Carlyle Group Inc. (CG) FY 2024 MD&A

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Unless context suggests otherwise, references in this report to “Carlyle,” the “Company,” “we,” “us,” and “our”

refer to The Carlyle Group Inc. and its consolidated subsidiaries. The following discussion and analysis should be read in

conjunction with the consolidated financial statements and the related notes included in this Annual Report on Form 10-K.

The following discussion includes a comparison of our results for the years ended December 31, 2024 and 2023. For a

discussion of our results for the year ended December 31, 2022 and a comparison of results for the years ended December 31,

2023 and 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

of our Annual Report on Form 10-K for the year ended December 31, 2023, which specific discussion is incorporated herein by

reference.

Overview

We are one of the world’s largest global investment firms that deploys private capital across its business, and we

conduct our operations through three reportable segments: Global Private Equity, Global Credit, and Global Investment

Solutions.

•Global Private Equity—Our Global Private Equity segment advises our buyout, middle market, and growth

capital funds, our U.S. and internationally focused real estate funds, and our infrastructure and natural

resources funds. The segment also includes the NGP Carry Funds advised by NGP. As of December 31,

2024, our Global Private Equity segment had $163.5 billion in AUM and $98.0 billion in Fee-earning AUM.

•Global Credit—Our Global Credit segment advises funds and vehicles that pursue investment strategies

including insurance solutions, liquid credit, opportunistic credit, direct lending, asset-backed finance, aviation

finance, infrastructure credit, cross-platform credit products, and global capital markets. As of December 31,

2024, our Global Credit segment had $192.4 billion in AUM and $154.2 billion in Fee-earning AUM.

•Global Investment Solutions—Our Global Investment Solutions segment advises global private equity

programs and related co-investment and secondary activities. As of December 31, 2024, our Global

Investment Solutions segment had $85.1 billion in AUM and $52.1 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 performance allocation, or 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. Refer to Note 15, Segment Reporting, to the consolidated financial statements included

in this Annual Report on Form 10-K for more information on the differences between our financial results reported pursuant to

U.S. GAAP and our financial results for segment reporting purposes.

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Trends Affecting our Business

The year 2024 was marked by the initiation of a broad global monetary policy easing cycle against a backdrop of

stable growth. Amid more favorable financing conditions, global mergers and acquisitions (“M&A”) activity recovered

modestly, though exit conditions remained challenging as market participants exercised patience in anticipation of future rate

cuts and lower borrowing costs. Entering 2025, as the inflation and growth outlook for the U.S. has grown more complex, the

expectation of near-term rate cuts and lower borrowing costs has dissipated, which we expect will in turn facilitate greater deal

activity. Globally, central banks’ policy paths appear likely to be far less synchronized than during the recent simultaneous

tightening cycle. Central banks in most other developed markets (with Japan a notable exception) have room to further cut rates

as inflation risks diminish and economic weakness persists, which could in turn put more upward pressure on the U.S. dollar.

At its last meeting of 2024, the Federal Open Market Committee (“FOMC”) reduced the federal funds rate by 25 basis

points, marking the third consecutive cut of the year and bringing cumulative 2024 reductions to 100 basis points. However, the

Federal Reserve’s preferred inflation gauge, the core PCE Price Index, ended the year up 2.8% year-over-year, reflecting a lack

of further downward inflation progress in recent months. While outright reinflation has not yet materialized, strong economic

data, inflation readings persistently above target, and easy financial conditions have raised questions about whether current

interest rate policy remains as restrictive as Federal Reserve officials suggest. The FOMC opted to pause further rate reductions

at its January 2025 meeting. Futures have now priced in just one to two additional cuts in 2025, down from expectations for six

as recently as September 2024. Notably, 10-year Treasury yields have risen rapidly since the first interest rate cut in September,

a phenomenon that is without precedent across the seven prior easing cycles. Though attributed by many to potential changes in

trade, immigration, and fiscal policy, this may also reflect the market’s realization that base rates may not currently be as

restrictive as previously thought.

The economy grew at an estimated 2.3% annualized rate in the fourth quarter of 2024 and averaged 2.8% over the

year, despite higher levels of interest rates. Overall, U.S. economic growth has outperformed relative to consensus expectations

over the past two years. This has been driven by government spending and large fiscal deficits, resilient household

consumption, supported by the prevalence of fixed-rate liabilities that have insulated disposable income from higher borrowing

costs, and, most significantly, by a generational boom in industrial fixed investment tied to AI spend and the energy transition.

This marked increase in capital expenditures has been led by companies known as “hyperscalers” (Amazon, Alphabet, Meta,

and Microsoft), and highlights a level of continued concentration risk to both U.S. economic growth and equity performance.

Any pullback in spending or shift in AI strategy could have notable negative implications for the broader U.S. macro-outlook.

While U.S. economic growth has consistently surprised to the upside and the inflation outlook has grown more

uncertain, euro area growth has by contrast struggled, and the European Central Bank’s (“ECB”) inflation target is now within

reach. The ECB delivered two additional 25 basis point cuts to its deposit rate during the fourth quarter of 2024, following two

cuts earlier in the year, and another 25 basis point cut in January 2025. Forward interest rates imply that the gap between U.S.

dollar and euro base rates will widen to more than 200 basis points over the next year, suggesting there is potential for the euro

to break through parity with the dollar. Euro area GDP grew at just a 0.2% annualized rate during the fourth quarter, though

underlying performance across member states has diverged. Germany, the region’s largest economy, continues to bear the brunt

of the energy supply shock caused by Russia’s invasion of Ukraine. German energy-intensive manufacturing output has fallen

20% below pre-invasion levels and the manufacturing job market there is now weaker than at any time since tracking began in

2002 outside of the Global Financial Crisis (GFC) and the onset of the COVID-19 pandemic. Growth in Spain, by contrast, has

been a relative bright spot and is projected to have grown 3.2% in 2024, over four times the eurozone average, boosted by

strong tourism flows and services exports. Outside of the euro area, the UK economy also expanded sluggishly, growing at a

0.4% annualized rate in the fourth quarter. The Bank of England’s policy outlook is complicated by persistent price pressures in

the context of this slower growth.

While global monetary policy generally eased in 2024, the opposite was true for Japan. The Bank of Japan (“BoJ”)

ended its negative interest rate regime in 2024 and outlined a plan to taper its asset purchases, a pivotal shift from its decade-

long stimulus program. Through January 2025, the BoJ has raised its policy rate three times to a current level of 0.5%, its

highest since 2008, as annual inflation remains elevated relative to target. Although Japan experienced a contraction in the first

quarter of 2024, its economy has since gained momentum with three consecutive quarters of growth supported by both

domestic demand and strong semiconductor and electronics output. Against this backdrop, it seems likely that the BoJ will raise

rates again by June 2025. In India, economic growth slowed through 2024, prompting the Reserve Bank of India to cut its

benchmark interest rate by 25 basis points to 6.25%—its first reduction in five years—as policymakers sought to support

weakening consumption and investment even as inflation pressures remained elevated. In China, underlying growth was uneven

as policymakers implemented targeted measures to stabilize property markets and boost domestic demand amid the country’s

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transition to a sustainable growth model centered on high-value industries such as semiconductors, batteries, and electric

vehicles (EVs).

Earnings are estimated to have grown by 16.9% in the fourth quarter of 2024 compared to the same period a year ago,

led by the financials, communication services, and consumer discretionary sectors. The estimated blended net profit margin for

the fourth quarter of 2024 was reported at 12.5%, nearly a full percentage point higher than the 11.3% margin observed a year

earlier.

The new U.S. administration has introduced aggressive and unpredictable trade policies and has imposed or threatened

to impose tariffs on goods, materials, inputs, and intermediate parts with numerous U.S. trade partners. The tariffs proposed to

date, if enacted in full, would amount to a tax increase roughly equivalent to 1% of GDP, a shock large enough to have negative

implications for broader growth. Analysts do not appear to have factored this risk into their estimates so far, and currently

expect results for full-year 2025 to not only meet but exceed those for 2024, with earnings growth for companies in the S&P

500 projected to be nearly 13%, compared to 10% in 2024. These optimistic projections suggest potential downside risk to

equities in 2025 in the event that actual results disappoint relative to estimates. Within our portfolio, the majority of our Global

Private Equity segment is either domestically focused or services- rather than goods-oriented, which we believe mitigates

exposure to tariff risk. However, we continue to closely monitor shifts in global trade policy and evaluate their potential

impacts.

Global financial markets generally performed well in 2024. The S&P 500 returned 23%, nearly matching its

performance in 2023. For a second consecutive year, returns in the U.S. were driven by a small number of mega-cap tech stocks

(known as the “Magnificent Seven”). These stocks accounted for over half of the S&P 500’s annual return and made up an

astounding 34% of the index’s market cap by the end of December. Excluding the Magnificent Seven, the “S&P 493” returned

11% in 2024. Notably, since the market bottom in October 2022, value-weighted returns across the U.S. equity market have

outpaced equal-weighted returns by over 20 percentage points on an annualized basis. In 2024, the broad U.S. equity market

returned 8% on an equal-weighted basis. This represents a significant divergence from historical norms, as value-weighted and

equal-weighted performance were roughly comparable over the previous decade. The reliance of U.S. equity outperformance on

a small pool of mega-cap tech stocks and the dichotomy of value-weighted versus equal-weighted returns both complicates the

effort to benchmark returns in the private markets and highlights the concentration risk of public equity performance in 2025.

Equities elsewhere lagged U.S. performance in 2024 but still produced positive returns and were comparable to the

U.S. results excluding the Magnificent Seven. In euro terms, the Euro Stoxx 50 rose 8.3% over the year, but was nearly flat

(+1.3%) in dollar terms, largely due to rapid euro depreciation that started in the fourth quarter and accelerated in the aftermath

of the U.S. election. This combination of significantly cheaper valuations relative to U.S. equities (forward ratios are nearly

40% lower) and the historically weak euro have brought investors back to the market: year-to-date through February 11, 2025,

the Euro Stoxx 50 is up nearly 10% compared to just 3% for the S&P 500. Japan’s Nikkei 225 and China’s Shanghai

Composite returned 19% and 12%, respectively, in 2024, while the MSCI World Index closed the year up 17% despite a

weaker fourth quarter. This robust full-year performance across indexes masks interim volatility during the year, the most

notable of which was the selloff in the third quarter associated with the monetary policy-driven disruption to the yen carry

trade. As demonstrated by full-year returns, equities recovered relatively quickly, although the Nikkei 225 remains 5.5% below

its July 11th peak as of year-end 2024. A stronger yen in 2025 due to narrowing interest rate differentials with the U.S. could

put downward pressure on Japanese equities.

Credit spreads across both leveraged loans and high yield bonds compressed to post-2008 lows in 2024 as strong

demand, particularly from collateralized loan obligations (“CLOs”), continued to outpace supply. Historically tight credit

spreads drove a surge in refinancing activity, pushing total global leveraged finance issuance in 2024 to nearly $1.2 trillion, up

92% from 2023 and one of the highest years on record. In the U.S., leveraged loan issuance doubled to $654 billion, the highest

total outside of the 2021 pandemic-era boom, with about half used for refinancing. Non-refinancing issuance also rebounded in

2024: in the U.S., total M&A-related leveraged loan volumes for the year (including pro-rata transactions) were 95% higher

than in 2023, led by a more than 200% increase in volume tied to leveraged buyout (“LBO”) activity. In Europe, leveraged loan

issuance rose 130% to $117 billion, returning to pre-pandemic averages.

Against this backdrop of relatively favorable financing conditions, global M&A activity recovered modestly, totaling

$3.5 trillion in 2024, a 12% increase over 2023 but still 11% lower than the yearly average from 2015 through 2019 and 41%

below the $6 trillion surge in 2021. Europe led the recovery, with deal volume rising 15% to $884 billion, though momentum

softened in the second half. U.S. M&A volume reached $1.6 trillion, an 8% increase, while Asia-Pacific transactions totaled

$858 billion, a 12% increase, with deal activity accelerating in the second half of the year. Buyout activity also rebounded, with

financial sponsors announcing $448 billion in buyout transactions, a 35% increase over 2023. Including add-ons, total deal

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volume reached $520 billion, up 27% year-over-year and roughly in line with historical averages from 2015 through 2019. U.S.

targets accounted for 42% of global buyout volume, while Europe represented 37%. Despite more robust deal activity, exit

conditions remained challenging, with buyout-backed exits rising just 6% from 2023, while total deal value fell by 12% as deal

sizes declined on average. However, the IPO market showed early signs of recovery, with 168 U.S.-listed IPOs raising $32

billion, a 60% increase in proceeds and a 44% rise in transaction count compared to 2023.

Our carry fund portfolio appreciated 8% during 2024. Within our Global Private Equity segment, our corporate private

equity funds appreciated 8%, with particular strength in our two latest vintage U.S. buyout funds, which appreciated 15% and

21%, respectively, during the year, outpacing growth in the S&P 493. Our infrastructure and natural resources funds

appreciated 8%, and our real estate funds appreciated 5%. Our Global Credit carry funds (which represent approximately 11%

of the total Global Credit remaining fair value as of December 31, 2024) appreciated 12% in 2024 and carry funds in our Global

Investment Solutions segment appreciated 9%.

Activity across our platform in 2024 reflected the rebound in global deal activity during the year over depressed 2023

levels. During the year ended December 31, 2024, our net transaction and portfolio advisory fees of $152.5 million more than

doubled from $68.6 million last year, driven by significant activity in our capital markets business. We generated $28.6 billion

in realized proceeds from our carry funds, including $12.4 billion from our corporate private equity funds which nearly doubled

from $6.5 billion in realized proceeds in 2023. We deployed $42.7 billion across our platform during 2024, a nearly 50%

increase compared to $28.8 billion in 2023, which included $8.2 billion and $10.0 billion in invested capital in our Global

Private Equity and Global Investment Solutions segments. In our Global Credit segment, deployment of $24.5 billion in 2024

included the closing of ten new CLOs, gross originations across our platform including $3.7 billion in direct lending, and

invested capital in our carry funds. Over one-third of our realized proceeds in 2024 were generated in the fourth quarter,

reflecting the acceleration of deal activity in the latter part of the year.

We had $40.8 billion in capital inflows in 2024, exceeding our previously announced target of $40 billion, with Global

Credit and Global Investment Solutions comprising over two-thirds of the activity. While we believe that we will continue to

attract a significant amount of capital for our buyout funds, we have seen a decline in buyout fund sizes across most

geographies, which may continue to result in lower management fees in Global Private Equity in the future.

The U.S. Securities and Exchange Commission (the “SEC”) has put forth several rule proposals, and we are evaluating

the potential impacts to our business and operations and those of our portfolio companies. The future of several final rules, such

as the public company climate-related disclosure rules and the private fund adviser rules, is in doubt pending the resolution of

recent litigation. We are closely evaluating potential impacts to our business of rule proposals and adoptions and various

financial, regulatory, and other proposals put forth by the new administration and Congress. The potential for policy changes

may create regulatory uncertainty for our investment strategies and our portfolio companies and could adversely affect our

profitability and the profitability of our portfolio companies.

Recent Developments

Dividends

In February 2025, the Company’s Board of Directors declared a quarterly dividend of $0.35 per share to common

stockholders of record at the close of business on February 21, 2025, payable on February 28, 2025.

Key Financial Measures

Our key financial measures and operating metrics are discussed in the following pages. Additional information

regarding U.S. GAAP measures and our other significant accounting policies can be found in Note 2, Summary of Significant

Accounting Policies, to the consolidated financial statements included in this Annual Report on Form 10-K.

Revenues

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 to funds or

certain portfolio companies with which we have an investment advisory or investment management agreement. These fees are

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largely from either traditional closed-end, long-dated funds, which are highly predictable and stable, or Perpetual Capital

products as defined below. Management fees also 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. We also earn management fees on our CLOs and other structured

products.

Transaction and portfolio advisory fees generally include capital markets fees generated by Carlyle Global Capital

Markets in connection with activities related to the underwriting, issuance and placement of debt and equity securities, and loan

syndication for our portfolio companies and third-party clients, which are generally not subject to rebate offsets as described

below with respect to our most recent vintages (but are subject to the rebate offsets set forth below for older funds).

Underwriting fees include gains, losses, and fees arising from securities offerings in which we participate in the underwriter

syndicate.

Transaction and portfolio advisory fees also include fees we receive for the transaction and portfolio advisory services

we provide to our portfolio companies. When covered by separate contractual agreements, we recognize transaction and

portfolio advisory fees for these services when the performance obligation has been satisfied and collection is reasonably

assured. We are generally required to offset our fund management fees by the transaction and advisory fees earned, which we

refer to as “rebate offsets.”

The recognition of portfolio advisory fees, transactions fees, and capital markets fees can be volatile as they are

primarily generated by investment activity within our funds, and therefore are impacted by our investment pace or other capital

transactions at our portfolio companies.

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 (loss). Investment income (loss) 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.

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.

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. The timing and receipt of realized performance allocations varies with the lifecycle of our carry funds

and there is often a difference between the time we start accruing performance allocations and realization. The timing of

performance allocations realizations from our Global Investment Solutions, Carlyle Aviation, and Abingworth funds is typically

later than in our other carry funds based on the terms of such arrangements.

Under our arrangements with the historical owners and management teams of AlpInvest and Abingworth, the amount

of carried interest to which we are entitled varies. In some cases, 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. In certain instances, carried

interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands. Additionally, in

connection with the acquisition of Abingworth, we are entitled to 15% of carried interest generated from certain Abingworth

funds.

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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. This amount is known as the “giveback obligation.” In all cases, each

investment fund is considered separately in evaluating carried interest and potential giveback obligations. See Note 8,

Commitments and Contingencies, to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-

K for additional information.

Accrued performance allocations and accrued giveback obligations at a point in time assume a hypothetical liquidation

of the funds’ investments at their then current fair values. Each investment fund is considered separately in evaluating carried

interest and potential giveback obligations. These assets and liabilities will continue to fluctuate in accordance with the fair

values of the funds’ investments until they are realized. The Company uses “net accrued performance revenues” to refer to the

aggregation of the accrued performance allocations net of (i) accrued giveback obligations, (ii) accrued performance allocations

related compensation, (iii) performance allocations related tax obligations, and (iv) accrued performance allocations attributable

to non-controlling interests. Net accrued performance revenues exclude any net accrued performance allocations and incentive

fees that have been realized but will be collected in subsequent periods, as well as net accrued performance revenues which are

presented as fee related performance revenues when realized in our non-GAAP financial measures. Realized performance

allocation-related compensation associated with our updated compensation program that has not yet been paid is also excluded

from our net accrued performance allocations.

In addition, realized performance allocations may be reversed in future periods to the extent that such amounts become

subject to a giveback obligation. The aggregate amount of giveback obligations realized since Carlyle’s inception totaled

$256.5 million, $175.0 million of which was related to various Legacy Energy Funds. Given that 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, only $86.5 million of the $256.5 million aggregate giveback obligation realized since

inception was attributable to Carlyle. The realization of giveback obligations for the Company’s portion of such obligations

reduces Distributable Earnings in the period realized. Further, each individual who holds equity interests in carried interest

generated by our funds and is a 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.

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, and other employees 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” and “—Segment Analysis” for the amount of realized net performance revenues recognized

each period and related discussion.

Investment income also represents the realized and unrealized gains and losses on our principal investments, including

our investments in Carlyle funds that are not consolidated, and our strategic investments in NGP as described below. 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.

We account for our investments in NGP under the equity method of accounting. Our investments in NGP include the

equity interests in NGP Management Company, L.L.C. (“NGP Management”) and the general partners of certain carry funds

advised by NGP. These interests entitle us to an allocation of income equal to 55.0% of the management fee related revenues of

NGP Management, which serves as the investment advisor to certain NGP funds, as well as 47.5% (40.0% or 42.75% in the

case of certain funds) of the performance allocations that NGP receives from the NGP Carry Funds. We record investment

income (loss) for our equity income allocation from NGP management fee related revenues and our share of any allocated

expenses from NGP Management, as well as expenses associated with the compensatory elements of the strategic investment.

We also record our equity income allocation from NGP performance allocations in principal investment income (loss) from

equity method investments rather than performance allocations in our consolidated statements of operations. We do not control

or manage NGP. Moreover, we do not operate NGP’s business, have representation on NGP’s board or serve as an investment

advisor to any investment fund sponsored by NGP, nor do we direct the operations of any of NGP portfolio companies. While

we have consent rights over certain major actions by NGP outside of the ordinary course of NGP’s business (including, for

example, consent rights over items such as amendments to the organizational documents of the entity in which we are invested,

changes to the management fee streams earned by NGP under its fund agreements, or the incurrence of certain debt by NGP

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and other similar items), we have no voting rights or consent rights on any NGP investment committee that selects investments

to be made by NGP funds. For further information regarding our strategic investments in NGP, refer to Note 4, Investments, to

the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Interest and other income. Interest and other income primarily represents reimbursement of certain costs incurred on

behalf of our funds, as well as interest income that we earn such as from our cash and money market accounts and other

investments, including CLO senior and subordinated notes.

Interest and other income of Consolidated Funds. Interest and other income of Consolidated Funds primarily

represents the interest earned on assets of consolidated CLOs.

Net investment income (loss) of Consolidated Funds. Net investment income (loss) of Consolidated Funds generally

measures the change in the difference in fair value between the assets and the liabilities of the Consolidated Funds. Income

(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. Income 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 income (losses) of Consolidated Funds attributable

to the limited partner investors is allocated to non-controlling interests. Therefore, income 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, income or loss from the Consolidated Funds generally does not impact

the assets available to our common stockholders.

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, advisors, and operating executives. However, subsequent to the updates made to our compensation

strategy effective December 31, 2023, we generally allocate a range of 60% to 70% of performance allocations and incentive

fees to our employees. As a result, the portion of performance allocations and incentive fees paid as compensation has increased

and cash-based compensation and benefits has decreased in 2024 compared to the prior period.

In addition, we have implemented various equity-based compensation arrangements that require senior Carlyle

professionals and other employees to provide services over a service period of generally one year to four years in order to vest

in the applicable equity interests, which under U.S. GAAP will result in compensation charges over current and future periods.

In certain of our equity-based compensation arrangements, vesting is based on the achievement of certain performance targets

or market conditions. See Note 14, Equity-Based Compensation, to the consolidated financial statements in Part II, Item 8 of

this Annual Report on Form 10-K for additional information. 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 prior 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), bad debt expense, 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 or lease right-of-use assets and expenses or insurance recoveries

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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. Similarly, our

general, administrative and other expenses may increase as a result of professional and other fees incurred as part of due

diligence related to strategic acquisitions and new product development. Additionally, we anticipate that general, administrative

and other expenses will fluctuate from period to period due to the impact of foreign exchange transactions.

Interest and other expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds consist

primarily of interest expense related primarily to loans of consolidated CLOs, professional fees and other third-party expenses.

Income taxes. Income taxes 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.

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.

Earnings Per Common Share. We compute earnings per common share in accordance with ASC 260, Earnings Per

Share. Basic earnings per common share is calculated by dividing net income (loss) attributable to the common shares of the

Company by the weighted average number of common shares outstanding for the period. Diluted earnings per common share

reflects the assumed conversion of all dilutive securities. See Note 12, Earnings Per Common Share, to the consolidated

financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

Non-GAAP Financial Measures

Distributable Earnings. Distributable Earnings, or “DE,” is a key performance benchmark used in our industry and is

evaluated regularly in making resource deployment and compensation decisions, and in assessing the performance of our three

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 certain foreign performance revenues (composed 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 that affect

period-to-period comparability and are not reflective of the Company’s operational performance. Charges (credits) related to

Carlyle corporate actions and non-recurring items include: charges associated with the Conversion, charges associated with

acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, amortization and any

impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions,

charges associated with earn-outs 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, and certain general, administrative and other expenses when the timing of any future

payment is uncertain, and non-recurring items that affect period-to-period comparability and are not reflective of the

Company’s operating performance. 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 base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized

performance revenues, realized principal investment income from investments in Carlyle funds, and net interest (interest

income less interest expense). Fee Related Earnings includes fee related performance revenues and related compensation

expense, which is generally approximately 45% of fee related performance revenues. Fee related performance revenues

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represent the realized portion of performance revenues that are measured and received on a recurring basis, are not dependent

on realization events, and which have no risk of giveback.

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 and for AlpInvest carry funds during the commitment fee period (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 (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 (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions)

as of the quarterly cut-off date;

(d)the external investor portion of the net asset value of 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 fair value of Fortitude’s general account assets invested under the strategic advisory services agreement (see

“Fee-earning AUM based on fair value and other” in the table below);

(f)the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our

business development companies and certain carry funds (included in “Fee-earning AUM based on lower of cost

or fair value and other” in the table below); and

(g)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, (included in “Fee-earning

AUM based on lower of cost or fair value and other” in the table below).

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The chart below presents Fee-earning AUM by segment at each period, in billions.

The table below details Fee-earning AUM by its respective components at each period.

(1)Ending balances as of December 31, 2024 and 2023 exclude $22.8 billion and $15.3 billion, respectively, 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.

(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, closed reinsurance transactions at Fortitude, as well as

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gross subscriptions in 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 for the year ended

December 31, 2023 include $26 billion of Fee-earning AUM related to closed reinsurance transactions at Fortitude.

(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-end funds, and outflows

from our liquid credit products. 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, activity of funds with fees based on gross asset value, and changes in the fair value of Fortitude’s

general account assets covered by the strategic advisory services agreement.

(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

generally equals the sum of the following:

(a)  the aggregate fair value of our carry funds and related co-investment vehicles, 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);

(c) the net asset value of certain carry funds;

(d)the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement; and

(e) 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.

The chart below presents Total AUM by segment at each period, in billions.

We include in our calculation of AUM and Fee-earning AUM the NGP Energy Funds that are advised by NGP. Our

calculation of AUM also includes third-party capital raised for the investment in Fortitude through a Carlyle-affiliated

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investment fund and from strategic investors who directly invest in Fortitude alongside the fund. The AUM and Fee-earning

AUM related to the strategic advisory services agreement with Fortitude is inclusive of the net asset value of investments in

Carlyle products. These amounts are also reflected in the AUM and Fee-earning AUM of the strategy in which they are

invested.

For most of our Global Private Equity and Global Investment Solutions 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.

The table below provides the period to period rollforward of Total AUM.

(1)Inflows generally reflects the impact of gross fundraising as well as closed reinsurance transactions at Fortitude and corporate

acquisitions during the period, if any. For funds or vehicles denominated in foreign currencies, this reflects translation at the average

quarterly rate. Inflows for the year ended December 31, 2023 include $26 billion of AUM related to closed reinsurance transactions at

Fortitude.

(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-end funds, outflows from our liquid credit products, 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, 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, changes in the fair value of Fortitude’s general account assets

covered by the strategic advisory services agreement, 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.

Please refer to “—Segment Analysis” for a detailed discussion by segment of the activity affecting Total AUM for

each of the periods presented.

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

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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.

Perpetual Capital. “Perpetual Capital” refers to the assets we manage or advise which have an indefinite term and for

which there is no immediate requirement to return capital to investors upon the realization of investments made with such

capital, except as required by applicable law. Perpetual Capital may be materially reduced or terminated under certain

conditions, including reductions from changes in valuations and payments to investors, including through elections by investors

to redeem their investments, dividend payments, and other payment obligations, as well as the termination of or failure to renew

the respective investment advisory agreements. Perpetual Capital includes: (a) assets managed under the strategic advisory

services agreement with Fortitude, (b) our Core Plus real estate fund, (c) our business development companies and certain other

direct lending products, (d) Carlyle Tactical Private Credit Fund (“CTAC”), (e) our closed-end tender offer Carlyle AlpInvest

Private Markets (“CAPM”) funds, and (f) certain other structured credit products. As of December 31, 2024, our total AUM

and Fee-earning AUM included $93.9 billion and $91.1 billion, respectively, of Perpetual Capital.

Performance Fee Eligible AUM. “Performance Fee Eligible AUM” represents the AUM of funds for which we are

entitled to receive performance allocations, inclusive of the fair value of investments in those funds (which we refer to as

“Performance Fee Eligible Fair Value”) and their Available Capital. Performance Fee Eligible Fair Value is “Performance Fee-

Generating” when the associated fund has achieved the specified investment returns required under the terms of the fund’s

agreement and is accruing performance revenue as of the quarter-end reporting date. Funds whose performance allocations are

treated as fee related performance revenues are excluded from these metrics. As of December 31, 2024, our total AUM included

$229.2 billion of Performance Fee Eligible AUM.

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. The entities we consolidate are referred to collectively as the Consolidated Funds in our

consolidated financial statements. As of December 31, 2024, our Consolidated Funds represent approximately 2% of our AUM;

1% of our management fees; and 1% of our total investment income or loss on an unconsolidated basis for the year ended

December 31, 2024.

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 and certain other funds that we advise. As of December 31, 2024, the

assets and liabilities of the Consolidated Funds were primarily related to our consolidated CLOs, which held approximately

$7.9 billion of total assets. 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 equity. 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.

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. 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, Summary of

Significant Accounting Policies, 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, 2024 and 2023. 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 fund terms and the creation and termination of funds. As further described above, the consolidation of these funds

primarily has the impact of increasing interest and other income of Consolidated Funds, interest and other expenses of

Consolidated Funds, and net investment income (losses) 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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NM - Not meaningful.

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Revenues

Fund management fees. Fund management fees increased $144.9 million, or 7%, for the year ended December 31,

2024 compared to 2023, primarily due to the following:

(1)Total increase in Fund management fees does not include our equity income allocation from NGP management fee related revenues. We

do not control NGP and account for our strategic investment in NGP as an equity method investment under U.S. GAAP. Therefore, Fund

management fees associated with NGP are included in Principal investment income (loss) in our U.S. GAAP results.

Management fees attributable to Carlyle Partners VIII, L.P. (“CP VIII”), our eighth U.S. buyout fund, were

approximately 11% of fund management fees recognized during the year ended December 31, 2023. No other fund generated

over 10% of total management fees in the periods presented. Average Fee-earning assets under management in our Global

Credit and Global Investment Solutions segments in 2024 grew approximately 19% and 21%, respectively, relative to the

average balances in 2023, while average Fee-earning assets under management in 2024 for Global Private Equity fell by 4%

relative to the average balance in 2023. As a result, Fund management fees increased in Global Credit and Global Investment

Solutions and decreased in Global Private Equity, due in part to smaller buyout fund sizes in our corporate private equity

strategy and step downs in rate or basis, particularly a step-down in management fee rate in CP VII at the beginning of 2024.

Fund management fees included transaction and portfolio advisory fees, net of rebate offsets, of $152.5 million and

$68.6 million for the years ended December 31, 2024 and 2023, respectively. These fees primarily comprise capital market fees

generated by Carlyle Global Capital Markets. The recognition of portfolio advisory fees, transactions fees, and capital markets

fees can be volatile as they are primarily generated by investment activity within our funds, and therefore are impacted by our

investment pace. See “—Trends Affecting Our Business” for further discussion on our investment activity and broader market

trends.

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Investment income. Investment income increased $2.2 billion for the year ended December 31, 2024 compared to

2023, which included an increase in Performance allocations of $2.1 billion and an increase in Principal investment income

(loss) of $0.1 billion. The components of Investment income are included in the following table:

Performance allocations. Performance allocations by segment for years ended December 31, 2024 and 2023

comprised the following:

Performance allocations for the year ended December 31, 2024 included:

•In the Global Private Equity segment, Performance allocation accruals were primarily driven by appreciation in

CP VII, and to a lesser extent appreciation in CP VIII, partially offset by the reversal of Performance allocation

accruals in CEP V reflecting portfolio depreciation.

•In the Global Credit segment, Performance allocation accruals were primarily driven by appreciation in

opportunistic credit funds.

•In the Global Investment Solutions segment, Performance allocation accruals were primarily driven by

appreciation in secondaries & portfolio finance and co-investment funds.

Performance allocations for the year ended December 31, 2023 included:

•In the Global Private Equity segment, the reversal of Performance allocations were primarily driven by CP VII, as

preferred returns outpaced portfolio appreciation, and the impact of portfolio depreciation in CP VI.

•In the Global Credit segment, Performance allocation accruals were primarily driven by portfolio appreciation in

our opportunistic credit funds.

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•In the Global Investment Solutions segment, Performance allocation accruals were primarily driven by our

secondaries & portfolio finance and co-investment strategies.

Principal investment income. The increase in Principal investment income for the year ended December 31, 2024

compared to 2023 was primarily due to an investment loss of $104.0 million during the year ended December 31, 2023 related

to our equity method investment in Carlyle FRL (see Note 4, Investments, to the consolidated financial statements in Item 8 of

this Annual Report on Form 10-K for more information). This was partially offset by a decrease in investment income in our

other Global Credit products related to a $45.5 million reversal of previously recorded unrealized investment income on our

investment in the BDC Preferred Shares due to the proposed merger between CSL and another Carlyle-advised BDC, which we

expect will result in higher fund management fees in CSL in future periods (refer to Note 9, Related Party Transactions, to the

consolidated financial statements for more information). The increase in Principal investment income was further offset by a

decrease investment income related to our equity method investment in the general partners of certain carry funds advised by

NGP. In addition, Other investment income in the year ended December 31, 2023 included an unrealized investment loss of

$13.3 million associated with the remeasurement of a corporate investment in equity securities, which was previously carried at

cost, resulting from an observable price change pursuant to ASC 321, Investments–Equity Securities.

Interest and other income of Consolidated Funds. Interest and other income of Consolidated Funds increased $61.5

million for the year ended December 31, 2024 as compared to 2023. Substantially all of the increase in interest and other

income of Consolidated Funds relates to increased interest income from consolidated CLOs. 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 (losses) 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.

Expenses

Compensation and benefits. Total compensation and benefits increased $328.4 million for the year ended

December 31, 2024 compared to 2023, driven by an increase in Performance allocations and incentive fee related compensation

of $257.8 million and an increase in Equity-based compensation of $218.8 million, partially offset by a decrease in Cash-based

compensation and benefits of $148.2 million.

Cash-based compensation and benefits. The decrease in Cash-based compensation and benefits was primarily due to

the updates to our compensation program under which we pay a greater portion of compensation from performance allocations.

The decrease was partially offset by an increase in headcount as well as incentive compensation related to capital markets fees.

Equity-based compensation. The increase in Equity-based compensation was primarily due to an increase in grants of

restricted stock units for the year ended December 31, 2024 compared to 2023. In February 2024, we granted 18.1 million

restricted stock units, including 13.2 million restricted stock units granted that are subject to vesting based on the achievement

of stock price performance conditions over a service period of three years. The grant date fair value of the awards subject to

stock price performance conditions was approximately $347 million and the year ended December 31, 2024 includes

$201.6 million of equity-based compensation expense related to these awards. Equity-based compensation related to these

awards will decline in 2025 as the recognition of expense for these awards is more heavily weighted to the earlier years of the

service period. Such expense is incurred regardless of whether the stock price performance conditions are achieved. During the

year ended December 31, 2024, stock price performance conditions were achieved for the first tranche of 4.3 million

performance-based restricted stock units granted in February 2024, which vested in February 2025. In February 2023, we

granted a total of 9.9 million restricted stock units to our personnel, as well as an aggregate 6.8 million of time- and

performance-based inducement equity awards in connection with the appointment of our Chief Executive Officer.

Performance allocations and incentive fee related compensation. The increase in Performance allocations and

incentive fee related compensation expense was primarily driven by the impact of the increase in Performance allocations, on

which Performance allocations and incentive fee related compensation is based, partially offset by a one-time $1.1 billion

charge in 2023 related to the updated employee compensation program effective December 31, 2023, which increased the

proportion of performance allocations revenue that will be used to compensate employees.

General, administrative and other expenses. General, administrative and other expenses increased $13.5 million for

the year ended December 31, 2024 compared to 2023, primarily driven by an increase in partnership expenses paid by the

Company on behalf of the Carlyle funds of $11.8 million, an increase in liabilities for litigation-related contingencies,

regulatory examination and inquiries, and other matters of $8.5 million, as well as increases in external finders fees and office-

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related costs. These increases were partially offset by a decrease in foreign currency remeasurement adjustments of $16.2

million, reflecting the impact of remeasurement gains on unrealized performance allocations at certain AlpInvest subsidiaries

during the year ended December 31, 2024, as well as the benefit of lower value-added tax (“VAT”) expense in Asia and lower

travel and entertainment expense.

Interest and other expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds increased

$145.8 million for the year ended December 31, 2024 as compared to 2023, primarily due to higher 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 (losses) 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.

Net investment income (loss) of Consolidated Funds. The table below summarizes the components of Net investment

income (loss) of Consolidated Funds, including our consolidated CLOs and certain other funds:

Provision (benefit) for income taxes. For the years ended December 31, 2024 and 2023, the Company’s provision

(benefit) for income taxes was $302.6 million and $(104.2) million, respectively, and the Company’s effective tax rates were

21.7% and 17.3%, respectively. The effective tax rate for the years ended December 31, 2024 and 2023 primarily comprises the

21% U.S. federal corporate income tax rate plus the impact of U.S. state and foreign corporate income tax provision (benefit)

and non-controlling interests. The effective tax rate for the year ended December 31, 2023 also differs from the statutory rate

due to a net tax provision from non-deductible restricted stock units.

As of December 31, 2024 and 2023, the Company had federal, state, local and foreign taxes payable of $46.2 million

and $46.9 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities in

the accompanying consolidated balance sheets.

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

controlling interests in consolidated entities was $70.7 million and $111.7 million for the years ended December 31, 2024 and

2023, 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 fund’s limited partners or CLO investors, as well as net earnings from our

Insurance Solutions business and certain other products that are allocated to certain third-party investors. The net income (loss)

of our Consolidated Funds, after eliminations, was $8.7 million and $82.6 million for the years ended December 31, 2024 and

2023, respectively. These amounts also reflect the net income attributable to non-controlling interests in carried interest,

giveback obligations, and cash held for carried interest distributions.

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, 2024 and 2023. Our Non-GAAP financial measures exclude the effects of unrealized performance

allocations net of related compensation expense, unrealized principal investment income, consolidated funds, acquisition and

disposition-related items including amortization and any impairment charges of acquired intangible assets and contingent

consideration taking the form of earn-outs, charges associated with the Conversion, impairment charges associated with lease

right-of-use assets, gains or losses from retirement of debt, charges associated with contract terminations and employee

severance, charges associated with equity-based compensation, changes in the tax receivable agreement liability, corporate

actions, and infrequently occurring or unusual events.

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The following table shows our total segment DE and FRE for the years ended December 31, 2024 and 2023.

The following table sets forth our total segment revenues for the years ended December 31, 2024 and 2023.

The following table sets forth our total segment expenses for the years ended December 31, 2024 and 2023.

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Income (loss) before provision for income taxes is the U.S. GAAP financial measure most comparable to Distributable

Earnings and Fee Related Earnings. The following table is a reconciliation of income (loss) before provision for income taxes to

Distributable Earnings and to Fee Related Earnings.

(1)Equity-based compensation for the years ended December 31, 2024 and 2023 includes amounts presented in principal investment

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

(2)Includes charges (credits) related to Carlyle corporate actions and non-recurring items that affect period-to-period comparability

and are not reflective of the Company’s operating performance.

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

(4)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

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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 fee related performance revenues, which are included in fund level fee

revenues in the segment results, and (vi) the reclassification of tax expenses associated with certain foreign 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, and the exclusion of charges

associated with the investment in NGP Management and its affiliates that are excluded from the Non-GAAP results, and the

exclusion of the principal investment loss from dilution of the indirect investment in Fortitude (see Note 4, Investments, to the

consolidated financial statements).

Distributable Earnings for our reportable segments are as follows:

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 chief operating decision maker 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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Global Private Equity

The following table presents our results of operations for our Global Private Equity(1) segment:

(1)  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.

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Distributable Earnings

Distributable Earnings decreased $114.5 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2024:

Realized Net Performance Revenues. Realized net performance revenues decreased $159.9 million for the year ended

December 31, 2024 as compared to 2023 despite a $122.1 million increase in realized performance revenues as realized

performance revenues related compensation increased disproportionately primarily as a result of the update to our compensation

and incentive plan that became effective December 31, 2023. For the year ended December 31, 2024, realized net performance

revenues of $337.1 million were primarily driven by CAP IV, CIEP, and CEOF II. For the year ended December 31, 2023,

realized net performance revenues of $497.0 million were primarily driven by NGP XII, our CEOF funds, CEP IV, and CP VI.

Fee Related Earnings

Fee Related Earnings increased $33.9 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2024:

Fee Revenues. Total fee revenues decreased $153.0 million for the year ended December 31, 2024 as compared to

2023, due to the following:

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The decrease in fund management fees for the year ended December 31, 2024 as compared to 2023 was primarily due

to the impact of investment realizations in funds on which management fees are based on invested capital, a step-down in

management fee rate in CP VII at the beginning of 2024 and a decrease in catch-up management fees primarily from CP VIII,

which completed fundraising in 2023. The impact of smaller buyout funds in our corporate private equity strategy is resulting

in, and may continue to result in, lower fund management fees relative to prior periods.

The decrease in fee related performance revenues for the year ended December 31, 2024 as compared to 2023 was

driven by CPI, which will fluctuate from year to year based on fund performance. The portion of these fees paid as

compensation are included in cash-based compensation and benefits expense. We do not expect material fee related

performance revenues in Global Private Equity for 2025.

Cash-based compensation and benefits expense. Cash-based compensation and benefits expense decreased $161.0

million, for the year ended December 31, 2024 as compared to 2023, primarily due to a decrease in the portion of bonuses

funded by fee earnings as a result of the updates to our compensation program effective as of December 31, 2023, which

resulted in a larger portion of compensation being derived from Realized performance revenues related compensation.

Additionally, the decrease was further impacted by a decrease in fee related performance compensation of $29.7 million.

General, administrative and other indirect expenses. General, administrative and other indirect expenses decreased

$26.7 million for the year ended December 31, 2024 as compared to 2023, primarily due to lower professional fees and the

benefit of lower VAT expense in Asia.

Fee-earning AUM

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.

(1)For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”

(2)Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM

in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.

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The table below provides the period to period rollforward of Fee-earning AUM.

(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 $98.0 billion at December 31, 2024, a decrease of 8% compared to $106.7 billion at

December 31, 2023, as outflows and negative foreign exchange activity exceeded inflows for the period. Outflows of

$14.9 billion were driven by realizations in funds that charge fees on invested capital, as well as fee basis step-downs in CRP

IX, CAP V, and CEP V. Negative foreign exchange activity of $1.2 billion reflected the impact of a strengthening U.S. Dollar

on the translation of our EUR- and JPY-denominated funds to USD. Inflows of $7.7 billion included the activation of

management fees in CJP V and CAP VI and capital deployed in CPI. Investment and distribution activity has no impact for

funds still in the original investment period where Fee-earning AUM is based on commitments.

Total AUM

The table below provides the period to period rollforward of Total AUM.

(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, gross redemptions in our open-ended funds, and the expiration of available capital.

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(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 $163.5 billion at December 31, 2024, an increase of 1% compared to $161.3 billion at December 31,

2023, as inflows and market appreciation were largely offset by outflows and negative foreign exchange activity for the period.

Inflows of $12.7 billion reflected fundraising across the segment, notably in CRP X and CJP V. Market activity of $7.5 billion

was driven by appreciation in CP VII (15% appreciation for $3.4 billion), CP VIII (21% appreciation for $1.7 billion), and CRP

IX (17% appreciation for $0.6 billion), partially offset by depreciation in CEP V (-16% depreciation for $1.0 billion). Outflows

of $16.3 billion were driven by distributions across the segment, notably in the U.S. buyout, Asia buyout, NGP energy, Japan

buyout, and international energy funds. Negative foreign exchange activity of $1.7 billion reflected the impact of a

strengthening U.S. Dollar on the translation of our EUR- and JPY-denominated funds to USD.

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, 2024, 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

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 Part I, Item 1A “Risk Factors—Risks Related to Our Business

Operations—Risks Related to the Assets We Manage—The historical returns attributable to our funds, including those

presented in this Annual Report on Form 10-K, 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 Global Private Equity business. See Part I,

Item 1 “Business—Our Global Investment Offerings” for a legend of the fund acronyms listed below.

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*Net accrued fee related performance revenues for CPI are excluded from Net Accrued Performance Revenues. These amounts will be

reflected as fee related performance revenues when realized, and included in Fund level fee revenues in our segment results. There were no

accrued fee related performance revenues for CPI as of December 31, 2024.

**The IRR is incalculable, which occurs in instances when a distribution occurs prior to a Limited Partner capital contribution due to the

use of fund-level credit facilities.

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

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

(3)Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining

escrow values for realized investments.

(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried

interest, divided by cumulative invested capital.

(5)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.

(6)Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested

capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of

management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the

impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based

on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment

cash flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow

dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in

each fund.

(7)Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested

capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all

management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on

the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash

flows for the fund. 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. Subtotal Net IRR aggregations for

multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted

return for a Limited Partner who invested sequentially in each fund.

(8)Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.

(9)Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried

interest.

(10)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and

stand-alone investments arranged by us: MENA, CCI, CSSAF I, CPF I, CAP Growth I, CAP Growth II, CBPF II,

CAGP IV, ABV 8, ABV 9 and ACCD 2.

(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: CP I, CP II, CP III, CP IV, CEP I, CEP II, CAP I, CAP II, CAP

III, CBPF I, CJP I, CJP II, CMG, CVP I, CVP II, CUSGF III, CGFSP I, CEVP I, CETP I, CETP II, CAVP I, CAVP II,

CAGP III, CEOF I, Mexico and CSABF.

(12)For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time

since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful

but is negative as of reporting period end.

(13)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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(14)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and

stand-alone investments arranged by us: CCR, CER I, and CER II.

(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: CRP I, CRP II, CRP III, CRP IV, CRP V, CRCP I, CAREP I,

CAREP II, CEREP I, CEREP II and CEREP III.

(16)Aggregate includes the following Legacy Energy funds and related co-investments: Energy I, Energy II, Energy III,

Energy IV, Renew I, and Renew II.

(17)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and

stand-alone investments arranged by us: NGP GAP, NGP RP I, NGP RP II, NGP ETP IV, CPOCP, and CRSEF.

(18)Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and

certain other stand-alone investments arranged by us: CIP.

(19)The fund stepdown date represents the contractual stepdown date under the respective fund agreements for funds on

which the fee basis stepdown has not yet occurred. Funds without a listed Fee Initiation Date and Stepdown Date have

not yet initiated fees.

(20)All amounts shown represent total capital commitments as of December 31, 2024. Certain of our recent vintage funds

are currently in fundraising and total capital commitments are subject to change.

(21)Funds are included when all investments have been realized. There may be remaining fair value and net accrued carry

where there are outstanding escrow balances or undistributed proceeds.

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Global Credit

The following table presents our results of operations for our Global Credit segment:

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Distributable Earnings

Distributable Earnings increased $102.9 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2024:

Realized Net Performance Revenues. Realized net performance revenues decreased $10.6 million for the year ended

December 31, 2024 as compared to 2023, primarily due to a decrease in realized net performance revenues generated by

CCOF I.

Realized Principal Investment Income. Realized principal investment income increased $9.1 million for the year ended

December 31, 2024 as compared to 2023, primarily driven by higher realized principal investment income from our indirect

investment in Fortitude.

Fee Related Earnings

Fee Related Earnings increased $108.1 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2024:

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Fee Revenues. Fee revenues increased $142.9 million for the year ended December 31, 2024 as compared to 2023, due

to the following:

The increase in fund management fees for the year ended December 31, 2024 as compared to 2023 was primarily

driven by closed reinsurance transactions at Fortitude in the fourth quarter of 2023, which increased the fee basis under the

strategic advisory services agreement, as well as increases reflecting the impact of inflows and capital deployment in CTAC and

CCOF III. These increases were partially offset by modest declines in management fees from CLOs due to net capital outflows

during the year ended December 31, 2024.

The increase in portfolio advisory and transaction fees, net, and other fees for the year ended December 31, 2024 as

compared to 2023 was primarily driven by an increase in capital markets fees. The recognition of capital markets fees can be

volatile as they are primarily generated by investment activity. See “—Trends Affecting Our Business” for further discussion

on our investment activity and broader market trends.

The increase in fee related performance revenues for the year ended December 31, 2024 as compared to 2023 was

primarily driven by higher fee related performance revenues from CTAC due to its growing capital base and continued positive

performance.

General, administrative and other indirect expenses. General, administrative and other indirect expenses increased

$33.6 million for the year ended December 31, 2024 as compared to 2023, primarily due to increases in partnership expenses

paid by the Company on behalf of the Carlyle funds, professional fees (including legal expenses), and external costs associated

with fundraising activities.

Fee-earning AUM

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.

(1)For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”

(2)Includes the fair value of Fortitude’s general account assets covered by the strategic advisory services agreement and funds with fees

based on gross asset value.

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(3)Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM

in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.

The table below provides the period to period rollforward of Fee-earning AUM.

(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, closed reinsurance transactions at Fortitude, and gross

subscriptions in our vehicles for which management fees are based on net asset value. Inflows for the year ended December 31, 2023

include $26 billion of Fee-earning AUM related to closed reinsurance transactions at Fortitude. 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, gross redemptions in our open-ended funds, and

outflows from our liquid credit products. 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, activity of funds with fees based on gross asset value, and changes in the fair value of

Fortitude’s general account assets covered by the strategic advisory services agreement.

(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 $154.2 billion at December 31, 2024, a decrease of less than 1% compared to $155.2 billion at

December 31, 2023, as outflows and negative market activity exceeded inflows for the period. Outflows of $12.5 billion were

driven by our liquid credit products and realizations in funds which charge fees on invested capital. Negative market activity of

$3.3 billion primarily consisted of a $4 billion decrease in the fair value of assets covered by the Fortitude strategic advisory

services agreement, partially offset by an increase in the gross asset value of CTAC. Inflows of $15.4 billion were primarily

from the closing of our ten latest vintage CLOs and capital deployment in funds which charge fees on invested capital. The

segment annualized management fee rate decreased to 0.36% at December 31, 2024 from 0.39% at December 31, 2023,

primarily reflecting the full-year impact of assets acquired via reinsurance transactions that closed in 2023 and are covered by

the strategic advisory services agreement with Fortitude, which have a lower fee rate than other Global Credit products.

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Total AUM

The table below provides the period to period rollforward of Total AUM.

(1)Inflows generally reflects the impact of gross fundraising and closed reinsurance transactions at Fortitude 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. Inflows for the year ended December 31, 2023 include $26

billion of AUM related to closed reinsurance transactions at Fortitude.

(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, outflows from our liquid credit products, 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 and non-investment income, change in

gross asset value for our business development companies, changes in the fair value of Fortitude’s general account assets covered by the

strategic advisory services agreement, 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 $192.4 billion at December 31, 2024, an increase of 2% compared to $187.8 billion at December 31,

2023. Inflows of $17.3 billion for the period were driven by the closing of ten new CLOs and other fundraising across the

platform, including the final closing in CCOF III and fundraising in CTAC. Outflows of $13.2 billion for the period were

primarily in our liquid credit products with additional activity, including realizations, in our aviation and opportunistic credit

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 Part I, Item 1A “Risk Factors—Risks Related to Our Business Operations—Risks Related to the

Assets We Manage—The historical returns attributable to our funds, including those presented in this Annual Report on Form

10-K, 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 table reflects the performance of our significant carry funds in our Global Credit business. See Part I,

Item 1 “Business—Our Global Investment Offerings” for a legend of the fund acronyms listed below.

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(1)Represents the original cost of investments since the inception of the fund. For CSP III and CSP IV, reflects amounts

net of investment level recallable proceeds which is adjusted to reflect recyclability of invested capital for the purpose

of calculating the fund MOIC.

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

(3)Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining

escrow values for realized investments.

(4)Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried

interest, divided by cumulative invested capital.

(5)Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested

capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of

management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the

impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based

on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment

cash flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow

dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in

each fund.

(6)Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested

capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all

management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on

the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash

flows for the fund. 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. Subtotal Net IRR aggregations for

multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted

return for a Limited Partner who invested sequentially in each fund.

(7)Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.

(8)For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time

since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful

but is negative as of reporting period end.

(9)Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and

stand-alone investments arranged by us: SASOF IV, SASOF V, CAPF VII, CICF, CICF II, CAF, and CALF.

(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, CSP II, CEMOF I, CSC, CMP I, CMP II, SASOF II, and

CASCOF.

(11)The fund stepdown date represents the contractual stepdown date under the respective fund agreements for funds on

which the fee basis stepdown has not yet occurred. Funds without a listed Fee Initiation Date and Stepdown Date have

not yet initiated fees.

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(12)All amounts shown represent total capital commitments as of December 31, 2024. Certain of our recent vintage funds

are currently in fundraising and total capital commitments are subject to change. Committed Capital for CEMOF II

reflects original committed capital of $2.8 billion, less $1.1 billion in commitments that were extinguished following a

Key Person Event. Committed capital for CCOF II excludes $150 million in capital committed by a CCOF II investor to

a side vehicle.

(13)Funds are included when all investments have been realized. There may be remaining fair value and net accrued carry

where there are outstanding escrow balances or undistributed proceeds.

(14)Gross IRR and Net IRR reflect the performance of equity commitments in CCOF III PSV.

Global Investment Solutions

The following table presents our results of operations for our Global Investment Solutions segment:

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Distributable Earnings

Distributable Earnings increased $106.6 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2024:

Fee Related Earnings

Fee Related Earnings increased $103.2 million for the year ended December 31, 2024 as compared to 2023. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2024:

Fee Revenues. Fee revenues increased $108.1 million for the year ended December 31, 2024 as compared to 2023,

primarily due to an increase in Fund management fees of $94.8 million and an increase in Fee related performance revenues of

$13.1 million. The increase in Fund management fees was primarily driven by the activation of management fees in ASF VIII

and ACF IX in the second half of 2023, and the impact of ongoing fundraising in our secondaries & portfolio finance and co-

investment products as well as our CAPM funds throughout 2024. The increase in Fund management fees for the year ended

December 31, 2024 included an increase in catch-up management fees of $13.2 million. The increase in Fee related

performance revenues was primarily driven by growth in our CAPM retail strategy due to its growing capital base and

performance.

Fee-earning AUM

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.

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(1)For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”

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

(3)Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM

in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.

The table below provides the period to period rollforward of Fee-earning AUM.

(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 $52.1 billion at December 31, 2024, an increase of 14% compared to $45.5 billion at

December 31, 2023, as inflows and market appreciation exceeded outflows and foreign exchange activity for the period.

Inflows of $9.9 billion were driven by fundraising, notably in ASF VIII and ACF IX, and capital deployed in our funds which

charge fees based on invested capital. Outflows of $3.9 billion were attributable to distributions and basis step-downs,

particularly in our primary funds. Negative foreign exchange activity of $1.1 billion reflected the impact of a strengthening U.S.

Dollar on the translation of our EUR-denominated funds to USD. 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.

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Total AUM

The table below provides the period to period rollforward of Total AUM.

(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 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.

(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 $85.1 billion as of December 31, 2024, an increase of 11% compared to $76.9 billion as of

December 31, 2023, as inflows and market appreciation exceeded outflows and the negative impact of foreign exchange for the

period. Inflows of $10.8 billion were driven by commitments raised across the platform, notably in ASF VIII and ACF IX, with

market appreciation of $6.6 billion reflecting performance across the segment. Outflows of $7.1 billion were driven by

realizations and the expiration of dry powder, predominantly in our primary and secondaries & portfolio finance funds.

Negative foreign exchange activity of $2.0 billion reflected the impact of a strengthening U.S. Dollar on the translation of our

EUR-denominated funds to USD.

Fund Performance Metrics

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 Part I, Item 1A “Risk Factors—Risks Related to Our Business

Operations—Risks Related to the Assets We Manage—The historical returns attributable to our funds, including those

presented in this Annual Report on Form 10-K, 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 Global Investment Solutions business. We

also present fund performance information for portfolios of investments held by separately managed accounts, generally

aggregated either as invested alongside the relevant commingled fund or over a specified time period.

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

originated by AlpInvest. Excluded from the performance information shown are: (a) investments that were not

originated by AlpInvest (i.e., AlpInvest did not make the original investment decision or recommendation); (b) Direct

Investments, which was spun off from AlpInvest in 2005; (c) Carlyle AlpInvest Private Markets (CAPM); and (d) LP

co-investment vehicles managed by AlpInvest. As of December 31, 2024, these excluded portfolios amounted to

approximately $8.7 billion of AUM in the aggregate.

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

(3)To exclude the impact of FX, all foreign currency cash flows have been converted to the currency representing a

majority of the capital committed to the relevant fund at the reporting period spot rate.

(4)Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried

interest.

(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 investment contributions, distributions and unrealized value of the underlying investments,

before management fees, expenses and carried interest at the AlpInvest level.

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(7)Net Internal Rate of Return (“Net 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,

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)“ASF” stands for AlpInvest Secondaries Fund, “ACF” stands forAlpInvest Co-Investment Fund, and “SMAs” are

Separately Managed Accounts. “ASF - SMAs” and “ACF - SMAs” reflect the aggregated portfolios of investments

held by SMAs within the relevant strategy, which invest alongside the relevant ASF or ACF (as applicable). Strategic

SMAs reflect the aggregated portfolios of co-investments made by SMAs sourced from the SMA investor’s own

private equity fund investment portfolio. Other SMAs reflect the aggregated portfolios of investments within the

relevant strategy that began making investments in the corresponding time periods. Co-Investments SMAs 2014-2016

does not include two SMAs that started in 2016 but invested a substantial majority alongside ACF VII. These two

SMAs have instead been grouped with ACF VII - SMAs. An SMA may pursue multiple investment strategies and

make commitments over multiple years.

(9)Includes ASF VIII - SMAs, ACF IX - SMAs, AlpInvest Strategic Portfolio Finance II, AlpInvest Atom Fund,

AlpInvest Atom Fund II, all mezzanine investment portfolios, all ‘clean technology’ private equity investment

portfolios, all strategic portfolio finance SMAs, and any state-focused investment mandate portfolios.

(10)For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited

time since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered

meaningful but is negative as of reporting period end.

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

period spot rate.

(12)Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end. Total Net

Accrued Carry excludes net accrued carry which was retained as part of the sale of MRE on April 1, 2021. There was

no net accrued carry balance for MRE as of December 31, 2024.

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 stockholders. Approximately 95% – 97% of all capital

commitments to our funds are provided by our fund investors, with the remaining amount typically funded by Carlyle, our

senior Carlyle professionals, advisors, and other professionals. We may elect to invest additional amounts in funds focused on

new investment areas.

Our Sources of Liquidity

We have multiple sources of liquidity to meet our capital needs, including cash on hand, annual cash flows,

accumulated earnings, cash we receive from our notes offerings, and funds from our senior revolving credit facility, which had

$1.0 billion of available capacity as of December 31, 2024. Although we may consider other financings to invest in growing our

business, we believe these sources will be sufficient to fund our capital needs for at least the next twelve months. We believe

we will meet longer-term expected future cash requirements and obligations through a combination of existing cash and cash

equivalent balances, cash flow from operations, accumulated earnings, and amounts available for borrowing from our senior

revolving credit facility or other financings.

Cash and cash equivalents. Cash and cash equivalents were approximately $1.3 billion at December 31, 2024.

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 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.

After deducting cash amounts allocated to the specific requirements mentioned above, the remaining cash and cash

equivalents was approximately $1.2 billion as of December 31, 2024. 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.

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Senior Revolving Credit Facility. The capacity under the amended and restated revolving credit facility is $1.0 billion

and the facility is scheduled to mature on April 29, 2027. The Company’s borrowing capacity is subject to the ability of the

financial institutions in the banking syndicate to fulfill their respective obligations under the revolving credit facility. 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 SOFR (or similar

benchmark rate for non-U.S. dollar borrowings) plus a 0.10% adjustment and an applicable margin not to exceed 1.50% per

annum (5.43% at December 31, 2024). As of December 31, 2024, there were no amounts outstanding under the senior

revolving credit facility.

The senior revolving credit facility is unsecured. We are required to maintain management fee earning assets (as

defined in the amended and restated senior revolving credit facility) of at least $126.6 billion and a total leverage ratio of less

than 4.0 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 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. Certain subsidiaries of the Company are parties to a revolving line of credit,

primarily intended to support certain lending activities within the Global Credit segment. As currently amended, the Global

Credit Revolving Credit Facility provides for a revolving line of credit with a capacity of $300 million, which matures in

September 2027, and a second revolving line of credit with a capacity of $200 million, which matures in August 2025.

The Company’s borrowing capacity is subject to the ability of the financial institutions in the banking syndicate to

fulfill their respective obligations under the Global Credit Revolving Credit Facility. Principal amounts outstanding accrue

interest at applicable SOFR or Eurocurrency rates plus an applicable margin of 2.00% or an alternate base rate plus an

applicable margin of 1.00%. For the year ended December 31, 2024, under the Global Credit Revolving Credit Facility the

Company made borrowings of $5.0 million and €5.0 million, which were subsequently repaid, and there was no balance

outstanding as of December 31, 2024.

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 and other financing arrangements with financial institutions or other financing arrangements.

The Company’s CLO borrowings outstanding were $289.4 million and $431.7 million at December 31, 2024 and 2023,

respectively. The decrease in borrowings outstanding at December 31, 2024 compared to 2023 was primarily attributable to net

repayments of CLO term loans during the year ended December 31, 2024. The CLO borrowings 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, 2024, $271.6 million of these borrowings are secured by

investments attributable to The Carlyle Group Inc. See Note 6, Borrowings, to the consolidated financial statements for more

information on our CLO borrowings.

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.

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.

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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.

Subordinated Notes. In May and June 2021, Carlyle Finance L.L.C. issued $500.0 million aggregate principal amount

of 4.625% subordinated notes due May 15, 2061. The subordinated notes are unsecured and subordinated obligations of the

issuer and are fully and unconditionally guaranteed, jointly and severally, on a subordinated basis, by the Company, each of the

Carlyle Holdings partnerships, and CG Subsidiary Holdings L.L.C., an indirect subsidiary of the Company. The indentures

governing the subordinated notes contain customary covenants that, among other things, limit the issuers’ and the guarantors’

ability, subject to certain exceptions, to incur indebtedness ranking on a parity with the subordinated notes or indebtedness

ranking junior to the subordinated notes secured by liens on voting stock or profit participating equity interests of their

subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all of their assets. The subordinated 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 on or after June 15, 2026, prior to their stated maturity, at a redemption price equal to their principal

amount plus any accrued and unpaid interest to, but excluding, the date of redemption. If interest due on the Subordinated Notes

is deemed to no longer be deductible in the U.S., a “Tax Redemption Event,” the subordinated notes may be redeemed, in

whole, but not in part, within 120 days of the occurrence of such event at a redemption price equal to their principal amount

plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the subordinated notes may be redeemed,

in whole, but not in part, at any time prior to May 15, 2026, within 90 days of the rating agencies determining that the

Subordinated Notes should no longer receive partial equity treatment pursuant to the rating agency’s criteria, a “rating agency

event,” at a redemption price equal to 102% of their principal amount plus any accrued and unpaid interest to, but excluding,

the date of redemption.

Obligations of CLOs. Loans payable of the Consolidated Funds primarily comprise amounts due to holders of debt

securities issued by the CLOs. We are not liable for any loans payable of the CLOs. 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.

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.

Our accrued performance allocations by segment as of December 31, 2024, gross and net of accrued giveback

obligations, are set forth below:

(1)Accrued incentive fees are excluded from net accrued performance revenues.

(2)Accrued performance allocations from NGP funds are presented as investments in the consolidated balance sheet.

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The net accrued performance revenues attributable to The Carlyle Group Inc., excluding realized amounts, related to

our carry funds and our other vehicles as of December 31, 2024, as well as the carry fund appreciation (depreciation), is set

forth below by segment (Dollars in millions):

(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.

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 The Carlyle Group Inc. (excluding certain general partner

interests, certain strategic investments, and investments in certain CLOs) may be sold at our discretion as a source of liquidity.

Investments as of December 31, 2024 consist of the following:

(1)Strategic equity method investment in NGP Management and investments in NGP general partners - accrued performance allocations. See Note 4,

Investments, to the consolidated financial statements.

Our investments as of December 31, 2024 can be further attributed as follows (Dollars in millions):

(1)Excludes our strategic equity method investment in NGP Management and investments in NGP general partners - accrued performance allocations.

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(2)Includes the Company’s indirect investment in Fortitude through Carlyle FRL, a Carlyle-affiliated investment fund, as discussed in Note 4,

Investments, to the consolidated financial statements. This investment had a carrying value of $723.5 million as of December 31, 2024.

(3)Of the $289.4 million in total CLO borrowings as of December 31, 2024 and as disclosed in Note 6, Borrowings, to the consolidated financial

statements, $271.6 million are collateralized by investments attributable to The Carlyle Group Inc. The remaining $17.8 million in total CLO

borrowings are collateralized by investments attributable to non-controlling interests.

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 return capital to our common stockholders in the form of dividends or

stock repurchases.

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 earn-outs and contingent cash consideration associated with our acquisitions and strategic investments;

•pay income taxes, including corporate income taxes;

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

•repurchase our common stock and pay any associated taxes; and

•settle tax withholding obligations in connection with net share settlements of equity-based awards.

Common Stockholder Dividends. Under our dividend policy for our common stock, our intention is to pay dividends to

holders of our common stock in an amount of $0.35 per common share on a quarterly basis ($1.40 annually), which

commenced with the first quarter 2023 dividend paid in May 2023. Prior to the first quarter 2023 dividend, we paid dividends

to holders of our common stock in an amount of $0.325 per share of common stock ($1.30 annually). For U.S. federal income

tax purposes, any dividends we pay 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. The declaration and payment of dividends to holders of our common stock will be at the sole

discretion of our Board of Directors and in compliance with applicable law, and our dividend policy may be changed at any

time.

With respect to dividend year 2024, the Board of Directors has declared a dividend to common stockholders totaling

$502.8 million, or $1.40 per share, consisting of the following:

With respect to dividend year 2023, the Board of Directors declared cumulative dividends to common stockholders

totaling $506.0 million, consisting of the following:

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Dividends to common stockholders paid during the year ended December 31, 2024 totaled $503.0 million, including

the amount paid in March 2024 of $0.35 per common share in respect of the fourth quarter of 2023. Dividends to common

stockholders paid during the year ended December 31, 2023 totaled $497.7 million, including the amount paid in March 2023

of $0.325 per common share in respect of the fourth quarter of 2022.

Fund Commitments. Generally 3% – 5% of all capital commitments to our investment funds are made by Carlyle, our

senior Carlyle professionals, advisors, and other professionals. Carlyle will generally commit up to 1% of of capital

commitments related to our 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, 2024, we and our senior Carlyle professionals, operating executives and

other professionals have invested or committed to invest in or alongside our funds. Generally 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.

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 $4.2 billion of unfunded

commitments, approximately $3.5 billion is subscribed individually by senior Carlyle professionals, operating executives, and

other professionals, with the balance funded directly by the Company. Approximately 76% of the $4.2 billion of unfunded

commitments relate to investment funds in our Global Private Equity segment.

Under the Carlyle Global Capital Markets platform, certain of our subsidiaries may act as an underwriter, syndicator,

or placement agent for security offerings and loan originations. We earn fees in connection with these activities and bear the

risk of the sale of such securities and placement of such loans, which may be longer dated. As of December 31, 2024, there

were $15.3 million in commitments related to the origination and syndication of loans and securities under the Carlyle Global

Capital Markets platform, of which $4.3 million was extinguished in January and February 2025.

Repurchase Program. For the year ended December 31, 2024, we paid an aggregate of $395.6 million to repurchase

and retire approximately 9.0 million shares of common stock. In addition, for the year ended December 31, 2024, we paid an

aggregate of $159.0 million and retired 3.3 million shares of common stock to settle tax withholding obligations in connection

with net share settlements of equity-based awards, for a total of $554.6 million shares repurchased or withheld this year. As of

December 31, 2024, $852.2 million of repurchase capacity remained under the share repurchase program, which reflects the

cost of common shares repurchased as well as shares settled for tax withholding payments made by the Company related to the

net share settlement of equity-based awards. For further information on our repurchase program, see Note 13, Equity, to the

consolidated financial statements.

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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.

Net cash provided by (used in) operating activities. Net cash provided by (used in) operating activities includes the

investment activity of our Consolidated Funds. Excluding this activity, net cash provided by 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 equity-based compensation, and depreciation, amortization and impairments, all of which are included

in earnings. Operating cash inflows primarily include the receipt of management fees, realized performance allocations and

incentive fees, while operating cash outflows primarily include payments for operating expenses, including compensation and

general, administrative and other expenses.

Cash flows from operating activities for the years ended December 31, 2024 and 2023, excluding the activities of our

Consolidated Funds, were $1.1 billion and $1.0 billion, respectively. During the years ended December 31, 2024 and 2023, net

cash provided by operating activities primarily included the receipt of management fees and realized performance allocations

and incentive fees, totaling approximately $3.4 billion and $3.0 billion, respectively. These inflows were partially offset by

payments for compensation, income taxes, interest, and general, administrative and other expenses of approximately $2.5

billion and $2.4 billion for the years ended December 31, 2024 and 2023, respectively. Operating outflows during the year

ended December 31, 2023 also included a $68.6 million payment relating to the Carlyle Aviation Partners earn-out and a

$20.3 million payment to the former Carlyle Holdings unitholders related to amounts owed under the tax receivable agreement.

See Note 17, Supplemental Financial Information.

Cash used to purchase investments, as well as the proceeds from the sale of such investments are also reflected in our

operating activities as investments are a normal part of our operating activities. During the year ended December 31, 2024,

investment proceeds were $498.0 million as compared to investment purchases of $385.9 million, which included a $115.1

million deferred consideration payment related to our investment in Fortitude. During the year ended December 31, 2023,

investment proceeds were $472.2 million while investment purchases were $301.2 million, which included our $50.0 million

follow-on investment in Carlyle FRL and our $40.0 million investment in Carlyle Capital Income Fund, an NYSE listed closed-

end fund that primarily invests in equity and junior debt tranches of CLOs.

The net cash provided by operating activities for the year ended December 31, 2024 also reflects the investment

activity of our Consolidated Funds. For the year ended December 31, 2024, proceeds from the sales and settlements of

investments by the Consolidated Funds were $5.5 billion, while purchases of investments by the Consolidated Funds were $7.4

billion. For the year ended December 31, 2023, proceeds from the sales and settlements of investments by the Consolidated

Funds were $2.3 billion, while purchases of investments by the Consolidated Funds were $3.1 billion.

Net cash used in investing activities. Our investing activities generally reflect cash used for fixed assets, software for

internal use, and corporate treasury investments. For the year ended December 31, 2024, cash used in investing activities

principally reflects purchases of fixed assets of $77.7 million. For the year ended December 31, 2023, cash used in investing

activities principally reflects purchases of corporate treasury investments of $187.3 million and net purchases of fixed assets of

$66.6 million, partially offset by proceeds from corporate treasury investments of $210.3 million.

Net cash provided by (used in) financing activities. Net cash provided by (used in) financing activities during the years

ended December 31, 2024 and 2023, excluding the activities of our Consolidated Funds, was $(1.2) billion and $(0.8) billion,

respectively. For the year ended December 31, 2024, we borrowed and subsequently repaid an aggregate of $10.4 million under

the Global Credit Revolving Credit Facility. We also paid $68.8 million in each of January 2024 and January 2023, representing

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the final and fourth annual installments, respectively, of the deferred consideration payable to former Carlyle Holdings

unitholders in connection with the Conversion. See Note 17, Supplemental Financial Information.

Dividends paid to our common stockholders were $503.0 million and $497.7 million for the years ended December 31,

2024 and 2023, respectively, and we paid $554.6 million and $203.5 million, respectively, to repurchase and retire 12.3 million

and 6.5 million shares, respectively, which included shares retired in connection with the net share settlement of equity-based

awards during the year ended December 31, 2024.

The net borrowings (payments) on loans payable by our Consolidated Funds during the years ended December 31,

2024 and 2023 were $1,825.0 million and $700.6 million, respectively. For the years ended December 31, 2024 and 2023,

contributions from non-controlling interest holders were $319.5 million and $177.0 million, respectively, which relate primarily

to contributions from the non-controlling interest holders in Consolidated Funds. For the years ended December 31, 2024 and

2023, distributions to non-controlling interest holders were $178.4 million and $139.7 million, respectively, which relate

primarily to distributions to the non-controlling interest holders in Consolidated Funds.

Our Balance Sheet

Total assets were $23.1 billion at December 31, 2024, an increase of $1.9 billion from December 31, 2023. The

increase in total assets was primarily attributable to an increase in Investments, including performance allocations of $1.0

billion, an increase in Investments in Consolidated Funds of $0.5 billion, and an increase in Cash and cash equivalents held at

Consolidated Funds of $0.5 billion. These were partially offset by a decrease in Cash and cash equivalents of $0.2 billion. The

increase in Investments, including performance allocations was primarily due to an increase in Accrued performance allocations

related to CP VII and CP VIII. Refer to “—Cash Flows” in Part II, Item 8 of this Annual Report on Form 10-K for details on

the decrease in Cash and cash equivalents.

Total liabilities were $16.8 billion at December 31, 2024, an increase of $1.4 billion from December 31, 2023. The

increase in liabilities was primarily attributable to an increase in Accrued compensation and benefits of $0.5 billion, an increase

in Other liabilities of Consolidated Funds of $0.5 billion, and an increase in Loans payable of Consolidated Funds of $0.4

billion. The increase in Accrued compensation and benefits was primarily due to accruals of Performance allocations.

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. In addition, 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 17, Supplemental Financial

Information, to the consolidated financial statements included in this Annual Report on Form 10-K. At December 31, 2024, our

total assets without the effect of the Consolidated Funds were $14.9 billion, including cash and cash equivalents of $1.3 billion

and net accrued performance revenues of $2.7 billion.

Unconsolidated Entities

Certain of our 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 our

funds.

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,

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.

For further information regarding our off-balance sheet arrangements, see Note 2, Summary of Significant Accounting

Policies, and Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K.

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Contractual Obligations

The following table sets forth information relating to our contractual obligations as of December 31, 2024 on a

consolidated basis and on a basis excluding the obligations of the Consolidated Funds:

(1)The table above assumes that no prepayments are made on the senior and subordinated notes and that the outstanding balances, if any, on the senior

credit facility and Global Credit Revolving Credit Facility are repaid on the maturity dates of credit facilities. The CLO term 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 6, Borrowings, to the consolidated

financial statements for the various maturity dates of our borrowings.

(2)The interest rates on the debt obligations as of December 31, 2024 consist of: 3.500% on $425.0 million of senior notes, 5.650% on $350.0 million of

senior notes, 5.625% on $600.0 million of senior notes, 4.625% on $500.0 million of subordinated notes, and a range of approximately 4.42% to

10.99% 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.

(3)These obligations represent our estimate of amounts to be paid on the contingent cash obligations associated with our acquisitions of Carlyle Aviation

Partners and Abingworth. 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.

(4)We lease office space in various countries around the world, including our largest offices in Washington, D.C., New York City, London, Amsterdam,

and Hong Kong, which have non-cancelable lease agreements expiring in various years through 2036. The amounts in this table represent the minimum

lease payments required over the term of the lease.

(5)These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These

amounts 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 $4.2 billion of

unfunded commitments to the funds, approximately $3.5 billion is subscribed individually by senior Carlyle professionals, advisors and other

professionals, with the balance funded directly by the Company. Additionally, these obligations include accrued giveback that has been realized but not

yet paid to the respective funds, a portion of which is payable by current and former senior Carlyle professionals.

(6)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, former 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.

(7)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, 2024, at spreads to market rates

pursuant to the debt agreements, and range from 1.65% to 12.18%.

(8)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 $38.0 million at December 31, 2024 as we

are unable to estimate when such amounts may be paid.

Contingent Cash Payments For Business Acquisitions and Strategic Investments

We have certain contingent cash obligations associated with our acquisition of Abingworth, which are accounted for as

compensation expense, and are accrued over the service period. If earned, payments are made in the quarter following the

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performance year to which the payments relate. The contingent cash obligations relate to future incentive payments of up to

$130.0 million that are payable upon the achievement of certain performance targets during 2025 through 2028, which is the

maximum amount that could be paid as of December 31, 2024. Through December 31, 2024, we paid $2.7 million, and as of

December 31, 2024, we recognized $2.0 million on the balance sheet related to these contingent obligations.

In connection with our acquisition of Carlyle Aviation Partners, we had contingent cash payments related to an earn-

out of up to $150.0 million that were payable upon the achievement of certain revenue and earnings performance targets during

2020 through 2025. Through December 31, 2022, we paid $53.6 million related to this earn-out. During the first quarter of

2023, we entered into a termination and settlement agreement with respect to the earn-out, pursuant to which we paid $68.6

million, and agreed to pay an aggregate $2.4 million in installments in 2024 and 2025. Pursuant to the termination and

settlement agreement, we paid the first installment of $1.5 million in 2024.

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 Part I, Item 1A “Risk Factors—Risks

Related to Regulation and Litigation—Financial regulations and changes thereto 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.”

Guarantees

See Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K for information related to all of 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 table above or recorded in our consolidated financial statements as of

December 31, 2024.

See Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K for information related to indemnifications.

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 8, Commitments and Contingencies, 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 8, Commitments and Contingencies, to the

consolidated financial statements included in this Annual Report on Form 10-K.

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Carlyle Common Stock

A rollforward of our common stock outstanding for the years ended December 31, 2024 and 2023 are as follows:

Shares of 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, 2024 and 2023. Shares of The Carlyle Group Inc. common stock

issued and repurchased/retired during the years ended December 31, 2024 and 2023 do not include shares retired as part of the

net share settlement of equity-based awards.

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, 2024 and 2023 and subsequently retired as part of our share repurchase

programs.

The total shares as of December 31, 2024 as shown above exclude approximately 4.2 million net common shares in

connection with the vesting of restricted stock units subsequent to December 31, 2024 that will participate in the common

shareholder dividend that will be paid on February 28, 2025.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires our management to

make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related

disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information

currently available to us and on various other assumptions management believes to be reasonable under the circumstances.

Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations.

Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We

believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the

preparation of our consolidated financial statements and should be read in conjunction with our consolidated financial

statements and related notes included in this report.

Basis of Accounting. The Company’s financial statements are prepared in accordance with U.S. GAAP. Management

has determined that the Company’s funds are investment companies under U.S. GAAP for the purposes of financial reporting.

U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the unrealized gains

and/or losses in an investment’s fair value are recognized on a current basis in the statements of operations. Additionally, the

funds do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). In the preparation of its

consolidated financial statements, the Company has retained the specialized accounting for the Funds.

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, Summary of Significant Accounting Policies, 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.

•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

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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, such as the Company’s 10.5%

indirect ownership interest in Fortitude.

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. As of December 31, 2024, we had accrued performance allocations of $7.1 billion.

Performance allocations consist principally of the performance-based allocation of profits from certain of the funds to which the

Company is entitled (commonly referred to 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.

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 investment income related to 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 in measuring the fair value of investments

in the absence of observable market prices as discussed below, 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, 2024, 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

$1.4 billion, on an after-tax basis where applicable, of which approximately $0.5 billion would be the responsibility of current

and former senior Carlyle professionals.

See Note 2, Summary of Significant Accounting Policies, 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. As of December 31, 2024, we had accrued performance allocations

and incentive fee related compensation of $4.8 billion. A portion of the performance allocations earned is due to employees and

advisers 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. The Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and thus is subject to U.S.

federal (and state and local) corporate income taxes. 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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As of December 31, 2024, we had gross deferred tax assets of $1.7 billion. 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. 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. As of

December 31, 2024, we recorded a valuation allowance of $62.7 million on our gross deferred tax assets. 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. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as

incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. 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.

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. As of December 31, 2024, we had unrecognized tax benefits of $38.0 million, which if recognized would

result in a reduction in the provision for income taxes of $27.0 million.

Fair Value Measurement. In the absence of observable market prices, the Company values its investments and its

funds’ 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 2,

Summary of Significant Accounting Policies, to the consolidated financial statements included in this Annual Report on Form

10-K.

Valuations of the funds’ investments are used in the calculation of accrued performance allocations, discussed above.

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 Part I, Item 1A “Risk Factors—Risks Related to Our Business Operations—Risks Related to the Assets

We Manage—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.

Our equity-method investment in NGP entitles us to 55% of the management fee related revenue of the NGP entities

that serve as advisors to the NGP Energy Funds and is subject to impairment under the U.S. GAAP accounting for equity

method investments. We evaluate our equity method investment in NGP for impairment whenever events or changes in

circumstances indicate that the carrying amount of the investment may not be recoverable, but no less than quarterly. For

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example, challenges with fundraising, lower future management fees, or a change in our economic arrangement could cause an

impairment of our investment in NGP in the future. As of December 31, 2024, we continue to believe that our investment in

NGP is not impaired.

Equity-based Compensation. During the year ended December 31, 2024, we recognized $467.9 million in equity-based

compensation expense. Compensation expense relating to the issuance of equity-based awards to Carlyle employees is

measured at fair value on the grant date. In determining the aggregate grant date fair value of awards with market-based

conditions, we use a Monte Carlo simulation which requires certain assumptions and estimates such as the volatility of our

future share price, and changes in those assumptions could result in materially different results. Of the $467.9 million in equity-

based compensation expense recognized during the year ended December 31, 2024, approximately $231.6 million related to

awards with market-based conditions.

Intangible Assets and Goodwill. The Company’s intangible assets consist of acquired contractual rights to earn future

fee income, including management and advisory fees, customer relationships, and acquired trademarks. We allocate the fair

value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their

estimated fair values. The excess of the fair value of purchase consideration over the fair value of these identifiable assets and

liabilities is recorded as goodwill. These valuations require management to make significant judgements, assumptions and

estimates. The allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as

acquired finite-lived intangible assets are amortized over their estimated useful lives, whereas goodwill is not amortized.

As of December 31, 2024, we had intangible assets, net of accumulated amortization, of $634.1 million, including

$103.6 million of goodwill. Our finite-lived intangible assets have estimated useful lives which range from four to eight 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.

Impairment testing requires the assessment of both qualitative and quantitative factors, including, but not limited to

whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or

significant or adverse changes in cash flow projections or earnings forecasts. These assessments require management to make

judgements, assumptions and estimates. As of December 31, 2024, we continue to believe our intangible assets and goodwill

are not impaired.

Recent Accounting Pronouncements

We discuss recent accounting pronouncements in Note 2, Summary of Significant Accounting Policies, to the

consolidated financial statements included in this Annual Report on Form 10-K.