The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Q4 2019 Earnings Presentation
39 slides from The Carlyle's earnings presentation, Feb 5, 2020
Slide 1: The Carlyle Group Reports Fourth Quarter and Full Year 2019 Financial Results
THE CARLYLE GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS FEBRUARY 5, 2020
Slide 2: The Carlyle Group Reports Fourth Quarter and Full Year 2019 Financial Results
The Carlyle Group Reports Fourth Quarter and Full Year 2019 Financial Results WASHINGTON, DC – FEBRUARY 5, 2020 – Global investment firm The Carlyle Group Inc. (NASDAQ: CG) today reported its unaudited results for the fourth quarter and full year ended December 31, 2019. Dividend The Board of Direct
Slide 3: Forward Looking Statements
The Carlyle Group Reports Fourth Quarter and F ul Full and l Year Year 2019 2019 Fi nanci Financial al ResResults ul ts Forward Looking Statements This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securiti
Slide 4: Fourth Quarter and Full Year 2019 Earnings
Fourth Quarter and Full Year 2019 Earnings 4
Slide 5: Carlyle Fourth Quarter & Full Year 2019 U.S. GAAP Results
Carlyle Fourth Quarter & Full Year 2019 U.S. GAAP Results • Net income (loss) attributable to The Carlyle Group L.P. common unitholders in Q4 2019 was $(8.3) million, and $345.3 million over the LTM (Dollars in millions, except per unit amounts) 4Q'18 4Q'19 FY'17 FY'18 FY'19 REVENUES Fund management
Slide 6: Carlyle Fourth Quarter and Full Year 2019 Highlights
Carlyle Fourth Quarter and Full Year 2019 Highlights • Distributable Earnings (“DE”) of $172 million for Q4 2019 on a pre-tax basis, or $0.47 per common share on a post-tax basis. Full year 2019 DE of $647 million, or $1.70 per common share Financial • Fee Related Earnings ("FRE") of $108 million fo
Slide 7: Carlyle Fourth Quarter & Full Year 2019 Total Segment Operating Results
Carlyle Fourth Quarter & Full Year 2019 Total Segment Operating Results (Dollars in millions, except per share amounts) 4Q'18 4Q'19 FY'18 FY'19 SEGMENT REVENUES Fund management fees $ 391.0 $ 390.2 $ 1,361.8 $ 1,570.9 Portfolio advisory fees, net and other 6.0 6.1 31.1 22.2 Transaction fees, net 25.
Slide 8: Distributable Earnings
Distributable Earnings • Distributable Earnings were $172 million in Q4 2019 and $647 million for FY 2019 – Fee Related Earnings accounted for 63% of Distributable Earnings in the quarter and 70% for FY 2019 • Net Realized Performance Revenues were $79 million in Q4 2019 and $164 million for FY 2019
Slide 9: Fee Related Earnings
Fee Related Earnings • Fee Related Earnings were $108 million in Q4 2019, compared to $175 million in Q4 2018 (which benefited from $32 million of net insurance recoveries, elevated transaction fees and catch-up management fees, as well as lower general, administrative and other expense). Excluding
Slide 10: Performance Revenues
Performance Revenues • Net Accrued Performance Revenues1 were $1.7 billion as of Q4 2019, up 2% from one year ago • Realized Net Performance Revenues were $79 million in Q4 2019 and $164 million for FY 2019 – Q4 2019 Net Realized Performance Revenues were primarily driven by exit activity in our U.S
Slide 11: Total Assets Under Management
Total Assets Under Management • Total Assets Under Management1 of $224 billion at December 31, 2019 increased 1% from the prior quarter and 4% from one year ago • Available Capital2 of $69 billion decreased from $75 billion one year ago as our latest generation funds continue to actively deploy capi
Slide 12: Fair Value of Investments
Fair Value of Investments • Fair Value of Investments4 was $155 billion at December 31, 2019, up 9% from one year ago • Fair value in traditional carry funds of $87 billion was up 10% from one year ago, with 54% currently accruing performance revenue Fair Value of Investments Traditional Carry Funds
Slide 13: Fee-earning Assets Under Management
Fee-earning Assets Under Management • Fee-earning Assets Under Management7 of $161 billion increased 1% compared to one year ago, driven by an 8% increase in Global Credit • Pending Fee-earning AUM8 was $8.5 billion as of December 31, 2019 3 Segment ($bn) 1-yr Product Type ($bn) Growth Credit (Non-C
Slide 14: Key Metrics Activity
Key Metrics Activity • Fundraising was $3.3 billion in Q4 2019, and $19.3 billion for FY 2019 • Invested Capital in carry funds was $7.1 billion in Q4 2019, and $21.3 billion for FY 2019 • Realized Proceeds in carry funds was $5.1 billion in Q4 2019, and $19.9 billion for FY 2019 Fundraising Investe
Slide 15: Segment Highlights
Segment Highlights 15
Slide 16: Corporate Private Equity
Corporate Private Equity • Fee Related Earnings of $72 million in Q4 2019 were down from $89 million in Q4 2018 with the Other difference primarily driven by elevated transaction fees of $23 million in the prior period. FY 2019 Fee Buyout US Related Earnings of $261 million were more than double the
Slide 17: Real Assets
Real Assets • Fee Related Earnings of $21 million in Q4 2019 were down from $37 million in Q4 2018 primarily driven by elevated catch-up management fees of $12 million in the prior period. FY 2019 Fee Related Earnings of $127 million were up from $121 million in 2018 Real Estate • Total AUM of $43 b
Slide 18: Global Credit
Global Credit Direct • Fee Related Earnings of $14 million in Q4 2019 compared to $42 million in Q4 2018 (which included Aviation Lending the positive impact from $32 million of net insurance recoveries). Fee Related Earnings of $48 million for FY 2019 increased 20% compared to FY 2018 when adjustin
Slide 19: Investment Solutions
Investment Solutions • Fee Related Earnings of $1 million in Q4 2019 were down from $7 million in Q4 2018 primarily driven AlpInvest - by lower management fees and higher compensation and G&A expenses. FY 2019 Fee Related Secondary Earnings of $17 million were down from $34 million in FY 2018 $10 •
Slide 20: Supplemental Details
Supplemental Details 20
Slide 21: Carlyle Fourth Quarter and Full Year 2019 Total Segment Results
Carlyle Fourth Quarter and Full Year 2019 Total Segment Results (Dollars in millions, except per share amounts) 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 FY'18 FY'19 SEGMENT REVENUES Fund management fees $ 391.0 $ 381.6 $ 414.5 $ 384.6 $ 390.2 $ 1,361.8 $ 1,570.9 Portfolio advisory fees, net and other 6.0 5.5 5
Slide 22: Total Segment Balance Sheet Highlights
Total Segment Balance Sheet Highlights • Balance sheet assets attributable to Carlyle stockholders (including net cash and equivalents, net accrued performance revenue and investments) totaled $2.4 billion at December 31, 2019, compared to $2.3 billion one year prior Key Balance Sheet Items1($bn) 12
Slide 23: AUM and Fee-earning AUM Roll Forward
AUM and Fee-earning AUM Roll Forward Total AUM Roll Forward (Unaudited) Three Months Ended December 31, 2019 Twelve Months Ended December 31, 2019 ($mm) Corporate Corporate Private Real Global Investment Private Real Global Investment 5 5 Equity Assets Credit Solutions Total Equity Assets Credit Sol
Slide 24: Corporate Private Equity Fund Performance
Corporate Private Equity Fund Performance TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(6) (Reported in Local Currency, mm) As of December 31, 2019 As of December 31, 2019 Original Cumulative Remaining Gross In Accrued LTM Cumulative Gross Fund Investment Committed Invested Realized Fair
Slide 25: Real Assets Fund Performance
Real Assets Fund Performance TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(6) (Reported in Local Currency, mm) As of December 31, 2019 As of December 31, 2019 Original Cumulative Remaining Gross In Accrued LTM Cumulative Gross Fund Investment Committed Invested Realized Fair MOIC IRR Net
Slide 26: Global Credit Fund Performance (Carry Funds Only)
Global Credit Fund Performance (Carry Funds Only) TOTAL INVESTMENTS ($mm) As of December 31, 2019 Original Cumulative LTM Realized Fund Investment Committed Invested Realized Remaining MOIC Gross IRR Net IRR In Accrued Carry/ Carry/ Vintage(1) Period End Capital Capital(24) Value(3) Fair Value(4) (5
Slide 27: Investment Solutions Fund Performance
Investment Solutions Fund Performance TOTAL INVESTMENTS (Reported in Local Currency, mm) As of December 31, 2019 Cumulative Invested Realized Value Remaining Total INVESTMENT SOLUTIONS(26) Vintage Year Fund Size Capital (2)(27) (27) Fair Value Fair Value(28) MOIC(5) Gross IRR(16)(29) Net IRR(9)(16)
Slide 28: Reconciliation & Disclosures
Reconciliation & Disclosures 28
Slide 29: Reconciliation for Distributable Earnings Per Share (Unaudited)
Reconciliation for Distributable Earnings Per Share (Unaudited) (Dollars in millions, 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 FY'19 QoQ YoY Annual except per share data and where noted) FEE RELATED EARNINGS $ 175.4 $ 103.3 $ 132.7 $ 108.8 $ 108.0 $ 452.8 (1)% (38)% 29% DISTRIBUTABLE EARNINGS $ 210.5 $ 100.8 $
Slide 30: Reconciliation of GAAP to Total Segment Information
Reconciliation of GAAP to Total Segment Information (Dollars in millions) 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 FY'17 FY'18 FY'19 INCOME BEFORE PROVISION FOR INCOME TAXES $ (78.7) $ 470.3 $ 542.0 $ 261.4 $ (40.3) $ 1,132.3 $ 360.2 $ 1,233.4 Adjustments: Net unrealized performance revenues 252.5 (155.8) (82.
Slide 31: Reconciliation of GAAP to Total Segment Information, continued
Reconciliation of GAAP to Total Segment Information, continued Total Reportable Consolidated Reconciling Carlyle Total Reportable Consolidated Reconciling Carlyle 1 1 (Dollars in millions) Segments Funds Items Consolidated Segments Funds Items Consolidated Three Months Ended December 31, 2018 Year E
Slide 32: Reconciliation of GAAP to Total Segment Information, continued
Reconciliation of GAAP to Total Segment Information, continued (Dollars in millions) 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 FY'17 FY'18 FY'19 REVENUE RECONCILING ITEMS Unrealized performance revenues $ (483.9) $ 301.8 $ 167.3 $ (87.4) $ (113.9) $ 1,089.5 $ (42.7) $ 267.8 Unrealized principal investment incom
Slide 33: Reconciliation for Total Segment Information, continued
Reconciliation for Total Segment Information, continued RECONCILIATION OF TOTAL INVESTMENTS RECONCILIATION OF ATTRIBUTABLE TO CARLYLE HOLDINGS ACCRUED PERFORMANCE ALLOCATIONS (Dollars in millions) 12/31/19 (Dollars in millions) 12/31/19 ACCRUED PERFORMANCE ALLOCATIONS, NET OF ACCRUED INVESTMENTS, EX
Slide 34: GAAP Statement of Operations (Unaudited)
GAAP Statement of Operations (Unaudited) (Dollars in millions, except per unit amounts) 4Q'18 4Q'19 FY'17 FY'18 FY'19 REVENUES Fund management fees $ 377.4 $ 372.4 $ 1,026.9 $ 1,272.0 $ 1,476.2 Incentive fees 9.7 9.1 35.3 30.2 35.9 Investment income Performance allocations (324.5) 90.0 2,058.6 622.9
Slide 35: GAAP Balance Sheet (Unaudited)
GAAP Balance Sheet (Unaudited) As of December 31, 2019 Consolidated Consolidated (Dollars in millions) Operating Entities Funds Eliminations Consolidated ASSETS Cash and cash equivalents $ 793.4 $ — $ — $ 793.4 Cash and cash equivalents of Consolidated Funds — 122.4 — 122.4 Restricted cash 34.6 — —
Slide 36: Notes
Notes Non-GAAP Financial Measures This press release contains financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America. These non-GAAP financial measures should be conside
Slide 37: Notes, continued
Notes, continued Note on Q4 2019 Key Metric Activity (Page 14) (1) Total for Real Assets includes Legacy Energy funds. The impact of these funds is no longer significant to our results of operations. Note on Investment Solutions (Page 19) (1) Includes Mezzanine funds. Notes on Total AUM Roll Forward
Slide 38: Notes, continued
Notes, continued Notes on Fund Performance Tables (Pages 24-27) (1) The data presented herein that provides “inception to date” performance results of our segments relates to the period following the formation of the first fund within each segment. For our Corporate Private Equity segment our first
Slide 39: Notes, continued
Notes, continued Notes on Fund Performance Tables (Pages 24-27), continued (21) 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: SASOF II, SASOF III, and CASCOF. (22) Aggregate in