Consolidated Funds:
                                            2020        2021-2022      

2023-2024 Thereafter Total

                                                                 (Dollars in millions)
Debt obligations (including senior
notes)(a)                                $    35.8     $     40.4     $    511.6     $  1,397.9     $ 1,985.7
Interest payable(b)                           89.6          176.3          149.8        1,151.8       1,567.5
Other consideration(c)                        76.4          203.7          191.8           95.0         566.9
Operating lease obligations(d)                56.9          103.8          102.6          438.4         701.7
Capital commitments to Carlyle funds(e)    3,863.9              -              -              -       3,863.9
Tax receivable agreement payments(f)             -           17.6           14.1           75.6         107.3

Loans payable of Consolidated Funds(g) 78.9 157.4 157.6 5,200.0 5,593.9 Unfunded commitments of the CLOs(h)

            3.0              -              -              -           3.0
Consolidated contractual obligations       4,204.5          699.2        1,127.5        8,358.7      14,389.9
Loans payable of Consolidated Funds(g)       (78.9 )       (157.4 )       (157.6 )     (5,200.0 )    (5,593.9 )
Capital commitments to Carlyle funds(e)   (3,332.8 )            -              -              -      (3,332.8 )
Unfunded commitments of the CLOs(h)           (3.0 )            -              -              -          (3.0 )
Carlyle Operating Entities contractual
obligations                              $   789.8     $    541.8     $    969.9     $  3,158.7     $ 5,460.2


(a) The table above assumes that no prepayments are made on the senior notes.

The CLO terms loans are included in the table above based on the earlier of

the stated maturity date or the date the CLO is expected to be dissolved.

See Note 7 to the consolidated financial statements for the various maturity

dates of the CLO term loans and senior notes.

(b) The interest rates on the debt obligations as of December 31, 2019 consist

of: 3.500% on $425.0 million of senior notes, 5.650% on $350 million of

senior notes, 3.875% on $250.0 million of senior notes, 5.625% on $600.0

million of senior notes, and a range of approximately 1.75% to 3.90% for our

CLO term loans. Interest payments assume that no prepayments are made and

loans are held until maturity with the exception of the CLO term loans,

     which are based on the earlier of the stated maturity date or the date the
     CLO is expected to be dissolved.


(c)  These obligations represent our estimate of amounts to be paid on the
     contingent cash and other obligations associated with our acquisition of
     Carlyle Aviation Partners (see Note 3) and our investment in Fortitude Re
     (see Note 5) and other obligations, as well as the deferred payment
     obligations described below. In connection with the Conversion, former

holders of Carlyle Holdings partnership units will receive cash payments

aggregating to approximately $344 million, which is equivalent to $1.50 per

     Carlyle Holdings partnership unit exchanged in the Conversion, payable in
     five annual installments of $0.30 each beginning in 2020. The payment
     obligations are unsecured obligations of the Company or a subsidiary

thereof, subordinated in right of payment to indebtedness of the Company and

its subsidiaries, and do not bear interest.

(d) We lease office space in various countries around the world and maintain our

headquarters in Washington, D.C., where in June 2018, we entered into an

amended non-cancelable lease agreement expiring on March 31, 2030. In July,

we entered into a new non-cancelable lease agreement expiring in 2036 for

new office space in New York City. Our office leases in other locations

expire in various years through 2032. The amounts in this table represent

the minimum lease payments required over the term of the lease.

(e) These obligations generally represent commitments by us to fund a portion of

the purchase price paid for each investment made by our funds. Commitments

to the funds are generally due on demand and are therefore presented in the

less than one year category. A substantial majority of these investments is

expected to be funded by senior Carlyle professionals and other

professionals through our internal co-investment program. Of the $3.9

billion of unfunded commitments to the funds, approximately $3.3 billion is

subscribed individually by senior Carlyle professionals, advisors and other

     professionals, with the balance funded directly by the Company.


(f)  In connection with our initial public offering, we entered into a tax
     receivable agreement with the limited partners of the Carlyle Holdings
     partnerships whereby we agreed to pay such limited partners 85% of the

amount of cash tax savings, if any, in U.S. federal, state and local income

tax realized as a result of increases in tax basis resulting from exchanges

of Carlyle Holdings partnership units for common units of The Carlyle Group

L.P. From and after the consummation of the Conversion, holders of Carlyle

Holdings partnership units do not have any rights to payments under the tax

receivable agreement except for payment obligations pre-existing at the time

of the Conversion with respect to exchanges that occurred prior to the

Conversion. These obligations are more than offset by the future cash tax

savings that we are expected to realize.

(g) These obligations represent amounts due to holders of debt securities issued

by the consolidated CLO vehicles. These obligations include interest to be

paid on debt securities issued by the consolidated CLO vehicles. Interest

payments assume that no prepayments are made and loans are held until

maturity. For debt securities with rights only to the residual value of the

CLO and no stated interest, no interest payments were included in this

calculation. Interest payments on variable-rate debt securities are based on

interest rates in effect as of December 31, 2019, at spreads to market rates

     pursuant to the debt agreements, and range from 0.40% to 9.24.%.


(h)  These obligations represent commitments of the CLOs to fund certain

investments. These amounts are generally due on demand and are therefore

presented in the less than one year category.

Excluded from the table above are liabilities for uncertain tax positions of $15.1 million at December 31, 2019 as we are unable to estimate when such amounts may be paid.



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Contingent Cash Payments For Business Acquisitions and Strategic Investments
We have certain contingent cash obligations associated with our acquisition of
Carlyle Aviation Partners and our strategic investment in Fortitude Re. For our
acquisition of Carlyle Aviation Partners, the contingent cash payments relate to
an earn-out of up to $150.0 million that is payable upon the achievement of
certain revenue and earnings performance targets during 2020 through 2025, which
will be accounted for as compensation expense. We accrue the compensation
liability over the service period.
For our strategic investment in Fortitude Re, the contingent cash payment
relates to performance-based contingent cash consideration payable to AIG
following December 31, 2023.
Based on the terms of the underlying contracts, the maximum amount that could be
paid from contingent cash obligations associated with the acquisition of Carlyle
Aviation Partners and the strategic investment in Fortitude Re as of
December 31, 2019 is $245.0 million versus the liabilities recognized on the
balance sheet of $31.4 million.
Risk Retention Rules
We will continue to comply with the risk retention rules governing CLOs issued
in Europe for which we are a sponsor, which require a combination of capital
from our balance sheet, commitments from senior Carlyle professionals, and/or
third party financing.

For additional information related to the U.S. Risk Retention Rules, see
"-Financial regulatory changes in the United States could adversely affect our
business and the possibility of increased regulatory focus could result in
additional burdens and expenses on our business" within Item 1A.
Guarantees
See Note 9 to the consolidated financial statements included in this Annual
Report on Form 10-K for information related to our material guarantees.
Indemnifications
In many of our service contracts, we agree to indemnify the third-party service
provider under certain circumstances. The terms of the indemnities vary from
contract to contract, and the amount of indemnification liability, if any,
cannot be determined and has not been included in the estimate above or recorded
in our consolidated financial statements as of December 31, 2019.
Contingent Obligations (Giveback)
Carried interest is ultimately realized when: (1) an underlying investment is
profitably disposed of, (2) certain costs borne by the limited partner investors
have been reimbursed, (3) the fund's cumulative returns are in excess of the
preferred return and (4) we have decided to collect carry rather than return
additional capital to limited partner investors. Realized carried interest may
be required to be returned by us in future periods if the fund's investment
values decline below certain levels. When the fair value of a fund's investments
remains constant or falls below certain return hurdles, previously recognized
performance allocations are reversed.
See Note 9 to the consolidated financial statements included in this Annual
Report on Form 10-K for additional information related to our contingent
obligations (giveback).
Other Contingencies
In the ordinary course of business, we are a party to litigation,
investigations, inquiries, employment-related matters, disputes and other
potential claims. We discuss certain of these matters in Note 9 to the
consolidated financial statements included in this Annual Report on Form 10-K.

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Carlyle Common Stock and Carlyle Holdings Partnership Units
Rollforwards of shares of our common stock outstanding and Carlyle Holdings
partnership units for the years ended December 31, 2019 and 2018 are as follows:
                     Shares as of                                                    Shares       Shares as of
                     December 31,      Shares         Shares         Shares      Repurchased /    December 31,
                         2018         Issued (1)     Forfeited     Exchanged        Retired           2019
The Carlyle Group
Inc. common shares   107,746,443     10,063,471             -      1,659,588     (1,628,851 )     117,840,651
Carlyle Holdings
partnership units    230,977,836          9,387             -     (1,659,588 )            -       229,327,635
Total                338,724,279     10,072,858             -              -     (1,628,851 )     347,168,286

(1) Units issued include restricted common units and units issued and delivered in connection with our equity method investment in NGP.

                       Shares as of                                                       Shares       Shares as of
                       December 31,                        Shares         Shares      Repurchased /    December 31,
                           2017         Shares Issued     Forfeited     Exchanged        Retired           2018
The Carlyle Group Inc.
common shares          100,100,650         8,757,156             -      3,836,022     (4,947,385 )     107,746,443
Carlyle Holdings
partnership units      234,813,858                 -             -     (3,836,022 )            -       230,977,836
Total                  334,914,508         8,757,156             -          

- (4,947,385 ) 338,724,279



The Carlyle Group Inc. common stock issued during the period presented in the
tables above relate to the vesting of the Company's restricted stock units and
shares issued and delivered in connection with our equity method investment in
NGP during the years ended December 31, 2019 and 2018. Further, The Carlyle
Group Inc. common stock in the tables above include 7,782 shares of common stock
that the Company acquired from Carlyle Holdings on January 1, 2018 upon the
vesting of certain of the Company's unvested common stock associated with the
acquisition of the remaining 40% equity interest in AlpInvest in August 2013.
The Carlyle Holdings partnership units exchanged relate to the exchange of
Carlyle Holdings partnership units held by NGP and certain limited partners for
shares of common stock on a one-for-one basis. Beginning with the second quarter
of 2017, senior Carlyle professionals were able to exchange their Carlyle
Holdings partnership units for shares of common stock on a quarterly basis,
subject to the terms of the Exchange Agreement. During 2019 and 2018, senior
Carlyle professionals and affiliates exchanged approximately 1.7 million and 3.8
million, respectively, of their Carlyle Holdings partnership units for shares of
common stock. All outstanding Carlyle Holdings partnership units were exchanged
for an equivalent number of shares of our common stock in connection with the
Conversion.

The Carlyle Group Inc. common stock repurchased during the period presented in
the tables above relate to shares repurchased during the years ended December
31, 2019 and 2018 and subsequently retired as part of our stock repurchase
programs.

The total shares as of December 31, 2019 as shown above exclude approximately
2.3 million shares of common stock in connection with the vesting of restricted
stock units subsequent to December 31, 2019 that will participate in the common
stockholder dividend that will be paid.

Critical Accounting Policies
Principles of Consolidation. The Company consolidates all entities that it
controls either through a majority voting interest or as the primary beneficiary
of variable interest entities ("VIEs"). The Company describes the policies and
procedures it uses in evaluating whether an entity is consolidated in Note 2 to
the consolidated financial statements included in this Annual Report on Form
10-K. As part of its consolidation procedures, the Company evaluates: (1)
whether it holds a variable interest in an entity, (2) whether the entity is a
VIE, and (3) whether the Company's involvement would make it the primary
beneficiary.
•         In evaluating whether the Company holds a variable interest, fees

(including management fees, incentive fees and performance allocations)

that are customary and commensurate with the level of services

provided, and where the Company does not hold other economic interests

          in the entity that would absorb more than an insignificant amount of
          the expected losses or returns of the entity, are not considered
          variable interests. The Company considers all economic interests,
          including indirect interests, to determine if a fee is considered a
          variable interest.



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•         For those entities where the Company holds a variable interest, the
          Company determines whether each of these entities qualifies as a VIE

and, if so, whether or not the Company is the primary beneficiary. The

          assessment of whether the entity is a VIE is generally performed
          qualitatively, which requires judgment. These judgments include: (a)
          determining whether the equity investment at risk is sufficient to
          permit the entity to finance its activities without additional
          subordinated financial support, (b) evaluating whether the equity
          holders, as a group, can make decisions that have a significant effect

on the economic performance of the entity, (c) determining whether two

          or more parties' equity interests should be aggregated, and (d)
          determining whether the equity investors have proportionate voting
          rights to their obligations to absorb losses or rights to receive
          returns from an entity.

• For entities that are determined to be VIEs, the Company consolidates

those entities where it has concluded it is the primary beneficiary.

The primary beneficiary is defined as the variable interest holder with

(a) the power to direct the activities of a VIE that most significantly

          impact the entity's economic performance and (b) the obligation to
          absorb losses of the entity or the right to receive benefits from the

entity that could potentially be significant to the VIE. In evaluating

whether the Company is the primary beneficiary, the Company evaluates

its economic interests in the entity held either directly or indirectly

by the Company.



Changes to these judgments could result in a change in the consolidation
conclusion for a legal entity.
Entities that do not qualify as VIEs are generally assessed for consolidation as
voting interest entities. Under the voting interest entity model, the Company
consolidates those entities it controls through a majority voting interest.
Performance Allocations. Performance allocations consist principally of the
allocation of profits from certain of the funds to which the Company is entitled
(commonly known as carried interest). The Company is generally entitled to a 20%
allocation (which can vary by fund) of the net realized income or gain as a
carried interest after returning the invested capital, the allocation of
preferred returns and return of certain fund costs (generally subject to
catch-up provisions as set forth in the fund limited partnership agreement).
Carried interest is ultimately realized when: (i) an underlying investment is
profitably disposed of, (ii) certain costs borne by the limited partner
investors have been reimbursed, (iii) the fund's cumulative returns are in
excess of the preferred return and (iv) the Company has decided to collect carry
rather than return additional capital to limited partner investors.
While carried interest is recognized upon appreciation of the funds' investment
values above certain return hurdles set forth in each respective partnership
agreement, the Company recognizes revenues attributable to performance
allocations based upon the amount that would be due pursuant to the fund
partnership agreement at each period end as if the funds were terminated at that
date. Accordingly, the amount recognized as performance allocations reflects the
Company's share of the gains and losses of the associated funds' underlying
investments measured at their then-current fair values relative to the fair
values as of the end of the prior period. Because of the inherent uncertainty,
these estimated values may differ significantly from the values that would have
been used had a ready market for the investments existed, and it is reasonably
possible that the difference could be material. If, at December 31, 2019, all of
the investments held by the Company's funds were deemed worthless, a possibility
that management views as remote, the amount of realized and distributed carried
interest subject to potential giveback would be $0.4 billion, on an after-tax
basis where applicable.
See Note 2 to the consolidated financial statements included in this Annual
Report on Form 10-K for information related to performance allocations for
various fund types, preferred return hurdle rates, the timing of performance
allocation recognition in investment income, and the potential for performance
allocation income reversal.
Performance Allocation Related Compensation. A portion of the performance
allocations earned is due to employees and advisors of the Company. These
amounts are accounted for as compensation expense in conjunction with the
recognition of the related performance allocation revenue and, until paid, are
recognized as a component of the accrued compensation and benefits liability.
Accordingly, upon a reversal of performance allocation revenue, the related
compensation expense, if any, is also reversed.
Income Taxes. Certain of the wholly-owned subsidiaries of the Company and the
Carlyle Holdings partnerships are subject to federal, state, local and foreign
corporate income taxes at the entity level and the related tax provision
attributable to the Company's share of this income is reflected in the
consolidated financial statements. Based on applicable federal, foreign, state
and local tax laws, the Company records a provision for income taxes for certain
entities. Tax positions taken by the Company are subject to periodic audit by
U.S. federal, state, local and foreign taxing authorities.

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On January 1, 2020, the Company converted from The Carlyle Group L.P., a
Delaware limited partnership, to The Carlyle Group Inc., a Delaware corporation.
As a result, all of the income before provision for income taxes attributable to
The Carlyle Group Inc. will be subject to U.S. federal (and state and local)
corporate income taxes.
The Company accounts for income taxes using the asset and liability method,
which requires the recognition of deferred tax assets and liabilities for the
expected future consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement reporting and the tax basis of assets and liabilities using enacted
tax rates in effect for the period in which the difference is expected to
reverse. The effect of a change in tax rates on deferred tax assets and
liabilities is recognized in the period of the change in the provision for
income taxes. Further, deferred tax assets are recognized for the expected
realization of available net operating loss and tax credit carry forwards. A
valuation allowance is recorded on the Company's gross deferred tax assets when
it is more likely than not that such asset will not be realized. When evaluating
the realizability of the Company's deferred tax assets, all evidence, both
positive and negative, is evaluated. Items considered in this analysis include
the ability to carry back losses, the reversal of temporary differences, tax
planning strategies, and expectations of future earnings.
The Company has approximately $270 million of deferred tax assets as of
December 31, 2019. Changes in judgment as it relates to the realizability of
these assets, as well as potential changes in corporate tax rates would have the
effect of significantly reducing the value of the deferred tax assets. On
December 22, 2017, the Tax Cuts and Jobs Act was enacted. The Act includes
numerous changes in existing tax law, including a permanent reduction in the
federal corporate income tax rate from 35% to 21%. This took effect on January
1, 2018. As a result of the reduction of the federal corporate income tax rate,
the Company revalued its deferred tax assets and liabilities as of December 31,
2017 using the newly enacted rate. The revaluation resulted in the recognition
of additional provision for income taxes of approximately $113.0 million in
2017. In addition, the Company's tax receivable agreement liability was reduced
by approximately $71.5 million in 2017 due to the reduction in the federal
corporate income tax rate.
Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is
the amount of benefit that is "more likely than not" to be sustained upon
examination. The Company analyzes its tax filing positions in all of the U.S.
federal, state, local and foreign tax jurisdictions where it is required to file
income tax returns, as well as for all open tax years in these jurisdictions.
If, based on this analysis, the Company determines that uncertainties in tax
positions exist, a liability is established, which is included in accounts
payable, accrued expenses and other liabilities in the consolidated financial
statements. The Company recognizes accrued interest and penalties related to
unrecognized tax positions in the provision for income taxes. If recognized, the
entire amount of unrecognized tax positions would be recorded as a reduction in
the provision for income taxes.
Fair Value Measurement. U.S. GAAP establishes a hierarchal disclosure framework
which ranks the observability of market price inputs used in measuring financial
instruments at fair value. The observability of inputs is impacted by a number
of factors, including the type of financial instrument, the characteristics
specific to the financial instrument and the state of the marketplace, including
the existence and transparency of transactions between market participants.
Financial instruments with readily available quoted prices, or for which fair
value can be measured from quoted prices in active markets, will generally have
a higher degree of market price observability and a lesser degree of judgment
applied in determining fair value.
Financial instruments measured and reported at fair value are classified and
disclosed based on the observability of inputs used in the determination of fair
values, as follows:
Level I - inputs to the valuation methodology are quoted prices available in
active markets for identical instruments as of the reporting date. The type of
financial instruments included in Level I include unrestricted securities,
including equities and derivatives, listed in active markets. The Company does
not adjust the quoted price for these instruments, even in situations where the
Company holds a large position and a sale could reasonably impact the quoted
price.
Level II - inputs to the valuation methodology are other than quoted prices in
active markets, which are either directly or indirectly observable as of the
reporting date. The type of financial instruments in this category includes less
liquid and restricted securities listed in active markets, securities traded in
other than active markets, government and agency securities, and certain
over-the-counter derivatives where the fair value is based on observable inputs.
Level III - inputs to the valuation methodology are unobservable and significant
to overall fair value measurement. The inputs into the determination of fair
value require significant management judgment or estimation. Financial
instruments that are included in this category include investments in
privately-held

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entities, non-investment grade residual interests in securitizations,
collateralized loan obligations, and certain over-the-counter derivatives where
the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the determination of which
category within the fair value hierarchy is appropriate for any given financial
instrument is based on the lowest level of input that is significant to the fair
value measurement. The Company's assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgment and
considers factors specific to the financial instrument.
In the absence of observable market prices, the Company values its investments
using valuation methodologies applied on a consistent basis. For some
investments little market activity may exist. Management's determination of fair
value is then based on the best information available in the circumstances and
may incorporate management's own assumptions and involves a significant degree
of judgment, taking into consideration a combination of internal and external
factors, including the appropriate risk adjustments for non-performance and
liquidity risks. Investments for which market prices are not observable include
private investments in the equity of operating companies and real estate
properties, and certain debt positions. The valuation technique for each of
these investments is described in Note 4 to the consolidated financial
statements included in this Annual Report on Form 10-K.
The valuation methodologies can involve subjective judgments, and the fair value
of assets established pursuant to such methodologies may be incorrect, which
could result in the misstatement of fund performance and accrued performance
allocations. Because there is significant uncertainty in the valuation of, or in
the stability of the value of, illiquid investments, the fair values of such
investments as reflected in an investment fund's net asset value do not
necessarily reflect the prices that would be obtained by us on behalf of the
investment fund when such investments are realized. Realizations at values
significantly lower than the values at which investments have been reflected in
prior fund net asset values would result in reduced earnings or losses for the
applicable fund, the loss of potential performance allocations and incentive
fees. Changes in values attributed to investments from quarter to quarter may
result in volatility in the net asset values and results of operations that we
report from period to period. Also, a situation where asset values turn out to
be materially different than values reflected in prior fund net asset values
could cause investors to lose confidence in us, which could in turn result in
difficulty in raising additional funds. See "Risk Factors - Risks Related to Our
Company - Valuation methodologies for certain assets in our funds can involve
subjective judgments, and the fair value of assets established pursuant to such
methodologies may be incorrect, which could result in the misstatement of fund
performance and accrued performance allocations."
Principal Equity-Method Investments. The Company accounts for all investments in
which it has or is otherwise presumed to have significant influence, including
investments in the unconsolidated funds and strategic investments, using the
equity method of accounting. The carrying value of equity-method investments is
determined based on amounts invested by the Company, adjusted for the equity in
earnings or losses of the investee allocated based on the respective partnership
or other agreement, less distributions received. The Company evaluates its
equity-method investments for impairment whenever events or changes in
circumstances indicate that the carrying amounts of such investments may not be
recoverable.
Equity-based Compensation. Compensation expense relating to the issuance of
equity-based awards to Carlyle employees is measured at fair value on the grant
date. The compensation expense for awards that vest over a future service period
is recognized over the relevant service period on a straight-line basis. The
compensation expense for awards that do not require future service is recognized
immediately. Cash settled equity-based awards are classified as liabilities and
are re-measured at the end of each reporting period. The compensation expense
for awards that contain performance conditions is recognized when it is probable
that the performance conditions will be achieved; in certain instances, such
compensation expense may be recognized prior to the grant date of the award. The
compensation expense for awards that contain market conditions is based on a
grant-date fair value that factors in the probability that the market conditions
will be achieved and is recognized over the requisite service period on a
straight-line basis.
The Company recognizes equity-based award forfeitures in the period they occur
as a reversal of previously recognized compensation expense.
Equity-based awards issued to non-employees are recognized as general,
administrative and other expenses, except to the extent they are recognized as a
part of equity method earnings because they are issued to employees of the
Company's equity method investees.
In determining the aggregate fair value of any award grants, we make judgments
as to the grant-date fair value, particularly the discount related to awards
that do not participate in distributions during the vesting period.

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Intangible Assets and Goodwill. The Company's intangible assets primarily
consist of acquired contractual rights to earn future fee income, including
management and advisory fees. Finite-lived intangible assets are amortized over
their estimated useful lives, which range from four to ten years, and are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable.

Goodwill represents the excess of cost over the identifiable net assets of
businesses acquired and is recorded in the functional currency of the acquired
entity. Goodwill is recognized as an asset and is reviewed for impairment
annually as of October 1 and between annual tests when events and circumstances
indicate that impairment may have occurred.
Recent Accounting Pronouncements
We discuss the recent accounting pronouncements in Note 2 to the consolidated
financial statements included in this Annual Report on Form 10-K.

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