Earnings Per Common Unit

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



	Three Months Ended September 30, 2017					Nine Months Ended September 30, 2017
	Basic		Diluted			Basic		Diluted
Net income attributable to The Carlyle Group L.P.	$	44,600,000	$	44,600,000		$	185,200,000	$	185,200,000
Incremental net income from assumed exchange of Carlyle Holdings partnership units	—		97,800,000			—		—
Net income attributable to common units	$	44,600,000	$	142,400,000		$	185,200,000	$	185,200,000
Weighted-average common units outstanding	95,198,102		334,392,424			89,815,112		97,538,190
Net income per common unit	$	0.47	$	0.43		$	2.06	$	1.90

	Three Months Ended September 30, 2016					Nine Months Ended September 30, 2016
	Basic		Diluted			Basic		Diluted
Net income attributable to The Carlyle Group L.P.	$	800,000	$	800,000		$	15,300,000	$	15,300,000
Incremental net income (loss) from assumed exchange of Carlyle Holdings partnership units	—		(5,700,000		)	—		8,100,000
Net income (loss) attributable to common units	$	800,000	$	(4,900,000	)	$	15,300,000	$	23,400,000
Weighted-average common units outstanding	83,602,503		312,534,968			82,062,633		306,981,103
Net income (loss) per common unit	$	0.01	$	(0.02	)	$	0.19	$	0.08

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



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
	Basic	Diluted	Basic	Diluted
The Carlyle Group L.P. weighted-average common units outstanding	95,198,102	95,198,102	89,815,112	89,815,112
Unvested deferred restricted common units	—	7,756,460	—	7,125,134
Issuable Carlyle Holdings Partnership units	—	597,944	—	597,944
Weighted-average vested Carlyle Holdings Partnership units	—	228,839,164	—	—
Unvested Carlyle Holdings Partnership units	—	2,000,754	—	—
Weighted-average common units outstanding	95,198,102	334,392,424	89,815,112	97,538,190

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
	Basic	Diluted	Basic	Diluted
The Carlyle Group L.P. weighted-average common units outstanding	83,602,503	83,602,503	82,062,633	82,062,633
Unvested deferred restricted common units	—	3,569,302	—	3,181,825
Weighted-average vested Carlyle Holdings Partnership units	—	224,826,988	—	221,377,938
Unvested Carlyle Holdings Partnership units	—	536,175	—	358,707
Weighted-average common units outstanding	83,602,503	312,534,968	82,062,633	306,981,103

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.

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, 228,839,164 of vested Carlyle Holdings partnership units and 2,000,754 of unvested Carlyle Holdings partnership units for the three months ended September 30, 2017 were dilutive. As a result, net income of non-controlling interests in Carlyle Holdings associated with the assumed exchange of $97.8 million for the three months ended September 30, 2017 has been included in net income attributable to The Carlyle Group L.P. for purposes of the dilutive earnings per common unit calculation. Further, 227,315,486 of vested Carlyle Holdings partnership units and 1,963,185 of unvested Carlyle Holdings partnership units for the nine months ended September 30, 2017 were antidilutive, and therefore have been excluded.

Further, based on these calculations, 224,826,988 and 221,377,938 of vested Carlyle Holdings partnership units and 536,175 and 358,707 of unvested Carlyle Holdings partnership units for the three and nine months ended September 30, 2016 were dilutive. As a result, a net (loss) income of non-controlling interests in Carlyle Holdings associated with the assumed exchange of $(5.7) million and $8.1 million for the three and nine months ended September 30, 2016 have been included in net income 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 September 30, 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.