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Item 7. Management’s Discussion and Analysis

2023-02-09 compared with 2022-02-10 · 679 added, 606 removed, 1517 unchanged (46% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On January 1, 2020, we completed our conversion from a Delaware limited partnership named The Carlyle Group L.P.

into a Delaware corporation named The Carlyle Group Inc.

Pursuant to the Conversion, at the specified effective time on January 1, 2020, each common unit of The Carlyle Group L.P.

outstanding immediately prior to the effective time converted into one share of common stock of The Carlyle Group Inc.

and each special voting unit and general partner unit was canceled for no consideration.

In addition, holders of the partnership units in Carlyle Holdings I L.P., Carlyle Holdings II L.P., and Carlyle Holdings III L.P.

exchanged such units for an equivalent number of shares of common stock and certain other restructuring steps occurred (the conversion, together with such restructuring steps and related transactions, the “Conversion”).

Unless the context suggests otherwise, references in this report to “Carlyle,” the “Company,” “we,” “us” and “our” refer (i) prior to the consummation of the Conversion to The Carlyle Group L.P.

and its consolidated subsidiaries and (ii) from and after the consummation of the Conversion to The Carlyle Group Inc.

Unless the 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.

References to our common stock in periods prior to the Conversion refer to the common units of The Carlyle Group L.P.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes included in this Annual Report on Form 10-K.

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• Global Private Equity — Our Global Private Equity segment advises our buyout and middle market and growth capital funds, our U.S.

and internationally focused real estate funds, our 14 natural resources funds, and our three Legacy Energy funds.

The segment also includes three NGP Predecessor Funds and five NGP Carry Funds advised by NGP.

and internationally focused real estate funds, our infrastructure and natural resources funds.

We also include the NGP Carry Funds in this segment, which are managed and advised by NGP.

As of December 31, 2022, our Global Private Equity segment had $163.1 billion in AUM and $107.8 billion in Fee-earning AUM.

• Global Credit — Our Global Credit segment advises a group of 87 funds that pursue investment strategies including loans and structured credit, direct lending, opportunistic credit, distressed credit, aircraft financing and servicing, infrastructure debt, insurance solutions and global capital markets.

• Global Credit — Our Global Credit segment advises products that pursue investment strategies including loans and structured credit, direct lending, opportunistic credit, aircraft finance, infrastructure debt, insurance solutions and global capital markets.

As of December 31, 2022, our Global Credit segment had $146.3 billion in AUM and $121.2 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 across 303 fund vehicles.

• Global Investment Solutions — Our Global Investment Solutions segment advises global private equity programs and related co-investment and secondary activities.

As of December 31, 2022, our Global Investment Solutions segment had $63.3 billion in AUM and $37.5 billion in Fee-earning AUM.

We earn management fees pursuant to contractual arrangements with the investment funds that we manage and fees for transaction advisory and oversight services provided to portfolio companies of these funds.

We also typically receive a performance fee from an investment fund, which may be either an incentive fee or a special residual allocation of income, which we refer to as a carried interest, in the event that specified investment returns are achieved by the fund.

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.

generally accepted accounting principles (“U.S.

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However, for segment reporting purposes, we present revenues and expenses on a basis that deconsolidates these investment funds.

Accordingly, our segment revenues primarily consist of fund management and related transaction and portfolio advisory fees and other income, realized performance revenues (consisting of incentive fees and carried interest allocations), realized principal investment income, including realized gains on our investments in our funds and other trading securities, as well as interest income.

Accordingly, our segment revenues primarily consist of fund management fees and related transaction and portfolio advisory fees and other income, realized performance revenues (consisting of incentive fees and performance allocations), realized principal investment income, including realized gains on our investments in our funds and other trading securities, as well as interest income.

Our segment expenses primarily consist of cash compensation and benefits expenses, including salaries, bonuses, and realized performance payment arrangements, and general and administrative expenses.

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Trends Affecting our Business

The year 2021 was an economic recovery year as the pandemic lockdowns eased and the world economy exited the pandemic recession, with boosts in cyclical sectors like industrials, materials and energy, which were also bolstered by the resurgence of inflation.

Corporate earnings in 2021 exceeded expectations driven by large productivity gains stemming from investments in digitization and technology, which more than offset input price inflation and powered margin expansion.

Current estimates anticipate S&P 500 constituents’ 2021 full year earnings growth in excess of 45%.

This robust performance, coupled with fiscal stimulus and ultra-low interest rates, buoyed global equity markets in the aggregate in 2021.

The Dow Jones, S&P 500, and Nasdaq 100 rose 18.7%, 26.9%, and 26.6% respectively in 2021.

Globally, the MSCI ACWI, EuroStoxx 600 and Shanghai Composite rose 16.8%, 22.3%, and 4.8% respectively over the same period.

In contrast to corporate earnings, while overall economic activity was generally strong in 2021, top line growth was hampered by ongoing pandemic-related restrictions, supply chain bottlenecks, labor shortages, and slowing consumption.

In the fourth quarter of 2021, the prospect of earlier and more aggressive monetary policy tightening in response to rising inflation drove renewed interest rate volatility.

Thus far in 2022, 10-year Treasury yields have risen 44 basis points to 1.96% as of February 8, 2022, as higher than expected inflation in December 2021 increased the likelihood and anticipated frequency of increases to the federal funds rate.

Futures markets have now priced in more than five to six rate hikes in 2022 and two to three hikes in 2023.

Treasury market volatility, however, has not yet translated into corporate bond market distress and financing markets remain favorable and open.

Single B-rated and sub-investment grade U.S corporate spreads actually declined 13 and 5 basis points in the fourth quarter of 2021, respectively, and remain near historic lows.

Single B-rated yields are 300 to 375 basis points below long-term averages and leveraged loan prices are higher than they were before the pandemic.

Equity market volatility, on the other hand, has risen with Treasury market volatility, and returns year-to-date in 2022 are down significantly.

The NASDAQ 100 is officially in correction territory, while the S&P 500 is down 5% as of February 8, 2022.

The prices of companies in the NASDAQ most exposed to interest rate risk – namely, those with cash flows weighted far into the future – are down 14% year-to-date, and down 43% since their 2021 peak.

Labor market tightness persists across our portfolio, with a U.S.

labor force participation rate still 1.2 percentage points below its pre-pandemic peak and a shortfall of roughly 3 million eligible workers.

Both producer and consumer prices continue to climb driven by capacity constraints in physical supply chains and such price increases are now a key focus for central banks.

In the U.S., December 2021 CPI inflation reached 7% year-over-year, the highest level in four decades, while inflation in the UK and Canada hit 30-year highs.

Producer prices in the U.S.

and Japan are also rising at the fastest rate since the early 1980s.

In Europe, and Germany in particular, where an energy crisis is compounding supply chain-driven pressures, producer prices are rising at the fastest rate on record.

Overall, household spending is liquid in a way the underlying economy is not.

Money intended to be spent on services and live experiences has instead largely been spent on durable goods.

However, unused services capacity cannot be transformed frictionlessly into goods production.

Supply-side scope can only adjust over time through an increase in factories, equipment, trained workers, and logistics network capacity.

Many companies have been hesitant to make this investment, as demand for goods seems likely to be only temporarily boosted by pandemic-era restrictions and risk aversion.

This imbalance of demand and underlying capacity constraints has likely contributed to today’s inflation.

Price pressures seem unlikely to abate until spending patterns realign with supply-side dynamics.

Asia, including China, remains an important component of Carlyle’s investment platform.

The Chinese economy grew 4% year-over-year in the fourth quarter of 2021, down from 7.9% and 4.9% in the second and third quarters of 2021, respectively.

The slowdown is partially attributable to a sharp decline in real estate development activity and sales with housing prices in China falling at the fastest rate since mid-2015.

Carlyle’s current exposure to the real estate sector in China and its constituent businesses is insignificant.

Market adjustments to-date mainly reflect increases in the risk premium investors earn for China exposure rather than deterioration in company-specific fundamentals.

Our carry fund portfolio continued to build on the strong momentum we have generated throughout the year.

Within our Global Private Equity segment, our corporate private equity funds appreciated 6% in the fourth quarter and 41% for the year, reflecting strong performance across the portfolio and our real estate funds appreciated 11% during the fourth quarter and 39% for the year.

Our natural resources funds appreciated by 7% in the fourth quarter due to strong commodity pricing, with appreciation of 34% for the year.

The year 2022 was characterized by high inflation, significant market volatility, rapidly tightening financial conditions, a surge in the U.S.

dollar against most currencies, and weakening fundamentals across the globe.

By the end of 2022, U.S.

consumption, investment and manufacturing all showed signs of slowing growth.

While fourth quarter 2022 U.S.

GDP growth surprised to the upside at a 2.9% quarter-over-quarter annualized rate, expanding inventories and declining imports accounted for nearly 70% of the headline growth.

Experiences and services spending stood out as bright spots as the year progressed, with hotel stays and domestic air travel rising above pre-pandemic averages as consumers shifted spending habits away from the pandemic-driven durable goods boom of 2020 and 2021.

Residential construction activity and investment declined rapidly in the latter half of 2022 due to a rapid increase in average mortgage rates and related collapse in home construction and purchasing activity.

After peaking at 9.1% in June 2022, consumer prices rose 6.5% in December 2022 from a year earlier;

core prices, which exclude food and energy, rose 5.7% in December, a decline from a September peak of 6.3%.

Faster than expected deceleration in inflation readings has increased market optimism over the past month that the Federal Reserve will not raise interest rates to as high a level as previously anticipated.

However, the dramatic increase in financing costs over the past year for many companies could result in reduced spending, hiring, and capital expenditures over the next several months, introducing risks to the near-term economic outlook.

Europe’s GDP growth in 2022 surprised to the upside, with current estimates anticipating greater than 3% growth for the year.

Price cap schemes, generous fiscal subsidies, and a mild winter all contributed to a smaller-than-expected impact of the energy crisis resulting from the Russia-Ukraine conflict.

After surging over the summer to oil price equivalents in excess of $1,000 per barrel, forward wholesale electricity prices have moderated back towards levels seen at the end of 2021 in response to policy actions by the European Commission.

Household consumption and consumer confidence have remained resilient as a result, with our portfolio data indicating steady improvement in spending patterns throughout the fourth quarter of 2022.

Going forward, the industrial sector remains most vulnerable to the ongoing energy crisis.

Industrial production costs have increased by 40% over the year and more than 200% for certain gas-intensive industrial processes.

Beyond energy, certain economies with very high household debt levels, such as the United Kingdom and Sweden, also face rising risks as mortgage rates reset and depress disposable income.

While Europe’s energy subsidies have softened the blow of the ongoing energy crisis to domestic consumers and businesses, the effect is to bid away already scarce natural gas from other net energy importers, many of which are emerging market economies that cannot compete on price.

The IMF forecasts that there will be between 20 and 30 sovereign defaults in 2023 and 2024 and that 1.7 billion people are at risk of food insecurity.

The triple threat of expensive and scarce energy supplies and food shortages pose a significant challenge to many emerging market economies around the globe, which in turn increases the risk of political and social unrest.

For much of Asia, 2022 was a year of below-trend growth due to high prices, particularly for food and fuel, slowing global demand for goods, and spillover effects from slower growth in China.

In Japan, lingering COVID-19 related restrictions, wages that lagged broader inflation, and volatile industrial output hindered growth, and overall GDP remains below pre-pandemic peaks in real terms.

In Korea, economic growth slowed throughout the year as export demand fell and high prices sapped consumer confidence.

India was a bright spot in 2022, with robust growth in domestic consumption and fixed investment.

China’s economy was flat in the fourth quarter of 2022 compared to the third quarter, a better-than-expected outcome given disruption experienced as a result of the rapid rollback in COVID-19 restrictions and subsequent surge in cases.

Overall, China’s economy, hampered by rolling COVID-19 related restrictions and broad lockdowns, grew 3% in 2022, well below its long-term trend.

However, the recent rapid rollback of COVID-19 related restrictions has introduced significant optimism that growth will rebound strongly in 2023.

Preliminary data on foot traffic in our portfolio retail locations and cargo throughput volumes indicate an acceleration in activity in January 2023.

While China’s growth outlook has improved, the relationship between China and the U.S.

remains strained, and tensions between China and Taiwan continue to mount, raising risks of further global economic volatility given the connection between the China and U.S.

Revenues for S&P 500 constituents are estimated to have grown 10.5% in 2022, a reflection of companies’ ability to push through higher prices.

This topline growth momentum did slow throughout the year;

however, for Q4 2022, revenues are estimated to have grown just 4% vs.

year-ago levels.

Estimates of S&P 500 constituents’ earnings growth for 2022 were steadily marked down throughout the year, and currently stand at 4.4% in 2022.

Notably, estimates anticipate that earnings contracted by 5.0% in Q4 2022 versus the same period a year ago, the worst decline since Q3 2020 during the midst of the pandemic.

Seven of eleven sectors estimate year-over-year earnings declines in the fourth quarter of 2022, led by materials, consumer discretionary, and communication services.

The estimated blended net profit margin is 11.4% for Q4 2022, down from 12.4% a year ago, as earnings growth lagged topline growth in 2022.

The productivity gains that companies enjoyed in 2020 and 2021 on the back of large investments in digitization and technology faded in 2022;

instead, a persistently tight labor market, faster wage gains, and higher input prices slowed real output growth.

Equity markets experienced significant volatility throughout 2022 as developed markets saw the highest rates of inflation in 40+ years, monetary policy shifted rapidly from accommodative to hawkish, and geopolitical developments introduced new growth fears.

The Federal Reserve raised the federal funds rate by a cumulative total of 450 bps since March 2022, and has indicated that more hikes are forthcoming, albeit at a somewhat slower pace.

Futures markets have been volatile in 2023, but currently price in an additional 50 bps in rate increases by June 2023.

The Dow Jones, S&P 500, and Nasdaq 100 fell 8.8%, 19.4 %, and 33%, respectively, from December 31, 2021 to December 30, 2022.

Globally, the MSCI ACWI, EuroStoxx 600 and Shanghai Composite fell 19.8%, 12.9%, and 15.1%, respectively, over the same period.

Obtaining financing in both the high yield bond market and the leveraged loan market is currently challenging.

In 2022, global bond funds experienced over $375 billion in outflows.

Financing has become increasingly expensive due to both the rise in base rates (SOFR rose 425 bps over the course of the year) and wider spreads (B-rated option-adjusted spreads rose 265 bps from December 2021 to December 2022).

Leveraged loans, which are floating rate and thus typically more appealing to investors when interest rates are rising, have sold off to a lesser extent, but financing and transaction volumes have been under pressure.

leveraged loan issuance fell 55% in 2022 versus 2021, while global M&A volumes totaled $3.8 trillion in 2022, a 36% decline from 2021.

IPO proceeds, which boomed in 2021, fell 69% globally and 93% in the U.S.

market in 2022, where IPOs raised just $24 billion, the lowest amount since 1990.

As capital markets activity slows, we may experience a corresponding reduction in the capital markets fees we earn in connection with activities related to the underwriting, issuance and placement of debt and equity securities.

Our announced new investment and realization activity has been slower, and we therefore expect a slow start to 2023 for both deployments and realizations.

As a result, we expect that transaction fee revenue, realized performance fee revenue and realized investment income will likely be lower over the next quarter or two.

Our activity could increase as we move throughout the year as industry levels improve over the coming months.

Our carry fund portfolio continued to reflect the impact of the broader macroeconomic environment in the fourth quarter.

Within our Global Private Equity segment, our corporate private equity funds appreciated 1% in the fourth quarter and 6% for the year, and our real estate funds depreciated 1% during the fourth quarter but appreciated 16% for the year.

Our natural resources and infrastructure funds appreciated by 2% in the fourth quarter and 48% for the year.

In our Global Credit segment, our carry funds (which represent approximately 11% of the total Global Credit remaining fair value) appreciated 2% in the fourth quarter and 3% for the year.

Global Investment Solutions appreciation was 7% in the fourth quarter and 48% for the year, though the valuations of our primary and secondary funds of funds generally reflect investment fair values on a one-quarter lag.

While our publicly traded investments appreciated 30% during the year, they were flat in the fourth quarter and were lower in the early part of January 2022, reflecting the equity market sell-off in the first weeks of 2022.

We reached record levels of realized proceeds in 2021, generating $15.3 billion in realized proceeds from our carry funds in the fourth quarter and $44.3 billion for the year.

Alongside the robust portfolio appreciation in 2021, this contributed to

record realized net performance revenues as well as record realized investment income recognized in the quarter, surpassing records set in the third quarter of 2021, as well as for the year overall.

Driven by positive impact from valuations across the portfolio, net accrued performance revenues on our balance sheet increased to $3.9 billion at December 31, 2021, up 67% since December 31, 2020 despite record levels of realizations during 2021.

The portion of our traditional carry funds attributable to publicly traded companies is 11% of fair value as of December 31, 2021, compared to 15% of fair value as of December 31, 2020 and 6% as of December 31, 2019.

While the share of our total fair value in publicly traded investments has started to decline with realizations, it remains a meaningful component of our portfolio, and to the extent that there is continued volatility in public equity markets and/or the prices of our publicly-traded portfolio companies, there may be elevated volatility in our performance revenue accrual in the coming quarters.

Capital deployment was at record levels across the entire private equity industry during 2021.

Global Investment Solutions funds depreciated 3% in the fourth quarter but appreciated 6% for the year;

however excluding the impact of foreign currency translation of the USD-denominated investments in our EUR-based funds, Global Investment Solutions would have been flat in the fourth quarter, and experienced 4% appreciation for the year.

The valuations of our primary and secondary funds of funds generally reflect investment fair values on a one-quarter lag.

Our non-carry fund Global Credit products continue to perform well.

Dividend yields on our business development companies as of December 31, 2022 were approximately 10%, and approximately 10% for our retail credit product (CTAC).

In our liquid credit strategy, our global CLO portfolio continues to experience a default rate less than the industry average, and we are actively managing our credit positions to maintain balanced risk-adjusted credit quality.

While default rates have remained low, we expect to see them increase in 2023 as inflation, higher financing costs and the threat of global recession continue to pressure borrower debt-service capacity.

We generated $8.6 billion in realized proceeds from our carry funds in the fourth quarter and $33.8 billion for the year;

however, we expect that as market conditions remain challenging, the pace of realizations will slow in the near term.

Our net accrued performance revenues on our balance sheet remained high at $4.0 billion at December 31, 2022, up 2% since December 31, 2021.

During the fourth quarter, our carry funds invested $6.8 billion in new or follow-on transactions and we invested a record $34.8 billion for the full year 2022.

While high levels of industry dry powder and widely available financing are likely to foster an increasingly competitive market, we believe our investment platform will enable us to pivot quickly to pursue opportunities where we have identified dislocation, which positions us to continue to deploy capital throughout 2022.

During 2021, we raised $51.3 billion in new capital, which included the launch of two key U.S.

buyout and growth funds, CP VIII and CP Growth, and our ninth U.S.

real estate fund, CRP IX.

We also saw a record level of CLO issuances in our Global Credit segment, and continued strength in our Global Investment Solutions segment, particularly in separately managed accounts.

The pace of capital deployment has resulted in fund products coming back to market faster than ever before, and limited partners have an increasing array of investment opportunities to consider.

As a result, we anticipate the fundraising landscape to become increasingly competitive as limited partners balance allocation limits with more offerings.

We are closely evaluating the financial and other proposals put forth by the current Administration and Congress and their potential impacts on our business.

While there may be changes to current tax and regulatory regimes, additional fiscal stimulus packages could be followed by longer-term spending increases on infrastructure, climate, health care and education.

The potential for policy changes may create regulatory uncertainty for our portfolio companies and our investment strategies and adversely affect the profitability of our portfolio companies.

Deal activity in private equity has retreated to pre-pandemic levels from the record level pace in 2021, and while we continue to see a pipeline of smaller transactions that require less debt at closing, we believe that larger deals will be slower to occur.

However, as the environment for traditional credit issuance remains challenging, we expect that demand for private credit will remain robust, resulting in the potential for strong deployment in our Global Credit segment.

During 2022, we raised $29.9 billion in new capital, which included $2.0 billion in additional third-party capital raised for our strategic investment in Fortitude, fundraising on our CLO platform and in CTAC, and the launch of our third Credit Opportunities fund within our Global Credit segment, as well as fundraising for our Global Private Equity and Global Investment Solutions funds.

We anticipate the fundraising landscape to continue to be competitive as limited partners are closely managing their portfolio allocation targets in light of market volatility and their liquidity requirements.

As a result, fundraising in certain products - particularly in corporate private equity strategies - may take longer to complete and fund sizes may not meet levels that they otherwise would in a more favorable market environment.

Slowdowns in fundraising may also

delay catch-up management fees that would be charged to fund investors in subsequent closings and smaller fund sizes could result in lower management fees in the future.

The SEC has put forth several rule proposals in recent months, and we are continuing to evaluate the potential impacts to our business and operations and those of our portfolio companies.

These proposals include, among others:

(i) new reporting requirements of material cybersecurity incidents and periodic reporting regarding a company’s cybersecurity risk programs, (ii) new rules and amendments under the Investment Advisers Act of 1940 that expand compliance obligations and prohibit certain activities for private fund advisors, and (iii) extensive climate change disclosure regulations.

We are also closely evaluating potential impacts to our business of financial, regulatory and other proposals put forth by the current Administration and Congress as well as the Inflation Reduction Act of 2022, which was signed into law in August.

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 and Transactions

CEO Appointment

On February 6, 2023, we announced that our Board of Directors has appointed Harvey M.

Schwartz as our Chief Executive Officer and a member of our Board of Directors, effective February 15, 2023 (the “Commencement Date”).

On the Commencement Date, Mr.

Schwartz will receive inducement equity awards with a combined grant date value of $180 million, of which $108 million will be granted in the form of performance-based restricted stock units which will be eligible to vest in five equal tranches and $72 million will be granted in the form of time-based restricted stock units which will be eligible to vest ratably in four equal installments.

The number of shares of common stock underlying the performance-based award will be determined by dividing the $108 million grant value by the per share accounting fair value on the Commencement Date.

As we anticipate that the accounting fair value on the Commencement Date will be less than the per share closing stock price on the Commencement Date, we expect that the total face value of the performance award (i.e., the number of shares multiplied by the closing price on the Commencement Date) will be greater than $108 million.

The number of shares of common stock underlying the time-based award will be determined by dividing the $72 million grant value by the per share closing stock price on the Commencement Date.

Recent Transactions

In February 2022, our Global Credit platform agreed to acquire a diversified portfolio of triple net leases for an enterprise value of $3 billion through a Carlyle-affiliated investment fund as part of the expansion of our real estate credit strategy.

The investment fund’s acquisition of the portfolio will be funded using $2 billion in debt and $1 billion in equity.

The debt is non-recourse to us and Carlyle, as general partner of the investment fund, will contribute up to $200 million as a minority interest balance sheet investment.

The transaction is expected to close in the first quarter of 2022.

In February 2022, the Board of Directors declared a quarterly dividend of $0.25 per common share to common stockholders of record at the close of business on February 15, 2022, payable on February 23, 2022.

During the year ended December 31, 2022, the Company completed several transactions with the objective of driving accretive growth on an inorganic basis as outlined below.

Acquisition of CLO Management Contracts from CBAM Partners LLC

In March 2022, we acquired the management contracts related to a portfolio of assets primarily comprised of U.S.

and European CLOs as well as other assets across private credit from CBAM Partners LLC (“CBAM”).

The purchase price of $812.9 million consisted of a combination of $618.4 million in cash, approximately 4.2 million newly issued, fully vested common shares ($194.5 million based on the value of the shares at closing), and approximately $3.4 million of acquisition costs incurred by us in connection with the transaction.

The portfolio of $15 billion in assets under management was integrated into our Global Credit platform.

See Note 4 to the consolidated financial statements for additional information regarding the acquisition.

Fortitude Capital Raise and Strategic Advisory Services Agreement

In March 2022, we raised $2.0 billion in third-party equity capital for Fortitude, and committed up to $100 million in additional capital to Carlyle FRL from our balance sheet.

In May 2022, Fortitude called $1.1 billion of the capital raise, with the remaining capital expected to be called in 2023.

In connection with the capital raise and subsequent funding, our indirect ownership of Fortitude decreased from 19.9% to 13.5%.

As a result of this dilution, we recorded a reduction in the carrying value of our equity method investment and corresponding loss of $176.9 million in our U.S.

GAAP results.

At the time the remaining capital is called by Fortitude, our indirect ownership will further decrease to 10.5% and we expect to record an additional reduction in the carrying value of our equity method investment and corresponding loss of approximately $121 million based on the carrying value of $646.0 million as of December 31, 2022, subject to change based on the timing of the dilution and changes in the carrying value of our investment.

On April 1, 2022, we entered into a new strategic advisory services agreement with certain subsidiaries of Fortitude through a newly-formed investment advisor, Carlyle Insurance Solutions Management L.L.C.

Under the agreement,

CISM provides Fortitude with certain services, including business development and growth, transaction origination and execution, and capital management services in exchange for a recurring management fee based on Fortitude’s general account assets, which adjusts within an agreed range based on Fortitude’s overall profitability.

Third party investors who participated in the March 2022 capital raise also made a minority investment in CISM, which is reflected as a non-controlling interest in consolidated entities in the condensed consolidated financial statements.

See Note 6 to the consolidated financial statements for additional information regarding the strategic investment in Fortitude.

Acquisition of Abingworth

On August 1, 2022, we acquired Abingworth, a life sciences investment firm, to expand our healthcare investment platform with the addition of nearly $2 billion in assets under management and a specialized team of over 20 investment professionals and advisors.

Consideration for Abingworth included a base purchase price of $186.2 million, of which $25.0 million was settled in newly-issued shares of the Company’s common stock, as well as up to a further $130 million in future incentive payments based on the achievement of certain performance targets.

The acquisition included the rights to 15% of performance revenues generated by Abingworth’s two most recent active investment funds, Abingworth Bioventures 8 LP and Abingworth Clinical Co-Development Fund 2 LP.

See Note 4 to the consolidated financial statements for additional information regarding the acquisition.

In February 2023, the Board of Directors declared a quarterly dividend of $0.325 per common share to common stockholders of record at the close of business on February 22, 2023, payable on March 1, 2023.

In February 2023, the Board of Directors approved an increase in the anticipated common stock dividend to an annual rate of $1.40 per share ($0.35 per common share on a quarterly basis), anticipated to commence for the first quarter 2023 dividend, which is anticipated to be paid in May 2023.

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of a fund which apply to the time period between the fee initiation date and the subsequent closing date.

Approximately 90% of

our fee revenue is in the form of management fees from traditional closed-end, long-dated funds, which are highly predictable

and stable, and do not have significant exposure to the underlying fund valuations.

More than 95% of our Fee-earning

AUM is in fund structures with contractual lives of generally ten years, and is not subject to redemption without cause.

We also earn management fees on our CLOs and other structured products.

Collectively, our carry funds and our CLOs and certain other products comprise 78% of our Fee-earning AUM as of December 31, 2022 and approximately 92% of our fund management fees during the year then ended.

The balance of our Fee-earning AUM and fund management fees are attributable to our Perpetual Capital products, which have an indefinite term and for which there is no immediate requirement to return capital to investors as investments are realized.

Management fees attributable to Carlyle Partners VIII, L.P.

(“CP VIII”), our eighth U.S.

buyout fund with $13.1 billion of Fee-earning AUM as of December 31, 2022 was approximately 10% of fund management fees recognized during the year ended December 31, 2022.

Management fees attributable to Carlyle Partners VII, L.P.

(“CP VII”), our seventh U.S.

buyout fund with approximately $15.3 billion of Fee-earning AUM as of December 31, 2021, was 15% of total management fees recognized during the year ended December 31, 2021, and 17% during the years ended December 31, 2020 and 2019.

buyout fund with approximately $15.5 billion of Fee-earning AUM as of December 31, 2022, was 10% of total management fees recognized during the year ended December 31, 2022, and 15% and 17% during the years ended December 31, 2021 and 2020, respectively.

No other fund generated over 10% of total management fees in the periods presented.

Fund management fees exclude the reimbursement of any partnership expenses paid by the Company on behalf of the Carlyle funds pursuant to the limited partnership agreements, including amounts related to the pursuit of actual, proposed, or unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of investments, and other fund administrative expenses.

unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of investments, and other fund administrative expenses.

Transaction and Portfolio Advisory Fees.

Transaction and portfolio advisory fees generally 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 required to offset our fund management fees earned by a percentage of the transaction and advisory fees earned, which we refer to as the “rebate offsets.” Historically, such rebate offset percentages generally approximated 80% of the fund’s portion of the transaction and advisory fees earned.

However, the percentage of transaction and portfolio advisory fees we share with our investors on our recent vintage funds has generally increased, and as such the rebate offset percentages generally range from 80% to 100% of the fund’s portion of the transaction and advisory fees earned, such that a larger share of the transaction fee revenue we retain is driven by co-investment activity.

In addition, Carlyle Global Capital Markets (“GCM”) generates capital markets fees 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 with respect to our most recent vintages (but are subject to the rebate offsets set forth above for older funds).

Transaction and portfolio advisory fees generally include capital markets fees generated by Carlyle Global Capital Markets (“GCM”) 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 with respect to our most recent vintages (but are subject to the rebate offsets set forth above for older funds).

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

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.

Transaction and portfolio advisory fees also include fees we receive for the transaction and portfolio advisory services we provide to our portfolio companies.

We are required to offset our fund management fees earned by a percentage of these transaction and advisory fees earned, which we refer to as the “rebate offsets,” which generally range from 80% to 100%.

The recognition of portfolio advisory fees, transaction 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.

Incentive Fees.

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Refer to “— Trends Affecting our Business” for further discussion.

In addition to the performance allocations from our Global Private Equity funds and closed-end carry funds in the Global Credit segment, we are also entitled to receive performance allocations from our Global Investment Solutions, Carlyle Aviation and NGP Carry Funds.

We account for our strategic 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% of the performance allocations received by the NGP Carry Funds.

We record investment income (loss) for our equity income allocation from NGP management fee-related revenues and also record our share of any allocated expenses from NGP Management, expenses associated with the compensatory elements of the strategic investment, and the amortization of the basis differences related to the definite-lived identifiable intangible assets of NGP Management.

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

In addition to the performance allocations from our Global Private Equity and Global Credit carry funds, and the NGP Carry Funds, we are also entitled to receive performance allocations from our Global Investment Solutions and Carlyle

Aviation funds.

We also retained our interest in the net accrued performance allocations of existing funds at the time of the sale of MRE.

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For an explanation of the fund acronyms used throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, refer to “Item 1.

Business — Our Family of Funds.”

Performance allocations in excess of 10% of the total for the years ended December 31, 2021, 2020 and 2019 were generated from the following funds:

Business—Our Global Investment Offerings.”

Performance allocations, before the impact of performance allocations related compensation, in excess of 10% of the total for the years ended December 31, 2022, 2021 and 2020 were generated from the following funds:

Year Ended December 31,

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(Dollars in millions)

CP VI $ 1,327.5 CP VI $ 1,124.3 CP VI $ 154.2

CP VII 717.8 CAP IV 331.0 CRP V 154.9

Alpinvest Co - & Secondary Investments 2006-2008 83.5

CEP IV (119.0)

CRP VIII $ 205.8 CP VI $ 1,327.5 CP VI $ 1,124.3

CPP II 187.7 CP VII 717.8 CAP IV 331.0

CETP IV 150.2

CP VI (453.2)

No other fund generated over 10% of performance allocations in the periods presented above.

The reversal of $453.2 million in previously recognized performance allocations in CP VI during 2022 was primarily driven by depreciation in the portfolio, notably its publicly traded investments, which comprise approximately 43% of its remaining fair value as of December 31, 2022.

Performance allocations from CP VI during 2021 were driven by appreciation across the portfolio, with notable increases in the values of the publicly traded investments in the portfolio and sale transactions of privately held investments.

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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.

For the years ended December 31, 2021, 2020 and 2019, the reversals of performance allocations were $48.2 million, $401.5 million and $215.8 million, respectively.

For the years ended December 31, 2022, 2021 and 2020, the reversals of performance allocations, before the impact of reversals of the related compensation, were $558.7 million, $48.2 million and $401.5 million, respectively.

As of December 31, 2022, accrued performance allocations and accrued giveback obligations were approximately $7.1 billion and $40.9 million, respectively.

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As of December 31, 2022, $18.9 million of the accrued giveback obligation is the responsibility of various current and former senior Carlyle professionals and other limited partners of the Carlyle Holdings partnerships, and the net accrued giveback obligation attributable to the Company is $22.0 million.

The Company uses “net accrued performance revenues” to refer to the aggregation of the accrued performance allocations and incentive fees net of (i) accrued giveback obligations, (ii) accrued performance allocations and incentive fee-related compensation, (iii) performance allocations and incentive fee-related tax obligations, and (iv) accrued performance allocations and incentive fees attributable to non-controlling interests and excludes any net accrued performance allocations and incentive fees that have been realized but will be collected in subsequent periods.

The net accrued performance revenues as of December 31, 2021 are $3.9 billion.

compensation, (iii) performance allocations and incentive fee-related tax obligations, and (iv) accrued performance allocations and incentive fees attributable to non-controlling interests and excludes any net accrued performance allocations and incentive fees that have been realized but will be collected in subsequent periods, as well as net accrued performance revenues which are presented as fee related performance revenues when realized in our non-GAAP financial measures.

Net accrued performance revenues as of December 31, 2022 were $4.0 billion.

In addition, realized performance allocations may be reversed in future periods to the extent that such amounts become subject to a giveback obligation.

If at December 31, 2021, all investments held by our carry funds were deemed worthless, the

amount of realized and previously distributed performance allocations subject to potential giveback would be approximately $1.5 billion, on an after-tax basis where applicable, of which approximately $0.7 billion would be the responsibility of current and former senior Carlyle professionals.

If at December 31, 2022, all investments held by our carry funds were deemed worthless, the amount of realized and previously distributed performance allocations subject to potential giveback would be approximately $1.5 billion, on an after-tax basis where applicable, of which approximately $0.7 billion would be the responsibility of current and former senior Carlyle professionals.

See the related discussion of within “—Liquidity and Capital Resources—Contingent Obligations (Giveback).”

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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, as well as any interest and other income.

As it relates to our investments in NGP, investment income also includes the related amortization of the basis difference between the carrying value of our investment and our share of the underlying net assets of the investee, as well as the compensation expense associated with compensatory arrangements provided by us to employees of our equity method investee.

Principal investment income also included our proportionate share of U.S.

GAAP earnings from our strategic investment in Fortitude prior to the contribution of our investment to a Carlyle-affiliated investment fund (see Note 4 to the consolidated financial statements in Part II, Item 8 of this Form 10-K).

GAAP earnings from our strategic investment in Fortitude prior to the contribution of our investment to a Carlyle-affiliated investment fund (see Note 6 to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K).

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.

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Fair Value Measurement.

GAAP establishes a hierarchal disclosure framework which ranks the observability of market price inputs used in measuring financial instruments at fair value.

GAAP establishes a hierarchical disclosure framework which ranks the observability of market price inputs used in measuring financial instruments at fair value.

The observability of inputs is impacted by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants.

Financial instruments with

readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

The table below summarizes the valuation of investments and other financial instruments included within our AUM, by segment and fair value hierarchy levels, as of December 31, 2022:

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Therefore, for any given period, the ratio of performance allocations and incentive fee compensation to performance allocations and incentive fee revenue may vary based on the funds generating the performance allocations and incentive fee revenue for that period and their particular allocation percentages.

In addition, we have implemented various equity-based compensation arrangements that require senior Carlyle professionals and other employees to vest ownership of a portion of their equity interests over a service period of generally one to four years, which under U.S.

In addition, we have implemented various equity-based compensation arrangements, including those under our Equity Incentive Plan.

These equity-based compensation arrangements require senior Carlyle professionals and other employees to vest ownership of a portion of their equity interests over a service period of generally one to four years, which under U.S.

GAAP will result in compensation charges over current and future periods.

During 2019 and 2020, we granted fewer equity awards than we have previously.

In 2021, we granted 7.1 million in long-term strategic restricted stock units to certain senior professionals.

The majority of these restricted stock units are subject to vesting based on the

achievement of annual performance targets over four years which align with our strategic plan announced at our investor day in February 2021, with a larger proportion of the awards vesting based on the 2024 performance year.

As a result, the number of restricted stock units granted in 2021 is higher than in 2020, which, combined with a higher share price than in prior periods, will result in higher equity-based compensation expense in the coming years.

The majority of these restricted stock units are eligible to vest based on the achievement of annual performance targets over four years, with a larger proportion of the awards eligible to vest based on the 2024 performance year.

On February 1, 2023, we granted a total of 9.9 million restricted stock units under the Equity Incentive Plan to our personnel, including certain senior Carlyle professionals and other key personnel.

In addition, on February 15, 2023, we will grant performance- and time-based inducement equity awards in connection with the appointment of our new Chief Executive Officer.

As a result of these grants, and combined with a higher share price than in periods prior to 2021, equity-based compensation expense will be higher in the coming years than it has been.

Compensation charges associated with all equity-based compensation grants are excluded from Fee Related Earnings and Distributable Earnings.

As of December 31, 2022, the total number of the Company’s common shares available for grant under the Equity Incentive Plan was 12,861,371, which does not reflect the restricted stock units granted on February 1, 2023.

An increase in the number of shares available for grant under the plan would require shareholder approval.

We may hire additional individuals and overall compensation levels may correspondingly increase, which could result in an increase in compensation and benefits expense.

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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.

Following the Conversion on January 1, 2020, all of the income before provision for income taxes attributable to The Carlyle Group Inc.

is subject to U.S.

federal, state, and local corporate income taxes.

Prior to the Conversion, the Company was generally organized as a series of pass through entities pursuant to the United States Internal Revenue Code.

As such, the Company was not responsible for the tax liability due on certain income earned during the year.

Such income was taxed at the unitholder and non-controlling interest holder level, and any income tax was the responsibility of the unitholders and was paid at that level.

See Note 10 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for more information regarding the impact of the Conversion.

In the normal course of business, we are subject to examination by federal and certain state, local and foreign tax regulators.

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These interests are adjusted for general partner allocations.

Prior to the Conversion, we recorded significant non-controlling interests in Carlyle Holdings relating to the ownership interests of the limited partners of the Carlyle Holdings partnerships.

The Company, through wholly owned subsidiaries, was the sole general partner of Carlyle Holdings.

Accordingly, the Company consolidated the financial position and results of operations of Carlyle Holdings into its financial statements, and the other ownership interests in Carlyle Holdings are reflected as a non-controlling interest in the Company’s financial statements.

The limited partners of the Carlyle Holdings partnerships exchanged their Carlyle Holdings partnership units for an equivalent number of shares of common stock of The Carlyle Group

as part of the Conversion.

As a result, following the Conversion the consolidated financial statements of The Carlyle Group Inc.

do not reflect any non-controlling interests in Carlyle Holdings.

Earnings Per Common Share.

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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.

Diluted earnings per common share

reflects the assumed conversion of all dilutive securities.

We apply the treasury stock method to determine the dilutive weighted-average common shares represented by unvested restricted stock units.

For certain equity-based compensation awards that contain performance or market conditions, the number of contingently issuable common shares is included in diluted earnings per common share based on the number of common shares, if any, that would be issuable under the terms of the awards if the end of the reporting period were the end of the contingency period, if the result is dilutive.

Prior to the Conversion, we applied the “if-converted” method to the Carlyle Holdings partnership units to determine the dilutive weighted-average common shares outstanding.

Subsequent to the Conversion, the Company has a single class of stock and therefore, the “if-converted” method is no longer applied in the computation of diluted earnings per share.

Non-GAAP Financial Measures

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GAAP in that it adjusts for the items included in the calculation of DE and also adjusts DE to exclude net realized performance revenues, realized principal investment income from investments in Carlyle funds, net interest (interest income less interest expense), and certain general, administrative and other expenses when the timing of any future payment is uncertain.

Fee Related Earnings includes fee related performance revenues and related compensation expense.

Fee related performance revenues 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

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(a) the amount of limited partner capital commitments, generally for carry funds where the original investment period has not expired, for AlpInvest carry funds during the commitment fee period and for Metropolitan carry funds during the weighted-average investment period of the underlying funds (see “Fee-earning AUM based on capital commitments” in the table below for the amount of this component at each period);

(b) the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment vehicles where the original investment period has expired, Metropolitan carry funds after the expiration of the weighted-average investment period of the underlying funds, and one of our business development companies (see “Fee-earning AUM based on invested capital” in the table below for the amount of this component at each period);

(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 and one of our business development companies (see “Fee-earning AUM based on invested capital” in the table below for the amount of this component at each period);

(c) the amount of aggregate fee-earning collateral balance at par of our CLOs and other securitization vehicles, as defined in the fund indentures (typically exclusive of equities and defaulted positions) as of the quarterly cut-off date;

(d) the external investor portion of the net asset value of certain carry funds (see “Fee-earning AUM based on net asset value” in the table below for the amount of this component at each period);

(e) the gross assets (including assets acquired with leverage), excluding cash and cash equivalents, of one of our business development companies and certain carry funds (see “Fee-earning AUM based on lower of cost or fair value and other” in the table below for the amount of this component at each period);

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

(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);

(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).

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

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Fee-earning AUM based on capital commitments (1)

$ 81,057 $ 71,829 $ 77,729

Fee-earning AUM based on invested capital (2)

60,459 60,828 38,055

Fee-earning AUM based on collateral balances, at par (3)

46,173 30,779 26,480

Fee-earning AUM based on net asset value (4)

Fee-earning AUM based on lower of cost or fair value and other (5) 20,338 19,872 17,941

11,979 9,645 7,966

Fee-earning AUM based on fair value and other (5)

66,909 20,338 19,872

Balance, End of Period (6)

$ 266,577 $ 193,419 $ 170,102

(1) Reflects limited partner capital commitments where the original investment period, weighted-average investment period, or commitment fee period has not expired.

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(4) Reflects the net asset value of certain other carry funds.

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

(6) Energy III, Energy IV, and Renew II (collectively, the “Legacy Energy Funds”) are managed with Riverstone Holdings LLC and its affiliates.

Affiliates of both Carlyle and Riverstone act as investment advisers to each of the Legacy Energy Funds.

Carlyle has a minority representation on the management committees of Energy IV and Renew II.

Carlyle and Riverstone each hold half of the seats on the management committees of Energy III, but the investment period for this fund has expired and the remaining investments in such fund are being disposed of in the ordinary course of business.

As of December 31, 2021, the Legacy Energy Funds had, in the aggregate, approximately $0.2 billion in AUM and $0.4 billion in Fee-earning AUM.

We are no longer raising capital for the Legacy Energy Funds and expect these balances to continue to decrease over time as the funds wind down.

(7) Ending balance excludes $15.9 billion of pending Fee-earning AUM for which fees have not yet been activated.

(5) Includes the fair value of Fortitude’s general account assets covered by the strategic advisory services agreement, funds with fees based on the lower of cost or fair value of invested capital and funds with fees based on gross asset value.

(6) Ending balance excludes $11.1 billion of pending Fee-earning AUM as of December 31, 2022 for which fees have not yet been activated.

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

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Balance, Beginning of Period $ 193,419 $ 170,102 $ 161,057

Inflows (1) 46,199 22,481 16,460

95,534 46,199 22,481

Outflows (including realizations) (2)

(18,431) (23,361) (17,130)

Market Activity & Other (3)

(505) 3,860 (466)

Foreign Exchange (4)

(3,440) (3,381) 4,160

Balance, End of Period $ 266,577 $ 193,419 $ 170,102

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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, 2022 include $2 billion of Fee-earning AUM acquired as part of the August 2022 Abingworth transaction, Fee-earning AUM of $48 billion associated with the strategic advisory services agreement with Fortitude which was effective April 1, 2022, and Fee-earning AUM of $14 billion acquired in the March 2022 CBAM transaction.

(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 runoff of CLO collateral balances.

Distributions for funds earning management fees based on commitments during the period do not affect Fee-earning AUM.

Outflows also reflect the sale of Metropolitan on April 1, 2021, which had $2.3 billion of Fee-earning AUM as of March 31, 2021.

Outflows during the year ended December 31, 2021 also reflect the sale of MRE on April 1, 2021, which had $2 billion of Fee-earning AUM as of March 31, 2021.

(3) Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower of cost or fair value and net asset value, as well as activity of funds with fees based on gross asset value.

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Our AUM equals the sum of the following:

(a) the aggregate fair value of our carry funds and related co-investment vehicles, NGP Predecessor Funds and separately managed accounts, plus the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle commitments to those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the terms of their capital commitments to those funds and vehicles;

(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);

(d) the gross assets (including assets acquired with leverage) of our business development companies, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital commitments to those vehicles.

We include in our calculation of AUM and Fee-earning AUM certain energy and renewable resources funds that we jointly advise with Riverstone, the NGP Energy Funds that are advised by NGP, as well as capital raised from a strategic third-party investor which directly invests in Fortitude alongside a carry fund.

For most of our carry funds, total AUM includes the fair value of the capital invested, whereas Fee-earning AUM includes the amount of capital commitments or the remaining amount of invested capital, depending on whether the original

investment period for the fund has expired.

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

(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.

We include in our calculation of AUM and Fee-earning AUM the Legacy Energy Funds that we jointly advise with Riverstone and 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 investment fund and from a strategic investor which directly invests 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.

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.

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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.

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.

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Balance, Beginning of Period $ 300,957 $ 245,769 $ 224,442

Inflows (1) 51,261 26,902 19,970

94,824 51,261 26,902

Outflows (including realizations) (2)

(35,665) (47,483) (21,477)

Market Activity & Other (3)

18,109 57,125 10,380

Foreign Exchange (4)

(5,534) (5,715) 5,522

Balance, End of Period $ 372,691 $ 300,957 $ 245,769

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For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate, while the separately reported Fundraising metric is translated at the spot rate for each individual closing.

(2) Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, separately managed accounts and the NGP Predecessor Funds, gross redemptions in our open-end funds, runoff of CLO collateral balances and the expiration of available capital.

Outflows also reflect the sale of Metropolitan on April 1, 2021, which had $2.4 billion of Total AUM as of March 31, 2021.

(3) Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and related co-investment vehicles, the NGP Predecessor Funds and separately managed accounts, as well as the net impact of fees, expenses and non-investment income, change in gross asset value for our business development companies and other changes in AUM.

Inflows for the year ended December 31, 2022 include $2 billion of AUM acquired as part of the August 2022 Abingworth transaction, AUM of $48 billion associated with the strategic advisory services agreement with Fortitude which was effective April 1, 2022, and AUM of $15 billion acquired in the March 2022 CBAM transaction.

(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, runoff of CLO collateral balances and the expiration of available capital.

Outflows for the year ended December 31, 2021 also reflect the sale of Metropolitan on April 1, 2021, which had $2.4 billion of Total AUM as of March 31, 2021.

(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 and other changes in AUM.

(4) Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S.

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

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, and (d) our Interval Fund.

As of December 31, 2022, our Total AUM and Fee-earning AUM included $61.0 billion and $58.2 billion, respectively, of Perpetual Capital.

Portfolio Appreciation (Depreciation).

The overall portfolio appreciation of 41% in 2021 is comprised of 41% appreciation for carry funds within our Global Private Equity segment focusing on corporate private equity, 39% for funds focusing on real estate and 34% for fund focusing on natural resources, 22% appreciation for carry funds in the Global Credit

segment and 48% appreciation for carry funds in the Global Investment Solutions segment.

While the publicly traded investments in our Global Private Equity and Global Credit segments were flat in the fourth quarter, they experienced appreciation of 30% for the year.

While there is no perfectly comparable market index benchmark for the overall portfolio or any of its segments or strategies, we would note that S&P 500 and MSCI ACWI appreciation for the year were 27% and 17%, respectively, while the FTSE NAREIT Composite appreciation was 36%, the S&P Oil and Gas Exploration & Production Index was 81%, and S&P Leveraged Loan Index appreciation was 1%.

The overall portfolio appreciation of 11% in 2022 is comprised of 6% appreciation for carry funds within our Global Private Equity segment focusing on corporate private equity, 16% for funds focusing on real estate and 48% for fund focusing on infrastructure and natural resources, 3% appreciation for carry funds in the Global Credit segment and 6% appreciation for carry funds in the Global Investment Solutions segment.

Excluding the impact of foreign exchange, carry funds in our Global Investment Solutions segment appreciated 4% in 2022.

Our publicly traded investments, which comprise 6% of the total fair value in our carry fund portfolio, depreciated (24)% during the year.

While there is no perfectly comparable market index benchmark for the overall portfolio or any of its segments or strategies, we would note that S&P 500 and MSCI ACWI depreciation for the year were (19)% and (20)%, respectively, while the FTSE NAREIT Composite depreciation was (28)%, the S&P Oil and Gas Exploration & Production Index appreciation was 50%, and S&P Leveraged Loan Index depreciation was (5)%.

Consolidation of Certain Carlyle Funds

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1% of our management fees;

and less than 1% of our investment income or loss for the year ended December 31, 2021.

and 1% of our investment income or loss for the year ended December 31, 2022.

We are not required under the consolidation guidance to consolidate in our financial statements most of the investment funds we advise.

However, we consolidate certain CLOs that we advise.

As of December 31, 2021, our consolidated CLOs held approximately $6.7 billion of total assets and comprised substantially all of the assets and loans payable of the Consolidated Funds.

However, we consolidate certain CLOs and certain other funds that we advise.

As of December 31, 2022, our consolidated CLOs held approximately $6.2 billion of total assets and comprised the majority of the assets and loans payable of the Consolidated Funds.

The assets and liabilities of the Consolidated Funds are generally held within separate legal entities and, as a result, the liabilities of the Consolidated Funds are non-recourse to us.

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Net income attributable to non-controlling interests in consolidated entities 59.7 70.5 34.6

Net income attributable to Carlyle Holdings 2,974.7 348.2 1,147.8

Net income attributable to non-controlling interests in Carlyle Holdings — — 766.9

Net income attributable to The Carlyle Group Inc.

2,974.7 348.2 380.9

Net income attributable to Series A Preferred Unitholders — — 19.1

Series A Preferred Units redemption premium — — 16.5

Net income attributable to The Carlyle Group Inc.

Common Stockholders $ 1,225.0 $ 2,974.7 $ 348.2

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Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 and Year Ended December 31, 2021 Compared to Year Ended December 31, 2020.

Total revenues increased $5.8 billion, or 199%, for the year ended December 31, 2021 as compared to 2020 and decreased $442.4 million, or 13%, for the year ended December 31, 2020 as compared to 2019.

Total revenues decreased $4.3 billion, or 49%, for the year ended December 31, 2022 as compared to 2021 and increased $5.8 billion, or 199%, for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the changes in total revenues for the years ended December 31, 2022 and 2021:

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Increase in incentive fees 14.9 11.8

Increase (decrease) in investment income, including performance allocations 5,626.7 (473.2)

(Decrease) increase in investment income, including performance allocations (4,823.9) 5,626.7

Increase in interest and other income of Consolidated Funds 57.8 26.4

Increase (decrease) in interest and other income 1.1 (7.7)

Total increase (decrease) 5,847.5 (442.4)

Increase in interest and other income 45.2 1.1

Total (decrease) increase (4,343.4) 5,847.5

Total Revenues, current year $ 4,438.7 $ 8,782.1

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and from net investment activity in funds whose management fees are based on invested capital (65.2) (28.3)

Decrease in catch-up management fees from subsequent closes of funds that are in the fundraising period (5.8) (18.3)

Increase (decrease) in catch-up management fees from subsequent closes of funds that are in the fundraising period 9.1 (5.8)

Higher transaction and portfolio advisory fees 15.5 39.9

Higher management fees due to CBAM and Abingworth acquisitions and Fortitude strategic advisory services agreement 116.7 —

Lower fund management fees due to sale of MRE on April 1, 2021 (4.7) (15.9)

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Total increase in fund management fees $ 362.6 $ 181.5

(1) The change in the year ended December 31, 2022 includes a $12.7 million loss related to the purchase of third party investor interests in a Global Investment Solutions product, which was recorded as a reduction to fund management fees.

Fund management fees include transaction and portfolio advisory fees, net of rebate offsets, of $106.2 million, $90.7 million, and $50.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Investment Income.

Investment income increased $5.6 billion for the year ended December 31, 2021 as compared to 2020, and decreased $473.2 million for the year ended December 31, 2020 as compared to 2019, primarily due to the following:

Investment income decreased $4.8 billion for the year ended December 31, 2022 as compared to 2021, and increased $5.6 billion for the year ended December 31, 2021 as compared to 2020.

The components of investment income are included in the following table:

Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Increase in performance allocations, excluding NGP $ 4,448.7 $ 836.8

Increase in investment income from NGP, which includes performance allocations from the investments in NGP 36.5 125.0

Increase in investment income from our corporate private equity funds 120.4 53.6

Decrease in gains on foreign currency hedges (6.2) (3.3)

Increase (decrease) in investment income from our real estate funds 26.7 (8.7)

Increase (decrease) in investment income from our natural resources funds, excluding NGP 22.0 (10.2)

Decrease from the settlement of CEREP I tax matter in 2019 — (71.5)

Increase in investment income from our Global Credit carry funds 13.6 14.3

Increase in investment income from our direct lending funds and interval funds 8.9 9.6

Increase (decrease) in investment income from Carlyle Aviation 0.9 (2.3)

Increase in investment income from our CLOs 24.7 3.3

Increase (decrease) in income from Fortitude 852.9 (1,414.8)

Increase (decrease) in investment income from AlpInvest 15.7 (0.5)

All other changes (1)

Total increase (decrease) in investment income $ 5,626.7 $ (473.2)

(1) All other changes in 2021includes investment income of $49.8 million associated with the remeasurement of a corporate investment, which was previously carried at cost, resulting from an observable price change pursuant to ASC 321, Investments–Equity Securities .

Prior to the Control Transaction which closed on June 2, 2020, as described in Note 4 to the consolidated financial statements, we accounted for our investment in Fortitude under the equity method of accounting by recognizing our pro rata share of Fortitude’s U.S.

GAAP earnings, which is included in principal investment income (loss) in the consolidated statements of operations.

These amounts were inclusive of unrealized gains (losses) resulting from changes in the fair value of embedded derivatives related to certain reinsurance contracts included in Fortitude’s U.S.

GAAP financial statements.

Modified coinsurance is subject to the general accounting principles for hedging, specifically the guidance originally issued as Derivatives Implementation Group Issue No.

Embedded Derivatives:

Modified Coinsurance Agreements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments (“DIG B36”).

At the time we contributed our existing 19.9% interest in Fortitude to Carlyle FRL, a Carlyle-affiliated investment fund, we began accounting for our investment under the equity method based on our net asset value in the fund, which resulted in a loss in principal investment income (loss) of $620.7 million in the year ended December 31, 2020.

Performance allocations, excluding NGP $ 1,327.5 $ 6,084.6 $ 1,635.9

Investment income from NGP:

Net investment income from NGP Management 58.1 59.2 58.6

Performance allocations from investment in the general partners of the NGP Carry Funds 560.7 3.8 —

Net investment income from principal investments in NGP Carry Funds 44.5 20.1 (12.0)

Investment income (loss) from our carry funds:

Global Private Equity 76.4 258.8 89.6

Global Credit (14.6) 12.3 (1.9)

Global Investment Solutions 9.5 27.0 9.8

Investment (loss) income from our CLOs (48.6) 22.9 (1.8)

Investment (loss) income from Carlyle FRL (119.0) 161.0 (691.9)

Investment income from our other Global Credit products (0.7) 17.6 9.1

Investment income (loss) on foreign currency hedges 1.1 (3.9) 2.3

All other investment income (loss) (1)

3.1 58.5 (2.5)

Total investment income $ 1,898.0 $ 6,721.9 $ 1,095.2

(1) All other investment income in 2021includes investment income of $49.8 million associated with the remeasurement of a corporate investment, which was previously carried at cost, resulting from an observable price change pursuant to ASC 321, Investments–Equity Securities .

Investment income during the years ended December 31, 2022, 2021 and 2020 primarily reflects carry fund appreciation of 11%, 41%, and 10%, respectively, which resulted in significantly higher performance allocations in 2021 relative to 2022 and 2020, as discussed below.

Investment loss from our equity method investment in Carlyle FRL during the year ended December 31, 2022 includes an investment loss of $176.9 million which was recorded as a result of the dilution in our indirect ownership in Fortitude from 19.9% to 13.5% in connection with the initial drawdown of the Fortitude capital raise.

The year ended December 31, 2020 also includes a loss in principal investment income (loss) of $620.7 million related to the contribution of our 19.9% interest in Fortitude to Carlyle FRL, at which time we began accounting for our investment under the equity method based on our net asset value in the fund.

As of December 31, 2022, our investment in Carlyle FRL was $646.0 million, relative to our cost of $389.4 million.

See Note 6 to the consolidated financial statements for more information regarding our equity method investment in Carlyle FRL and the Control Transaction.

Our 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.

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As of December 31, 2022, we continue to believe that our investment in NGP is not impaired.

We recorded an increase in investment income from CLOs during the year ended December 31, 2021 relative to the comparable period in 2020.

We recorded a decrease in investment income from CLOs during the year ended December 31, 2022 relative to the comparable period in 2021.

The fair value of the CLO investments held by the firm (before the effects of consolidation) decreased 24% in 2022, with our investments in subordinated notes depreciating 37% and our investments in the senior notes depreciating 13% during 2022.

Performance Allocations .

Performance allocations increased $4.4 billion for the year ended December 31, 2021 compared to 2020 and increased $836.8 million for the year ended December 31, 2020 as compared to 2019.

Performance allocations decreased $4.8 billion for the year ended December 31, 2022 compared to 2021 and increased $4.4 billion for the year ended December 31, 2021 as compared to 2020.

Performance allocations by segment for the years ended December 31, 2022, 2021 and 2020 comprised the following:

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Refer to “—Key Financial Measures” for a listing of the funds with performance allocations in excess of 10% of the total for the periods presented.

Despite the pandemic’s persistence, corporate earnings in 2021 exceeded expectations;

investments in digitization and technology drove large productivity gains which more than offset input price inflation and powered margin expansion.

Current estimates anticipate S&P 500 constituents’ 2021 full year earnings growth in excess of 45%.

This robust performance, coupled with fiscal stimulus and ultra-low interest rates, buoyed global equity markets in aggregate in 2021.

The Dow Jones, S&P 500, and Nasdaq 100 rose 18.7%, 26.9%, and 26.6% respectively in 2021.

Globally, the MSCI ACWI, EuroStoxx 600 and Shanghai Composite rose 16.8%, 22.3%, and 4.8% respectively over the same period.

Our carry fund portfolio exhibited similar momentum during 2021.

Within our Global Private Equity segment, our corporate private equity funds appreciated 6% in the fourth quarter and 41% for the year and our real estate funds appreciated 11% during the fourth quarter and appreciated 39% for the year.

Our natural resources funds appreciated 7% during the fourth quarter and appreciated 34% for the year.

Global Credit carry funds, which represent approximately 18% of the total Global Credit remaining fair value, were up 1% in the fourth quarter and up 22% for the year.

The year 2022 was characterized by high inflation, significant market volatility, rapidly tightening financial conditions, a surge in the U.S.

dollar against most currencies, and weakening fundamentals across the globe.

Estimates of S&P 500 constituents’ earnings growth for 2022 were steadily marked down throughout the year, and currently stand at 4.6% in 2022.

The Dow Jones, S&P 500, and Nasdaq 100 fell 8.8%, 19.4 %, and 33%, respectively, in 2022.

Globally, the MSCI ACWI, EuroStoxx 600, and Shanghai Composite fell 19.8%, 12.9%, and 15.1%, respectively, over the same period.

Our carry fund portfolio continued to reflect the impact of the broader macroeconomic environment in the fourth quarter but outperformed the global equity markets for the year.

Our infrastructure and natural resources funds appreciated 2% during the fourth quarter and appreciated 48% for the year.

Global Credit carry funds, which represent approximately 11% of the total Global Credit remaining fair value, appreciated 2% in the fourth quarter and 3% for the year.

Global Investment Solutions funds depreciated 3% in the fourth quarter but appreciated 6% for the year, however excluding the impact of foreign currency translation of the USD-denominated investments in our EUR-based funds, our Global Investment Solutions were flat in the fourth quarter, and experienced 4% appreciation for the year.

The valuations of our primary and secondary funds of funds generally reflect investment fair values on a one-quarter lag.

Interest and Other Income.

Interest and other income increased $1.1 million for the year ended December 31, 2021 as compared to 2020 and decreased $7.7 million for the year ended December 31, 2020 as compared to 2019.

Interest and other income increased $45.2 million for the year ended December 31, 2022 as compared to 2021 and increased $1.1 million for the year ended December 31, 2021 as compared to 2020.

The increase for the year ended December 31, 2022 was primarily due to an increase in the reimbursement of certain costs incurred on behalf of Carlyle funds, as well as interest income from investments in CLO senior notes, due in part to the CBAM acquisition, and interest income on corporate treasury investments.

The increase for the year ended December 31, 2021 was primarily as a result of an increase in the reimbursement of certain costs incurred on behalf of Carlyle funds.

The decrease in 2020 was primarily as a result of decreases in the reimbursement of certain costs incurred on behalf of Carlyle funds and decreases in interest income from investments in CLO subordinated notes and interest income related to corporate treasury investments that matured in 2019.

Interest and Other Income of Consolidated Funds.

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Substantially all of the variance in interest and other income of Consolidated Funds for both periods relates to interest income from CLOs.

Total expenses increased $2.4 billion for the year ended December 31, 2021 as compared to 2020, and increased $213.6 million for the year ended December 31, 2020 as compared to 2019.

Total expenses decreased $1.9 billion for the year ended December 31, 2022 as compared to 2021, and increased $2.4 billion for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the changes in total expenses for the year ended December 31, 2022 and 2021:

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Increases (Decreases):

Increase in total compensation and benefits 2,298.4 323.6

Increase (decrease) in general, administrative and other expenses 82.4 (145.1)

Increase in interest 19.3 11.9

(Decrease) increase in total compensation and benefits (2,106.2) 2,298.4

Increase in general, administrative and other expenses 144.1 82.4

(Decrease) increase in interest (2.9) 19.3

Increase in interest and other expenses of Consolidated Funds 33.1 15.0

Increase (decrease) in other non-operating expense 8.7 (8.5)

Total increase 2,423.8 213.6

(Decrease) increase in other non-operating expense (0.5) 8.7

Total (decrease) increase (1,932.4) 2,423.8

Total Expenses, current year $ 2,824.7 $ 4,757.1

Total Compensation and Benefits.

Total compensation and benefits increased $2.3 billion for the year ended December 31, 2021 as compared to 2020, and increased $323.6 million for the year ended December 31, 2020 as compared to 2019, due to the following:

Total compensation and benefits decreased $2.1 billion for the year ended December 31, 2022 as compared to 2021, and increased $2.3 billion for the year ended December 31, 2021 as compared to 2020, due to the following:

Year Ended December 31,

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Increase in cash-based compensation and benefits $ 144.0 $ 58.4

Increase (decrease) in equity-based compensation 58.1 (35.0)

Increase in performance allocations and incentive fee related compensation 2,181.9 342.4

Total increase in total compensation and benefits $ 2,298.4 $ 323.6

(Decrease) increase in equity-based compensation (9.1) 58.1

(Decrease) increase in performance allocations and incentive fee related compensation (2,241.1) 2,181.9

Total (decrease) increase in total compensation and benefits $ (2,106.2) $ 2,298.4

Cash-based compensation and benefits .

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(Decrease) increase in compensation expense associated with contingent earn-out payments (1)

(22.6) (11.3)

Total increase in base compensation and benefits $ 144.0 $ 58.4

(1) T he Carlyle Aviation Partners acquisition included an earn-out of up to $150.0 million, under which we have paid $53.6 million through December 31, 2022.

The Abingworth acquisition included an earn-out of up to $130.0 million.

For additional information, refer to “— Liquidity and Capital Resources—Contingent Cash Payments For Business Acquisitions and Strategic Investments .”

Equity-based compensation .

Equity-based compensation, net of forfeitures, increased $58.1 million, or 55%, for the year ended December 31, 2021 as compared to 2020.

Equity-based compensation, net of forfeitures, decreased $9.1 million, or 6%, for the year ended December 31, 2022 as compared to 2021.

The decrease in equity-based compensation from 2021 to 2022 was primarily driven by fewer performance-based restricted stock units expected to vest based on 2022 performance compared to 2021, partially offset by $10 million of expense related to the modification of certain restricted stock awards in connection with the departure of our former chief executive officer.

On February 1, 2023, we granted a total of 9.9 million restricted stock units to our personnel, including certain senior Carlyle professionals and other key personnel.

In addition, on February 15, 2023, we

will grant performance- and time-based inducement equity awards in connection with the appointment of our new Chief Executive Officer.

As a result of these grants, and combined with a higher share price than in prior periods, we expect that equity-based compensation expense will be higher in the coming years than it has been.

The increase in equity-based compensation from 2020 to 2021 was primarily due to the expanded use of equity-based compensation incentive programs as well as a forfeiture credit recorded in 2020 related to the retirement of one of our co-chief executive officers.

During the year ended December 31, 2021, we granted 7.1 million long-term strategic restricted stock units to certain senior professionals, the majority of which are subject to vesting based on the achievement of annual performance targets over four years, with a larger proportion of the awards vesting based

on the 2024 performance year.

The decrease in equity-based compensation from 2019 to 2020 was due primarily to the lower rate of ongoing grants of restricted stock units, as well as a forfeiture credit recorded in 2020 related to the retirement of one of our co-chief executive officers.

During the year ended December 31, 2021, we granted 7.1 million long-term strategic restricted stock units to certain senior professionals, the majority of which are eligible to vest based on the achievement of annual performance targets over four years, with a larger proportion of the awards eligible to vest based on the 2024 performance year.

Performance allocations and incentive fee related compensation expense .

Performance allocations and incentive fee related compensation expense increased $2.2 billion for the year ended December 31, 2021 as compared to 2020 and increased $342.4 million for the year ended December 31, 2020 as compared to 2019.

Performance allocations and incentive fee related compensation expense decreased $2.2 billion for the year ended December 31, 2022 as compared to 2021 and increased $2.2 billion for the year ended December 31, 2021 as compared to 2020.

Performance allocations and incentive fee related compensation as a percentage of performance allocations and incentive fee was 52%, 48%, and 47% for the years ended December 31, 2022, 2021 and 2020, respectively.

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For our largest segment, Global Private Equity, our performance allocations and incentive fee related compensation expense as a percentage of performance allocations and incentive fees is generally around 45%.

Conversely, performance allocations from the Legacy Energy funds in our Global Private Equity segment are primarily allocated to Carlyle because the investment teams for the Legacy Energy funds are employed by Riverstone not Carlyle.

Performance allocations from our Global Investment Solutions segment pay a higher ratio of performance allocations and incentive fees as compensation, primarily as a result of the terms of our acquisition of AlpInvest (see “ —Key Financial Measures—Revenues—Investment Income ” for more information regarding the terms of our acquisition).

General, Administrative and Other Expenses.

General, administrative and other expenses increased $82.4 million for the year ended December 31, 2021 as compared to 2020, and decreased $145.1 million for the year ended December 31, 2020 as compared to 2019, primarily due to:

General, administrative and other expenses increased $144.1 million for the year ended December 31, 2022 as compared to 2021, and increased $82.4 million for the year ended December 31, 2021 as compared to 2020, primarily due to:

Year Ended December 31,

(Dollars in millions)

Higher (lower) intangible asset amortization (1)

$ 93.7 $ (4.4)

Higher depreciation and amortization 1.7 4.3

Higher (lower) professional fees 48.3 (5.4)

Higher (lower) travel and conference costs 29.2 (2.9)

Higher external fundraising costs 7.8 2.0

Higher (lower) IT and other office expenses 18.8 (1.1)

Higher rent expense 0.7 7.7

Foreign exchange adjustments (2)

Right-of-use asset impairment (3)

CCC litigation cost recovery in 2020 (4)

Lower intangible asset amortization (4.4) (0.9)

Higher (lower) depreciation and amortization 4.3 (12.6)

Lower professional fees, including corporate conversion costs (5.4) (29.7)

Lower travel and conference costs (2.9) (49.2)

Higher (lower) rent expense 7.7 (1.1)

Foreign exchange adjustments (3)

Higher external fundraising costs 2.0 4.2

Other changes (5)

Total increase (decrease) in general, administrative and other expenses $ 82.4 $ (145.1)

Total increase in general, administrative and other expenses $ 144.1 $ 82.4

(1) Intangible asset amortization increase for the year ended December 31, 2022 as compared to 2021 was primarily related to the CBAM and Abingworth acquisitions.

See Note 4 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more information.

(2) Foreign exchange adjustments are primarily driven by the revaluation on our European CLO investments.

Foreign exchange adjustments for the year ended December 31, 2021 also include a loss of $14.7 million from the sale of our local Brazilian management entity related to amounts previously recorded in accumulated other comprehensive income.

(3) In connection with the April 1, 2021 sale of MRE, we entered into a sublease of certain office space in New York which resulted in a $26.8 million right-of-use asset impairment charge.

(4) General, administrative and other expenses in 2020 included the positive impact of a $29.9 million recovery of litigation costs.

See Note 8 to the consolidated financial statements in Item 8 of this Form 10-K.

(3) Foreign exchange adjustments for the year ended December 31, 2021 include a loss of $14.7 million from the sale of our local Brazilian management entity related to amounts previously recorded in accumulated other comprehensive income.

Foreign exchange adjustments for the years ended December 31, 2021 and 2020 are also driven by the revaluation on our European CLO investments.

Interest increased $19.3 million for the year ended December 31, 2021 as compared to 2020 primarily due to interest accrued on the Subordinated Notes issued in May 2021, as well as $10.1 million of interest expense recorded upon the early extinguishment of the 3.875% Senior Notes in November 2021.

Interest increased $11.9 million for the year ended December 31, 2020 as compared to 2019 primarily due to interest accrued on the 3.500% Senior Notes issued in September 2019.

See Note 6 to the consolidated financial statements in Item 8 of this Form 10-K for more information.

See Note 8 to the consolidated financial statements in Part II, Item 8 to the 2021 Annual Report on Form 10-K.

(5) The year ended December 31, 2022 includes $7.5 million in advances to a portfolio company which have been fully reserved as an expense until recovered.

Interest decreased $2.9 million for the year ended December 31, 2022 as compared to 2021 primarily due to lower interest accruals on the 3.875% Senior Notes, which were redeemed in November 2021, and interest expense of $10.1 million recorded in 2021 upon their early extinguishment.

These impacts were partially offset by higher interest on CLO

term loans, mainly related to CBAM, and higher interest accruals on the Subordinated Notes issued in May 2021.

Interest increased $19.3 million for the year ended December 31, 2021 as compared to 2020 primarily due to interest accrued on the Subordinated Notes, as well as $10.1 million of interest expense recorded upon the early extinguishment of the 3.875% Senior Notes in November 2021.

These increases were partially offset by lower interest accruals on the 3.875% Senior Notes.

See Note 8 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more information.

Interest and Other Expenses of Consolidated Funds.

Interest and other expenses of Consolidated Funds increased $15.0 million for the year ended December 31, 2021 as compared to 2020 primarily due to higher interest expense on the

consolidated CLOs.

Interest and other expenses of Consolidated Funds increased $31.7 million for the year ended December 31, 2020 as compared to 2019, primarily due to higher interest expense on the consolidated CLOs.

Interest and other expenses of Consolidated Funds increased $33.1 million for the year ended December 31, 2022 as compared to 2021, and increased $15.0 million for the year ended December 31, 2021 as compared to 2020, 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.

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For the year ended December 31, 2020, this caption includes the impact of the Conversion on our tax receivable agreement liability, which was reduced by $9.3 million.

See Note 10 to the consolidated financial statements for more information on the tax impacts of the Conversion.

See Note 11 to the consolidated financial statements in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2020 for information regarding the impact of the Conversion.

Net Investment Gains (Losses) of Consolidated Funds

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(Dollars in millions)

Realized losses $ 9.6 $ (91.3) $ (14.2)

Net change in unrealized gains (losses) 67.0 62.2 (4.7)

Total losses 76.6 (29.1) (18.9)

Realized (losses) gains $ (29.6) $ 9.6 $ (91.3)

Net change in unrealized (losses) gains (378.5) 67.0 62.2

Total (losses) gains (408.1) 76.6 (29.1)

Gains (losses) from liabilities of CLOs 366.6 (74.1) 7.8

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state and foreign corporate income taxes, partially offset by non-controlling interests and the impact of a tax benefit resulting from the vesting of restricted stock units.

The effective tax rate for the year ended December 31, 2020 also differs from the statutory rate due to the income tax expense resulting from the Conversion (see Note 10 to the accompanying consolidated financial statements for more information regarding the impact of the Conversion).

The effective tax rate for the year ended December 31, 2022 also differs from the statutory rate due to the use of foreign tax credits, a lower estimated state effective tax rate due to the mix of income during the year, and a benefit due to a restructuring of ownership in our Global Investment Solutions business.

The effective tax rate for the year ended December 31, 2020 also differs from the statutory rate due to the income tax expense resulting from the Conversion (see Note 11 to the consolidated financial statements in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2020 for information regarding the impact of the Conversion).

Excluding this impact from Conversion, our effective income tax rate would have been approximately 19% for the year ended December 31, 2020.

The effective tax rate for the year ended December 31, 2019 reflects our pre-Conversion status as a partnership.

As of December 31, 2022 and 2021, the Company had federal, state, local and foreign taxes payable of $39.7 million and $93.3 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheet.

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Net income attributable to non-controlling interests in consolidated entities was $59.7 million, $70.5 million, and $34.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

These amounts are primarily attributable to the net earnings of the Consolidated Funds for each period, which are substantially all allocated to the related funds’ limited partners or CLO investors, as well as net earnings from our Insurance Solutions business allocated to certain third party investors.

The net income (loss) of our Consolidated Funds, after eliminations, was $36.1 million, $2.7 million, and $8.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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The net income attributable to The Carlyle Group Inc.

common stockholders was $3.0 billion, $348.2 million, and $345.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Prior to the Conversion, the Company was allocated a portion of the monthly net income (loss) attributable to Carlyle Holdings based on the Company’s ownership in Carlyle Holdings (which was approximately 34% as of December 31, 2019).

In addition, net income attributable to The Carlyle Group L.P.

common unitholders for the year ended December 31, 2019 was reduced by the Series A preferred units (“Preferred Units”) redemption premium.

common stockholders was $1.2 billion, $3.0 billion, and $348.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Non-GAAP Financial Measures

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Portfolio advisory and transaction fees, net and other 111.1 97.0 56.9

Fee related performance revenues 129.3 43.2 35.9

Total fund level fee revenues 2,237.3 1,794.8 1,616.1

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38.3 (351.8) 556.2

Adjusted unrealized principal investment (income) loss from investment in Fortitude (2)

— 104.4 (140.9)

Principal investment loss from dilution of indirect investment in Fortitude 176.9 — —

Adjusted unrealized principal investment (income) loss from direct investment in Fortitude (2)

Equity-based compensation (3)

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Debt extinguishment costs — 10.2 —

Other adjustments including severance and Conversion costs in 2020 and 2019 14.2 8.0 34.6

Other adjustments, including severance and Conversion costs in 2020 12.4 14.2 8.0

Distributable Earnings 1,909.0 2,243.7 762.1

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This resulted in an unrealized loss in principal investment income (loss) of $620.7 million during the year ended December 31, 2020.

Adjustments to unrealized principal investment income (loss) during the year ended December 31, 2019 are inclusive of $582.0 million of unrealized gains on embedded derivatives.

(2) Adjusted unrealized principal investment income (loss) from the investment in Fortitude represents 19.9% of Fortitude’s estimated net income (loss), excluding the unrealized gains (losses) related to embedded derivatives, prior to the contribution of our investment in Fortitude to Carlyle FRL on June 2, 2020.

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Principal investment income (loss) $ (540.7) $ 613.7 $ 73.0

(5) Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net of related compensation expense and unrealized principal investment income, which are excluded from our Non-GAAP results, (ii) amounts earned from the Consolidated Funds, which are eliminated in the U.S.

GAAP consolidation but are included in the Non-GAAP results, (iii) amounts attributable to non-controlling interests in consolidated entities, which are excluded from the Non-GAAP results, (iv) the reclassification of NGP performance revenues, which are included in investment income in the U.S.

GAAP financial statements, (v) the reclassification of certain incentive fees from business development companies, which are included in fund management fees in the Non-GAAP results, and (vi) the reclassification of 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 (see Note 4 to the consolidated financial statements).

(5) Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net of related compensation expense and unrealized principal investment income, which are excluded from the Non-GAAP results, (ii) amounts earned from the Consolidated Funds, which are eliminated 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 Non-GAAP 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 the dilution of the indirect investment in Fortitude (see Note 6 to the consolidated financial statements).

Distributable Earnings for our reportable segments is as follows:

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Portfolio advisory and transaction fees, net and other 29.5 34.3 22.8

Fee related performance revenues 69.4 — —

Total fund level fee revenues 1,399.8 1,146.1 1,064.8

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Distributable Earnings

Distributable earnings increased $1.4 billion for the year ended December 31, 2021 as compared to 2020, and increased $25.1 million for the year ended December 31, 2020 as compared to 2019.

Distributable earnings decreased $516.3 million for the year ended December 31, 2022 as compared to 2021, and increased $1.4 billion for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the changes in distributable earnings for the years ended December 31, 2022 and 2021:

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Increases (decreases):

Increase (decrease) in fee related earnings 19.3 (4.6)

Increase in realized net performance revenues 1,292.7 64.9

Increase (decrease) in realized principal investment income 115.8 (21.3)

Increase in net interest (10.4) (13.9)

Total increase 1,417.4 25.1

Increase in fee related earnings 138.3 19.3

(Decrease) increase in realized net performance revenues (609.1) 1,292.7

(Decrease) increase in realized principal investment income (59.1) 115.8

Decrease (increase) in net interest 13.6 (10.4)

Total (decrease) increase (516.3) 1,417.4

Distributable earnings, current year $ 1,505.6 $ 2,021.9

Realized Net Performance Revenues.

Realized net performance revenues increased $1.3 billion for the year ended December 31, 2021 as compared to 2020, and increased $64.9 million for the year ended December 31, 2020 as compared to 2019.

Realized net performance revenues increased in 2021 primarily driven by realization activity in our U.S., Europe and Asia buyout funds, as well as our U.S.

Realized net performance revenues decreased $609.1 million for the year ended December 31, 2022 as compared to 2021, primarily driven by lower realization activity in our U.S.

buyout and U.S.

real estate funds, partially offset by higher realizations in our Europe buyout.

During the year ended December 31, 2022, we realized performance revenues for the first time on our fourth Europe buyout and fourth Europe Technology funds.

Realized net performance revenues increased $1.3 billion for the year ended December 31, 2021 as compared to 2020, primarily driven by realization activity in our U.S., Europe and Asia buyout funds, as well as our U.S.

real estate funds.

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real estate fund, our fourth Asia buyout fund, and our third Japan buyout fund.

Realized net performance revenues for the year ended December 31, 2020 increased compared to 2019 as we began realizing carry from CP VI during the year, and we generated higher performance revenue realizations from our financial services and Europe real estate funds.

Realized net performance revenues in 2019 were also impacted by the realized clawback on one of the Legacy Energy funds.

Realized net performance revenues were primarily generated by the following funds for the years ended December 31, 2022, 2021 and 2020, respectively:

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2022 2021 2020

CP V CP IV CETP III

CP VI CP V CAP III

CEP III CP VI CGFSP II

CAP III CETP III CETP II

CAP IV CGFSP I CP V

CETP III CRP VII CRP VII

CRP V CERF CRP V

CRP VII CEREP III CPI

CRP VIII CPI Energy IV (clawback)

CJP III CGFSP II CRP III

CGFSP II CRP III CRP VI

CP V CP V CP IV

CP VI CP VI CP V

CEOF II CEP III CP VI

CGFSP II CAP III CETP III

CEP IV CAP IV CGFSP I

CAP IV CETP III CGFSP II

CJP III CRP V CRP III

CETP IV CRP VII CRP VII

CRP VIII CRP VIII CERF

CJP III CEREP III

Realized Principal Investment Income.

Realized principal investment income increased $115.8 million for the year ended December 31, 2021 as compared to 2020 and decreased $21.3 million for the year ended December 31, 2020 as

compared to 2019.

Realized principal investment income decreased $59.1 million for the year ended December 31, 2022 as compared to 2021 and increased $115.8 million for the year ended December 31, 2021 as compared to 2020.

The decrease in realized principal investment income for the year ended December 31, 2022 as compared to 2021 was primarily driven by decreases in realized principal investment income from our U.S.

real estate and U.S.

growth funds, partially offset by an increase in realized principal investment income from our NGP Energy funds.

The increase in realized principal investment income for the year ended December 31, 2021 as compared to 2020 was primarily driven by increases in realized principal investment income from our U.S.

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growth funds.

The decrease in realized principal investment income for the year ended December 31, 2020 as compared to 2019 was primarily due to the recovery of $71.5 million from the final resolution of French tax litigation concerning a European real estate fund in 2019 (see Note 8 of our consolidated financial statements for more information on this matter), partially offset by higher realized gains in 2020 from our U.S., Asia and Europe buyout funds.

Fee Related Earnings

Fee related earnings increased $19.3 million for the year ended December 31, 2021 as compared to 2020, and decreased $4.6 million for the year ended December 31, 2020 as compared to 2019.

Fee related earnings increased $138.3 million for the year ended December 31, 2022 as compared to 2021, and increased $19.3 million for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the change in fee related earnings for the years ended December 31, 2022 and 2021:

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Increases (decreases):

Increase (decrease) in fee revenues 81.3 (80.7)

(Increase) decrease in cash-based compensation (44.3) 8.7

(Increase) decrease in general, administrative and other indirect expenses (14.6) 57.3

Increase in fee revenues 253.7 81.3

Increase in cash-based compensation (52.1) (44.3)

Increase in general, administrative and other indirect expenses (62.8) (14.6)

All other changes (0.5) (3.1)

Total increase (decrease) 19.3 (4.6)

Total increase 138.3 19.3

Fee related earnings, current year $ 540.6 $ 402.3

Fee Revenues.

Total fee revenues increased $81.3 million for the year ended December 31, 2021 as compared to 2020 and decreased $80.7 million for the year ended December 31, 2020 as compared to 2019, due to the following:

Total fee revenues increased $253.7 million for the year ended December 31, 2022 as compared to 2021 and increased $81.3 million for the year ended December 31, 2021 as compared to 2020, due to the following:

Year Ended December 31,

(Dollars in millions)

Higher (lower) fund management fees $ 69.8 $ (64.6)

Higher (lower) portfolio advisory and transaction fees, net and other 11.5 (16.1)

Total increase (decrease) in fee revenues $ 81.3 $ (80.7)

The increase in fund management fees for the year ended December 31, 2021 as compared to 2020 was primarily due to activation of management fees on CP VIII, CRP IX, CAP Growth II and CP Growth during the year, as well as higher management fees from CJP IV, CPI, and our Renewables fund (CRSEF) which included $3.2 million in catch-up management fees.

Higher fund management fees $ 189.1 $ 69.8

(Lower) higher portfolio advisory and transaction fees, net and other (4.8) 11.5

Higher fee related performance revenues 69.4 —

Total increase in fee revenues $ 253.7 $ 81.3

The increase in fund management fees for the year ended December 31, 2022 as compared to 2021 was primarily due to the activation of management fees on CETP V in the current year and CP VIII and CRP IX in the fourth quarter of the prior year, as well as management fees from Abingworth which was acquired in August 2022 and $9.1 million of catch-up management fees, primarily related to CP VIII.

These increases were partially offset by the basis step-down in CP VII and CRP VIII and lower management fees on CP VI, on which management fees are based on invested capital.

The increase in fund management fees for the year ended December 31, 2021 as compared to 2020 was primarily due to activation of management fees on CP VIII, CRP IX, CAP Growth II and CP Growth during the current year, as well as higher management fees from CJP IV, CPI, and CRSEF, which included $3.2 million in catch-up management fees.

These increases were partially offset by basis step-downs in CJP III and CEOF II, as well as lower management fees on CP VI and CEP IV, on which management fees are based on invested capital and which have had realizations over the last twelve months.

CIEP II also had a decrease in management fees, driven by catch-up management fees of $6.6 million in 2020.

The decrease in fund management fees for the year ended December 31, 2020 as compared to 2019 was primarily due to lower management fees from CGIOF, including $20.4 million in catch-up management fees for subsequent closes in 2019, and lower management fees from NGP X, NGP XI and NGP XII.

These decreases were partially offset by higher management fees from CIEP II, including catch-up management fees of $6.6 million in 2020, activation of management fees in 2020 from CJP IV, and higher management fees from CETP IV.

The increase in fee related performance revenues for the year ended December 31, 2022 as compared to 2021 was driven by CPI, which began to realize recurring fee related performance revenue during the first quarter of 2022.

The weighted average management fee rate increased to 1.39% at December 31, 2022 from 1.26% at December 31, 2021, reflecting new funds raised with higher fee rates.

Fee-earning AUM increased $3.5 billion to $107.8 billion as of December 31, 2022 from $104.3 billion as of December 31, 2021.

The weighted average management fee rate slightly increased to 1.26% at December 31, 2021 from 1.25% at December 31, 2020.

Fee-earning AUM was $104.3 billion and $91.6 billion as of December 31, 2021 and 2020, respectively, reflecting an increase of $12.7 billion.

The weighted average management fee rate decreased slightly from 1.26% at December 31, 2019 to 1.25% at December 31, 2020.

Fee-earning AUM was $91.6 billion and $94.8 billion as of December 31, 2020 and 2019, respectively, reflecting a decrease of $3.2 billion.

Portfolio advisory and transaction fees increased for the year ended December 31, 2021 as compared to 2020 and resulted primarily from transaction fees related to investments in our Japan buyout, Europe buyout and Global Partners funds.

Portfolio advisory and transaction fees decreased for the year ended December 31, 2020 as compared to 2019 and resulted primarily from transaction fees related to investments in our financial services and international energy funds.

Fee-earning AUM increased $12.7 billion to $104.3 billion as of December 31, 2021 from $91.6 billion as of December 31, 2020.

Portfolio advisory and transaction fees decreased for the year ended December 31, 2022 as compared to 2021, and increased for the year ended December 31, 2021 as compared to 2020.

The recognition of portfolio advisory and transaction fees can be volatile as they are primarily generated by investment activity within our funds, and therefore are impacted by our investment pace.

Cash-based compensation and benefits expense.

Cash-based compensation and benefits expense increased $44.3 million, or 9%, for the year ended December 31, 2021 as compared to 2020, primarily due to higher year-end bonuses.

Cash-based compensation and benefits expense decreased $8.7 million for the year ended December 31, 2020 as compared to 2019, primarily due to lower cash bonuses as a result of decreased headcount.

Cash-based compensation and benefits expense increased $52.1 million, or 10%, for the year ended December 31, 2022 as compared to 2021, primarily due to increased headcount, as well as an increase in compensation associated with fee related performance revenues (approximately 45% of fee related performance revenues are paid as cash-based compensation) of $33.1 million for the year ended December 31, 2022.

Cash-based compensation and benefits expense increased $44.3 million for the year ended December 31, 2021 as compared to 2020, primarily due to higher year-end bonuses.

General, administrative and other indirect expenses.

General, administrative and other indirect expenses increased $62.8 million for the year ended December 31, 2022 as compared to 2021, primarily due to increased professional fees, travel and conference expenses, IT expenses and external costs associated with fundraising activities.

General, administrative and other indirect expenses for the year ended December 31, 2022 also include $7.5 million in advances to a portfolio company which have been fully reserved as an expense until recovered.

General, administrative and other indirect expenses decreased $5.7 million, excluding the impact of litigation cost recoveries in 2020, for the year ended December 31, 2021 as compared to 2020, primarily due to lower professional fees.

General, administrative and other indirect expenses decreased $57.3 million for the year ended December 31, 2020 as compared to 2019 primarily due to the allocated portion of the cost recovery associated with the CCC matter of $20.3 million (see Note 8 to the consolidated financial statements for more information), lower professional fees and lower travel and entertainment expenses as a result of travel restrictions during the COVID-19 pandemic.

Fee-earning AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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

Twelve Months Ended December 31,

Year Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 104,252 $ 91,571 $ 94,811

Inflows (1) 24,588 5,400 8,315

12,983 24,588 5,400

Outflows (including realizations) (2)

(8,306) (10,925) (9,514)

Market Activity & Other (3)

Foreign Exchange (4)

(1,189) (1,271) 1,180

Balance, End of Period $ 107,801 $ 104,252 $ 91,571

(1) Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are based on invested capital, and gross subscriptions in open-ended vehicles with management fees based on net asset value.

(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 for the year ended December 31, 2022 include $2 billion of Fee-earning AUM associated with the Abingworth transaction in August 2022.

Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM.

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Fee-earning AUM was $107.8 billion at December 31, 2022, an increase of $3.5 billion, or 3%, compared to $104.3 billion at December 31, 2021.

This was driven by inflows of $13.0 billion primarily related to new fee-paying commitments raised in CETP V and CP VIII, new capital deployment in CPI, and $2 billion acquired as part of the Abingworth transaction in August 2022.

Partially offsetting the increase were realizations of $8.3 billion in funds that charge fees based on invested capital and $1.2 billion in negative foreign exchange activity primarily from the translation of our EUR-denominated funds’ AUM to USD.

Investment and distribution activity by funds still in the investment period does not impact Fee-earning AUM as these funds are based on commitments.

Fee-earning AUM was $104.3 billion at December 31, 2021, an increase of $12.7 billion, or 14%, compared to $91.6 billion at December 31, 2020.

This was driven by inflows of $24.6 billion primarily related to the activation of management fees in CP VIII, CRP IX, and CP Growth, as well as capital invested in CPI.

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Negative foreign exchange activity of $1.3 billion resulted from the translation of our Europe buyout, growth, and real estate AUM from EUR to USD.

Investment and distribution activity by funds still in the investment period does not impact Fee-earning AUM as these funds are based on commitments.

Fee-earning AUM was $91.6 billion at December 31, 2020, a decrease of $3.2 billion, or 3%, compared to $94.8 billion at December 31, 2019.

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Also offsetting the decrease was positive foreign exchange activity of $1.2 billion from the translation of our Europe Buyout, Growth, and Real Estate AUM from EUR to USD.

Fee-earning AUM was $94.8 billion at December 31, 2019, a decrease of $0.5 billion, or 1%, compared to $95.3 billion at December 31, 2018.

This was driven by outflows of $8.6 billion which were principally a result of dispositions in our U.S.

real estate, NGP Energy, and Europe buyout funds, as well as distributions in other funds outside of their investment period.

This was offset by inflows of $8.3 billion primarily related to the activation of management fees in CIEP II and CETP IV, as well as new fee-paying commitments raised in various other funds.

Total AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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

Twelve Months Ended December 31,

Year Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 162,117 $ 131,780 $ 129,784

Inflows (1) 27,199 3,550 10,663

12,391 27,199 3,550

Outflows (including realizations) (2)

(22,086) (27,819) (9,589)

Market Activity & Other (3)

12,554 32,730 6,412

Foreign Exchange (4)

(1,878) (1,773) 1,623

Balance, End of Period $ 163,098 $ 162,117 $ 131,780

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Inflows for the year ended December 31, 2022 include $2 billion of AUM associated with the August 2022 Abingworth transaction.

(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.

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Total AUM was $163.1 billion at December 31, 2022, an increase of $1.0 billion, or 1%, compared to $162.1 billion at December 31, 2021.

This increase was driven by $27.2 billion of inflows primarily due to fundraising in CP VIII, CRP IX, CPI, and CP Growth, as well as market appreciation of $32.7 billion.

Driving the increase were $12.6 billion of portfolio appreciation and $12.4 billion of inflows, largely attributable to additional capital raised in CETP V and CP VIII, as well as $2 billion of AUM acquired as part of the Abingworth transaction in August 2022.

Overall portfolio appreciation was driven by appreciation of $2.9 billion in NGP XI, $1.8 billion in NGP XII, and $1.1 billion in CRP VIII, partially offset by depreciation of $2.4 billion in CP VI.

The increase was largely offset by outflows of $22.1 billion primarily from distributions of investment proceeds in our U.S.

Buyout, NGP Energy, Europe Buyout, Asia Buyout, and U.S.

Real Estate funds, as well as $1.9 billion of negative foreign exchange activity primarily from the translation of our EUR-denominated funds’ AUM to USD.

Total AUM was $162.1 billion at December 31, 2021, an increase of $30.3 billion, or 23%, compared to $131.8 billion at December 31, 2020.

This increase was driven by $27.2 billion of inflows primarily due to fundraising in CP VIII, CRP IX, CPI, and CP Growth, as well as portfolio appreciation of $32.7 billion.

The carry funds driving appreciation for the period included $7.3 billion attributable to CP VI, $3.7 billion attributable to CP VII, $1.9 billion attributable to CEP IV, and $1.7 billion attributable to CRP VIII.

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This increase was driven by $3.6 billion of inflows primarily due to fundraising in CPI, CIEP II, and CJP IV.

Also contributing to this increase was market appreciation of $6.4 billion.

Also contributing to this increase was portfolio appreciation of $6.4 billion.

The carry funds driving appreciation for the period included $6.1 billion attributable to CP VI, $1.3 billion attributable to CAP IV, and $0.8 billion attributable to CP VII, offset by $(1.0) billion attributable to NGP XI and $(0.5) billion attributable to CIEP I.

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Real Estate funds.

Total AUM was $129.8 billion at December 31, 2019, an increase of $3.4 billion, or 3%, compared to $126.4 billion at December 31, 2018.

This increase was driven by $10.7 billion of inflows primarily due to fundraising in CJP IV, CGP II, CETP IV, and CIEP II.

Also contributing to this increase was market appreciation and other activity of $2.9 billion due to appreciation in our carry funds partially offset by the impact of management fees and expenses.

The carry funds driving appreciation for the period included $0.9 billion attributable to CP VI, $0.5 billion attributable to CP VII, and $0.4 billion attributable to CAP V.

Partially offsetting the increase were $9.9 billion of outflows driven primarily by distributions in our U.S.

real estate, NGP Energy, and U.S.

buyout funds.

Fund Performance Metrics

Fund performance information for our investment funds that generally have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of December 31, 2021, 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.

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.

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There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

See “Item 1A.

Risk Factors — Risks Related to Our Business Operations — The historical returns attributable to our funds, including those presented in this report, should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our common stock.”

“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 report, should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our common stock.”

The following tables reflect the performance of our significant funds in our Global Private Equity business.

“Business — Our Family of Funds” for a legend of the fund acronyms listed below.

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

TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS (5)

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Capital (1) Percent Invested Realized

Value(2) Remaining Fair Value(3) MOIC

(4) Gross IRR

(6)(12) Net IRR

(7)(12) Net Accrued Carry/(Clawback)

Value(9) MOIC

Value (2) Remaining Fair Value (3) MOIC (4) Gross IRR (6)(12) Net IRR (7)(12) Net Accrued Carry/(Giveback) (8) Total

Value (9) MOIC (4) Gross

Corporate Private Equity

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CEP III (Jul 2007 / Dec 2012) € 5,295 € 5,177 98% € 11,715 € 72 2.3x 19% 14% $ 8 € 11,647 2.3x 19%

CEP II (Sep 2003 / Sep 2007) € 1,805 € 2,048 113% € 4,152 € 8 2.0x 36% 20% $ 2 € 4,124 2.2x 43%

CAP V (Jun 2018 / Jun 2024) $ 6,554 $ 5,654 86% $ 1,423 $ 5,991 1.3x 25% 12% $ 113 $ 904 1.8x 143%

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CAP III (Jun 2008 / Jul 2013) $ 2,552 $ 2,543 100% $ 5,123 $ 16 2.0x 17% 12% $ 2 $ 5,138 2.0x 17%

CJP IV (Oct 2020 / Oct 2026) ¥ 258,000 ¥ 78,946 31% ¥ — ¥ 91,696 1.2x NM NM $ 3 n/a n/a n/a

CJP IV (Oct 2020 / Oct 2026) ¥ 258,000 ¥ 165,478 64% ¥ — ¥ 214,638 1.3x 68% 30% $ 24 n/a n/a n/a

CJP III (Sep 2013 / Aug 2020) ¥ 119,505 ¥ 91,192 76% ¥ 189,426 ¥ 49,548 2.6x 24% 17% $ 29 ¥ 182,269 3.9x 33%

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CEOF I (Sep 2011 / Nov 2015) $ 1,119 $ 1,175 105% $ 1,656 $ 187 1.6x 12% 8% $ 43 $ 1,604 1.6x 15%

CETP IV (Jul 2019 / Jul 2025) € 1,350 € 1,109 82% € — € 1,727 1.6x 63% 41% $ 58 n/a n/a n/a

CETP V (Mar 2022 / Jun 2028) € 3,114 € 211 7% € — € 208 1.0x n/a n/a $ — n/a n/a n/a

CETP IV (Jul 2019 / Jun 2022) € 1,350 € 1,173 87% € 788 € 1,804 2.2x 56% 41% $ 96 € 788 9.3x 122%

CETP III (Jul 2014 / Jul 2019) € 657 € 602 92% € 1,239 € 586 3.0x 42% 29% $ 44 € 1,181 4.4x 51%

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CAGP IV (Aug 2008 / Dec 2014) $ 1,041 $ 954 92% $ 1,123 $ 90 1.3x 6% 1% $ — $ 1,122 1.3x 7%

CSABF (Dec 2009 / Dec 2016) $ 776 $ 736 95% $ 483 $ 422 1.2x 4% 1% $ — $ 698 1.4x 3%

CSABF (Dec 2009 / Dec 2016) $ 776 $ 736 95% $ 490 $ 378 1.2x 3% Neg $ — $ 650 1.3x 8%

All Other Active Funds & Vehicles (10) $ 22,593 n/a $ 22,850 $ 14,847 1.7x 22% 15% $ 77 $ 23,237 2.2x 33%

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CRP VI (Mar 2011 / Jun 2014) $ 2,340 $ 2,160 92% $ 3,785 $ 142 1.8x 27% 18% $ 5 $ 3,708 1.9x 29%

CRP V (Nov 2006 / Mar 2011) $ 3,000 $ 3,294 110% $ 6,109 $ 21 1.9x 13% 9% $ 7 $ 6,092 1.9x 13%

CRP IV (Jan 2005 / Nov 2006) $ 950 $ 1,199 126% $ 1,963 $ 3 1.6x 7% 4% $ — $ 1,966 1.6x 7%

CPI (May 2016 / n/a) $ 6,428 $ 4,727 74% $ 1,230 $ 5,399 1.4x 19% 17% $ 61 $ 784 1.7x NM

CEREP III (Jun 2007 / May 2012) € 2,230 € 2,053 92% € 2,451 € 43 1.2x 4% 1% $ — € 2,445 1.2x 4%

TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(5)

As of December 31, 2021 As of December 31, 2021

Fund (Fee Initiation Date/Stepdown Date) (19) Committed

Capital (20) Cumulative

Capital(1) Percent Invested Realized

Value(2) Remaining Fair Value(3) MOIC

(4) Gross IRR

(6)(12) Net IRR

(7)(12) Net Accrued Carry/(Clawback)

Value(9) MOIC

All Other Active Funds & Vehicles(14) $ 3,492 n/a $ 3,018 $ 2,391 1.5x 10% 8% $ 7 $ 2,732 1.7x 11%

CPI (May 2016 / n/a) $ 7,991 $ 6,748 21% $ 1,981 $ 7,334 1.4x 20% 17% n/a* $ 1,186 1.8x 9%

All Other Active Funds & Vehicle (14) $ 8,717 n/a $ 10,910 $ 2,831 1.6x 10% 7% $ 18 $ 10,559 1.6x 11%

Fully Realized Funds & Vehicles (15) $ 6,886 n/a $ 9,718 $ 5 1.4x 11% 6% $ — $ 9,723 1.4x 11%

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Natural Resources

CIEP II (Apr 2019 / Apr 2025) $ 2,286 $ 841 37% $ 364 $ 809 1.4x NM NM $ 17 $ 501 2.1x NM

CIEP II (Apr 2019 / Apr 2025) $ 2,286 $ 1,008 44% $ 544 $ 997 1.5x 41% 19% $ 32 $ 596 2.5x NM

CIEP I (Sep 2013 / Jun 2019) $ 2,500 $ 2,374 95% $ 1,764 $ 2,785 1.9x 19% 11% $ 174 $ 2,780 2.7x 26%

CPP II (Sep 2014 / Apr 2021) $ 1,527 $ 1,537 101% $ 809 $ 1,942 1.8x 17% 11% $ 101 $ 365 4.1x 76%

CGIOF (Dec 2018 / Sep 2023) $ 2,201 $ 1,242 56% $ 98 $ 1,254 1.1x NM NM $ — $ 42 1.8x NM

NGP XII (Jul 2017 / Jul 2022) $ 4,278 $ 2,547 60% $ 379 $ 2,957 1.3x 12% 8% $ — n/a n/a n/a

CGIOF (Dec 2018 / Sep 2023) $ 2,201 $ 1,723 78% $ 291 $ 1,985 1.3x 24% 10% $ 36 $ 248 1.4x 15%

NGP XII (Jul 2017 / Jul 2022) $ 4,304 $ 2,775 64% $ 1,365 $ 3,952 1.9x 22% 16% $ 191 $ 1,201 3.2x 39%

NGP XI (Oct 2014 / Jul 2017) $ 5,325 $ 4,979 93% $ 4,102 $ 5,331 1.9x 15% 11% $ 340 $ 5,923 2.2x 30%

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Legacy Energy Funds (16) $ 16,741 n/a $ 23,983 $ 72 1.4x 12% 6% $ — $ 23,589 1.5x 14%

*Net accrued fee related performance revenues for CPI of $53 million 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.

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

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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.

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 fee balance/(giveback obligation) as of the current quarter end.

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(10) Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and stand-alone investments arranged by us:

CVP II, MENA, CCI, CSSAF I, CPF, CAP Growth I, CAP Growth II and CBPF II.

CVP II, MENA, CCI, CSSAF I, CPF I, CAP Growth I, CAP Growth II, CBPF II, CEP II, ABV 8 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:

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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.

CCR, CER I, CER II, CEREP III and CRP V.

(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, CRCP I, CAREP I, CAREP II, CEREP I, and CEREP II.

CRP I, CRP II, CRP III, CRP IV, CRCP I, CAREP I, CAREP II, CEREP I, and CEREP II.

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

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(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, CPOCP, CRSEF, and NGP Minerals.

NGP GAP, NGP RP I, NGP RP II, NGP ETP IV, CPOCP, CRSEF and CRSEF II.

(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:

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Portfolio advisory and transaction fees, net and other 81.6 62.2 34.0

Fee related performance revenues 59.9 43.2 35.9

Total fund level fee revenues 614.6 419.8 358.2

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Increase in fee related earnings 112.9 12.2

(Decrease) increase in realized net performance revenues (17.6) 12.9

Increase (decrease) in realized net performance revenues 73.5 (17.6)

Increase in realized principal investment income 6.2 13.2

Increase in net interest (4.3) (3.4)

Decrease (increase) in net interest 3.2 (4.3)

Total increase 195.8 3.5

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Realized Net Performance Revenues.

Realized net performance revenues decreased $17.6 million for the year ended December 31, 2021 as compared to 2020 primarily due to realization of a $6.5 million net giveback obligation for CSP III in 2021 and performance revenue realizations generated from Carlyle Aviation Partners for the year ended December 31, 2020.

Realized net performance revenues increased $12.9 million for the year ended December 31, 2020 as compared to 2019 primarily driven by Carlyle Aviation Partners in 2020.

Realized net performance revenues increased $73.5 million for the year ended December 31, 2022 as compared to 2021, primarily due to realized net performance revenues generated by CCOF I and our structured credit fund, partially offset by the realization of a $5.9 million net giveback obligation for CSP III in 2022.

Realized net performance revenues decreased $17.6 million for the year ended December 31, 2021 as compared to 2020 primarily due to realization of a $6.5 million net giveback obligation for CSP III in 2021 and realized net performance revenues generated from Carlyle Aviation Partners for the year ended December 31, 2020.

Realized Principal Investment Income.

Realized principal investment income increased $6.2 million for the year ended December 31, 2022 as compared to 2021 and increased $13.2 million for the year ended December 31, 2021 as compared to 2020.

The increase in realized principal investment income for the year ended December 31, 2021 as compared to 2020 was primarily due to higher gains on investments in our U.S.

The increase in realized principal investment income for the year ended December 31, 2022 as compared to 2021 was primarily driven by realized principal investment income from CCOF I and CCOF II in 2022, as well as the impact of realized losses on investments in CEMOF in the prior year.

These impacts were partially offset by lower realized principal investment income from our U.S.

CLOs and CSP IV in 2022.

The increase in realized principal investment income for the year ended December 31, 2021 as compared to 2020 was primarily due to higher realized principal investment income from our U.S.

CLOs and distressed credit carry funds.

The increase in realized principal investment income for the year ended December 31, 2020 as compared to 2019 was primarily due to realized losses in one of our energy mezzanine funds in 2019 and higher realized gains on investments in our business development companies.

Fee Related Earnings

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Increase in cash-based compensation (47.1) (31.0)

(Increase) decrease in general, administrative and other indirect expenses (17.4) 33.2

Increase in general, administrative and other indirect expenses (34.6) (17.4)

All other changes (0.2) (1.0)

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Higher portfolio advisory and transaction fees, net and other 19.4 28.2

Higher fee related performance revenues 16.7 7.3

Total increase in fee revenues $ 194.8 $ 61.6

The increase in fund management fees for the year ended December 31, 2021 as compared to 2020 was primarily driven by increased management fees from CCOF I, which earns fees based on AUM, CCOF II, which activated management fees in October 2020, record CLO origination activity, our Interval Fund and the activation of fees on newly-raised SMAs.

The increase in fund management fees for the year ended December 31, 2022 as compared to 2021 was primarily driven by $107.0 million in fees earned under the Fortitude strategic advisory services agreement and on the CBAM portfolio, as well as investment activity at CCOF II, which charges fees based on invested capital, the issuance of U.S.

CLOs over the last twelve months, and growth in our Interval Fund.

These increases were partially offset by lower management fees from CSP IV due to the step-down of the fee rate and basis in January 2021.

The increase in fund management fees for the year ended December 31, 2020 as compared to 2019 was primarily driven by increased management fees from our CLOs, opportunistic credit carry fund, direct lending platform, Carlyle FRL and Carlyle Aviation Partners, partially offset by lower management fees from our energy mezzanine carry funds.

The increases in fee related performance revenues for the years ended December 31, 2022 and 2021 relative to the prior periods were driven by higher fee related performance revenues from our Interval Fund.

The weighted average management fee rate on our carry funds decreased from 1.21% at December 31, 2021 to 1.05% at December 31, 2022.

The rate decrease was primarily due to investment activity in funds on which management fees are based on invested capital and have a lower fee rate, including separately managed accounts.

The weighted average management fee rate on our carry funds slightly decreased from 1.22% at December 31, 2020 to 1.21% at December 31, 2021.

The weighted average management fee rate on our carry funds increased from 1.20% at December 31, 2019 to 1.22% at December 31, 2020 primarily due to fundraising in Carlyle Aviation Partners.

The increase in portfolio advisory and transaction fees, net, and other fees for the years ended December 31, 2021 and 2020 to their comparable prior periods resulted primarily from increased underwriting fees related to Carlyle Global Capital Markets.

Portfolio advisory and transaction fees, net, and other fees for the year ended December 31, 2020 also reflects transaction fees associated with Carlyle FRL.

Portfolio advisory and transaction fees, net, and other fees for the year ended December 31, 2022 were primarily driven by transaction fees in our insurance and aviation strategies, as well as underwriting fees related to Carlyle Global Capital Markets.

Portfolio advisory and transaction fees, net, and other fees for the year ended December 31, 2021 was primarily from increased underwriting fees related to Carlyle Global Capital Markets.

Cash-based compensation and benefits expense.

The increase in cash-based compensation and benefits expense for the years ended December 31, 2021 and 2020 relative to their comparable periods was primarily due to increased headcount and higher cash bonuses as we continue to invest in the growth of our platform and launch new strategies.

Cash-based compensation and benefits expense increased $47.1 million for the year ended December 31, 2022 as compared to 2021, primarily due to increased headcount, as well as an increase in compensation associated with fee related performance revenues (approximately 45% of fee related performance revenues are paid as cash-based compensation) of $7.5 million for the year ended December 31, 2022.

Cash-based compensation and benefits expense increased $31.0 million for the years ended December 31, 2021 and 2020, primarily due to increased headcount and higher cash bonuses.

General, administrative and other indirect expenses.

General, administrative and other indirect expenses increased $11.1 million for the year ended December 31, 2021 as compared to 2020, excluding the impact of litigation cost recoveries in 2020, primarily due to increases in professional fees, rent, other general expenses.

General, administrative and other indirect expenses increased $34.6 million for the year ended December 31, 2022 as compared to 2021, primarily due to increases in professional fees, travel and other general expenses.

General, administrative and other indirect expenses for the year ended December 31, 2020 also reflects expense recoveries from Carlyle FRL.

General, administrative and other indirect expenses decreased $33.2 million for the year ended December 31, 2020 as compared to 2019 primarily due to the allocated portion of the cost recovery associated with the CCC matter of $6.3 million (see Note 8 to the consolidated financial statements for more information), as well as lower professional fees, due in part to expense recoveries from Carlyle FRL, and lower travel and entertainment expenses as a result of travel restrictions during the COVID-19 pandemic.

Fee-earning AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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Fee-earning AUM based on net asset value 2,008 1,409 1,578

Fee-earning AUM based on other (2) 7,140 4,547 2,178

Fee-earning AUM based on fair value and other (2)

53,362 7,140 4,547

Total Fee-earning AUM $ 121,229 $ 51,718 $ 42,133

Weighted Average Management Fee Rates (3)

All Funds, excluding CLOs 1.21 % 1.22 % 1.20 %

Global Credit Carry Funds 1.05 % 1.21 % 1.22 %

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

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

(3) Represents the aggregate effective management fee rate for carry funds, weighted by each fund’s Fee-earning AUM, as of the end of each period presented.

Management fees for CLOs are based on the total par amount of the assets (collateral) and principal balance of the notes in the fund and are not calculated as a percentage of equity and are therefore not included.

(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.

(3) Represents the aggregate effective management fee rate for carry funds only, weighted by each carry fund’s Fee-earning AUM, as of the end of each period presented.

As of December 31, 2022, carry funds represented 13% of Global Credit Fee-earning AUM, respectively.

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

Twelve Months Ended December 31,

Year Ended Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 51,718 $ 42,133 $ 37,862

Inflows (1) 13,029 6,368 4,437

78,057 13,029 6,368

Outflows (including realizations) (2)

(6,845) (4,314) (3,906)

Market Activity & Other (3)

(1,103) 1,501 618

Foreign Exchange (4)

(598) (631) 1,191

Balance, End of Period $ 121,229 $ 51,718 $ 42,133

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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, 2022 include Fee-earning AUM associated with the strategic advisory services agreement with Fortitude which was effective April 1, 2022, as well as Fee-earning AUM acquired in the CBAM transaction in March 2022.

Inflows associated with these transactions were $48 billion and $14 billion, respectively.

Realizations for funds earning management fees based on commitments during the period do not affect Fee-earning AUM.

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Fee-earning AUM was $121.2 billion at December 31, 2022, an increase of $69.5 billion, or 134%, compared to $51.7 billion at December 31, 2021.

Driving the increase were inflows of $78.1 billion primarily from Fee-earning AUM related to the strategic advisory services agreement signed with Fortitude in April 2022 and Fee-earning AUM acquired in the CBAM transaction in March 2022, as well as investment activity in CCOF II, the activation of fees and investment activity in Aviation, and the closing of our six latest vintage U.S.

CLOs and three latest vintage Europe CLOs.

This increase was minimally offset by outflows of $6.8 billion primarily due to reductions for funds that are no longer calling for management fees, realizations in other funds with fees tied to invested capital, and run-off of our CLO collateral balances, as well as $1.1 billion of portfolio depreciation.

Distributions from carry funds still in the investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital.

Fee-earning AUM was $51.7 billion at December 31, 2021, an increase of $9.6 billion, or 23%, compared to $42.1 billion at December 31, 2020.

Driving the increase were inflows of $13.0 billion primarily attributable to new fee-paying capital raised in our U.S.

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Partially offsetting the increase were $4.3 billion of outflows primarily related to run-off of our CLO collateral balances and dispositions from funds which charge fees on invested capital.

Distributions from carry funds still in the investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital.

Fee-earning AUM was $42.1 billion at December 31, 2020, an increase of $4.2 billion, or 11%, compared to $37.9 billion at December 31, 2019.

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Partially offsetting the increase were $3.9 billion of outflows primarily related to a fee basis step-down in CEMOF II and run-off of our CLO collateral balances.

Fee-earning AUM was $37.9 billion at December 31, 2019, an increase of $2.7 billion, or 8%, compared to $35.2 billion at December 31, 2018.

Driving the increase were inflows of $4.4 billion primarily attributable to new fee-paying capital raised in our U.S.

and Europe CLO’s and follow-on closes in CCOF I, as well as $1.1 billion of market and other activity primarily related to increases in gross asset value in our BDCs and securitization vehicles.

Partially offsetting the increase were $2.7 billion of outflows primarily related to a fee basis step-down in CEMOF II and run-off of our CLO collateral balances.

Total AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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

Twelve Months Ended December 31,

Year Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 73,384 $ 55,881 $ 49,412

Inflows (1) 16,933 9,497 6,338

78,277 16,933 9,497

Outflows (including realizations) (2)

(5,741) (4,171) (4,167)

Market Activity & Other (3)

991 5,403 402

Foreign Exchange (4)

(609) (662) 737

Balance, End of Period $ 146,302 $ 73,384 $ 55,881

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Inflows for the year ended December 31, 2022 include AUM associated with the strategic advisory services agreement with Fortitude which was effective April 1, 2022, as well as AUM acquired in the CBAM transaction in March 2022.

Inflows associated with these transactions were $48 billion and $15 billion, respectively.

(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, run-off of CLO collateral balances, and the expiration of available capital.

(3) Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, change in gross asset value for our business development companies and other changes in AUM.

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Total AUM was $146.3 billion at December 31, 2022, an increase of $72.9 billion, or 99%, compared to $73.4 billion at December 31, 2021.

The increase was driven by $78.3 billion of inflows primarily from AUM related to the strategic advisory services agreement signed with Fortitude in April 2022, third party capital capital raised from a strategic third-party investor which directly invests in Fortitude, AUM acquired in the CBAM transaction in March 2022, the closing of our six latest vintage U.S.

CLOs and three latest vintage Europe CLOs, and the first closing in CCOF III.

The increase was minimally offset by outflows of $5.7 billion due to run-off of CLO and other collateral balances and distributions in our carry funds, namely in our Energy Credit and Opportunistic Credit funds.

Total AUM was $73.4 billion at December 31, 2021, an increase of $17.5 billion, or 31%, compared to $55.9 billion at December 31, 2020.

This was driven by $16.9 billion of inflows primarily due to new U.S.

and Europe CLO issuances, as well as fundraising in CCOF II and various platform accounts.

Also driving the increase was $5.4 billion of market and other activity

attributable to 22% appreciation in our carry funds and increases in the gross asset value of our BDCs and securitization vehicles.

Also driving the increase was $5.4 billion of market and other activity attributable to 22% appreciation in our carry funds and increases in the gross asset value of our BDCs and securitization vehicles.

Partially offsetting the increase were outflows of $4.2 billion primarily related to run-off of our CLO collateral balances and distributions in our Distressed Credit and Energy Credit funds.

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Partially offsetting the increase were outflows of $4.2 billion primarily related to distributions in our Energy Credit and Aviation funds, as well as CLO run-off.

Total AUM was $49.4 billion at December 31, 2019, an increase of $5.0 billion, or 11%, compared to $44.4 billion at December 31, 2018.

This was driven by $6.3 billion of inflows primarily due to new U.S.

and Europe CLO issuances, as well as additional closes in CCOF I.

Also driving the increase was market and other activity of $1.2 billion, the majority of which was attributable to increases in the gross asset value of our BDC’s and securitization vehicles.

Partially offsetting the increase were outflows of $2.4 billion primarily related to distributions in our Energy Credit and Aviation funds, as well as CLO run-off.

Fund Performance Metrics

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There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

“Risk Factors—Risks Related to Our Business Operations—The historical returns attributable to our funds including those presented in this report should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our common stock.”

The following table reflects the performance of certain funds in our Global Credit business.

These tables separately present funds that, as of the periods presented, had at least $1.0 billion in capital commitments, cumulative equity invested or total equity value.

“Business — Our Family of Funds” for a legend of the fund acronyms listed below.

(Dollars in millions) TOTAL INVESTMENTS

As of December 31, 2021

Fund (Fee Initiation Date/Stepdown Date) (11) Committed

Capital (12) Cumulative

Capital (1) Percent Invested Realized

Value (2) Remaining Fair Value (3) MOIC (4) Gross IRR

(5) (8) Net IRR

(6) (8) Net Accrued Carry/(Clawback) (7)

Global Credit Carry Funds

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

TOTAL INVESTMENTS

(Dollars in millions) As of December 31, 2022

Fund (Fee Initiation Date/Stepdown Date) (11) Committed Capital (12) Cumulative Invested Capital (1) Percent Invested Realized

Value (2) Remaining Fair Value (3) MOIC (4) Gross IRR (5)(8) Net IRR (6)(8) Net Accrued Carry/(Giveback) (7)

CSP IV (Apr 2016 / Dec 2020) $ 2,500 $ 2,500 100% $ 843 $ 2,351 1.3x 14% 7% $ —

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CSP II (Dec 2007 / Jun 2011) $ 1,352 $ 1,352 100% $ 2,431 $ 66 1.8x 17% 11% $ 7

CCOF II (Nov 2020 / Oct 2025) $ 4,167 $ 1,667 40% $ 45 $ 1,783 1.1x NM NM $ 13

CCOF II (Nov 2020 / Oct 2025) $ 4,425 $ 4,408 100% $ 384 $ 4,477 1.1x 15% 10 $ 33

CCOF I (Nov 2017 / Sep 2022) $ 2,373 $ 3,452 145% $ 2,427 $ 2,120 1.3x 19% 13% $ 44

CEMOF II (Dec 2015 / Jun 2019) $ 1,692 $ 1,713 101% $ 1,789 $ 376 1.3x 8% 3% $ —

CEMOF I (Dec 2010 / Dec 2015) $ 1,383 $ 1,606 116% $ 936 $ 153 0.7x Neg Neg $ —

CSC (Mar 2017/ n/a) $ 838 $ 1,303 155% $ 1,150 $ 512 1.3x 18% 14% $ 34

SASOF III (Nov 2014 / n/a) $ 833 $ 991 119% $ 1,192 $ 101 1.3x 19% 11% $ 12

All Other Active Funds & Vehicles (9) $ 7,976 n/a $ 1,536 $ 6,101 1.0x NM NM $ 7

Fully Realized Funds & Vehicles(10) $ 1,944 n/a $ 2,783 $ 1 1.4x 13% 8% $ —

TOTAL GLOBAL CREDIT $ 20,188 n/a $ 14,081 $ 10,316 1.2x 11% 5% $ 161

Fully Realized Funds & Vehicles (10) $ 5,230 n/a $ 5,642 $ 1 1.1x 3% Neg $ —

TOTAL GLOBAL CREDIT CARRY FUNDS $ 28,325 n/a $ 17,172 $ 15,649 1.2x 10% 4% $ 102

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

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SASOF IV, SASOF V, CALF and CICF.

(10) Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-alone investments arranged by us:

CSP I, CMP I, CMP II, SASOF II and CASCOF.

(10) Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMA's), and certain other stand-alone investments arranged by us:

CSP I, 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.

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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 which were extinguished following a Key Person Event.

Global Investment Solutions

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Distributable Earnings and Fee Related Earnings attributable to MRE in periods prior to the sale were immaterial to the Global Investment Solutions segment.

The $5.0 million gain on the sale and the $26.8 million right-of-use asset impairment, as a result of the sublease transaction (see Note 8 to the consolidated financial statements in Item 8 of this Form 10-K), are not included in DE or FRE.

The $5.0 million gain on the sale and the $26.8 million right-of-use asset impairment, as a result of the sublease transaction (see Note 10 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K), are not included in DE or FRE.

See “Non-GAAP Financial Measures” for the reconciliation of Total DE and FRE to the U.S.

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Distributable Earnings

Distributable earnings increased $60.7 million for the year ended December 31, 2021 as compared to 2020, and increased $22.6 million for the year ended December 31, 2020 as compared to 2019.

Distributable earnings decreased $14.2 million for the year ended December 31, 2022 as compared to 2021, and increased $60.7 million for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the change in distributable earnings for the years ended December 31, 2022 and 2021:

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Increases (decreases):

Increase in fee related earnings 46.9 19.9

(Decrease) increase in fee related earnings (14.9) 46.9

Increase in realized net performance revenues 4.5 8.2

Increase in realized principal investment income 7.5 0.6

Increase in net interest (1.9) (2.3)

Total increase 60.7 22.6

(Decrease) increase in realized principal investment income (6.0) 7.5

Decrease (increase) in net interest 2.2 (1.9)

Total (decrease) increase (14.2) 60.7

Distributable earnings, current year $ 87.9 $ 102.1

Realized Net Performance Revenues.

Realized net performance revenues increased $8.2 million for the year ended December 31, 2021 as compared to 2020, and increased $4.4 million for the year ended December 31, 2020 as compared to 2019.

Substantially all of the realized net performance revenues were generated from AlpInvest secondary and co-investment carry fund vehicles for the years ended December 31, 2021, 2020 and 2019.

Performance revenues from our Global Investment Solutions segment pay a higher ratio of performance revenues as compensation, primarily as a result of the terms of our acquisition of AlpInvest.

Under our arrangements with the historical owners and management team of AlpInvest, we generally do not retain any carried interest with respect to the historical investments and commitments to our AlpInvest fund vehicles that existed as of July 1, 2011 (including any options to increase any such commitments exercised after such date).

We are entitled to 15% of the carried interest with respect to commitments from the historical owners of AlpInvest for the period between 2011 and 2020, except in certain instances, and 40% of the carried interest in respect of all other commitments (including all future commitments from third parties).

Global Investment Solutions had realized performance revenues of $192.6 million, $186.8 million and $155.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

However, most of these realizations are from AlpInvest fund vehicles in which we generally do not retain carried interest.

Therefore, our realized net performance revenues were $23.2 million, $18.7 million and $10.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As funds that have launched since our acquisition of AlpInvest in 2011 begin to realize performance revenues, which will not occur until all capital contributions for investments and expenses and the preferred return hurdle have been returned, an increasing share of net realized performance revenues will be for our benefit.

Realized Principal Investment Income.

Realized principal investment income decreased $6.0 million for the year ended December 31, 2022 as compared to 2021 and increased $7.5 million for the year ended December 31, 2021 as compared to 2020, primarily due to investments in our secondary funds.

Fee Related Earnings

Fee related earnings increased $46.9 million for the year ended December 31, 2021 as compared to 2020, and increased $19.9 million for the year ended December 31, 2020 as compared to 2019.

Fee related earnings decreased $14.9 million for the year ended December 31, 2022 as compared to 2021, and increased $46.9 million for the year ended December 31, 2021 as compared to 2020.

The following table provides the components of the change in fee related earnings for the years ended December 31, 2022 and 2021:

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Increases (decreases):

Increase in fee revenues 35.8 36.0

Decrease (increase) in cash-based compensation 5.3 (17.2)

Decrease (increase) in general, administrative and other indirect expenses 5.8 (0.6)

All other changes — 1.7

Total increase 46.9 19.9

(Decrease) increase in fee revenues (6.0) 35.8

(Increase) decrease in cash-based compensation (3.5) 5.3

(Increase) decrease in general, administrative and other indirect expenses (4.8) 5.8

Total (decrease) increase (14.9) 46.9

Fee related earnings, current year $ 69.3 $ 84.2

Fee Revenues.

Total fee revenues increased $35.8 million for the year ended December 31, 2021 as compared to 2020, primarily due to increased management fees driven by the activation of management fees on our latest secondaries fund in the second quarter of 2020 and our latest coinvestment fund in the second quarter of 2021, as well as $4.4 million in catch-up fees.

Total fee revenues decreased $6.0 million for the year ended December 31, 2022 as compared to 2021, primarily due to the negative impact of foreign currency translation and the sale of MRE in April 2021, partially offset by management fees in our latest coinvestment fund, which activated fees in the second quarter of 2021.

These increases were partially offset by the impact of the sale of MRE on April 1, 2021, which resulted in a $15.9 million decrease in management fees.

Total fee revenues increased $36.0 million for the year ended December 31, 2020 as compared to 2019, primarily due to increased management fees from our private equity fund vehicles driven by the activation of management fees on our latest secondaries fund and higher catch-up management fees on MRE real estate fund-of-fund vehicles.

Cash-based compensation and benefits expense.

Cash-based compensation and benefits expense increased $3.5 million for the year ended December 31, 2022 as compared to 2021, primarily due to an increase in cash bonuses, partially offset by a decrease in cash-based compensation and benefits expense as a result of the MRE sale.

Cash-based compensation and benefits expense decreased $5.3 million for the year ended December 31, 2021 as compared to 2020, primarily as a result of the MRE sale on April 1, 2021, partially offset by an increase in cash bonuses.

Cash-based compensation and benefits expense increased $17.2 million for the year ended December 31, 2020 as compared to 2019, primarily due to an increase in 2020 cash bonuses.

General, administrative and other indirect expenses.

General, administrative and other indirect expenses increased $4.8 million for the year ended December 31, 2022 as compared to 2021, primarily due to higher professional fees and travel and other general expenses.

General, administrative and other indirect expenses decreased $9.1 million for the year ended December 31, 2021 as compared to 2020 , excluding the impact of litigation cost recoveries in 2020, primarily due to the sale of MRE.

General, administrative and other indirect expenses increased $0.6 million for the year ended December 31, 2020 as compared to 2019 , primarily due to increased professional fees, partially offset by the allocated portion of the cost recovery associated with the CCC matter of $3.3 million (see Note 8 to the consolidated financial statements for more information) and lower travel and entertainment expenses as a result of travel restrictions during the COVID-19 pandemic.

Fee-earning AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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Fee-earning AUM based on invested capital (2)

4,985 4,495 2,319

Fee-earning AUM based on net asset value 3,783 3,652 3,180

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

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

Twelve Months Ended December 31,

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

Year Ended Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 37,449 $ 36,398 $ 28,384

Inflows (1) 8,582 10,713 3,708

4,494 8,582 10,713

Outflows (including realizations) (2)

(3,280) (8,122) (3,710)

Market Activity & Other (3)

537 2,070 (778)

Foreign Exchange (4)

(1,653) (1,479) 1,789

Balance, End of Period $ 37,547 $ 37,449 $ 36,398

(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.

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.

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Ending balances are translated at the spot rate as of the period end.

Fee-earning AUM of $37.5 billion at December 31, 2022 was relatively flat compared to $37.4 billion at December 31, 2021.

Inflows of $4.5 billion primarily attributable to fundraising, capital deployed in our funds which charge fees based on invested capital, and $0.5 billion of market appreciation were offset by outflows of $3.3 billion primarily attributable to distributions.

Foreign exchange activity related to the translation of our AlpInvest Fee-earning AUM from EUR to USD resulted in a decrease in Fee-earning AUM of $1.7 billion.

Distributions from funds still in the commitment or weighted-average investment period do not impact Fee-earning AUM as these funds are based on commitments and not invested capital.

Increases in fair value may have an impact on Fee-earning AUM for Global Investment Solutions as the management fees for many fully committed funds are based on fair value or on the lower of cost or fair value of the underlying investments.

Fee-earning AUM was $37.4 billion at December 31, 2021, an increase of $1.0 billion, or 3%, compared to $36.4 billion at December 31, 2020.

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Foreign exchange activity related to the translation of our AlpInvest Fee-earning AUM from EUR to USD resulted in a decrease in Fee-earning AUM of $1.5 billion.

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.

Fee-earning AUM was $36.4 billion at December 31, 2020, an increase of $8.0 billion, or 28%, compared to $28.4 billion at December 31, 2019.

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Partially offsetting this increase were outflows of $3.7 billion primarily attributable to distributions in our AlpInvest funds.

Fee-earning AUM was $28.4 billion at December 31, 2019, a decrease of $0.7 billion, or 2%, compared to $29.1 billion at December 31, 2018.

This decrease was driven by outflows of $4.0 billion primarily attributable to distributions in our AlpInvest funds as well as $0.4 billion of foreign exchange activity related to the translation of our AlpInvest Fee-earning AUM from EUR to USD.

Partially offsetting this decrease were inflows of $3.7 billion primarily attributable to fundraising in our AlpInvest funds as well as capital deployed in our AlpInvest funds which charge fees based on invested capital.

Total AUM as of and for each of the Three Years in the Period Ended December 31, 2022

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

Twelve Months Ended December 31,

Year Ended Ended December 31,

2022 2021 2020

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Balance, Beginning of Period $ 65,456 $ 58,108 $ 45,246

Inflows (1) 7,129 13,855 2,969

4,156 7,129 13,855

Outflows (including realizations) (2)

(7,838) (15,493) (7,721)

Market Activity & Other (3)

4,564 18,992 3,566

Foreign Exchange (4)

(3,047) (3,280) 3,162

Balance, End of Period $ 63,291 $ 65,456 $ 58,108

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Ending balances are translated at the spot rate as of the period end.

Total AUM was $63.3 billion as of December 31, 2022, a decrease of $2.2 billion, or 3%, compared to $65.5 billion as of December 31, 2021.

Driving the decrease were $7.8 billion of outflows primarily due to distributions in our AlpInvest funds and $3.0 billion of negative foreign exchange activity related to the translation of our AlpInvest AUM from EUR to USD.

Offsetting the decrease was market appreciation of $4.6 billion of market appreciation, reflecting appreciation of 6% for the year, and $4.2 billion of inflows from fundraising.

Total AUM was $65.5 billion as of December 31, 2021, an increase of $7.4 billion, or 13%, compared to $58.1 billion as of December 31, 2020.

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Offsetting the increase were $7.7 billion of outflows primarily due to distributions in our AlpInvest funds.

Total AUM was $45.2 billion as of December 31, 2019, a decrease of $0.5 billion, or 1%, compared to $45.7 billion as of December 31, 2018.

Driving this decrease were $7.9 billion of outflows primarily due to distributions in our AlpInvest funds and $0.5 billion of foreign exchange losses related to the translation of our AlpInvest AUM from EUR to USD.

Offsetting the decrease were $3.0 billion of inflows from new commitments raised in our AlpInvest and MRE funds and $5.0 billion of market and other activity.

Market appreciation was driven by 15% appreciation in our AlpInvest funds and 3% appreciation in our MRE funds.

Fund Performance Metrics

Fund performance information for our investment funds that have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of December 31, 2021, which we refer to as our “significant funds,” is generally included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods

Fund performance information for our investment funds that have at least $1.0 billion in capital commitments, cumulative equity invested or total value as of December 31, 2022, which we refer to as our “significant funds,” is generally included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented.

The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group Inc.

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There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

“Risk Factors—Risks Related to Our Business Operations—The historical returns attributable to our funds, including those presented in this report, should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our common stock.”

Primary and secondary investments in external funds are generally valued based on the proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.

As a result, amounts presented may not include the impact of economic activity in the current quarter.

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

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Global Investment Solutions (1)(8)(13) Vintage Year Fund Size Cumulative

(2)(3) Realized Value (3) Remaining Fair Value(3) Total Fair

Value(3)(4) MOIC

Capital (2)(3) Realized Value (3) Remaining Fair Value (3) Total Fair

Value (3)(4) MOIC (5) Gross

IRR (6)(10) Net

(7)(10) Net Accrued Carry/(Clawback)

IRR (7)(10) Net Accrued Carry/(Giveback) (12)

(Reported in Local Currency, in Millions)

AlpInvest(13)

Main Fund VI - Fund Investments 2015 € 1,106 € 1,048 € 887 € 1,323 € 2,210 2.1x 29% 28% $ 4

Main Fund V - Fund Investments 2012 € 5,080 € 5,598 € 6,275 € 5,965 € 12,239 2.2x 21% 20% $ 22

Main Fund IV - Fund Investments 2009 € 4,877 € 5,585 € 8,766 € 3,607 € 12,373 2.2x 19% 18% $ 2

Main Fund III - Fund Investments 2005 € 11,500 € 13,128 € 20,646 € 2,294 € 22,939 1.7x 10% 10% $ —

Main Fund II - Fund Investments 2003 € 4,545 € 4,901 € 7,671 € 244 € 7,915 1.6x 10% 9% $ —

Main Fund I - Fund Investments 2000 € 5,175 € 4,306 € 7,076 € 63 € 7,139 1.7x 12% 11% $ —

Main Fund VII - Secondary Investments 2020 $ 8,513 $ 2,589 $ 606 $ 2,644 $ 3,250 1.3x NM NM $ 25

AlpInvest Secondaries Fund VII 2020 $ 6,769 $ 1,808 $ 431 $ 1,847 $ 2,279 1.3x NM NM $ 17

Main Fund VI - Secondary Investments 2017 $ 6,017 $ 5,144 $ 2,387 $ 5,346 $ 7,733 1.5x 19% 16% $ 70

Secondary Investments Main Fund VII 2020 $ 8,649 $ 4,376 $ 906 $ 4,806 $ 5,712 1.3x 27% 20% $ 55

AlpInvest Secondaries Fund VII 2020 $ 6,769 $ 3,230 $ 646 $ 3,557 $ 4,203 1.3x 26% 19% $ 39

Main Fund VI 2017 $ 6,017 $ 5,337 $ 3,255 $ 4,994 $ 8,249 1.5x 17% 14% $ 81

AlpInvest Secondaries Fund VI 2017 $ 3,333 $ 2,996 $ 1,780 $ 2,833 $ 4,613 1.5x 17% 13% $ 52

Main Fund V - Secondary Investments 2011 € 4,273 € 4,292 € 6,512 € 1,272 € 7,785 1.8x 21% 20% $ 31

Main Fund V 2011 € 4,273 € 4,495 € 7,303 € 1,051 € 8,354 1.9x 21% 20% $ 20

AlpInvest Secondaries Fund V 2012 $ 756 $ 648 $ 949 $ 217 $ 1,165 1.8x 18% 15% $ 9

Main Fund IV - Secondary Investments 2010 € 1,859 € 1,969 € 3,300 € 107 € 3,407 1.7x 19% 18% $ —

Main Fund III - Secondary Investments 2006 € 2,250 € 2,395 € 3,639 € 49 € 3,688 1.5x 11% 10% $ —

Main Fund VIII - Co-Investments 2021 $ 4,012 $ 1,090 $ — $ 1,091 $ 1,092 1.0x NM NM $ —

AlpInvest Co-Investment Fund VIII 2021 $ 3,614 $ 1,030 $ — $ 1,032 $ 1,032 1.0x NM NM $ —

Main Fund VII - Co-Investments 2017 $ 2,842 $ 2,692 $ 582 $ 4,033 $ 4,615 1.7x 25% 21% $ 68

Main Fund IV 2010 € 1,859 € 2,039 € 3,448 € 77 € 3,526 1.7x 19% 18% $ —

Co-Investments Main Fund VIII 2021 $ 3,986 $ 2,389 $ 33 $ 2,665 $ 2,698 1.1x 14% 10% $ 8

AlpInvest Co-Investment Fund VIII 2021 $ 3,614 $ 2,144 $ 31 $ 2,406 $ 2,437 1.1x 15% 10% $ 7

Main Fund VII 2017 $ 2,842 $ 2,649 $ 1,039 $ 3,681 $ 4,719 1.8x 20% 17% $ 73

AlpInvest Co-Investment Fund VII 2017 $ 1,688 $ 1,605 $ 658 $ 2,248 $ 2,905 1.8x 20% 17% $ 47

Main Fund VI - Co-Investments 2014 € 1,115 € 968 € 1,624 € 1,004 € 2,628 2.7x 28% 26% $ 10

Main Fund V - Co-Investments 2012 € 1,124 € 1,056 € 2,558 € 515 € 3,074 2.9x 29% 27% $ 5

Main Fund IV - Co-Investments 2010 € 1,475 € 1,366 € 3,342 € 838 € 4,180 3.1x 24% 23% $ —

Main Fund III - Co-Investments 2006 € 2,760 € 2,827 € 3,893 € 337 € 4,230 1.5x 6% 5% $ —

Main Fund III - Mezzanine Investments 2006 € 2,000 € 2,010 € 2,616 € 123 € 2,739 1.4x 10% 9% $ —

Main Fund II - Mezzanine Investments 2004 € 700 € 768 € 1,064 € 9 € 1,073 1.4x 8% 7% $ —

Main Fund VI 2014 € 1,115 € 997 € 1,877 € 682 € 2,558 2.6x 26% 24% $ 6

Main Fund V 2012 € 1,124 € 1,090 € 2,680 € 487 € 3,168 2.9x 28% 26% $ 4

Main Fund IV 2010 € 1,475 € 1,411 € 3,582 € 576 € 4,159 2.9x 24% 22% $ —

Primary Investments Main Fund VI 2015 € 1,106 € 1,119 € 1,191 € 1,172 € 2,364 2.1x 25% 24% $ 4

Main Fund V 2012 € 5,080 € 5,939 € 7,697 € 5,106 € 12,802 2.2x 19% 19% $ 18

Main Fund IV 2009 € 4,877 € 5,790 € 9,679 € 2,711 € 12,389 2.1x 18% 17% $ 1

Main Fund III 2005 € 11,500 € 13,696 € 21,898 € 1,722 € 23,620 1.7x 10% 10% $ —

Main Fund II 2003 € 4,545 € 5,075 € 7,988 € 232 € 8,220 1.6x 10% 9% $ —

All Other Active Funds & Vehicles (9) Various $ 12,428 $ 7,070 $ 10,719 $ 17,789 1.4x 12% 11% $ 101

Fully Realized Funds & Vehicles Various € 14,196 € 23,933 € 84 € 24,017 1.7x 14% 13% $ —

TOTAL ALPINVEST (USD)(11) $ 82,885 $ 105,616 $ 41,905 $ 147,521 1.8x 14% 13% $ 317

(1) Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments originated by the AlpInvest team, as well as real estate primary fund investments, secondary fund investments and co-investments originated by the Metropolitan Real Estate team.

TOTAL GLOBAL INVESTMENT SOLUTIONS (USD) (11) $ 86,992 $ 110,060 $ 41,753 $ 151,813 1.7x 14% 13% $ 370

(1) Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments originated by the AlpInvest team.

Excluded from the performance information shown are a) investments that were not originated by AlpInvest, b) Direct Investments, which was spun off from AlpInvest in 2005, and c) LP co-investment vehicles advised by AlpInvest.

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(8) As used herein, ‘Main Funds’ are each comprised of (i) an anchor mandate(s) (i.e., generally the largest account(s) within a strategy’s investment program) and (ii) AlpInvest’s other advisory client mandates with investment periods that fall within the relevant investment periods under the mandate of the anchor mandate(s) (but do not overlap with more than one such investment period).

AlpInvest’s commingled funds, AlpInvest Secondaries Fund VI (“ASF VI”), ASF VII and AlpInvest Co-Investment Fund VII (“ACF VII”) are part of the Main Funds.

AlpInvest’s commingled funds, AlpInvest Secondaries Fund V (“ASF V”), ASF VI, ASF VII, AlpInvest Co-Investment Fund VII (“ACF VII”) and ACF VIII are part of the Main Funds.

Mezzanine Main Funds include mezzanine investments across all strategies (i.e., Primary Funds, Secondaries, and Co-Investments).

(9) Aggregate includes Main Fund VII - Fund Investments, Main Fund VIII - Fund Investments, Main Fund IX - Fund Investments, Main Fund X - Fund Investments, Main Fund XI - Fund Investments, Main Fund XII - Fund Investments, Main Fund XIII - Fund Investments, Main Fund IV - Mezzanine Investments, Main Fund V - Mezzanine Investments, all ‘clean technology’ private equity investments, all strategic co-investment mandates that invest in co-investment opportunities arising out of an investor’s own separate private equity relationships and invitations, all strategic capital mandates, any state-focused investment mandates, and all other investors whose investments are not reflected in a Main Fund.

(9) The performance information of all ‘Other Funds’ includes Primary Investments Main Funds VII-XIII, Mezzanine Investments Main Funds III-V, all ‘clean technology’ private equity investments, all strategic co-investment mandates that invest in co-investment opportunities arising out of an investor’s own separate private equity relationships and invitations, all strategic portfolio finance mandates, any state-focused investment mandates, and all other investors whose investments are not reflected in a Main Fund.

(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.

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

Total Net Accrued Carry for Global Investment Solutions excludes approximately $1.9 million of net accrued carry as of December 31, 2021, which was retained as part of the sale of Metropolitan Real Estate on April 1, 2021.

Net accrued carry excludes $4 million of net accrued carry as of December 31, 2022, which was retained as part of the sale of Metropolitan Real Estate on April 1, 2021.

(13) “Main Fund” entries represent a combination of a commingled fund and SMA vehicles which together comprise a “program” vintage.

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Our Sources of Liquidity

We have multiple sources of liquidity to meet our capital needs, including cash on hand, annual cash flows, accumulated earnings and funds from our senior revolving credit facility, which has $775.0 million of available capacity as of December 31, 2021.

We have multiple sources of liquidity to meet our capital needs, including cash on hand, annual cash flows, accumulated earnings and funds from our senior revolving credit facility, which has $1.0 billion of available capacity as of December 31, 2022.

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.

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and (iii) regulatory capital.

After deducting cash amounts allocated to the specific requirements mentioned above, the remaining cash and cash equivalents is approximately $2.2 billion as of December 31, 2021.

Corporate Treasury Investments .

These investments represent investments in U.S.

Treasury and government agency obligations, commercial paper, certificates of deposit, other investment grade securities and other investments with original maturities of greater than three months when purchased.

As of December 31, 2022, we had $20.0 million in corporate treasury investments.

After deducting cash amounts allocated to the specific requirements mentioned above, the remaining cash, cash equivalents and corporate treasury investments is approximately $1.3 billion as of December 31, 2022.

This remaining amount will be used towards our primary liquidity needs, as outlined in the next section.

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Senior Revolving Credit Facility.

On February 11, 2019, the Company entered into an amendment and restatement of its senior revolving credit facility.

The capacity under the revolving credit facility is $775.0 million and is scheduled to mature on February 11, 2024.

Principal amounts outstanding under the amended and restated revolving credit facility accrue interest, at the option of the borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed 0.50% per annum, or (b) at LIBOR plus an applicable margin not to exceed 1.50% per annum (1.35% at December 31, 2021).

On April 29, 2022, the Company entered into an amendment and restatement of its senior revolving credit facility.

Following the amendment, the capacity under the revolving credit facility is $1.0 billion and is scheduled to mature on April 29, 2027.

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 plus an applicable margin not to exceed 1.50% per annum (5.46% at December 31, 2022).

As of December 31, 2022, there was no balance outstanding under the senior revolving credit facility.

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Principal amounts outstanding under the facility accrue interest, at the option of the borrowers, either (a) at an alternate base rate plus applicable margin not to exceed 1.00%, or (b) at the Eurocurrency rate plus an applicable margin not to exceed 2.00%.

During the year ended December 31, 2021, the Company borrowed $70.0 million and repaid $70.0 million under the credit facility, and there was no borrowing outstanding under this facility as of December 31, 2021.

There was no borrowing outstanding under this facility as of December 31, 2022.

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 outstanding CLO borrowings were $222.6 million and $356.1 million at December 31, 2021 and 2020, respectively.

The Company’s outstanding CLO borrowings were $421.7 million and $222.6 million at December 31, 2022 and 2021, respectively, with the increase year-over-year primarily driven by the CBAM acquisition.

The CLO term loans are secured by the Company’s investments in the respective CLO, have a general unsecured interest in the Carlyle entity that manages the CLO, and generally do not have recourse to any other Carlyle entity.

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5.625% Senior Notes .

In January 2013, Carlyle Holdings Finance L.L.C.

issued $500.0 million of 3.875% senior notes due February 1, 2023 at 99.966% of par.

In September 2018, we completed a tender offer to purchase $250.0 million in aggregate principal amount of these notes and in November 2021, we completed the redemption of the remaining $250.0 million at the make-whole redemption price set forth in the notes.

5.625% Senior Notes .

In March 2013, Carlyle Holdings II Finance L.L.C.

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In March 2014, an additional $200.0 million of these notes were issued at 104.315% of par and are treated as a single class with the already outstanding $400.0 million aggregate principal amount of these notes.

Promissory Notes.

In June 2017, as part of the settlement with investors in two commodities investment vehicles managed by an affiliate of the Company (discussed in Note 8 to the consolidated financial statements), the Company issued a series of promissory notes, aggregating to $53.9 million, to the investors of these commodities investment vehicles.

Interest on these promissory notes accrued at the three month LIBOR plus 2%.

These promissory notes matured on July 15, 2019 and were fully repaid as of that date.

Subordinated Notes.

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issued $435.0 million aggregate principal amount of 4.625% subordinated notes due May 15, 2061.

In June 2021, an additional $65.0 million aggregate principal amount of these subordinated notes were issued and are treated as a single series with the already outstanding $435.0 million aggregate principal amount.

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.

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

Several of the CLOs issued preferred shares representing the most subordinated interest, however these tranches are mandatorily redeemable upon the maturity dates of the senior secured loans payable, and as a result have been classified as liabilities under U.S.

GAAP, and are included in loans payable of Consolidated Funds in our consolidated balance sheets.

Loans payable of the CLOs are collateralized by the assets held by the CLOs and the assets of one CLO may not be used to satisfy the liabilities of another.

This collateral consists of cash and cash equivalents, corporate loans, corporate bonds and other securities.

Preferred Units.

In September 2017, we issued 16 million of our Preferred Units for net proceeds of approximately $387.5 million.

In October 2019, we completed the redemption of our Preferred Units for $25.339757 per unit, which is equal to $25.25 per preferred unit plus declared and unpaid distributions to, but excluding, the redemption date.

Realized Performance Allocation Revenues .

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Accrued performance allocations from NGP Carry Funds 564.6

Net accrued performance allocations presented as fee related performance revenues (53.2)

Accrued performance allocation-related compensation (3,625.3)

Receivable for giveback obligations from current and former employees 10.1

Deferred taxes on certain foreign accrued performance allocations (31.6)

Net accrued performance allocations attributable to non-controlling interests in consolidated entities 1.0

Net accrued performance allocations/giveback obligations attributable to non-controlling interests in consolidated entities 1.1

Net accrued performance allocations attributable to Consolidated Funds, eliminated in consolidation 5.4

Net accrued performance revenues before timing differences 3,947.9

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Performance Revenues

FY 2019 FY 2020 FY 2021

Overall Carry Fund Appreciation/(Depreciation) 10% 41% 11%

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Corporate Private Equity 19% 41% 6% 2,313.8

16% 8% 39% 298.4

Natural Resources

(5)% (16)% 34% 139.7

Real Estate 8% 39% 16% 275.5

Infrastructure & Natural Resources (16)% 34% 48% 899.4

Global Credit Carry Funds (2)% 22% 3% 102.4

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Amounts are fund only, and do not include coinvestments.

(2) Includes $3.7 million of net accrued clawback from our Legacy Energy funds.

(2) The Company’s primary and secondary investments in external funds are generally valued based on its proportionate share of the net assets provided by the third party general partners of the underlying fund partnerships based on the most recent available information which typically has a lag of up to 90 days.

As a result, amounts presented may not include the impact of economic activity in the current quarter.

Appreciation in 2022 includes the positive impact of foreign currency translation of the USD-denominated investments in our EUR-based funds.

Excluding that impact, appreciation was 4% for the year ended December 31, 2022.

Realized Principal Investment Income.

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

During the year ended December 31, 2021, we sold approximately $150.4 million of investments in U.S.

the year ended December 31, 2021, we sold approximately $150.4 million of investments in U.S.

CLOs and used the proceeds to repay outstanding CLO borrowings (see Note 8 to the consolidated financial statements).

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Investment in NGP general partners - accrued performance allocations — (564.5) (564.5)

Total investments attributable to The Carlyle Group Inc., exclusive of NGP Management $ 2,293.7 $ — $ 2,293.7

(1) See Note 4 to our consolidated financial statements.

Total investments attributable to The Carlyle Group Inc.

$ 2,764.8 $ — $ 2,764.8

(1) See Note 6 to the consolidated financial statements.

Our investments as of December 31, 2022 can be further attributed as follows (Dollars in millions):

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

(2) Includes the Company’s investment in Fortitude, which was contributed to Carlyle FRL, a Carlyle-affiliated investment fund, in June 2020 as discussed in Note 4 to the consolidated financial statements.

(2) Includes the Company’s investment in Fortitude Re, which was contributed to Carlyle FRL, a Carlyle-affiliated investment fund, in June 2020 as discussed in Note 6 to the consolidated financial statements.

This investment has a carrying value of $715.7 million as of December 31, 2022.

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As a result, amounts presented may not include the impact of economic activity in the current quarter.

(4) Of the $222.6 million in total CLO borrowings outstanding as of December 31, 2021 and as disclosed in Note 6 to the consolidated financial statements, $204.4 million are collateralized by investments attributable to The Carlyle Group Inc.

The remaining $18.2 million in total CLO borrowings outstanding are collateralized by investments attributable to non-controlling interests.

(4) Of the $421.7 million in total CLO borrowings as of December 31, 2022 and as disclosed in Note 8 to the consolidated financial statements, $401.0 million are collateralized by investments attributable to The Carlyle Group Inc.

The remaining $20.7 million in total CLO borrowings are collateralized by investments attributable to non-controlling interests.

Our Liquidity Needs

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The declaration and payment of any dividends to holders of our common stock is subject to the discretion of our Board of Directors and compliance with applicable law.

Under our dividend policy for our common stock that we adopted in connection with the Conversion, we have paid dividends to holders of our common stock in an amount of $0.25 per share of common stock ($1.00 per share annually).

Under our dividend policy for our common stock, we have paid dividends to holders of our common stock in an amount of $0.325 per share of common stock ($1.30 per share annually) during dividend year 2022.

In February 2023, our Board of Directors approved an increase in the anticipated common stock dividend to an annual rate of $1.40 per share ($0.35 per common share on a quarterly basis), anticipated to commence for the first quarter 2023 dividend anticipated to be paid in May 2023.

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Q3 2022 0.325 118.2 November 18, 2022 November 25, 2022

Q4 2021 0.25 89.5 February 15, 2022 February 23, 2022

Q4 2022 0.325 118.4 February 22, 2023 March 1, 2023

Total $ 1.30 $ 472.5

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Common Stock Dividends - Dividend Year 2020

Quarter Dividend per Common Share Dividend to Common Stockholders (1)

Record Date Payment Date

Quarter Dividend per Common Share Dividend to Common Stockholders Record Date Payment Date

Q1 2020 $ 0.25 $ 87.2 May 12, 2020 May 19, 2020

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Total $ 1.00 $ 352.6

(1) The dividend to common stockholders for Q4 2019 reflects the exchange of all Carlyle Holdings partnership units to shares of common stock in The Carlyle Group Inc.

in connection with the Conversion on January 1, 2020.

Dividends to common stockholders paid during the year ended December 31, 2022 totaled $443.6 million, including the amount paid in February 2022 of $0.25 per common share in respect of the fourth quarter of 2021.

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Dividends to common stockholders paid during the year ended December 31, 2020 totaled $351.3 million, including the amount paid in February 2020 of $0.25 per common share in respect of the fourth quarter of 2019.

Preferred Unit Distributions and Redemption.

With respect to distribution year 2019, the Board of Directors declared a distribution to preferred unitholders totaling approximately $19.1 million.

In October 2019, we completed the redemption of our preferred units for $25.339757 per unit, which is equal to $25.25 per Preferred Unit plus declared and unpaid distributions to, but excluding, the redemption date.

Fund Commitments.

Generally, we intend to have Carlyle commit to fund approximately 0.75% of the capital commitments to our future carry funds, although we may elect to invest additional amounts in funds focused on new investment areas.

For example, in February 2022, our Global Credit platform agreed to acquire a diversified portfolio of triple net leases through a Carlyle-affiliated investment fund as part of the expansion of our real estate credit strategy.

The investment fund’s acquisition of the portfolio will be funded using $2 billion in debt and $1 billion in equity.

The debt is non-recourse to us and Carlyle, as general partner of the investment fund, will contribute up to $200 million as a minority interest balance sheet investment.

The transaction is expected to close in the first quarter of 2022.

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.

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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 $4.1 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.

Of the $3.9 billion of unfunded commitments, approximately $3.2 billion is subscribed individually by senior Carlyle professionals, operating executives and other professionals, with the balance funded directly by the Company.

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, 2022, we had €20.0 million ($21.4 million) in commitments related to the origination and syndication of loans and securities under the Carlyle Global Capital Markets platform, which were extinguished in January 2023.

Repurchase Program.

In December 2018, our Board of Directors authorized the repurchase of up to $200 million of common units and/or Carlyle Holdings units.

In connection with the Conversion, in January 2020 our Board of Directors re-authorized the repurchase program with regard to our common stock.

In February 2021, the Board of Directors replenished the repurchase program to its limit of $200 million of common stock in the aggregate from its maximum remaining purchase amount of $139.1 million.

In October 2021, our Board of Directors authorized the repurchase of up to $400 million of common stock effective January 1, 2022, which replaced a repurchase authorization provided in February 2021.

This program authorizes the repurchase of shares of common stock from time to time in open market transactions, in privately negotiated transactions or otherwise.

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As of December 31, 2022, $214.3 million of repurchase capacity remained under the program.

In October 2021, our Board of Directors authorized the repurchase of up to $400.0 million of common stock, effective January 1, 2022, which replaced the authorization provided in February 2021.

In February 2023, the Board of Directors replenished the repurchase program and expanded the limit to $500 million of common stock in aggregate, effective March 31, 2023.

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.

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Statements of Cash Flows Data

Net cash provided by (used in) operating activities, including investments in Carlyle funds $ 1,791.0 $ (169.2) $ 358.6

Net cash (used in) provided by operating activities, including investments in Carlyle funds $ (379.3) $ 1,791.0 $ (169.2)

Net cash used in investing activities (828.8) (32.2) (61.2)

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Net change in cash, cash equivalents and restricted cash $ (1,113.6) $ 1,485.5 $ 161.6

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.

Cash flows from operating activities for the years ended December 31, 2021, 2020 and 2019, excluding the activities of our Consolidated Funds, were $2.1 billion, $716.8 million and $591.3 million, respectively.

Net Cash (Used In) Provided by Operating Activities.

Net cash (used in) provided by operating activities includes the investment activity of our Consolidated Funds.

Excluding this activity, net cash (used in) 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.

Cash flows from operating activities for the years ended December 31, 2022, 2021 and 2020, excluding the activities of our Consolidated Funds, were $860.7 million, $2,143.0 million and $716.8 million, respectively.

Operating cash inflows primarily include the receipt of management fees and realized performance allocations and incentive fees, while operating cash outflows primarily include payments for operating expenses, including compensation, income taxes, interest, and general, administrative and other expenses.

During the years ended December 31, 2022, 2021 and 2020, net cash provided by operating activities primarily includes the receipt of management fees and realized performance allocations and incentive fees, totaling approximately $4.1 billion, $4.7 billion, and $2.1 billion, respectively.

These inflows were partially offset by payments for compensation, income taxes, interest, and general, administrative and other expenses of approximately $2.9 billion, $1.6 billion, and $1.6 billion for the years ended December 31, 2021, 2020 and 2019, respectively.

These inflows were partially offset by payments for compensation, income taxes, interest, and general, administrative and other expenses of ap proximately $3.1 billion, $3.1 billion, and $1.4 billion for the years ended December 31, 2022, 2021 and 2020, respectively.

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, 2022, investment proceeds were $474.9 million while investment purchases were $629.9 million, which includes our $200 million strategic investment in iStar through our real estate credit fund and our $49 million follow-on investment in Carlyle FRL.

During the year ended December 31, 2021, investment proceeds were $668.4 million while investment purchases were $276.7 million.

During the year ended December 31, 2020, investment proceeds were $307.5 million while investment purchases were $350.9 million, including $79.6 million related to a purchase price adjustment on our strategic investment in Fortitude.

During the year ended December 31, 2019, investment proceeds were $389.2 million while investment purchases were $312.4 million.

Investment proceeds in 2019 also included $71.5 million received from the resolution of French tax litigation.

The net cash provided by operating activities for the year ended December 31, 2022 also reflects the investment activity of our Consolidated Funds.

For the year ended December 31, 2021, proceeds from the sales and settlements of investments by the Consolidated Funds were $4.9 billion, while purchases of investments by the Consolidated Funds were $5.4

For the year ended December 31, 2022, proceeds from the sales and settlements of investments by the Consolidated Funds were $2.9 billion, while purchases of investments by the Consolidated Funds were $3.8 billion.

For the year ended December 31, 2020, proceeds from the sales and settlements of investments by the Consolidated Funds were $2.0 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 acquisitions, fixed assets and software for internal use, and cash received from dispositions.

For the year ended December 31, 2021, cash used in investing activities principally reflects purchases of fixed assets, partially offset by proceeds received from the sales of MRE and our Brazil management entity of $5.9 million and $3.3 million, respectively.

Purchases of fixed assets were $41.4 million, $61.2 million and $27.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Our investing activities generally reflect cash used for acquisitions, fixed assets and software for internal use, corporate treasury investments and cash received from dispositions.

For the year ended December 31, 2022, cash used in investing activities principally reflects purchases of intangible assets and net CLO investments from the CBAM transaction of $618.4 million, the purchase of Abingworth of $150.2 million, and net purchases of corporate treasury investments of $69.6 million, as well as net purchases of fixed assets of $40.6 million.

For the year ended December 31, 2021, net purchases of fixed assets of $41.4 million were partially offset by proceeds received from the sales of MRE and our Brazil management entity of $5.9 million and $3.3 million, respectively.

During the year ended December 31, 2020, purchases of fixed assets were $61.2 million.

Net Cash Provided by (Used in) Financing Activities.

Net cash provided by (used in) financing activities during the years ended December 31, 2022, 2021 and 2020, excluding the activities of our Consolidated Funds, was $(1.1) billion, $(602.1) million and $(511.0) million, respectively.

Dividends paid to our common stockholders were $443.6 million, $355.8 million, and $351.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

In 2022, we also paid $68.8 million in January 2022 for the third installment of the deferred consideration payable to former Carlyle Holdings unitholders in connection with the Conversion, and paid $185.6 million to repurchase and retire 4.9 million shares of common stock.

Net cash used in financing activities for the year ended December 31, 2022 (prior to the effects of consolidation) also includes $456.2 million primarily related to amounts funded to bridge investment activity in consolidated funds that are actively fundraising in our Global Private Equity segment.

This investment activity is reflected as purchases of investment in our consolidated statement of cash flows.

In 2021, we received net proceeds of $484.1 million from the issuance of $500.0 million of 4.625% subordinated notes, and made $120.8 million of net repayments on borrowings used to finance a portion of our investments in the CLOs.

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In 2020, we received net proceeds of $294.1 million from borrowings under the revolving credit facilities, and repaid $329.9 million, and paid $68.8 million in January 2020 for the first installment of the deferred consideration payable to former Carlyle Holdings unitholders in connection with the Conversion.

In 2019, we received net proceeds of $420.6 million from the issuance of $425.0 million of 3.500% senior notes, and $41.0 million from the issuance of various CLO borrowings, paid $405.4 million to repurchase our outstanding Preferred Units, paid $34.5 million to repurchase 1.6 million units under our repurchase program and paid off a $25.0 million term loan.

Dividends paid to our common stockholders were $355.8 million, $351.3 million, and $154.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Distributions to the non-controlling interest holders in Carlyle Holdings were $313.3 million the year ended December 31, 2019.

The net (payments) borrowings on loans payable by our Consolidated Funds during the years ended December 31, 2021, 2020 and 2019 were $182.9 million, $704.1 million, and $224.8 million, respectively.

The net borrowings on loans payable by our Consolidated Funds during the years ended December 31, 2022, 2021 and 2020 were $624.2 million, $182.9 million, and $704.1 million, respectively.

For the years ended December 31, 2022, 2021 and 2020, contributions from non-controlling interest holders were $391.2 million, $216.2 million, and $210.0 million, respectively, which relate primarily to contributions from the non-controlling interest holders in Consolidated Funds.

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Total assets were $21.4 billion at December 31, 2022, an increase of $0.2 billion from December 31, 2021.

The increase in total assets was primarily attributable to a $3.5 billion increase in investments, including performance allocations, an increase in cash and cash equivalents of $1.5 billion and increases in Investments of consolidated funds of $604.1 million.

The increase in investments, including performance allocations, was largely driven by appreciation across our portfolio.

The increase in cash was primarily due to the issuance of $500 million in subordinated notes and the receipt of management fees and realized performance revenues, partially offset by the redemption of the 3.875% Senior Notes, the payment of deferred consideration related to our acquisition of Carlyle Aviation Partners, payment of the second installment of deferred consideration to the former Carlyle Holdings unitholders, and payments for bonuses and payroll, dividends and income taxes.

The increase in Investments of consolidated funds was primarily due to the consolidation of two CLOs, partially offset by the deconsolidation of one CLO during the year ended December 31, 2021.

The increase in total assets was primarily attributable to an increase in net intangible assets of $0.9 billion driven by the Abingworth and CBAM transactions, an increase in investments of Consolidated Funds of $0.2 billion, and an increase in amounts due from affiliates and other receivables of $0.2 billion.

These increases were partially offset by a decrease in cash and cash equivalents of $1.1 billion driven by the iStar, CBAM and Abingworth strategic transactions, as well as the payment of the third installment of deferred consideration to the former Carlyle Holdings unitholders, and payments for bonuses and payroll, dividends and income taxes.

Cash and cash equivalents were approximately $1.4 billion and $2.5 billion at December 31, 2022 and December 31, 2021, respectively.

Total liabilities were $15.5 billion at December 31, 2021, an increase of $2.8 billion from December 31, 2020.

The increase in liabilities was primarily attributable to an increase in accrued compensation and benefits of $1.7 billion due to the corresponding increase in accrued performance allocations, as well as an increase in deferred tax liabilities of $429.3 million from December 31, 2020 to 2021.

Total liabilities were $14.6 billion at December 31, 2022, a decrease of $1.0 billion from December 31, 2021.

The decrease in liabilities was primarily attributable to a decrease in accrued compensation and benefits of $0.6 billion due to the corresponding decrease in accrued performance allocations, as well as a decrease in other liabilities of Consolidated Funds of $0.4 billion.

These decreases were partially offset by an increase in debt obligations of $0.2 billion, driven by an increase in outstanding CLO borrowings, largely in connection with the CBAM transaction (see Notes 4 and 8 to the consolidated financial statements).

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.

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Our balance sheet without the effect of the Consolidated Funds can be seen in Note 19 to the consolidated financial statements included in this Annual Report on Form 10-K.

At December 31, 2021, our total assets without the effect of the Consolidated Funds were $14.5 billion, including cash and cash equivalents totaling $2.5 billion and net accrued performance revenues of $3.9 billion.

At December 31, 2022, our total assets without the effect of the Consolidated Funds were $14.8 billion, including cash and cash equivalents totaling $1.4 billion and net accrued performance revenues of $4.0 billion (inclusive of net accrued performance allocations from NGP).

Unconsolidated Entities

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The degree of leverage employed varies among our funds.

In March 2022, Carlyle Net Leasing Income, L.P., a Carlyle-affiliated investment fund, acquired a diversified portfolio of triple net leases from iStar, Inc.

for an enterprise value of $3 billion, which was funded using $2 billion in debt and $1 billion in equity.

The investment fund is not consolidated by us, and the debt is non-recourse to us.

As general partner of the investment fund, we contributed $200 million as a minority interest balance sheet investment, which is included in our Global Credit principal equity method investments (see Note 6 to the consolidated financial statements included in this Annual Report on Form 10-K).

Off-balance Sheet Arrangements

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Debt obligations (1)

$ — $ — $ 16.3 $ 2,280.4 $ 2,296.7

Interest payable (2)

183.0 227.5 220.7 1,795.7 2,426.9

Other consideration (3)

147.8 250.3 36.0 18.0 452.1

Operating lease obligations (4)

68.1 125.0 117.3 339.2 649.6

Capital commitments to Carlyle funds (5)

3,971.3 — — — 3,971.3

Tax receivable agreement payments (6)

20.4 6.5 6.5 66.6 100.0

Loans payable of Consolidated Funds (7)

215.1 430.8 430.2 6,690.0 7,766.1

Unfunded commitments of the CLOs (8)

6.8 — — — 6.8

Consolidated contractual obligations 4,612.5 1,040.1 827.0 11,189.9 17,669.5

Loans payable of Consolidated Funds (7)

(215.1) (430.8) (430.2) (6,690.0) (7,766.1)

Capital commitments to Carlyle funds (5)

(3,244.2) — — — (3,244.2)

Unfunded commitments of the CLOs (8)

(6.8) — — — (6.8)

Carlyle Operating Entities contractual obligations $ 1,146.4 $ 609.3 $ 396.8 $ 4,499.9 $ 6,652.4

(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, which are February 2024 and September 2024, respectively.

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.

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(2) The interest rates on the debt obligations as of December 31, 2022 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 1.36% to 8.11% for our CLO term loans.

10.15% 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 acquisition of Carlyle Aviation Partners, our estimate of amounts to be paid pursuant to two letter agreements entered into with our agent pursuant to our 10b5-1 plan which expire in February 2022 totaling approximately $41.1 million, deferred consideration related to our strategic investment in Fortitude, and other obligations, as well as the deferred payment obligations described below.

In connection with the Conversion, former holders of Carlyle Holdings partnership units will receive cash payments aggregating to approximately $344 million, which is equivalent to $1.50 per Carlyle Holdings partnership unit exchanged in the Conversion, payable in five annual installments of $0.30, the second of which occurred during the first quarter of 2021.

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 and maintain our headquarters in Washington, D.C., where we entered into an amended non-cancelable lease agreement expiring on March 31, 2030.

We entered into a new non-cancelable lease agreement expiring in 2036 for new office space in New York City.

Our office leases in other locations expire in various years through 2032.

(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, deferred consideration related to our strategic investment in Fortitude, and other obligations, as well as the deferred payment obligations described below.

In connection with the Conversion, former holders of Carlyle Holdings partnership units will receive cash payments aggregating to approximately $344 million, which is equivalent to $1.50 per Carlyle Holdings partnership unit exchanged in the Conversion, payable in five annual installments of $0.30, the third of which occurred during the first quarter of 2022.

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 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.

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Of the $3.9 billion of unfunded commitments to the funds, approximately $3.2 billion is subscribed individually by senior Carlyle professionals, advisors and other professionals, with the balance funded directly by the Company.

These amounts are inclusive of a $200 million commitment made by Carlyle to a Carlyle-affiliated investment fund in February 2022 related to the announced acquisition of a diversified portfolio of triple net leases, which is expected to close in the first quarter of 2022.

(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.

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These obligations are more than offset by the future cash tax savings that we are expected to realize.

A payment under the tax receivable agreement of $20.4 million was made in January 2023.

(7) These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles.

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Contingent Cash Payments For Business Acquisitions and Strategic Investments

We have certain contingent cash obligations associated with our acquisition of Carlyle Aviation Partners, which relate to an earn-out of up to $150.0 million that is payable upon the achievement of certain revenue and earnings performance targets during 2020 through 2025, and which is accounted for as compensation expense.

We accrue the compensation liability over the service period.

We have certain contingent cash obligations associated with our acquisition of Carlyle Aviation Partners and Abingworth which are accounted for as compensation expense and are accrued for over the service period.

If earned, payments are made in the year following the performance year to which the payments relate.

In 2021, we paid $47.9 million related to the Carlyle Aviation Partners earn-out for the performance period ended December 31, 2020.

Based on the terms of the underlying contract, the maximum amount that could be paid from contingent cash obligations associated with the acquisition of Carlyle Aviation Partners as of December 31, 2021 is $102.1 million versus amounts recognized on the balance sheet of $2.6 million.

For our acquisition of Carlyle Aviation Partners, the contingent cash payments relate to an earn-out of up to $150.0 million that is payable upon the achievement of certain revenue and earnings performance targets during 2020 through 2025.

To date, we have paid $53.6 million related to the Carlyle Aviation Partners earn-out.

For our acquisition of Abingworth, 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 2023 through 2028.

Based on the terms of the underlying contracts, the maximum amount that could be paid from contingent cash obligations associated with the acquisitions of Carlyle Aviation Partners and Abingworth as of December 31, 2022 is $226.4 million versus amounts recognized on the balance sheet of $76.5 million.

Risk Retention Rules

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Risk Retention Rules, see Part I.

“Risk Factors—Risk Related to Our Company—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.”

“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.”

See Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K for information related to our material guarantees.

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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, 2021.

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, 2022.

See Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K for information related to indemnifications.

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Realized carried interest may be required to be returned by us in future periods if the fund’s investment values decline below certain levels.

For example, during the year ended December 31, 2021, we realized a giveback obligation of $11.8 million related to carried interest previously realized in Carlyle Strategic Partners III, of which $6.5 million is attributable to the Company.

For example, during the year ended December 31, 2022, we realized a giveback obligation of $10.7 million related to carried interest previously realized in Carlyle Strategic Partners III, of which $5.9 million was attributable to the Company.

When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized performance allocations are reversed.

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Carlyle Common Stock and Carlyle Holdings Partnership Units

Rollforwards of shares of our common stock outstanding and Carlyle Holdings partnership units for the years ended December 31, 2021 and 2020 are as follows:

Rollforwards of shares of our common stock outstanding for the years ended December 31, 2022 and 2021 are as follows:

Shares as of December 31, 2021 Shares

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common shares 353,520,576 5,114,394 — — (3,267,094) 355,367,876

Carlyle Holdings partnership units 229,318,248 — — (229,318,248) — —

Total 347,158,899 7,452,114 — — (1,090,437) 353,520,576

The Carlyle Group Inc.

The Carlyle Holdings partnership units exchanged during the year ended December 31, 2020 relate to the exchange of Carlyle Holdings partnership units for an equivalent number of shares of common stock of the Company on January 1, 2020 pursuant to the Conversion.

common stock issued during the period presented in the tables above relate to the vesting of the Company’s restricted stock units, shares issued pursuant to a program under which we may distribute realized performance allocation related compensation in fully vested, newly issued shares (see Note 15 to the accompanying consolidated financial statements), 4.2 million and 0.6 million shares issued as part of the purchase price consideration in the CBAM and Abingworth transactions during the year ended December 31, 2022 (see Note 4 to the accompanying consolidated financial statements), and shares issued and delivered in connection with our equity method investment in NGP during the years ended December 31, 2022 and 2021.

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, 2022 and 2021 and subsequently retired as part of our stock repurchase programs.

The total shares as of December 31, 2021 as shown above exclude approximately 2.7 million net shares of common stock in connection with the vesting of restricted stock units and shares issued pursuant to the carry distributed in shares program subsequent to December 31, 2021 that will participate in the common stockholder dividend that will be paid on February 23, 2022.

The total shares as of December 31, 2021 as shown above also exclude approximately 0.3 million shares of common stock issued pursuant to the carry distributed in shares program subsequent to December 31, 2021 that will not participate in the common stockholder dividend that will be paid on February 23, 2022.

The total shares as of December 31, 2022 as shown above exclude approximately 1.9 million net shares of common stock in connection with the vesting of restricted stock units subsequent to December 31, 2022 that will participate in the common stockholder dividend that will be paid on March 1, 2023.

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.

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.

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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:

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.

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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, 2021, 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 $1.5 billion, on an after-tax basis where applicable.

If, at December 31, 2022, 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 $1.5 billion, on an after-tax basis where applicable, of which approximately $0.7 billion would be the responsibility of current and former senior Carlyle professionals.

See Note 3 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.

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Income Taxes.

On January 1, 2020, the Company converted from The Carlyle Group L.P., a Delaware limited partnership, to The Carlyle Group Inc., a Delaware corporation.

As a result, all of the income before provision for income taxes attributable to The Carlyle Group Inc.

is subject to U.S.

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.

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For some investments little market activity may exist.

combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.

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.

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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.

“Risk Factors — Risks Related to Our Company — Valuation methodologies for certain assets in our funds can involve subjective judgments, and the fair value of assets established pursuant to such methodologies may be incorrect, which could result in the misstatement of fund performance and accrued performance allocations.”

“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.

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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 earnings or losses of our unconsolidated investment funds are primarily driven by 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.

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.

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Intangible Assets and Goodwill.

As of December 31, 2021, we had intangible assets, net of accumulated amortization, of $34.9 million, including $13.3 million of 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.

Finite-lived intangible assets are amortized over their estimated useful lives, which range from four to ten years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

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, 2022, we had intangible assets, net of accumulated amortization, of $897.8 million, including $103.9 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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis