Carlyle Group Inc. (CG)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless context suggests otherwise, references in this Quarterly Report on Form 10-Q to “Carlyle,” the “Company,”

“we,” “us,” and “our” refer to The Carlyle Group Inc. and its consolidated subsidiaries. The following discussion and

analysis should be read in conjunction with the consolidated financial statements and the related notes included in this

Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

We are one of the world’s largest global investment firms and deploy private capital across our business. We conduct our

operations through three reportable segments: Global Private Equity, Global Credit, and Carlyle AlpInvest.

•Global Private Equity — Our Global Private Equity segment advises our buyout, growth, real estate, and infrastructure &

natural resources funds. The segment also includes the NGP Carry Funds advised by NGP. As of March 31, 2026, our

Global Private Equity segment had $159.0 billion in AUM and $99.1 billion in Fee-earning AUM.

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

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

credit, cross-platform credit products, and global capital markets. As of March 31, 2026, our Global Credit segment had

$209.5 billion in AUM and $166.4 billion in Fee-earning AUM.

•Carlyle AlpInvest — Our Carlyle AlpInvest segment advises global private equity programs that pursue secondary

purchases and financing of existing portfolios, managed co-investment programs, and primary fund investments. As of

March 31, 2026, our Carlyle AlpInvest segment had $106.9 billion in AUM and $67.9 billion in Fee-earning AUM.

We earn management fees pursuant to contractual arrangements with the investment funds that we manage and fees for

transaction advisory and oversight services provided to portfolio companies of these funds. We also typically receive a

performance fee from an investment fund, which may be either an incentive fee or a special residual allocation of income,

which we refer to as a performance allocation, or carried interest, in the event that specified investment returns are achieved by

the fund. Under U.S. generally accepted accounting principles (“U.S. GAAP”), we are required to consolidate some of the

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

deconsolidates these investment funds. Refer to Note 14, Segment Reporting, to the condensed consolidated financial

statements included in this Quarterly Report on Form 10-Q for more information on the differences between our financial

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

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Our Global Investment Offerings

The following table provides a breakout of the product offerings and related acronyms included in our total assets under

management of $475 billion as of March 31, 2026 for each of our three global business segments (in billions):

Note: All amounts shown represent total assets under management as of March 31, 2026, and totals may not sum due to rounding. In addition,

certain carry funds included herein may not be included in fund performance if they have not made an initial capital call or commenced

investment activity.

(1)Includes our Financial Services (CGFSP), Sub-Saharan Africa Buyout (CSSAF), Peru Buyout (CPF), and MENA Buyout funds, as well

as platform accounts which invest across Corporate Private Equity strategies.

(2)NGP Energy funds are advised by NGP Energy Capital Management, LLC, a separately registered investment adviser. We do not serve as

an investment adviser to those funds.

(3)Includes our Infrastructure (CGIOF) and Renewable Energy (CRSEF) funds.

(4)Includes Carlyle FRL, capital raised from strategic third-party investors which directly invest in Fortitude alongside Carlyle FRL, as well

as the fair value of the general account assets covered by the strategic advisory services agreement with Fortitude.

(5)Includes our business development companies (CGBD / CARS) and our evergreen fund (CDLF).

(6)Includes our Energy Credit (CEMOF) and Real Estate Credit (CNLI) funds.

(7)Includes Carlyle AlpInvest Private Markets (CAPM) and Carlyle AlpInvest Private Markets Secondaries (CAPS) funds.

Trends Affecting Our Business

The commencement of hostilities in the Middle East and the closure of the Strait of Hormuz have not yet manifested as

visible economic damage. However, risks to the global economy remain elevated as the conflict in the Middle East persists, and

those risks will continue to rise for as long as the Strait remains effectively shut. Approximately 20% of global crude oil, 20%

of global liquid natural gas (“LNG”), 30% of global helium supplies, and 50% of global stocks of urea, the most widely used

nitrogenous fertilizer, transit the Strait. For the industrial sector, energy looms large, but for many businesses beyond this

sector, disruptions to supplies of petrochemicals, metals, helium, and other byproducts of LNG processing are just as

significant. In the U.S., which is less reliant on imports that traverse the Strait, impacts seem most likely to manifest in higher

prices, which could put downward pressure on consumption demand and slow overall growth. For much of the rest of the

world, impacts could be more substantial, with physical shortages of energy and supplies resulting in outright demand

destruction. Global supply shortages also have significant implications for the AI buildout, and AI-related capex growth

intentions could be pared back materially should the conflict become prolonged.

In equity markets, investors have grown skeptical about returns to AI capex: the Magnificent 7 stocks declined 12%

during the quarter, though recent layoff announcements (presumably in an effort to offset these AI-related capex costs) and

soaring cloud revenues have driven a recovery rally that has more than erased the drawdown, lifting the group above its

October 2025 market peak to new all-time highs (as of May 8, 2026). The quarter was also marked by distinct pre- and post-

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conflict market dynamics. In the U.S., prior to February 27, 2026, investors rotated away from mega-cap technology and

software toward “real economy” sectors: industrials were up 14%, while SaaS stocks were down 30% from the start of the year

through that date, as new AI capabilities raised concerns about incumbent business models. After February 27, 2026, however,

that rotation partially reversed in response to the energy shock, and industrials underperformed through quarter-end. Since the

end of the first quarter of 2026, both “real economy” sectors and enterprise software (which is seen as less vulnerable to AI

disruption) have performed well, while SaaS and cloud services providers continue to lag. Overall, the S&P 500 ended the

quarter down 4.6%, though significant upgrades to “consensus” earnings estimates coupled with market optimism for an end to

the Middle East conflict have driven the index to record highs in May. This recent rally is a symptom of the difficulty investors

face in hedging and quantifying geopolitical risk. In contrast to other discrete shocks, such as the failure of SVB in 2023,

markets face less clarity in mapping out the trajectory of evolving geopolitical developments and so tend to “look through”

them. Globally, Japan’s Nikkei and Europe’s Euro Stoxx 50 started the quarter up 16.9% and 6%, respectively, prior to the

outbreak of hostilities, but ultimately finished the quarter up just 1.4% and down 3.8%, respectively. The shock also reaffirmed

the notion that bonds no longer hedge equity market risk. Bonds have now sold off with stocks during each major shock of the

last 12 months, and the correlation between the monthly returns of stocks and bonds has moved from -25% to +50% since 2022.

As the “natural” hedge of the traditional 60/40 portfolio continues to dissolve, investors may choose to rotate towards private

markets to achieve greater diversification.

The U.S. economy retained underlying momentum during the quarter. The labor market did not show obvious signs of

deterioration, and our measure of real final demand—a proxy for real GDP net of foreign trade and inventories—grew at a 2.7%

annualized rate, a result consistent with 5.7% annual growth in S&P 1500 revenue. Business spending continued to advance at

an 11.1% annualized rate, led by AI-related investment. That strength is not limited to capex associated with data centers, which

continues to grow at prodigious rates, but also reflects enterprise IT budgets, as the need to devise and implement AI strategies

has moved technology spending from “nice to have” to a top corporate priority. Much of the spending thus far has been

concentrated in data capture, storage, and analytics, with companies also reporting significant value from dynamic pricing

algorithms that have allowed them to optimize prices across customers and products. At the same time, portfolio-wide energy

prices increased, while stronger transportation and logistics volumes suggested that some activity may have been pulled

forward in anticipation of higher prices and/or outright shortages. For many businesses, the challenge extends beyond energy to

supplies of petrochemicals, metals, helium, and other byproducts of LNG processing, with many focused on “taking price” to

defend margins in the face of escalating input costs. To date, our data are consistent with a short-term price shock and distortion

in volumes and shipments rather than sustained inflation. However, it is important to appreciate that energy and durable

consumer goods have been the expenditure categories doing the most to keep a lid on overall inflation. A reversal here seems

likely to intensify households’ affordability concerns as the supply impulse transitions from disinflationary to inflationary.

Although these pressures have not yet resulted in visible economic damage, there were signs of growing divergence in

consumer activity towards the end of Q1 2026, including a sharp deceleration in experiences spending and softer demand

among lower-income households, which could become more pronounced if current supply disruptions persist.

For much of the rest of the

[Excerpt truncated for page length; source filing is linked above.]

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

OF OPERATIONS

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

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

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

The following discussion includes a comparison of our results for the years ended December 31, 2025 and 2024. For a

discussion of our results for the year ended December 31, 2023 and a comparison of results for the years ended December 31,

2024 and 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

of our Annual Report on Form 10-K for the year ended December 31, 2024, which specific discussion is incorporated herein by

reference.

Overview

We are one of the world’s largest global investment firms and deploy private capital across our business. We conduct

our operations through three reportable segments: Global Private Equity, Global Credit, and Carlyle AlpInvest (formerly,

Global Investment Solutions).

•Global Private Equity — Our Global Private Equity segment advises our buyout, growth, real estate, and

infrastructure & natural resources funds. The segment also includes the NGP Carry Funds advised by NGP.

As of December 31, 2025, our Global Private Equity segment had $163.5 billion in AUM and $101.4 billion

in Fee-earning AUM.

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

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

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

2025, our Global Credit segment had $211.3 billion in AUM and $169.5 billion in Fee-earning AUM.

•Carlyle AlpInvest — Our Carlyle AlpInvest segment advises global private equity programs that pursue

secondary purchases and financing of existing portfolios, managed co-investment programs, and primary fund

investments. As of December 31, 2025, our Carlyle AlpInvest segment had $102.0 billion in AUM and $66.0

billion in Fee-earning AUM.

We earn management fees pursuant to contractual arrangements with the investment funds that we manage and fees for

transaction advisory and oversight services provided to portfolio companies of these funds. We also typically receive a

performance fee from an investment fund, which may be either an incentive fee or a special residual allocation of income,

which we refer to as a performance allocation, or carried interest, in the event that specified investment returns are achieved by

the fund. Under U.S. generally accepted accounting principles (“U.S. GAAP”), we are required to consolidate some of the

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

deconsolidates these investment funds. Refer to Note 15, Segment Reporting, to the consolidated financial statements included

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

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

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Trends Affecting Our Business

Equity markets closed out 2025 at or near new all-time highs, with major indices across the United States, Europe, and

Japan setting new records in the fourth quarter. In Europe, the Euro Stoxx 50 rose 5% to end the year 18% higher, while the

Nikkei rose 12% in the quarter to tally more than 26% for the year, firmly surpassing the 1989 peak that took nearly 35 years to

regain. Returns in the United States decelerated from a strong third quarter with the S&P 500 gaining 2.3% for the fourth

quarter and 16% for the year, marking the first time in 20 years that the S&P 500 was the worst performing major equity index.

While continued economic growth and a resolution to the U.S. government shutdown helped support momentum across many

sectors, concerns regarding an “AI bubble” intensified in November and dragged down many of the largest technology

companies in the last two months of the year. The “Magnificent 7,” which generated annualized returns of 29% over the last

five years and represented over half of the S&P 500’s gains from 2021 through their peak on October 29, 2025, have declined

7% from their top (as of February 24, 2026), offsetting gains in the rest of the index. By contrast, cyclical, value, and quality

factors have strengthened since the start of the year; after a period of large-cap growth dominance, more reasonably priced

value stocks have outperformed by over 600 basis points (“bps”) year-to-date in 2026. Public equity markets overall have been

volatile in recent weeks; individual stocks have experienced large price swings in apparent response to headlines, new AI

product offerings, and “viral” research reports. The software sector in particular has sold off on “AI disruption” fears and is

down 33% year-to-date through February 24, 2026. Meanwhile, the public-private market valuation gap widened to its largest

level in at least a decade in 2025, as buyout purchase multiples in the United States fell to 11.2x earnings before interest, taxes,

depreciation, and amortization (“EBITDA”), while public market valuations rose to 17.7x EBITDA, about half a turn below

their 2021 peak of 18.2x EBITDA. Importantly, this valuation differential is not a reflection of underlying performance. Every

year since 2019, including the twelve months ended September 30, 2025, which represents the most recent private markets data,

the median buyout company has matched or beaten the revenue and EBITDA growth rates of the median company in the S&P

500.

While headline U.S. GDP growth of 1.4% disappointed in the fourth quarter, real underlying demand as proxied by

real final sales to private domestic purchasers (which strips out effects from trade, inventories, and government spending) was

more resilient and expanded at a 2.4% annualized rate. Business spending remained a key contributing factor; our proprietary

portfolio data indicate technology spending growth ended the year at a record 30% annualized rate. Consistent with prior

quarters, much of this momentum remains concentrated in AI-related investment, particularly data centers, where hardware

shipments are 7.5x higher than 2021 levels and capital expenditures continue to grow rapidly from a much larger base. While

many observers focus on the economy’s “dependence” on the surge in AI-related capex, there are increasing signs that it is

“crowding out” other forms of real estate development as data centers consume a larger share of the finite supply of investible

capital. For other real estate sectors, capital is increasingly scarce, setting the stage for strategies focused elsewhere, such as our

own real estate funds, to find greater opportunities to generate higher relative returns. Despite a constructive macro backdrop,

our portfolio data suggest U.S. labor market momentum has softened further as the deceleration in payroll employment growth

now appears to exceed what could be explained by the labor-supply shock from immigration enforcement. Some hiring

weakness appears tied to corporate AI-integration efforts, as companies reassess workflows and pursue efficiencies to create

financial capacity for incremental tech-enabled services spending. Recent statements from the Federal Open Market Committee

(“FOMC”), however, suggest that they are no longer as concerned with the labor market as they were in the fourth quarter of

2025, and feel comfortable with the current policy rate. Given the Federal Reserve’s historically dovish bias, continued cooling

in employment and inflation indicators could increase the likelihood of additional easing down the road, despite core Personal

Consumption Expenditures (“PCE”) inflation that remains near the 3% levels that have maintained for the better part of two

years.

In Europe, there is a push for greater strategic autonomy that can only be achieved through a substantial increase in the

domestic development and production of defense technologies and systems. Early signs of these efforts have started to become

visible through improvement in broader economic data, supported by a notable pickup in factory output that seems to be tied to

defense-related orders. Germany has also been part of that improvement, though energy-intensive industrial production remains

roughly 20% below levels seen prior to Russia’s invasion of Ukraine, and momentum may hinge on how quickly Berlin can

translate public investment plans into executed spending. Federal investment in Germany rose 17% in 2025 to €87 billion,

though still came in nearly €29 billion below the original budget. In China, the key story continues to be the divergence

between household consumption and industrial output: retail sales grew just 0.9% in December 2025 from a year earlier, the

slowest pace since 2022, while industrial output grew by over 5%, contributing to a record $1.2 trillion trade surplus for the

year. In India, our data suggest domestic demand grew at its fastest pace in over two years, supported by the Goods and

Services Tax reform and low inflation that continues to support real household incomes. In Japan, recent moves in the yen and

Japan 10-year government bond yields have fueled concerns of fiscal sustainability and the risk of a sovereign debt or currency

crisis. However, these concerns overlook key attributes of the Japanese economy. Nominal per capita GDP has grown at an

annualized rate of nearly 3% over the past five years, and public net debt looks manageable, particularly when viewed through

the lens of substantial broader economy-wide savings. The normalization of rates appears to be more consistent with an

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economy exiting its deflationary slump than of one in crisis. Japanese policymakers want this process to unfold gradually while

preserving the benefits of a competitive exchange rate. Given recent election outcomes, Japan’s new leadership may also be

able to move faster on its stated plans to increase defense spending and potentially ease restrictions on weapons sales to allies

and partners. These shifts could create capital deployment opportunities surrounding increased defense expenditure.

Additionally, tax reform could provide a near-term boost to growth by increasing disposable income for households and

supporting domestic demand.

Global mergers and acquisitions (“M&A”) activity was very strong in 2025, with total volume of $5.1 trillion, a

notable 44% increase over 2024 and the highest annual volume since 2021. The fourth quarter was the busiest of the year, with

over $1.5 trillion in transactions, up 19% from the prior quarter, and 57% from a year ago. However, headline volumes were

boosted by a shift toward larger deals. In 2025, average deal size was $125 million, a nearly 50% increase over 2024 and a 40%

increase over the average size in the preceding five years (2020 through 2024). Buyout activity rose at a similar pace. Globally,

financial sponsors announced $657 billion in buyout transactions in 2025, roughly 48% higher than 2024, with U.S.-target deals

accounting for nearly 60% of global volume amid a surge in large transactions. In the fourth quarter, general partners

announced $155 billion in global leveraged buyouts, nearly 50% higher than a year earlier, though underlying deal counts

remained subdued at 420 deals, and the top 10 deals represented 53% of quarterly volume. Despite blockbuster deal volumes,

buyout exits remained slow. Aggregate exit volumes of $116 billion in the fourth quarter of 2025 were roughly flat to the third

quarter and were 18% lower than the fourth quarter of 2024; only 410 companies were fully divested globally, the lowest

quarterly exit count since the fourth quarter of 2022. However, the initial public offering (“IPO”) market gained momentum

throughout the year. In the fourth quarter, 21 U.S. exchange-listed IPOs raised $12.9 billion, a pullback in comparison to a very

strong third quarter but still the second-best quarter by dollar amount since the fourth quarter of 2021. Activity remained

concentrated in certain sectors: software and pharma/healthcare accounted for nearly 60% of deals and roughly 80% of

proceeds. Notably, Medline alone represented 55% of total proceeds in the fourth quarter. In total, there were 93 U.S.-exchange

listed IPOs over full-year 2025, with proceeds totaling $43.4 billion, an increase of 21% and 84% in transaction and volume

terms, respectively, over 2024.

Credit markets remained resilient in 2025, with demand supported by record fundraising in the CLO market, and an

uptick in new supply from robust M&A activity, dividend recaps, and refinancing. While U.S. institutional loan activity fell in

the fourth quarter, 2025 was still the second-busiest year on record with total activity over $1 trillion. European leveraged loan

volume increased 21% over 2024, driven by a wave of repricing on the back of more favorable financing conditions. Spreads

continued to compress, with direct lending deals pricing at 510bps and 521bps in the United States and Europe, respectively,

and syndicated markets pricing well below 400bps in both regions. Risks appear to be muted, as defaults plus distressed

exchanges in the leveraged loan market fell by more than a percentage point over the fourth quarter to end the year at just a

3.35% rate; private credit defaults remained below 2% as of the third quarter of 2025 (the latest quarter for which data are

available).

Our carry fund portfolio appreciated 8% during 2025. Within our Global Private Equity segment, our corporate private

equity funds appreciated 7%, with particular strength in our latest vintage U.S. buyout and Japan buyout funds, which

appreciated 17% and 33%, respectively, during the year, and our latest Europe technology fund, which appreciated 20% during

the year. As a result, the net accrued performance revenues in our corporate private equity strategy increased. Our infrastructure

and natural resources funds appreciated 17%, and our real estate funds appreciated 3%. Our Global Credit carry funds (which

represent approximately 11% of the total Global Credit remaining fair value as of December 31, 2025) appreciated 16% in 2025

and carry funds in our Carlyle AlpInvest segment appreciated 6%.

In contrast to the muted transaction volumes in the broader market, activity across our platform in 2025 picked up

significantly relative to 2024. We generated $34.1 billion in realized proceeds from our carry funds in 2025, an increase of 19%

from the prior year. We also continued to successfully execute public offerings during the year, including the IPO of Medline,

which was the largest public offering of 2025. We deployed $54.5 billion across our platform during 2025, a more than 25%

increase over 2024, which included $10.4 billion and $14.2 billion in invested capital in our Global Private Equity and Carlyle

AlpInvest segments, respectively. In our Global Credit segment, deployment of $29.9 billion in 2025 included the closing of

nine new CLOs, and gross originations across our platform including $5.1 billion in our direct lending strategy, which had its

highest quarter of originations in the fourth quarter of 2025. In connection with the increase in deal activity, our net transaction

and portfolio advisory fees of $206.0 million for the year increased 35% from $152.5 million in 2024.

We had $53.7 billion in capital inflows in 2025, an increase of 32% from 2024. Inflows during the year included over

$7 billion in our evergreen wealth products, contributing to a near doubling of assets under management year-over-year in this

area of strategic focus. We also completed fundraising on our largest secondaries fund in Carlyle AlpInvest during 2025, which

reflects the demand for secondary solutions as investors seek liquidity and portfolio optimization strategies. With $88 billion of

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available capital across our three business segments, we are well-positioned to deploy capital across our global investment

platform.

Notable Developments

Dividends

In February 2026, our Board of Directors declared a quarterly dividend of $0.35 per share to common stockholders of

record at the close of business on February 16, 2026, payable on February 20, 2026.

Senior Note Issuance

In September 2025, we issued $800.0 million of 5.050% senior notes due 2035. For further information, see Note 6,

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

Share Repurchase Program

Our Board of Directors reset the total repurchase authorization to $2.0 billion in shares of our common stock, effective

as of February 26, 2026. Under the share repurchase program, shares of our common stock may be repurchased from time to

time in open market transactions, in privately negotiated transactions, or otherwise, including through Rule 10b5-1 plans. The

timing and actual number of shares of common stock repurchased will depend on a variety of factors, including legal

requirements and price, economic, and market conditions. In addition to the repurchase of common stock, the share repurchase

program is used for the payment of tax withholding amounts upon net share settlement of equity-based awards granted pursuant

to our Equity Incentive Plan or otherwise based on the value of shares withheld that would have otherwise been issued to the

award holder. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration

date.

Key Financial Measures

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

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

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

Revenues

Revenues primarily consist of Fund management fees, Incentive fees, Investment income (including Performance

allocations, realized and unrealized gains of our investments in our funds, and other principal investments), as well as Interest

and other income.

Fund management fees. Fund management fees include management fees and transaction and portfolio advisory fees.

We earn management fees for advisory services we provide to funds in which we hold a general partner interest or to funds or

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

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

products as defined below. Management fees also include catch-up management fees, which are episodic in nature and

represent management fees charged to fund investors in subsequent closings of a fund which apply to the time period between

the fee initiation date and the subsequent closing date. We also earn management fees on our CLOs and other structured

products.

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

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

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

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

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

syndicate.

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

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

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

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

refer to as “rebate offsets.”

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

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

transactions at our portfolio companies.

Incentive fees. Incentive fees consist of performance-based incentive arrangements pursuant to management contracts

when the return on assets under management exceeds certain benchmark returns or other performance targets. In such

arrangements, incentive fees are recognized when the performance benchmark has been achieved.

Investment income (loss). Investment income (loss) consists of our performance allocations as well as the realized and

unrealized gains and losses resulting from our equity method investments and other principal investments.

Performance allocations consist principally of the performance-based capital allocation from fund limited partners to

us, commonly referred to as carried interest, from certain of our investment funds, which we refer to as the “carry funds.”

Carried interest revenue is recognized by Carlyle upon appreciation of the valuation of our funds’ investments above certain

return hurdles as set forth in each respective partnership agreement and is based on the amount that would be due to us pursuant

to the fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount of

carried interest recognized as performance allocations reflects our share of the fair value gains and losses of the associated

funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior

period. As a result, the performance allocations earned in an applicable reporting period are not indicative of any future period,

as fair values are based on conditions prevalent as of the reporting date. Refer to “—Trends Affecting Our Business” for further

discussion.

For any given period, performance allocations revenue on our statement of operations may include reversals of

previously recognized performance allocations due to a decrease in the value of a particular fund that results in a decrease of

cumulative performance allocations earned to date. Since fund return hurdles are cumulative, previously recognized

performance allocations also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate.

Additionally, unrealized performance allocations reverse when performance allocations are realized, and unrealized

performance allocations can be negative if the amount of realized performance allocations exceed total performance allocations

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

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

performance allocation realizations from our Carlyle AlpInvest, Carlyle Aviation, and Abingworth funds is typically later than

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

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

of carried interest to which we are entitled varies. In some cases, we are entitled to 15% of the carried interest in respect of

commitments from the historical owners of AlpInvest for the period between 2011 and 2020. In certain instances, carried

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

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

funds.

Realized carried interest may be clawed back or given back to the fund if the fund’s investment values decline below

certain return hurdles, which vary from fund to fund. This amount is known as the “giveback obligation.” In all cases, each

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

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

K for additional information.

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

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

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

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

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

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

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

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

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

allocation-related compensation that has not yet been paid is also excluded from our net accrued performance allocations.

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

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

$257.0 million, $175.6 million of which was related to various Legacy Energy Funds. Given that current and former senior

Carlyle professionals and other limited partners of the Carlyle Holdings partnerships are responsible for paying the majority of

the realized giveback obligation, only $87.1 million of the $257.0 million aggregate giveback obligation realized since

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

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

generated by our funds and is a recipient of realized carried interest typically signs a guarantee agreement or partnership

agreement that personally obligates such person to return his/her pro rata share of any amounts of realized carried interest

previously distributed that are later clawed back. Accordingly, carried interest as performance allocation compensation is

subject to return to the Company in the event a giveback obligation is funded. Generally, the actual giveback liability, if any,

does not become due until the end of a fund’s life.

In addition, in our discussion of our non-GAAP results, we use the term “realized net performance revenues” to refer

to realized performance allocations and incentive fees from our funds, net of the portion allocated to our investment

professionals, and other employees and certain tax expenses associated with carried interest attributable to certain partners and

employees, which are reflected as realized performance allocations and incentive fees related compensation expense. See “—

Non-GAAP Financial Measures” and “—Segment Analysis” for the amount of realized net performance revenues recognized

each period and related discussion.

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

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

principal investment income (loss) is recorded when we redeem all or a portion of our investment or when we receive or are due

cash income, such as dividends or distributions. A realized principal investment loss is also recorded when an investment is

deemed to be permanently impaired or worthless. Unrealized principal investment income (loss) results from changes in the fair

value of the underlying investment, as well as the reversal of previously recognized unrealized gains (losses) at the time an

investment is realized.

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

equity interests in NGP Management and the general partners of certain carry funds advised by NGP. Following the

restructuring of the terms of our strategic investment in NGP in March 2025 (the “Restructuring”), our equity interests in NGP

Management entitle us to an allocation of income equal to 55.0% of the management fee related revenues earned by NGP

Management for existing funds, and up to 55.0% for all NGP funds that held an initial closing after December 31, 2024,

including all management fees being retained by NGP for the years 2025 through 2028 on such future NGP funds. Our

investment in the general partners of the NGP Carry Funds entitle us to up to 47.5% of the performance allocations received

from NGP fund general partners. For further information regarding our strategic investments in NGP and the Restructuring,

refer to Note 4, Investments, to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

We record investment income (loss) for our equity income allocation from NGP management fee related revenues and

our share of any allocated expenses from NGP Management, as well as expenses associated with the compensatory elements of

the strategic investment and any impairment charges. 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’s 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.

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

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

investments, including CLO senior and subordinated notes.

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

represents the interest earned on assets of consolidated CLOs.

Net investment income of Consolidated Funds. Net investment income of Consolidated Funds generally measures the

change in the difference in fair value between the assets and the liabilities of the Consolidated Funds. Income (loss) indicates

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that the fair value of the assets of the Consolidated Funds appreciated more (less), or depreciated less (more), than the fair value

of the liabilities of the Consolidated Funds. Income or loss is not necessarily indicative of the investment performance of the

Consolidated Funds and does not impact the management or incentive fees received by Carlyle for its management of the

Consolidated Funds. The portion of the net investment income (losses) of Consolidated Funds attributable to the limited partner

investors is allocated to non-controlling interests. Therefore, income or loss is not expected to have a material impact on the

revenues or profitability of the Company beyond the Company’s capital invested in the Consolidated Funds. Moreover,

although the assets of the Consolidated Funds are consolidated onto our balance sheet pursuant to U.S. GAAP, ultimately we do

not have recourse to such assets and such liabilities are generally non-recourse to us. Therefore, income or loss from the

Consolidated Funds generally does not impact the assets available to our common stockholders.

Expenses

Compensation and benefits. Compensation includes salaries, bonuses, equity-based compensation, and performance

payment arrangements. Bonuses are accrued over the service period to which they relate.

We recognize as compensation expense the portion of performance allocations and incentive fees that are due to our

employees, senior Carlyle professionals, advisors, and operating executives in a manner consistent with how we recognize the

performance allocations and incentive fee revenue. These amounts are accounted for as compensation expense in conjunction

with the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued

compensation and benefits liability. Compensation in respect of performance allocations and incentive fees is paid when the

related performance allocations and incentive fees are realized, and not when such performance allocations and incentive fees

are accrued. The funds do not have a uniform allocation of performance allocations and incentive fees to our employees, senior

Carlyle professionals, advisors, and operating executives. However, we generally allocate a range of 60% to 70% of

performance allocations and incentive fees to our employees.

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

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

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

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

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

this Annual Report on Form 10-K for additional information. Compensation charges associated with all equity-based

compensation grants are excluded from Fee Related Earnings and Distributable Earnings.

We may hire additional individuals and overall compensation levels may correspondingly increase, which could result

in an increase in compensation and benefits expense. As a result of prior acquisitions, we have charges associated with

contingent consideration taking the form of earn-outs and profit participation, some of which are reflected as compensation

expense.

General, administrative and other expenses. General, administrative and other expenses include occupancy and

equipment expenses and other expenses, which consist principally of professional fees, including those related to our global

regulatory compliance program, external costs of fundraising, travel and related expenses, communications and information

services, depreciation and amortization (including intangible asset amortization and impairment), bad debt expense, and foreign

currency transactions. We expect that general, administrative and other expenses will vary due to infrequently occurring or

unusual items, such as impairment of intangible assets or lease right-of-use assets and expenses or insurance recoveries

associated with litigation and contingencies. Also, in periods of significant fundraising, to the extent that we use third parties to

assist in our fundraising efforts, our general, administrative and other expenses may increase accordingly. Similarly, our

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

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

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

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

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

Income taxes. Income taxes are accounted for using the asset and liability method of accounting. Under this method,

deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying

amounts of assets and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred tax

assets and liabilities of a change in tax rates is recognized in income in the period in which the change is enacted. Deferred tax

assets are reduced by a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be

realized.

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Non-controlling Interests in Consolidated Entities. Non-controlling interests in consolidated entities represent the

component of equity in consolidated entities not held by us. These interests are adjusted for general partner allocations.

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

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

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

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

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

Non-GAAP Financial Measures

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

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

segments. We also use DE in our budgeting, forecasting, and the overall management of our segments. We believe that

reporting DE is helpful to understanding our business and that investors should review the same supplemental financial measure

that management uses to analyze our segment performance. DE is intended to show the amount of net realized earnings without

the effects of consolidation of the Consolidated Funds. DE is derived from our segment reported results and is an additional

measure to assess performance.

Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S.

GAAP in that it includes certain tax expenses associated with certain foreign performance revenues (composed of performance

allocations and incentive fees), and does not include unrealized performance allocations and related compensation expense,

unrealized principal investment income, equity-based compensation expense, net income (loss) attributable to non-Carlyle

interest in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items that affect

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

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

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

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

charges associated with earn-outs and contingent consideration including gains and losses associated with the estimated fair

value of contingent consideration issued in conjunction with acquisitions or strategic investments, impairment charges

associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract

terminations and employee severance, and non-recurring items that affect period-to-period comparability and are not reflective

of the Company’s operating performance. We believe the inclusion or exclusion of these items provides investors with a

meaningful indication of our core operating performance. This measure supplements and should be considered in addition to

and not in lieu of the results of operations discussed further under “—Consolidated Results of Operations” prepared in

accordance with U.S. GAAP.

Fee Related Earnings. Fee Related Earnings, or “FRE,” is a component of DE and is used to assess the ability of the

business to cover base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized

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

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

expense. 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

We monitor certain operating metrics that are common to the asset management industry.

Fee-earning Assets under Management. Fee-earning assets under management or Fee-earning AUM refers to the

assets we manage or advise from which we derive recurring fund management fees. Our Fee-earning AUM is generally based

on one of the following, once fees have been activated:

(a)the amount of limited partner capital commitments, generally for carry funds where the original investment period

has not expired and for AlpInvest carry funds during the commitment fee period (see “Fee-earning AUM based on

capital commitments” in the table below for the amount of this component at each period);

(b)the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-

investment vehicles where the original investment period has expired (see “Fee-earning AUM based on invested

capital” in the table below for the amount of this component at each period);

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

defined in the fund indentures (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions)

as of the quarterly cut-off date;

(d)the external investor portion of the net asset value of certain carry funds and evergreen products (see “Fee-earning

AUM based on net asset value” in the table below for the amount of this component at each period);

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

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

(f)the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending

products, excluding cash and cash equivalents for one of our business development companies (included in “Fee-

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

(g)the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee

period has expired and certain carry funds where the investment period has expired, (included in “Fee-earning

AUM based on fair value and other” in the table below).

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

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

(1)Ending balances as of December 31, 2025 and 2024 exclude $16.8 billion and $22.8 billion, respectively, of pending Fee-earning AUM

for which fees have not yet been activated.

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

(1)Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on

commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are based

on invested capital, the fee-earning collateral balance of new CLO issuances, reinsurance and other transactions at Fortitude, as well as

gross subscriptions in vehicles for which management fees are based on net asset value. Inflows exclude fundraising amounts during the

period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM.

(2)Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair

value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has

expired during the period, reductions for funds that are no longer calling for fees, gross redemptions in our open-end funds, and outflows

from our liquid credit products. Distributions for funds earning management fees based on commitments during the period do not affect

Fee-earning AUM.

(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower

of cost or fair value and net asset value, activity of funds with fees based on gross asset value, and changes in the fair value of Fortitude’s

general account assets covered by the strategic advisory services agreement.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Refer to “—Segment Analysis” for a detailed discussion by segment of the activity affecting Fee-earning AUM for

each of the periods presented by segment.

Assets under Management. Assets under management or “AUM” refers to the assets we manage or advise. Our AUM

generally equals the sum of the following:

(a)  the aggregate fair value of our carry funds and related co-investment vehicles, and separately managed accounts, plus

the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle commitments to

those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the terms of their capital

commitments to those funds and vehicles;

(b) the amount of aggregate collateral balance and principal cash at par or aggregate principal amount of the notes of our

CLOs and other structured products (inclusive of all positions);

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

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

(e) the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending products,

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.

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

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

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

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

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

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

invested.

For most of our Global Private Equity and Carlyle AlpInvest carry funds, total AUM includes the fair value of the

capital invested, whereas Fee-earning AUM includes the amount of capital commitments or the remaining amount of invested

capital, depending on whether the original investment period for the fund has expired. As such, Fee-earning AUM may be

greater than total AUM when the aggregate fair value of the remaining investments is less than the cost of those investments.

Our calculations of AUM and Fee-earning AUM may differ from the calculations of other asset managers. As a result,

these measures may not be comparable to similar measures presented by other asset managers. In addition, our calculation of

AUM (but not Fee-earning AUM) includes uncalled commitments to, and the fair value of invested capital in, our investment

funds from Carlyle and our personnel, regardless of whether such commitments or invested capital are subject to management

fees or performance allocations. Our calculations of AUM or Fee-earning AUM are not based on any definition of AUM or

Fee-earning AUM that is set forth in the agreements governing the investment funds that we manage or advise.

We generally use Fee-earning AUM as a metric to measure changes in the assets from which we earn recurring

management fees. Total AUM tends to be a better measure of our investment and fundraising performance as it reflects

investments at fair value plus available capital.

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

(1)Inflows generally reflects the impact of gross fundraising, reinsurance and other transactions at Fortitude, and corporate acquisitions

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

(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 products, outflows from our liquid credit products, and the expiration of available

capital.

(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and

related co-investment vehicles, and separately managed accounts, as well as the net impact of fees, expenses and non-investment income,

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

covered by the strategic advisory services agreement, and other changes in AUM.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

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

each of the periods presented.

Available Capital. “Available Capital” refers to the amount of capital commitments available to be called for

investments, which may be reduced for equity invested that is funded via a fund credit facility and expected to be called from

investors at a later date, plus any additional assets/liabilities at the fund level other than active investments. Amounts previously

called may be added back to available capital following certain distributions. “Expired Available Capital” occurs when a fund

has passed the investment and follow-on periods and can no longer invest capital into new or existing deals. Any remaining

Available Capital, typically a result of either recycled distributions or specific reserves established for the follow-on period that

are not drawn, can only be called for fees and expenses and is therefore removed from the Total AUM calculation.

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

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

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

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

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

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

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

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

Private Markets (“CAPM”) and Carlyle AlpInvest Private Markets Secondaries (“CAPS”) funds, and (f) certain other structured

credit products. As of December 31, 2025, our total AUM and Fee-earning AUM included $115.4 billion and $110.9 billion,

respectively, of Perpetual Capital. Our Perpetual Capital total AUM and Fee-earning AUM, exclusive of assets managed under

the strategic advisory services agreement with Fortitude, was $35.0 billion and $30.5 billion, respectively, as of December 31,

2025.

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

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

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

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

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

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treated as fee related performance revenues are excluded from these metrics. As of December 31, 2025, our total AUM included

$235.5 billion of Performance Fee Eligible AUM.

Consolidation of Certain Carlyle Funds

The Company consolidates all entities that it controls either through a majority voting interest or as the primary

beneficiary of variable interest entities. The entities we consolidate are referred to collectively as the Consolidated Funds in our

consolidated financial statements. 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 support our operating activities, and similarly,

the liabilities of the Consolidated Funds are non-recourse to us. As of December 31, 2025, our Consolidated Funds represent

approximately 4% of our AUM; 2% of our management fees; and 4% of our total investment income or loss on an

unconsolidated basis for the year ended December 31, 2025.

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

funds we advise. However, we consolidate certain CLOs and certain other funds that we advise, and the number of funds we are

required to consolidate has been increasing as a result of the impacts of capital from our balance sheet invested in new products

and our indirect interest in funds through our investment in Fortitude (see Note 4, Investments). As of December 31, 2025, the

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

$11.0 billion of total assets. Additionally, the Investments of Consolidated Funds included approximately $1.1 billion related to

investments that have been bridged to investment funds in our Global Private Equity segment.

Generally, the consolidation of the Consolidated Funds has a gross-up effect on our assets, liabilities and cash flows

but has no net effect on the net income attributable to the Company. The majority of the net economic ownership interests of the

Consolidated Funds are reflected as non-controlling interests in consolidated entities in the consolidated financial statements.

However, in certain Consolidated Funds, particularly those where we have elected to invest additional amounts or bridge

investments in new investment areas, the non-controlling interests are less significant and may impact net income attributable to

the common stockholders.

The Consolidated Funds are not the same entities in all periods presented. The Consolidated Funds in future periods

may change due to changes in fund terms, formation of new funds, and terminations of funds. Because only a small portion of

our funds are consolidated, the performance of the Consolidated Funds is not necessarily consistent with or representative of the

combined performance trends of all of our funds.

For further information on our consolidation policy and the consolidation of certain funds, see Note 2, Summary of

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

Consolidated Results of Operations

The following table and discussion sets forth information regarding our consolidated results of operations for the years

ended December 31, 2025 and 2024. Our consolidated financial statements have been prepared on substantially the same basis

for all historical periods presented; however, the Consolidated Funds are not the same entities in all periods shown due to

changes in fund terms and the creation and termination of funds. As further described above, the consolidation of these funds

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

Consolidated Funds, and net investment income (losses) of Consolidated Funds in the year that the fund is initially

consolidated. The consolidation of these funds had no effect on net income attributable to the Company for the periods

presented.

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NM - Not meaningful.

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Revenues

Fund management fees. Fund management fees increased $208.5 million, or 10%, for the year ended December 31,

2025 compared to 2024, primarily due to the following:

(1)The year ended December 31, 2025 included approximately $19 million of catch-up subordinated management fees in certain aviation

funds.

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

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

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

No fund generated over 10% of total fund management fees in any of the periods presented. In 2025, average Fee-

earning AUM in our Carlyle AlpInvest and Global Credit segments grew approximately 21% and 5%, respectively, relative to

the average balances in 2024, while average Fee-earning AUM in 2025 for Global Private Equity fell by 3% relative to the

average balance in 2024. As a result, Fund management fees increased in Carlyle AlpInvest and Global Credit, while Global

Private Equity decreased, which was due in part to smaller buyout fund sizes in our corporate private equity strategy and step-

downs in rate or basis as well as realizations, partially offset by the activation of fees in certain products in our Global Private

Equity segment. The increase in catch-up management fees for the year ended December 31, 2025 was primarily attributable to

our Carlyle AlpInvest segment. We expect catch-up management fees associated with our Carlyle AlpInvest segment to

decrease in 2026 compared to 2025, as fundraising for our most recent vintage of secondaries & portfolio finance funds

concluded during 2025.

Fund management fees included transaction and portfolio advisory fees, net of rebate offsets, of $206.0 million and

$152.5 million for the years ended December 31, 2025 and 2024, respectively. These fees primarily comprise capital markets

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

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

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

market trends.

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Investment income. Investment income decreased $0.9 billion for the year ended December 31, 2025 compared to

2024, which included a decrease in Performance allocations of $0.8 billion and a decrease in Principal investment income (loss)

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

Performance allocations. Performance allocations by segment for years ended December 31, 2025 and 2024

comprised the following:

Performance allocations for the year ended December 31, 2025 included:

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

CP VII, CP VIII, and our infrastructure and natural resources funds, partially offset by the reversal of Performance

allocation accruals in CAP V driven by the impact of preferred returns.

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

V, CCOF II, and CCOF III.

•In the Carlyle AlpInvest segment, Performance allocation accruals were primarily driven by appreciation in ASF

VIII, ACF VIII, and ASF VII.

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

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

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

accruals in CEP V reflecting portfolio depreciation.

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

opportunistic credit funds.

•In the Carlyle AlpInvest segment, Performance allocation accruals were primarily driven by appreciation in our

secondaries & portfolio finance and co-investment funds.

See “—Trends Affecting Our Business” for further discussion on the macroeconomic, geopolitical and industry

landscape, and our investment activity.

Principal investment income. The decrease in Principal investment income for the year ended December 31, 2025

compared to 2024 was primarily attributable to an impairment charge of $92.5 million and a $38.0 million reduction in NGP

accrued carry, both related to the restructuring of the terms of our strategic investment in NGP (see Note 4, Investments, for

more information), and investment losses from our CLOs in 2025 compared to gains in 2024. These were partially offset by an

increase in investment income (loss) from our other Global Credit products primarily driven by our BDCs and an increase in

investment income related to our Carlyle AlpInvest products.

Expenses

Compensation and benefits. Total compensation and benefits decreased $498.7 million for the year ended

December 31, 2025 compared to 2024, primarily attributable to a decrease in Performance allocations and incentive fee related

compensation of $425.2 million, which was primarily attributable to the impact of the decrease in Performance allocations on

which Performance allocations and incentive fee related compensation is based, and a decrease in Equity-based compensation

of $93.2 million, which was primarily attributable to lower amortization on performance-based stock awards, partially offset by

additional equity awards granted in February 2025. In December 2025, we granted 2.7 million restricted stock units that are

subject to vesting based on the achievement of stock price performance conditions over a service period of four years. The

grant-date fair value of these performance-based stock awards was approximately $136 million. As a result, Equity-based

compensation is expected to be higher in 2026 and such expense is incurred regardless of whether the stock price performance

conditions are achieved.

General, administrative and other expenses. General, administrative and other expenses increased $118.7 million for

the year ended December 31, 2025 compared to 2024, primarily attributable to an increase in foreign currency remeasurement

adjustments of $21.7 million driven by the movement of EUR and GBP relative to USD, an increase in liabilities for litigation-

related contingencies, regulatory examination and inquiries, and other matters of $15.0 million, an increase in professional fees,

as well as smaller increases in external fundraising, marketing, travel, and information technology costs, and other expenses

associated with growing the business.

Interest and other expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds increased $59.4

million for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in interest expense on loans

payable and other expenses attributable to a new collateralized fund obligation vehicle in our Carlyle AlpInvest segment that

was consolidated in 2025.

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

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

Net investment income of Consolidated Funds for the year ended December 31, 2025 primarily included net gains of

$308.9 million across various Carlyle AlpInvest and Global Private Equity Consolidated Funds, partially offset by unrealized

losses of $178.2 million related to a consolidated infrastructure fund, of which approximately $150 million is attributable to the

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Company. Net investment income of Consolidated Funds for the year ended December 31, 2025 also reflected $12.8 million in

losses related to our CLOs.

Provision for income taxes. For the years ended December 31, 2025 and 2024, our provision for income taxes was

$214.5 million and $302.6 million, respectively, and the Company’s effective tax rates were 18.5% and 21.7%, respectively.

The effective tax rate for the years ended December 31, 2025 and 2024 primarily comprised the 21% U.S. federal corporate

income tax rate plus the impact of U.S. state and foreign corporate income tax provision. The effective tax rate for the year

ended December 31, 2025 was partially offset by net excess tax benefits on Equity-based compensation and non-controlling

interest. See Note 10, Income Taxes, to the consolidated financial statements for more information on our provision for income

taxes.

As of December 31, 2025 and 2024, the Company had federal, state, local, and foreign taxes payable of $141.4 million

and $46.2 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities in

the accompanying consolidated balance sheets.

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

controlling interests in consolidated entities was $136.0 million and $70.7 million for the years ended December 31, 2025 and

2024, respectively. These amounts are primarily related to the net earnings of the Consolidated Funds attributable to the related

fund’s limited partners or CLO investors for each period, as well as net earnings from our insurance solutions business and

certain other products that are allocated to certain third-party investors. These amounts also reflect the net income attributable to

non-controlling interests in carried interest and giveback obligations. The net income (loss) of our Consolidated Funds, after

eliminations, attributable to non-controlling interests was $109.8 million and $8.7 million for the years ended December 31,

2025 and 2024, respectively.

Non-GAAP Financial Measures

The following tables set forth information in the format used by management when making resource deployment

decisions and in assessing performance of our segments. These Non-GAAP financial measures are presented for the years

ended December 31, 2025 and 2024. Our Non-GAAP financial measures exclude the effects of unrealized performance

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

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

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

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

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

actions, infrequently occurring or unusual events, and non-recurring items that affect period-to-period comparability and are not

reflective of the Company's operating performance.

The following table shows our total segment DE and FRE for the years ended December 31, 2025 and 2024.

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The following table sets forth our total segment revenues for the years ended December 31, 2025 and 2024.

The following table sets forth our total segment expenses for the years ended December 31, 2025 and 2024.

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

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

Distributable Earnings and to Fee Related Earnings.

(1)Equity-based compensation for the years ended December 31, 2025 and 2024 includes amounts presented in principal investment

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

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

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

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

(4)Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net

of related compensation expense and unrealized principal investment income, which are excluded from our Non-GAAP results,

(ii) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in

the Non-GAAP results, (iii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from

the Non-GAAP results, (iv) the reclassification of NGP performance revenues, which are included in investment income in the

U.S. GAAP financial statements, (v) the reclassification of fee related performance revenues, which are included in fund level fee

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

revenues. Adjustments to principal investment income (loss) also include the reclassification of earnings for the investment in

NGP Management and its affiliates to the appropriate operating captions for the Non-GAAP results, and the exclusion of charges

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

Distributable Earnings for our reportable segments are as follows:

Segment Analysis

Discussed below is our DE and FRE for our segments for the periods presented. Our segment information is reflected

in the manner used by our chief operating decision maker to make operating and compensation decisions, assess performance,

and allocate resources.

For segment reporting purposes, revenues and expenses are presented on a basis that deconsolidates our Consolidated

Funds. As a result, segment revenues from management fees, realized performance revenues and realized principal investment

income (loss) are different than those presented on a consolidated U.S. GAAP basis because these revenues recognized in

certain segments are received from Consolidated Funds and are eliminated in consolidation when presented on a consolidated

U.S. GAAP basis. Furthermore, segment expenses are different than related amounts presented on a consolidated U.S. GAAP

basis due to the exclusion of fund expenses that are paid by the Consolidated Funds.

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Global Private Equity

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

(1)For purposes of presenting our results of operations for this segment, our earnings from our investments in NGP are presented in the respective operating

captions.

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Distributable Earnings

Distributable Earnings decreased $66.5 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2025:

Realized net performance revenues. Realized net performance revenues decreased $31.9 million for the year ended

December 31, 2025 as compared to 2024. For the year ended December 31, 2025, realized net performance revenues of $305.2

million were primarily driven by CPP II, NGP XI, CP VI, CETP IV, and CAP IV. For the year ended December 31, 2024,

realized net performance revenues of $337.1 million were primarily driven by CAP IV, CIEP I, and CEOF II.

Fee Related Earnings

Fee Related Earnings decreased $37.8 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2025:

Fee revenues. Total Fee revenues decreased $27.9 million for the year ended December 31, 2025 as compared to 2024,

due to the following:

The decrease in Fund management fees for the year ended December 31, 2025 as compared to 2024 was primarily due

to step-downs in management fee basis on CEP V and CRP IX in the fourth quarter of 2024, a step-down in the management

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fee basis of CIEP II in the second quarter of 2025, as well as net investment realizations in funds on which management fees are

based on invested capital, including the sale of the remaining assets in our power funds and other asset sales in funds such as

CP VII and NGP XI. These were partially offset by the activation of fees in CRP X, which turned on fees on April 1, 2025, as

well as CJP V, which turned on fees in the fourth quarter of 2024. The impact of smaller buyout funds in our corporate private

equity strategy is resulting in, and may continue to result in, lower fund management fees relative to prior periods.

The increase in Portfolio advisory and transaction fees, net and other for the year ended December 31, 2025 as

compared to 2024 was primarily due to an increase in transaction fees related to the acquisition of a healthcare investment

across our U.S., Europe, and Asia buyout funds.

Cash-based compensation and benefits expense. Cash-based compensation and benefits expense decreased $25.6

million, for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in the portion of

compensation being derived from Realized performance revenues related compensation as well as lower headcount in the

segment.

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

$32.9 million for the year ended December 31, 2025 as compared to 2024, primarily attributable to an increase in professional

fees.

Fee-earning AUM

Fee-earning AUM is presented below for each period together with the components of change during each respective

period.

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

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

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

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

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

(1)Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on

commitments were activated during the period, and the fee-earning commitments invested in vehicles for which management fees are

based on invested capital. Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which are

referenced as Pending Fee-earning AUM.

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(2)Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair

value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has

expired during the period, and reductions for funds that are no longer calling for fees. Realizations for funds earning management fees

based on commitments during the period do not affect Fee-earning AUM.

(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower

of cost or fair value.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Fee-earning AUM of $101.4 billion at December 31, 2025 increased 3% from $98.0 billion at December 31, 2024. The

net increase was due to:

•Inflows of $12.7 billion, primarily driven by the activation of management fees in CRP X, additional fee-paying

capital raised in CAP VI, and investments in CPI and CAP V, which charge fees on invested capital; and

•Positive foreign exchange activity of $1.5 billion predominantly reflecting the translation of our EUR-denominated

funds to USD.

Offsetting these increases were:

•Outflows of $10.7 billion, which were driven by realizations in funds that charge fees on invested capital, notably in

the NGP energy funds and our U.S. buyout, Europe buyout, Asia buyout, and U.S. real estate funds, as well as the

expiration of fees in CP VI during the period and a fee basis step-down in CIEP II.

Total AUM

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

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

translation at the average quarterly rate.

(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 products, and the expiration of available capital.

(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related

co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, and other

changes in AUM.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Total AUM was $163.5 billion at December 31, 2025, flat compared to $163.5 billion at December 31, 2024. This was

due to:

•Inflows of $7.5 billion, driven by new capital raised in our U.S. real estate, Asia buyout, life sciences, and

infrastructure funds, as well as the NGP energy funds;

•Market activity of $6.9 billion driven by appreciation in CP VII ($2.1 billion), CP VIII ($1.7 billion), CGP II ($0.7

billion), and CJP IV ($0.6 billion), partially offset by depreciation in CEP V ($1.1 billion); and

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•Positive foreign exchange activity of $2.6 billion predominantly reflecting the translation of our EUR-denominated

funds to USD.

Offsetting these increases were:

•Outflows of $17.1 billion, driven by realizations across the segment, notably in our U.S. buyout, power, U.S. real

estate, international energy, and Europe technology funds, as well as the NGP energy funds.

Fund Performance Metrics

Fund performance information as of December 31, 2025 for our significant investment funds, which we generally

define as those with at least $1.0 billion in capital commitments, is included throughout this discussion and analysis to facilitate

an understanding of our results of operations for the periods presented. The fund return information reflected in this discussion

and analysis is not indicative of the performance of The Carlyle Group Inc. and is also not necessarily indicative of the future

performance of any particular fund. An investment in The Carlyle Group Inc. is not an investment in any of our funds. There

can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. See Part I, Item 1A

“Risk Factors—Risks Related to Our Business Operations—Risks Related to the Assets We Manage—The historical returns

attributable to our funds, including those presented in this Annual Report on Form 10-K, should not be considered as indicative

of the future results of our funds or of our future results or of any returns expected on an investment in our common stock.”

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

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

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

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

accrued fee related performance revenues for CPI as of December 31, 2025.

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

use of fund-level credit facilities.

(1)The fund step-down date represents the contractual step-down date under the respective fund agreements for funds on

which the fee basis step-down has not yet occurred. Funds without a listed Fee Initiation Date and Step-down Date have

not yet initiated fees.

(2)All amounts shown represent total capital commitments as of December 31, 2025. Certain of our recent vintage funds

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

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

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

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

escrow values for realized investments.

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

interest, divided by cumulative invested capital.

(7)Gross Internal Rate of Return (“Gross IRR”) represents an annualized return on Limited Partner invested capital, based

on contributions, distributions and unrealized fair value as of the reporting date, before the impact of management fees,

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

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

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

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

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

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

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

but is negative as of reporting period end.

(9)Net Internal Rate of Return (“Net IRR”) represents an annualized return on Limited Partner invested capital, based on

contributions, distributions and unrealized fair value as of the reporting date, after the impact of all management fees,

partnership expenses and carried interest, including current accruals. Net IRR is calculated based on the timing of

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

fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that

of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a blended

Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for multiple funds are

calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited

Partner who invested sequentially in each fund.

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

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

interest.

(12)An investment is considered realized when the investment fund has completely exited, and ceases to own an interest in,

the investment. An investment is considered partially realized when the total amount of proceeds received in respect of

such investment, including dividends, interest or other distributions and/or return of capital, represents at least 85% of

invested capital and such investment is not yet fully realized. Because part of our value creation strategy involves

pursuing best exit alternatives, we believe information regarding Realized/Partially Realized MOIC and Gross IRR,

when considered together with the other investment performance metrics presented, provides investors with meaningful

information regarding our investment performance by removing the impact of investments where significant realization

activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR have limitations as measures of

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

do not include the performance of earlier stage and other investments that do not satisfy the criteria provided above. The

exclusion of such investments will have a positive impact on Realized/Partially Realized MOIC and Gross IRR in

instances when the MOIC and Gross IRR in respect of such investments are less than the aggregate MOIC and Gross

IRR. Our measurements of Realized/Partially Realized MOIC and Gross IRR may not be comparable to those of other

companies that use similarly titled measures.

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

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

CAGP IV, ABV 8, ABV 9, ACCD 2, ACCD 3, and CCD-CIF.

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

certain other stand-alone investments arranged by us: CP I, CP II, CP III, CP IV, CEP I, CEP II, CAP I, CAP II, CAP

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

CAGP III, CEOF I, Mexico, and CSABF.

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

where there are outstanding escrow balances or undistributed proceeds.

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

period spot rate.

(17)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.

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

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

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

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

CRSEF.

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

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

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Global Credit

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

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Distributable Earnings

Distributable Earnings increased $103.7 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2025:

Realized net performance revenues. Realized net performance revenues increased $25.5 million for the year ended

December 31, 2025 as compared to 2024, primarily due to an increase in realized net performance revenues generated by

CCOF II.

Realized principal investment income. Realized principal investment income increased $13.2 million for the year

ended December 31, 2025 as compared to 2024, primarily attributable to an increase in dividend income of $23.6 million from

our equity method investment in Carlyle FRL, partially offset by lower realized principal investment income from our CLOs.

Fee Related Earnings

Fee Related Earnings increased $69.0 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2025:

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Fee Revenues. Fee revenues increased $103.9 million for the year ended December 31, 2025 as compared to 2024, due

to the following:

The increase in Fund management fees for the year ended December 31, 2025 as compared to 2024 was primarily

driven by an increase in management fees from our direct lending business, CTAC, and CCOF III. The increase in Fund

management fees was also impacted by the receipt of approximately $19 million of catch-up subordinated management fees in

certain aviation funds during the year ended December 31, 2025, due in part to the collection of insurance proceeds and in part

due to the sale of collateral in those vehicles. These increases were partially offset by lower management fees from our liquid

credit business.

The increase in Portfolio advisory and transaction fees, net, and other fees for the year ended December 31, 2025 as

compared to 2024 was primarily driven by an increase in capital markets fees. The recognition of capital markets fees can be

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

on our investment activity and broader market trends.

Cash-based compensation and benefits expense. Cash-based compensation and benefits expense increased $31.8

million for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in accrued bonuses related to

capital markets fees, higher headcount, and higher fee related performance revenue compensation, partially offset by an

increase in the portion of compensation being derived from Realized performance revenues related compensation.

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

$0.1 million for the year ended December 31, 2025 as compared to 2024, primarily due to a decrease in external fundraising

costs, offset by an increase in other operating costs such as IT and travel-related costs.

Fee-earning AUM

Fee-earning AUM is presented below for each period together with the components of change during each respective

period.

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

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

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

based on gross asset value.

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

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

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

(1)Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on

commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are based

on invested capital, the fee-earning collateral balance of new CLO issuances, reinsurance and other transactions at Fortitude, and gross

subscriptions in our vehicles for which management fees are based on net asset value.

(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 products, and

outflows from our liquid credit products. Realizations for funds earning management fees based on commitments during the period do

not affect Fee-earning AUM.

(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in funds or vehicles based on the

lower of cost or fair value or net asset value, activity of funds with fees based on gross asset value, and changes in the fair value of

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

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Fee-earning AUM was $169.5 billion at December 31, 2025, an increase of 10% compared to $154.2 billion at

December 31, 2024. The net increase was due to:

•Inflows of $26.8 billion, which were driven by activity at Fortitude and capital deployment across the platform,

including the closing of seven U.S. CLOs and two European CLOs.

Offsetting these increases were:

•Outflows of $13.9 billion, which were driven by outflows from our liquid credit products and realizations in our

opportunistic credit and aviation funds.

Total AUM

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

(1)Inflows generally reflects the impact of gross fundraising, as well as reinsurance and other transactions at Fortitude during the period.

For funds or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate.

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(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 products, outflows from our liquid credit products, and the expiration of available

capital.

(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related

co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, change in

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

strategic advisory services agreement, and other changes in AUM.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Total AUM was $211.3 billion at December 31, 2025, an increase of 10% compared to $192.4 billion at December 31,

2024. The net increase was due to:

•Inflows of $28.3 billion, which were driven by the closing of seven U.S. CLOs and two European CLOs, as well as

capital raised in our asset-backed finance, cross-platform credit, aviation, and opportunistic credit products, and

more than $9 billion of inflows at Fortitude; and

•Positive market activity of $5.5 billion, which primarily reflected an increase in the fair value of our direct lending,

cross-platform credit, opportunistic credit, and asset-backed finance products, as well as an increase in the fair value

of assets covered by the Fortitude strategic advisory services agreement.

Offsetting these increases were:

•Outflows of $16.0 billion for the period, which were primarily in our liquid credit products, with additional activity

reflecting realizations across the platform, notably in our asset-backed finance and aviation products.

Fund Performance Metrics

Fund performance information for certain of our Global Credit funds is included throughout this discussion and

analysis to facilitate an understanding of our results of operations for the periods presented. The fund return information

reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group Inc. and is also not

necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group Inc. is not an

investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will

achieve similar returns. See Part I, Item 1A “Risk Factors—Risks Related to Our Business Operations—Risks Related to the

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

10-K, should not be considered as indicative of the future results of our funds or of our future results or of any returns expected

on an investment in our common stock.”

The following table reflects the performance of our significant carry funds in our Global Credit business. See Part I,

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

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

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

of calculating the fund MOIC.

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

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

escrow values for realized investments.

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

interest, divided by cumulative invested capital.

(5)Gross Internal Rate of Return (“Gross IRR”) represents an annualized return on Limited Partner invested capital, based

on contributions, distributions and unrealized fair value as of the reporting date, before the impact of management fees,

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

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

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

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

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

(6)Net Internal Rate of Return (“Net IRR”) represents an annualized return on Limited Partner invested capital, based on

contributions, distributions and unrealized fair value as of the reporting date, after the impact of all management fees,

partnership expenses and carried interest, including current accruals. Net IRR is calculated based on the timing of

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

fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ from that

of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a blended

Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for multiple funds are

calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a Limited

Partner who invested sequentially in each fund.

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

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

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

but is negative as of reporting period end.

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

stand-alone investments arranged by us: SASOF IV, SASOF V, CAPF VII, CICF, CAF, CALF, CCOF III - Unlevered,

and CCOF III PSV.

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

certain other stand-alone investments arranged by us: CSP I, CSP II, CSP III, CEMOF I, CEMOF II, CSC, CMP I,

CMP II, SASOF II, and CASCOF.

(11)The fund step-down date represents the contractual step-down date under the respective fund agreements for funds on

which the fee basis step-down has not yet occurred. Funds without a listed Fee Initiation Date and Step-down Date have

not yet initiated fees.

(12)All amounts shown represent total capital commitments as of December 31, 2025. Certain of our recent vintage funds

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

excludes $150 million in capital committed by a CCOF II investor to a side vehicle. The CCOF III platform, which

includes CCOF III - Levered, CCOF III - Unlevered, and CCOF III PSV, collectively has $5.7 billion of committed

capital.

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

where there are outstanding escrow balances or undistributed proceeds.

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Carlyle AlpInvest

The following table presents our results of operations for our Carlyle AlpInvest segment:

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Distributable Earnings

Distributable Earnings increased $128.5 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Distributable Earnings for the year ended December 31, 2025:

Realized principal investment income. Realized principal investment income increased $31.0 million for the year

ended December 31, 2025 as compared to 2024, primarily driven by proceeds from our investment in the CAPM funds.

Fee Related Earnings

Fee Related Earnings increased $100.4 million for the year ended December 31, 2025 as compared to 2024. The

following table provides the components of the changes in Fee Related Earnings for the year ended December 31, 2025:

Fee Revenues. Fee revenues increased $162.9 million for the year ended December 31, 2025 as compared to 2024,

primarily due to an increase in Fund management fees of $120.5 million and an increase in Fee related performance revenues of

$42.3 million. The increase in Fund management fees was primarily driven by the impact of fundraising in our most recent

vintage of secondaries & portfolio finance funds and to a lesser extent an increase in Fund management fees from CAPM. Fund

management fees for the year ended December 31, 2025 included catch-up management fees of $55.7 million, an increase of

$42.4 million compared to 2024. Fundraising for our most recent vintage of secondaries & portfolio finance funds concluded in

the third quarter of 2025; therefore, related catch-up management fees will not recur next year. The increase in Fee related

performance revenues was attributable to CAPM, driven by its growing capital base and performance.

Cash-based compensation and benefits expense. Cash-based compensation and benefits expense increased $34.2

million for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in headcount and an increase

in compensation associated with fee related performance revenues, partially offset by an increase in the portion of

compensation being derived from Realized performance revenues related compensation.

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

$26.9 million for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in external fundraising

costs and an increase in partnership expenses paid by the Company on behalf of certain funds.

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Fee-earning AUM

Fee-earning AUM is presented below for each period together with the components of change during each respective

period.

The table below breaks out Fee-earning AUM by its respective components during the period.

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

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

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

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

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

(1)Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on

commitments were activated during the period, fee-earning commitments invested in vehicles for which management fees are based on

invested capital, and gross subscriptions in our vehicles for which management fees are based on net asset value. Inflows exclude

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

(2)Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair

value, changes in basis for funds where the investment period, weighted-average investment period, or commitment fee period has

expired during the period, and reductions for funds that are no longer calling for fees. Distributions for funds earning management fees

based on commitments during the period do not affect Fee-earning AUM.

(3)Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower

of cost or fair value and net asset value.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Fee-earning AUM was $66.0 billion at December 31, 2025, an increase of 27% compared to $52.1 billion at

December 31, 2024. The net increase was due to:

•Inflows of $16.0 billion, which were driven by fee-paying capital raised and investment activity across all strategies,

notably in our secondaries & portfolio finance, CAPM, and CAPS funds; and

•Positive foreign exchange activity of $2.1 billion, primarily from the translation of our EUR-denominated funds to

USD.

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Offsetting these increases were:

•Outflows of $5.3 billion, which were driven by realizations across all strategies in funds that charge fees on invested

capital.

Total AUM

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

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

translation at the average quarterly rate.

(2)Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts, as well as the

expiration of available capital.

(3)Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related

co-investment vehicles and separately managed accounts, the net impact of fees, expenses and non-investment income, as well as other

changes in AUM.

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

funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the

period end.

Total AUM was $102.0 billion as of December 31, 2025, an increase of 20% compared to $85.1 billion as of

December 31, 2024. The net increase was due to:

•Inflows of $17.9 billion, which reflected fundraising across the platform, notably in our secondaries & portfolio

finance and co-investment strategies, as well as the CAPM and CAPS funds;

•Market appreciation of $5.6 billion, which was driven by our secondaries & portfolio finance and co-investment

strategies; and

•Positive foreign exchange activity of $3.6 billion, primarily from the translation of our EUR-denominated funds to

USD.

Offsetting these increases were:

•Outflows of $10.2 billion, which reflected realizations across all strategies.

Fund Performance Metrics

The fund return information reflected in this discussion and analysis is not indicative of the performance of The

Carlyle Group Inc. and is also not necessarily indicative of the future performance of any particular fund. An investment in The

Carlyle Group Inc. is not an investment in any of our funds. There can be no assurance that any of our funds or our other

existing and future funds will achieve similar returns. See Part I, Item 1A “Risk Factors—Risks Related to Our Business

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

presented in this Annual Report on Form 10-K, should not be considered as indicative of the future results of our funds or of

our future results or of any returns expected on an investment in our common stock.”

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The following table reflects the performance of our significant funds in our Carlyle AlpInvest business. We also

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

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

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

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

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

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

Carlyle AlpInvest Private Markets Secondaries (“CAPS”); and (e) LP co-investment vehicles managed by AlpInvest.

As of December 31, 2025, these excluded portfolios amounted to approximately $16.8 billion of AUM in the

aggregate.

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

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

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

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

interest.

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

interest, divided by cumulative invested capital.

(6)Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner

invested capital based on investment contributions, distributions and unrealized value of the underlying investments,

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

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(7)Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner

invested capital based on investment contributions, distributions and unrealized value of the underlying investments,

after management fees, expenses and carried interest. Fund level IRRs are based on aggregate Limited Partner cash

flows, and this blended return may differ from that of individual Limited Partners. As a result, certain funds may

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

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

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

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

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

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

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

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

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

make commitments over multiple years.

(9)Includes ASF VIII - SMAs, ACF IX - SMAs, AlpInvest Atom Fund, AlpInvest Atom Fund II, all mezzanine

investment portfolios, all ‘clean technology’ private equity investment portfolios, all strategic portfolio finance SMAs,

all AlpInvest senior portfolio lending SMAs, and any state-focused investment mandate portfolios.

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

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

meaningful but is negative as of reporting period end.

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

period spot rate.

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

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

no net accrued carry balance for MRE as of December 31, 2025.

Liquidity and Capital Resources

Historical Liquidity and Capital Resources

We have historically required limited capital resources to support the working capital and operating needs of our

business. Our management fees have largely covered our operating costs and all realized performance allocations, after

covering the related compensation, are available for distribution to stockholders. Approximately 97% of all capital

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

senior Carlyle professionals, advisors, and other professionals. We may elect to invest additional amounts in new investment

areas through increased investment in our funds, which we may subsequently transfer to newly developed products.

Our Sources of Liquidity

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

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

$1.0 billion of available capacity as of December 31, 2025. Although we may consider other financings to invest in growing our

business, such as the $800.0 million senior note offering during the year ended December 31, 2025, we believe these sources

will be sufficient to fund our capital needs for at least the next twelve months. We believe we will meet longer-term expected

future cash requirements and obligations through a combination of existing cash and cash equivalent balances, cash flow from

operations, accumulated earnings, and amounts available for borrowing from our senior revolving credit facility or other

financings.

Cash and cash equivalents. Cash and cash equivalents were approximately $2.0 billion at December 31, 2025.

However, a portion of this cash is allocated for specific business purposes, including, but not limited to: (i) performance

allocations and incentive fee related cash that has been received but not yet distributed as performance allocations and incentive

fee related compensation and amounts owed to non-controlling interests, (ii) proceeds received from realized investments that

are allocable to non-controlling interests, and (iii) regulatory capital.

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.

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

equivalents, and corporate treasury investments (if any) was approximately $1.8 billion as of December 31, 2025. This

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remaining amount will be used towards our primary liquidity needs, as outlined in the next section. This amount does not take

into consideration ordinary course of business payables and reserves for specific business purposes.

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

which was amended in May 2025 to extend the maturity date from April 29, 2027 to May 29, 2030. The Company’s borrowing

capacity is subject to the ability of the financial institutions in the banking syndicate to fulfill their respective obligations under

the revolving credit facility. Principal amounts outstanding under the amended and restated revolving credit facility accrue

interest, at the option of the borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed 0.50% per

annum, or (b) at SOFR (or similar benchmark rate for non-U.S. dollar borrowings) plus a 0.10% adjustment and an applicable

margin not to exceed 1.50% per annum (4.79% at December 31, 2025). As of December 31, 2025, there were no amounts

outstanding under the senior revolving credit facility.

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

defined in the amended and restated senior revolving credit facility) of at least $156.9 billion and a total leverage ratio of less

than 4.0 to 1.0, in each case, tested on a quarterly basis. Non-compliance with any of the financial or non-financial covenants

without cure or waiver would constitute an event of default under the senior revolving credit facility. An event of default

resulting from a breach of certain financial or non-financial covenants may result, at the option of the lenders, in an acceleration

of the principal and interest outstanding, and a termination of the senior revolving credit facility. The senior revolving credit

facility also contains other customary events of default, including defaults based on events of bankruptcy and insolvency,

nonpayment of principal, interest or fees when due, breach of specified covenants, change in control, and material inaccuracy of

representations and warranties.

Global Credit Revolving Credit Facility. Certain subsidiaries of the Company are parties to a revolving line of credit,

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

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

September 2027, and a second revolving line of credit with a capacity of $200 million, which was amended in August 2025 to

extend the maturity date to August 19, 2026.

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

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

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

applicable margin of 1.00%. As of December 31, 2025, there was no borrowing outstanding under the Global Credit Revolving

Credit Facility.

CLO Borrowings. For certain of our CLOs, the Company finances a portion of its investment in the CLOs through the

proceeds received from term loans and other financing arrangements with financial institutions or other financing arrangements.

The Company’s CLO borrowings outstanding were $350.1 million and $289.4 million at December 31, 2025 and 2024,

respectively. The CLO borrowings are secured by the Company’s investments in the respective CLO, have a general unsecured

interest in the Carlyle entity that manages the CLO and generally do not have recourse to any other Carlyle entity. As of

December 31, 2025, $330.7 million of these borrowings are secured by investments attributable to The Carlyle Group Inc. See

Note 6, Borrowings, to the consolidated financial statements for more information on our CLO borrowings.

Senior Notes. The Company and certain indirect finance subsidiaries of the Company have issued senior notes, on

which interest is payable semi-annually, as discussed below. The senior notes are unsecured and unsubordinated obligations of

the respective subsidiary and are fully and unconditionally guaranteed, jointly and severally, by the Company and each of the

Carlyle Holdings partnerships. The indentures governing each of the senior notes contain customary covenants that, among

other things, limit the issuers’ and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens

on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets.

The notes also contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in

part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the notes.

If a change of control repurchase event occurs, the notes are subject to repurchase at the repurchase price as set forth in the

notes.

3.500% Senior Notes. In September 2019, Carlyle Finance Subsidiary L.L.C. issued $425.0 million of 3.500% senior

notes due September 19, 2029 at 99.841% of par.

5.050% Senior Notes. In September 2025, the Company issued $800.0 million of 5.050% senior notes due September

19, 2035 at 99.767% of par.

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5.625% Senior Notes. In March 2013, Carlyle Holdings II Finance L.L.C. issued $400.0 million of 5.625% senior

notes due March 30, 2043 at 99.583% of par. In March 2014, an additional $200.0 million of these notes were issued at

104.315% of par and are treated as a single class with the already outstanding $400.0 million aggregate principal amount of

these notes.

5.650% Senior Notes. In September 2018, Carlyle Finance L.L.C. issued $350.0 million of 5.650% senior notes due

September 15, 2048 at 99.914% of par.

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

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

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

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

governing the Subordinated Notes contain customary covenants that, among other things, limit the issuers’ and the guarantors’

ability, subject to certain exceptions, to incur indebtedness ranking on a parity with the Subordinated Notes or indebtedness

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

subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all of their assets. The Subordinated Notes also

contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in part, at any

time and from time to time on or after June 15, 2026, prior to their stated maturity, at a redemption price equal to their principal

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

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

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

plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Subordinated Notes may be

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

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

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

excluding, the date of redemption.

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

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

collateralized by the assets held by the CLOs and the assets of one CLO may not be used to satisfy the liabilities of another.

This collateral consists of cash and cash equivalents, corporate loans, corporate bonds and other securities.

Realized Performance Allocation Revenues. Another source of liquidity we may use to meet our capital needs is the

realized performance allocation revenues generated by our investment funds. Performance allocations are generally realized

when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return.

For certain funds, performance allocations are realized once all invested capital and expenses have been returned to the fund’s

investors and the fund’s cumulative returns are in excess of the preferred return. Incentive fees earned on our CLO vehicles

generally are paid upon the dissolution of such vehicles.

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Our accrued performance allocations by segment as of December 31, 2025, gross and net of accrued giveback

obligations, are set forth below:

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

(2)Accrued performance allocations from NGP funds are presented as principal equity method investments in the consolidated balance sheets.

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

our carry funds and our other vehicles as of December 31, 2025, as well as the carry fund appreciation (depreciation), is set

forth below by segment (Dollars in millions):

(1)Appreciation/(Depreciation) represents unrealized gain/(loss) for the period on a total return basis before fees and expenses. The percentage of return

is calculated as: ending remaining investment fair market value plus net investment outflow (sales proceeds minus net purchases) minus beginning

remaining investment fair market value divided by beginning remaining investment fair market value. Amounts are fund only, and do not include

coinvestments.

Realized Principal Investment Income. Another source of liquidity we may use to meet our capital needs is the realized

principal investment income generated by our equity method investments and other principal investments. Principal investment

income is realized when we redeem all or a portion of our investment or when we receive or are due cash income, such as

dividends or distributions. Certain of the investments attributable to The Carlyle Group Inc. (excluding certain general partner

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

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Investments as of December 31, 2025 consist of the following:

(1)Represents our total investment in NGP. See Note 4, Investments, to the consolidated financial statements.

Our investments as of December 31, 2025 can be further attributed as follows (Dollars in millions):

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

This balance also includes amounts bridged by us on behalf of investment funds for which we have entered into warehouse agreements. Under such

warehouse agreements, we may elect to transfer investments for a price that differs from fair value.

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

Investments, to the consolidated financial statements. This investment had a carrying value of $722.4 million as of December 31, 2025.

(3)Of the $350.1 million in total CLO borrowings as of December 31, 2025 and as disclosed in Note 6, Borrowings, to the consolidated financial

statements, $330.7 million are collateralized by investments attributable to The Carlyle Group Inc. The remaining $19.4 million in total CLO

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

Our Liquidity Needs

We generally use our working capital and cash flows to invest in growth initiatives, service our debt, fund the working

capital needs of our business and investment funds, and return capital to our common stockholders in the form of dividends or

stock repurchases.

In the future, we expect that our primary liquidity needs will be to:

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

•provide capital to facilitate our expansion into new, complementary business lines, including acquisitions;

•pay operating expenses, including compensation and compliance costs and other obligations as they arise;

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

•fund the capital investments in our funds;

•fund capital expenditures;

•repay borrowings and related interest costs and expenses;

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

•pay income taxes, including corporate income taxes;

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

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

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

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

holders of our common stock in an amount of $0.35 per common share on a quarterly basis ($1.40 annually). For U.S. federal

income tax purposes, any dividends we pay generally will be treated as qualified dividend income (generally taxable to U.S.

individual stockholders at capital gain rates) paid by a domestic corporation to the extent paid out of our current or accumulated

earnings and profits, as determined for U.S. federal income tax purposes, with any excess dividends treated as return of capital

to the extent of the stockholder’s basis. The declaration and payment of dividends to holders of our common stock will be at the

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

time.

With respect to dividend year 2025, the Board of Directors has declared a dividend to common stockholders totaling

$505.1 million, or $1.40 per share, consisting of the following:

With respect to dividend year 2024, the Board of Directors declared cumulative dividends to common stockholders

totaling $502.7 million, consisting of the following:

Dividends to common stockholders paid during the year ended December 31, 2025 totaled $505.1 million, including

the amount paid in February 2025 of $0.35 per common share in respect of the fourth quarter of 2024. Dividends to common

stockholders paid during the year ended December 31, 2024 totaled $503.0 million, including the amount paid in March 2024

of $0.35 per common share in respect of the fourth quarter of 2023.

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

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

related to our carry funds, although we may elect to invest additional amounts in funds focused on new investment areas. We

may, from time to time, exercise our right to purchase additional interests in our investment funds that become available in the

ordinary course of their operations. We expect our senior Carlyle professionals and employees to continue to make significant

capital contributions to our funds based on their existing commitments, and to make capital commitments to future funds

consistent with the level of their historical commitments. We also intend to make investments in our open-end funds and our

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CLO vehicles. Our investments in our European CLO vehicles will comply with the risk retention rules as discussed in “Risk

Retention Rules” later in this section.

A substantial majority of the remaining commitments to our investment funds are expected to be funded by senior

Carlyle professionals, operating executives, and other professionals through our internal co-investment program. Of the $3.9

billion of unfunded commitments, approximately $3.2 billion is subscribed individually by senior Carlyle professionals,

operating executives, and other professionals, with the balance funded directly by the Company. Approximately 77% of the

$3.9 billion of unfunded commitments relate to investment funds in our Global Private Equity segment.

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

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

risk of the sale of such securities and placement of such loans, which may be longer dated. As of December 31, 2025, there

were no material commitments related to the origination and syndication of loans and securities under the Carlyle Global

Capital Markets platform.

Repurchase Program. For the year ended December 31, 2025, we paid an aggregate of $400.0 million to repurchase

and retire approximately 7.5 million shares of common stock. In addition, for the year ended December 31, 2025, we paid an

aggregate of $286.5 million and retired 5.1 million shares of common stock to settle tax withholding obligations in connection

with net share settlements of equity-based awards, for a total of $686.5 million for approximately 12.7 million shares

repurchased or withheld this year. As of December 31, 2025, $165.7 million of repurchase capacity remained under the

$1.4 billion share repurchase program authorized in February 2024, which reflects the cost of common shares repurchased as

well as shares settled for tax withholding payments made by the Company related to the net share settlement of equity-based

awards. Our Board of Directors reset the total repurchase authorization to $2.0 billion in shares of our common stock, effective

as of February 26, 2026. For further information on our repurchase program, see Note 13, Equity, to the consolidated financial

statements.

Cash Flows

The following tables summarize our consolidated statements of cash flows by activities attributable to the Company

and the Consolidated Funds.

The consolidated statements of cash flows include the cash flows of our Consolidated Funds, which include certain

consolidated investment funds and the CLOs. Generally, the consolidation of the Consolidated Funds has a gross-up effect on

our assets, liabilities and cash flows activities. The primary cash flow activities of the Consolidated Funds generally include (i)

purchases of investments, (ii) proceeds from sales of investments, and (iii) net borrowings of the Consolidated Funds.

Contributions from and distributions to the non-controlling interest holders on the consolidated statements of cash flows

primarily relate to non-controlling interest holders in the Consolidated Funds. The impact that the Consolidated Funds had on

cash flows attributable to the Company for the periods presented were limited to our interest in these funds, which is included in

the discussion below. Thus we excluded the Consolidated Funds from the discussion below.

Net cash provided by (used in) operating activities. Net cash provided by (used in) operating activities primarily

consists of: (i) net cash generated from operating activities, which include the receipt of management fees, realized performance

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allocations and incentive fees after payments for compensation and general, administrative and other expenses, and (ii) our net

investment activity, which include purchases of and proceeds from our investment activities.

For the years ended December 31, 2025 and 2024 we received management fees and realized performance allocations,

investment income, and incentive fees of $3.7 billion and $3.6 billion, respectively, partially offset by payments for

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

billion, respectively, which included 2024 and 2023 year-end bonuses paid in January 2025 and 2024, respectively.

For the years ended December 31, 2025 and 2024, net cash used in our investment activities were $0.3 billion and $0.1

billion, respectively, which primarily represented cash used to fund commitments and investments in our portfolio, partially

offset by proceeds related to distributions from our investments. As of December 31, 2025 and 2024, our commitments in our

funds were $3.3 billion and $2.8 billion, respectively. We expect our commitments in our funds will continue to increase with

the growth of our assets under management and our investments in new products.

Net cash used in investing activities. For the years ended December 31, 2025 and 2024, cash used in investing

activities primarily reflected capital expenditures related to information technology, leasehold improvements, and other fixed

assets of $99.4 million and $77.7 million, respectfully.

Net cash provided by (used in) financing activities. For the year ended December 31, 2025, we issued $800.0 million

of 5.050% senior notes due 2035. For the year ended December 31, 2024, we paid $68.8 million in January 2024, representing

the final annual installment of the deferred consideration payable to former Carlyle Holdings unitholders in connection with the

Conversion. For the years ended December 31, 2025 and 2024, we paid dividends to our common stockholders of $505.1

million and $503.0 million, respectively, and we paid $686.5 million and $554.6 million, respectively, to repurchase and retire

12.7 million and 12.3 million shares, respectively, which included shares retired in connection with the net share settlement of

equity-based awards.

Our Balance Sheet

Total assets were $29.1 billion at December 31, 2025, an increase of $6.0 billion from December 31, 2024. The

increase in total assets was primarily attributable to an increase in Investments in Consolidated Funds of $4.7 billion, primarily

due to the consolidation of six additional CLOs in 2025 compared to 2024, and an increase in Cash and cash equivalents of $0.7

billion. Refer to “—Cash Flows” in Part II, Item 8 of this Annual Report on Form 10-K for details on the increase in Cash and

cash equivalents.

Total liabilities were $22.1 billion at December 31, 2025, an increase of $5.3 billion from December 31, 2024. The

increase in liabilities was primarily attributable to an increase in Loans payable of Consolidated Funds of $3.6 billion, and an

increase in Debt obligations of $0.9 billion. The increase in Debt obligations was driven by our issuance of $800.0 million of

5.050% senior notes due 2035 in 2025.

The assets and liabilities of the Consolidated Funds are generally held within separate legal entities and, as a result, the

assets of the Consolidated Funds are not available to meet our liquidity requirements and similarly the liabilities of the

Consolidated Funds are non-recourse to us. In addition, as previously discussed, the CLO term loans generally are secured by

the Company’s investment in the CLO, have a general unsecured interest in the Carlyle entity that manages the CLO, and do

not have recourse to any other Carlyle entity. The number of funds that we consolidate fluctuates period to period. In general,

the number of funds we are required to consolidate has been increasing as a result of the impacts of capital from our balance

sheet invested in new products and our indirect interest in funds through our indirect investment in Fortitude.

Our balance sheet without the effect of the Consolidated Funds can be seen in Note 17, Supplemental Financial

Information, to the consolidated financial statements included in this Annual Report on Form 10-K. At December 31, 2025, our

total assets without the effect of the Consolidated Funds were $16.5 billion, including cash and cash equivalents of $2.0 billion

and Investments, including accrued performance allocations, of $12.2 billion.

Unconsolidated Entities

Certain of our funds have entered into lines of credit secured by their investors’ unpaid capital commitments or by a

pledge of the equity of the underlying investment. These lines of credit are used primarily to reduce the overall number of

capital calls to investors or for working capital needs. In certain instances, however, they may be used for other investment

related activities, including serving as bridge financing for investments. The degree of leverage employed varies among our

funds.

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Off-balance Sheet Arrangements

In the normal course of business, we enter into various off-balance sheet arrangements including sponsoring and

owning limited or general partner interests in consolidated and non-consolidated funds, entering into derivative transactions,

and entering into guarantee arrangements. We also have ongoing capital commitment arrangements with certain of our

consolidated and non-consolidated funds.

For further information regarding our off-balance sheet arrangements, see Note 2, Summary of Significant Accounting

Policies, and Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K. Other than what we have disclosed in this Annual Report on Form 10-K, we do not have any other off-balance

sheet arrangements that would require us to fund losses or guarantee target returns to investors in any of our other investment

fund.

Contractual Obligations

The following table sets forth information relating to our contractual obligations as of December 31, 2025 on a

consolidated basis and on a basis excluding the obligations of the Consolidated Funds:

(1)The table above assumes that no prepayments are made on the senior and subordinated notes and that the outstanding balances, if any, on the senior

credit facility and Global Credit Revolving Credit Facility are repaid on the maturity dates of credit facilities. The CLO term loans are included in the

table above based on the earlier of the stated maturity date or the date the CLO is expected to be dissolved. See Note 6, Borrowings, to the consolidated

financial statements for the various maturity dates of our borrowings.

(2)The interest rates on the debt obligations as of December 31, 2025 consist of: 3.500% on $425.0 million of senior notes, 5.050% on $800.0 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 3.64% to 10.21% 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 Abingworth. The

payment obligations are unsecured obligations of the Company or a subsidiary thereof, subordinated in right of payment to indebtedness of the

Company and its subsidiaries, and do not bear interest.

(4)We lease office space in various countries around the world, including our largest offices in Washington, D.C., New York City, London, Amsterdam,

and Hong Kong, which have non-cancelable lease agreements expiring in various years through 2036. The amounts in this table represent the minimum

lease payments required over the term of the lease.

(5)These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These

amounts are generally due on demand and are therefore presented in the less than one year category. A substantial majority of these investments is

expected to be funded by senior Carlyle professionals and other professionals through our internal co-investment program. Of the $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. Additionally, these obligations include accrued giveback that has been realized but not

yet paid to the respective funds, a portion of which is payable by current and former senior Carlyle professionals.

(6)In connection with our initial public offering, we entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships

whereby we agreed to pay such limited partners 85% of the amount of cash tax savings, if any, in U.S. federal, state and local income tax realized as a

result of increases in tax basis resulting from exchanges of Carlyle Holdings partnership units for common units of The Carlyle Group L.P. From and

after the consummation of the Conversion, former holders of Carlyle Holdings partnership units do not have any rights to payments under the tax

receivable agreement except for payment obligations pre-existing at the time of the Conversion with respect to exchanges that occurred prior to the

Conversion. These obligations are more than offset by the future cash tax savings that we are expected to realize.

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(7)These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles. These obligations include interest to be

paid on debt securities issued by the consolidated CLO vehicles. Interest payments assume that no prepayments are made and loans are held until

maturity. For debt securities with rights only to the residual value of the CLO and no stated interest, no interest payments were included in this

calculation. Interest payments on variable-rate debt securities are based on interest rates in effect as of December 31, 2025, at spreads to market rates

pursuant to the debt agreements, and range from 1.65% to 10.90%.

(8)These obligations represent commitments of the CLOs to fund certain investments. These amounts are generally due on demand and are therefore

presented in the less than one year category.

Excluded from the table above are liabilities for uncertain tax positions of $41.4 million at December 31, 2025 as we

are unable to estimate when such amounts may be paid.

Contingent Cash Payments For Business Acquisitions and Strategic Investments

We have certain contingent cash obligations associated with our acquisition of Abingworth, which are accounted for as

compensation expense, and are accrued over the service period. If earned, payments are made in the quarter following the

performance year to which the payments relate. The contingent cash obligations relate to future incentive payments of up to

$130.0 million that are payable upon the achievement of certain performance targets during 2025 through 2028, which is the

maximum amount that could be paid as of December 31, 2025. Through December 31, 2025, we paid $4.3 million related to

these contingent obligations.

In connection with our acquisition of Carlyle Aviation Partners, we had contingent cash payments related to an earn-

out of up to $150.0 million that were payable upon the achievement of certain revenue and earnings performance targets during

2020 through 2025. We previously entered into a termination and settlement agreement with respect to the earn-out and made a

final payment of $1.0 million during the first quarter of 2025 for total earn-out payments of $124.7 million.

Risk Retention Rules

We will continue to comply with the risk retention rules governing CLOs issued in Europe for which we are a sponsor,

which require a combination of capital from our balance sheet, commitments from senior Carlyle professionals, and/or third-

party financing. For additional information related to the U.S. Risk Retention Rules, see Part I, Item 1A “Risk Factors—Risks

Related to Regulation and Litigation—Financial regulations and changes thereto in the United States could adversely affect our

business and the possibility of increased regulatory focus could result in additional burdens and expenses on our business.”

Guarantees

See Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K for information related to all of our material guarantees.

Indemnifications

In many of our service contracts, we agree to indemnify the third-party service provider under certain circumstances.

The terms of the indemnities vary from contract to contract, and the amount of indemnification liability, if any, cannot be

determined and has not been included in the table above or recorded in our consolidated financial statements as of

December 31, 2025.

See Note 8, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report

on Form 10-K for information related to indemnifications.

Contingent Obligations (Giveback)

Carried interest is ultimately realized when: (1) an underlying investment is profitably disposed of, (2) certain costs

borne by the limited partner investors have been reimbursed, (3) the fund’s cumulative returns are in excess of the preferred

return, and (4) we have decided to collect carry rather than return additional capital to limited partner investors. Realized carried

interest may be required to be returned by us in future periods if the fund’s investment values decline below certain levels.

When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized

performance allocations are reversed. See Note 8, Commitments and Contingencies, to the consolidated financial statements

included in this Annual Report on Form 10-K for additional information related to our contingent obligations (giveback).

Other Contingencies

In the ordinary course of business, we are a party to litigation, investigations, inquiries, employment-related matters,

disputes and other potential claims. We discuss certain of these matters in Note 8, Commitments and Contingencies, to the

consolidated financial statements included in this Annual Report on Form 10-K.

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Carlyle Common Stock

A rollforward of our common stock outstanding for the years ended December 31, 2025 and 2024 are as follows:

Shares of The Carlyle Group Inc. common stock issued during the period presented in the tables above relate to the

vesting of the Company’s restricted stock units and shares issued and delivered in connection with our equity method

investment in NGP during the years ended December 31, 2025 and 2024. Shares of The Carlyle Group Inc. common stock

repurchased during the years ended December 31, 2025 and 2024 relate to shares repurchased and subsequently retired as part

of our share repurchase programs. Shares of The Carlyle Group Inc. common stock issued and repurchased/retired during the

years ended December 31, 2025 and 2024 include shares retired as part of the net share settlement of equity-based awards.

The total shares as of December 31, 2025 as shown above exclude approximately 3.8 million net common shares,

representing the vesting of restricted stock units subsequent to December 31, 2025 that will participate in the common

shareholder dividend that will be paid on February 20, 2026.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires our management to

make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related

disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information

currently available to us and on various other assumptions management believes to be reasonable under the circumstances.

Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations.

Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We

believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the

preparation of our consolidated financial statements and should be read in conjunction with our consolidated financial

statements and related notes included in this report.

Basis of Accounting. The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP.

Management has determined that the Company’s funds are investment companies under U.S. GAAP for the purposes of

financial reporting. U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the

unrealized gains and/or losses in an investment’s fair value are recognized on a current basis in the consolidated statements of

operations. Additionally, the funds do not consolidate their majority-owned and controlled investments. In the preparation of its

consolidated financial statements, the Company has retained the specialized accounting for the Funds.

Principles of Consolidation. The Company consolidates all entities that it controls either through a majority voting

interest or as the primary beneficiary of variable interest entities (“VIEs”). The Company describes the policies and procedures

it uses in evaluating whether an entity is consolidated in Note 2, Summary of Significant Accounting Policies, to the

consolidated financial statements included in this Annual Report on Form 10-K. As part of its consolidation procedures, the

Company evaluates: (1) whether it holds a variable interest in an entity, (2) whether the entity is a VIE, and (3) whether the

Company’s involvement would make it the primary beneficiary.

•In evaluating whether the Company holds a variable interest, fees (including management fees, incentive fees and

performance allocations) that are customary and commensurate with the level of services provided, and where the

Company does not hold other economic interests in the entity that would absorb more than an insignificant

amount of the expected losses or returns of the entity, are not considered variable interests. The Company

considers all economic interests, including indirect interests, to determine if a fee is considered a variable interest.

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

entities qualifies as a VIE and, if so, whether or not the Company is the primary beneficiary. The assessment of

whether the entity is a VIE is generally performed qualitatively, which requires judgment. These judgments

include: (a) determining whether the equity investment at risk is sufficient to permit the entity to finance its

activities without additional subordinated financial support, (b) evaluating whether the equity holders, as a group,

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can make decisions that have a significant effect on the economic performance of the entity, (c) determining

whether two or more parties’ equity interests should be aggregated, and (d) determining whether the equity

investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an

entity.

•For entities that are determined to be VIEs, the Company consolidates those entities where it has concluded it is

the primary beneficiary. The primary beneficiary is defined as the variable interest holder with (a) the power to

direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the

obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be

significant to the VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its

economic interests in the entity held either directly or indirectly by the Company, such as the Company’s 10.5%

indirect ownership interest in Fortitude.

Changes to these judgments could result in a change in the consolidation conclusion for a legal entity.

Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting

interest entity model, the Company consolidates those entities it controls through a majority voting interest.

Performance Allocations. As of December 31, 2025, we had accrued performance allocations of $7.6 billion.

Performance allocations consist principally of the performance-based allocation of profits from certain of the funds to which the

Company is entitled (commonly referred to as carried interest). The Company is generally entitled to a 20% allocation (which

can vary by fund) of the net realized income or gain as a carried interest after returning the invested capital, the allocation of

preferred returns and return of certain fund costs (generally subject to catch-up provisions as set forth in the fund limited

partnership agreement). Carried interest is ultimately realized when: (i) an underlying investment is profitably disposed of,

(ii) certain costs borne by the limited partner investors have been reimbursed, (iii) the fund’s cumulative returns are in excess of

the preferred return, and (iv) the Company has decided to collect carry rather than return additional capital to limited partner

investors.

Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth

in each respective partnership agreement, the Company recognizes revenues attributable to performance allocations based upon

the amount that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at

that date. Accordingly, the amount recognized as investment income related to performance allocations reflects the Company’s

share of the gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative

to the fair values as of the end of the prior period. Because of the inherent uncertainty in measuring the fair value of investments

in the absence of observable market prices as discussed below, these estimated values may differ significantly from the values

that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could

be material. If, at December 31, 2025, 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 $0.6 billion would be the responsibility of current

and former senior Carlyle professionals.

See Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in this

Annual Report on Form 10-K for information related to performance allocations for various fund types, preferred return hurdle

rates, the timing of performance allocation recognition in investment income, and the potential for performance allocation

income reversal.

Performance Allocation Related Compensation. As of December 31, 2025, we had accrued performance allocations

and incentive fee related compensation of $5.1 billion. A portion of the performance allocations earned is due to employees and

advisers of the Company. These amounts are accounted for as compensation expense in conjunction with the recognition of the

related performance allocation revenue and, until paid, are recognized as a component of the accrued compensation and benefits

liability. Accordingly, upon a reversal of performance allocation revenue, the related compensation expense, if any, is also

reversed.

Income Taxes. The Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and thus is subject to U.S.

federal (and state and local) corporate income taxes. Based on applicable federal, foreign, state and local tax laws, the Company

records a provision for income taxes for certain entities. Tax positions taken by the Company are subject to periodic audit by

U.S. federal, state, local and foreign taxing authorities.

As of December 31, 2025, we had gross deferred tax assets of $1.8 billion. The Company accounts for income taxes

using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future

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consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recorded on

the Company’s gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating

the realizability of the Company’s deferred tax assets, all evidence, both positive and negative, is evaluated. As of

December 31, 2025, we recorded a valuation allowance of $74.0 million on our gross deferred tax assets. Items considered in

this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and

expectations of future earnings. Changes in judgment as it relates to the realizability of these assets, as well as potential changes

in corporate tax rates would have the effect of significantly reducing the value of the deferred tax assets.

Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more

likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state,

local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these

jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is

established, which is included in accounts payable, accrued expenses and other liabilities in the consolidated financial

statements. As of December 31, 2025, we had unrecognized tax benefits of $41.4 million, which if recognized would result in a

reduction in the provision for income taxes of $29.2 million.

Fair Value Measurement. In the absence of observable market prices, the Company values its investments and its

funds’ investments using valuation methodologies applied on a consistent basis. For some investments little market activity

may exist. Management’s determination of fair value is then based on the best information available in the circumstances and

may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a

combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.

Investments for which market prices are not observable include private investments in the equity of operating companies and

real estate properties, and certain debt positions. The valuation technique for each of these investments is described in Note 2,

Summary of Significant Accounting Policies, to the consolidated financial statements included in this Annual Report on Form

10-K.

Valuations of the funds’ investments are used in the calculation of accrued performance allocations, discussed above.

The valuation methodologies can involve subjective judgments, and the fair value of assets established pursuant to such

methodologies may be incorrect, which could result in the misstatement of fund performance and accrued performance

allocations. Because there is significant uncertainty in the valuation of, or in the stability of the value of, illiquid investments,

the fair values of such investments as reflected in an investment fund’s net asset value do not necessarily reflect the prices that

would be obtained by us on behalf of the investment fund when such investments are realized. Realizations at values

significantly lower than the values at which investments have been reflected in prior fund net asset values would result in

reduced earnings or losses for the applicable fund, the loss of potential performance allocations and incentive fees. Changes in

values attributed to investments from quarter to quarter may result in volatility in the net asset values and results of operations

that we report from period to period. Also, a situation where asset values turn out to be materially different than values reflected

in prior fund net asset values could cause investors to lose confidence in us, which could in turn result in difficulty in raising

additional funds. See Part I, Item 1A “Risk Factors—Risks Related to Our Business Operations—Risks Related to the Assets

We Manage—Valuation methodologies for certain assets in our funds can involve subjective judgments, and the fair value of

assets established pursuant to such methodologies may be incorrect, which could result in the misstatement of fund performance

and accrued performance allocations.”

Principal Equity Method Investments. The Company accounts for all investments in which it has or is otherwise

presumed to have significant influence, including investments in the unconsolidated funds and strategic investments, using the

equity method of accounting. The carrying value of equity method investments is determined based on amounts invested by the

Company, adjusted for the equity in earnings or losses of the investee allocated based on the respective partnership or other

agreement, less distributions received. The Company evaluates its equity method investments for impairment whenever events

or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

Our equity method investment in NGP entitles us to up to 55% of the management fee related revenue of the NGP

entities that serve as advisors to the NGP Energy Funds and is subject to impairment under the U.S. GAAP accounting for

equity method investments. We evaluate our equity method investment in NGP for impairment whenever events or changes in

circumstances indicate that the carrying amount of the investment may not be recoverable, but no less than quarterly. For

example, challenges with fundraising, lower future management fees, or a change in our economic arrangement could cause an

impairment of our investment in NGP in the future. For more information on the Restructuring and the resulting impairment of

our investment in NGP, see Note 4, Investments, to the consolidated financial statements.

Equity-based Compensation. During the year ended December 31, 2025, we recognized $374.7 million in equity-based

compensation expense. Compensation expense relating to the issuance of equity-based awards to Carlyle employees is

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measured at fair value on the grant date. In determining the aggregate grant-date fair value of awards with market-based

conditions, we use a Monte Carlo simulation which requires certain assumptions and estimates such as the volatility of our

future share price, and changes in those assumptions could result in materially different results. Of the $374.7 million in equity-

based compensation expense recognized during the year ended December 31, 2025, approximately $115.8 million related to

awards with market-based conditions.

Intangible Assets and Goodwill. The Company’s intangible assets consist of acquired contractual rights to earn future

fee income, including management and advisory fees, customer relationships, and acquired trademarks. We allocate the fair

value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their

estimated fair values. The excess of the fair value of purchase consideration over the fair value of these identifiable assets and

liabilities is recorded as goodwill. These valuations require management to make significant judgments, 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, 2025, we had intangible assets, net of accumulated amortization, of $507.1 million, including

$104.6 million of goodwill. Our finite-lived intangible assets have estimated useful lives which range from four to eight years,

and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset

may not be recoverable. Goodwill represents the excess of cost over the identifiable net assets of businesses acquired and is

recorded in the functional currency of the acquired entity. Goodwill is recognized as an asset and is reviewed for impairment

annually as of October 1 and between annual tests when events and circumstances indicate that impairment may have occurred.

Impairment testing requires the assessment of both qualitative and quantitative factors, including, but not limited to

whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or

significant or adverse changes in cash flow projections or earnings forecasts. These assessments require management to make

judgments, assumptions and estimates. As of December 31, 2025, we continue to believe our intangible assets and goodwill are

not impaired.

Recent Accounting Pronouncements

We discuss recent accounting pronouncements in Note 2, Summary of Significant Accounting Policies, to the

consolidated financial statements included in this Annual Report on Form 10-K.