Earnings Per Common Unit

Basic and diluted net income (loss) per common unit are calculated as follows:



	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
	Basic		Diluted		Basic		Diluted
Net income attributable to The Carlyle Group L.P.	$	83,000,000	$	83,000,000	$	8,400,000	$	8,400,000
Incremental net (loss) income from assumed exchange of Carlyle Holdings partnership units	—		—		—		(6,400,000		)
Net income attributable to common units	$	83,000,000	$	83,000,000	$	8,400,000	$	2,000,000
Weighted-average common units outstanding	85,337,534		91,967,452		80,885,060		299,949,767
Net income per common unit	$	0.97	$	0.90	$	0.10	$	0.01

The weighted-average common units outstanding, basic and diluted, are calculated as follows:



	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
	Basic	Diluted	Basic	Diluted
The Carlyle Group L.P. weighted-average common units outstanding	85,337,534	85,337,534	80,885,060	80,885,060
Unvested deferred restricted common units	—	6,031,974	—	1,809,650
Issuable Carlyle Holdings Partnership units	—	597,944	—	—
Weighted-average vested Carlyle Holdings Partnership units	—	—	—	216,955,323
Unvested Carlyle Holdings Partnership units	—	—	—	299,734
Weighted-average common units outstanding	85,337,534	91,967,452	80,885,060	299,949,767

The Carlyle Group L.P. weighted-average common units outstanding includes vested deferred restricted common units and common units associated with acquisitions that have been earned for which issuance of the related common units is deferred until future periods.

The Partnership applies the treasury stock method to determine the dilutive weighted-average common units represented by the unvested deferred restricted common units. Also included in the determination of dilutive weighted-average common units are issuable Carlyle Holdings partnership units associated with the Partnership's strategic investments in NGP. For purposes of determining the dilutive weighted-average common units, it is assumed that March 31, 2017 and 2016 represent the end of the contingency period.

The Partnership applies the “if-converted” method to the vested Carlyle Holdings partnership units to determine the dilutive weighted-average common units outstanding. The Partnership applies the treasury stock method to the unvested Carlyle Holdings partnership units and the “if-converted” method on the resulting number of additional Carlyle Holdings partnership units to determine the dilutive weighted-average common units represented by the unvested Carlyle Holdings partnership units.

In computing the dilutive effect that the exchange of Carlyle Holdings partnership units would have on earnings per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Carlyle Holdings (including any tax impact). Based on these calculations, 224,675,389 of vested Carlyle Holdings partnership units and 2,991,731 of unvested Carlyle Holdings partnership units for the three months ended March 31, 2017 were antidilutive, and therefore have been excluded.

Further, based on these calculations, 216,955,323 of vested Carlyle Holdings partnership units and 299,734 of unvested Carlyle Holdings partnership units for the three months ended March 31, 2016 were dilutive. As a result, the net loss of non-controlling interests in Carlyle Holdings associated with the assumed exchange of $6.4 million for the three months ended March 31, 2016 has been included in net income (loss) attributable to The Carlyle Group L.P. for purposes of the dilutive earnings per common unit calculation.

On August 1, 2013, as part of acquiring the remaining 40% equity interests in AlpInvest, the Partnership issued 914,087 common units that are subject to vesting conditions. As of March 31, 2017, 7,782 common units remain unvested. The common units participate immediately in any Partnership distributions. Under ASC 260, these common units are considered participating securities and are required to be included in the computation of earnings per common unit pursuant to the two-class method.