The Carlyle Group Inc.

The Carlyle Group Inc. manages private equity, credit and private-market investment programs for institutional and other clients. Its three segments are Global Private Equity, Global Credit and Carlyle AlpInvest. Revenue includes management and advisory fees, a share of investment profits and income on Carlyle's own investments. The company trades on Nasdaq as CG and reports on a December 31 year-end.

Earnings through the latest quarter

The third quarter's realized performance revenue, net of related compensation, was $99.8 million, versus $19.1 million a year earlier. Realized income on principal investments was $64.1 million versus $49.5 million. These contributions lifted distributable earnings despite softer Fee Related Earnings.

Catch-up management fees were $14 million versus $31 million a year earlier. Investment realizations also reduced some private equity management fees, partly offset by newer AlpInvest funds. First-nine-month Fee Related Earnings were $950.3 million versus $945.8 million; distributable earnings were $1.232 billion versus $1.255 billion.

The estimated current tax deducted from distributable earnings fell to $35.4 million from $89.7 million in June. Its rate fell to 8.2% from 19.0%, helping after-tax earnings per share rise despite lower pretax earnings. This is the tax calculation for the distributable measure.

GAAP net loss attributable to Carlyle was $7.7 million, or $0.02 a diluted share. Distributable earnings exclude unrealized performance allocations and principal-investment valuation changes, stock compensation, specified acquisition-related charges and other adjustments. Fee Related Earnings additionally remove realized investment returns and adjust net interest.

Assets, fundraising and the next fee opportunity

Total assets under management were $478.5 billion at September. Fee-earning assets were $329.6 billion, compared with $334.4 billion at June and $332.0 billion a year earlier. Pending fee-earning commitments of $28 billion were unchanged from June, though up 48% year over year. Activation of fees or investment of the commitments, according to each fund's structure, is the next step to monitor.

Quarterly inflows were $10.8 billion and outflows, including investment realizations, were $14.3 billion. Market movements and other changes also reduced the asset base. Fund exits and distributions to fund investors are part of the investment-management business; they are separate from dividends and repurchases for Carlyle shareholders.

Net accrued performance revenues attributable to Carlyle fell to $2.136 billion from $2.415 billion at June, reflecting realizations and lower accrued returns in some strategies. Carlyle expects a previously disclosed $222 million cumulative infrastructure investment loss to be realized in the fourth quarter. The same cumulative amount had already been reported in August.

Company cash, debt and shareholder returns

September operating-entity cash was $1.584 billion. Segment debt was $2.649 billion, excluding $367.7 million of borrowing used to finance CLO investments and $436.9 million of lease liabilities. GAAP operating-entity debt, including that CLO financing, was $3.017 billion. The $1 billion corporate revolving facility was undrawn.

The latest available first-half cash-flow statement separates $230.8 million of cash from the company's own operating activities from the cash flows of consolidated investment funds. First-half capital spending was $60.1 million, common dividends paid were $252.1 million and repurchases plus employee share-tax settlements cost $508.9 million.

In the third quarter, Carlyle repurchased and retired 2.6 million shares, while another 1.9 million were withheld for employee taxes. The reported $210.4 million combined cost includes both. Existing repurchase capacity was about $1.4 billion at September. The board declared a $0.35 quarterly dividend payable November 23 to November 16 record holders.