Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

8. Commitments and ContingenciesCapital Commitments

The Company and its unconsolidated affiliates have unfunded commitments totaling $4.2 billion as of December 31,

2024, of which approximately $3.5 billion is subscribed individually by senior Carlyle professionals, advisors and other

professionals. In addition to these unfunded commitments, the Company may from time to time exercise its right to purchase

additional interests in its investment funds that become available in the ordinary course of their operations.

Under the Carlyle Global Capital Markets platform, certain subsidiaries of the Company may act as an underwriter,

syndicator or placement agent for security offerings and loan originations. The Company earns fees in connection with these

activities and bears the risk of the sale of such securities and placement of such loans, which may be longer dated. As of

December 31, 2024, the Company had $15.3 million in commitments related to the origination and syndication of loans and

securities under the Carlyle Global Capital Markets platform, of which $4.3 million was extinguished in January and February

2025.

Guaranteed Loans

From time to time, the Company or its subsidiaries may enter into agreements to guarantee certain obligations of the

investment funds related to, for example, credit facilities or equity commitments. Certain consolidated subsidiaries of the

Company are the guarantors of revolving credit facilities for certain funds in the Global Investment Solutions segment. The

guarantee is limited to the lesser of the total amount drawn under the credit facilities or the total of net asset value of the

guarantor subsidiaries plus any uncalled capital of the applicable general partner. The outstanding balances are secured by

uncalled capital commitments from the underlying funds, and the Company believes the likelihood of any material funding

under this guarantee to be remote. As of December 31, 2024, there were no outstanding balances under the credit facilities with

a guarantee agreement.

Contingent Obligations (Giveback)

A liability for potential repayment of previously received performance allocations of $44.0 million at December 31,

2024, was shown as accrued giveback obligations in the consolidated balance sheets, representing the giveback obligation that

would need to be paid if the funds were liquidated at their current fair values at December 31, 2024. However, the ultimate

giveback obligation, if any, generally is not paid until the end of a fund’s life or earlier if the giveback becomes fixed and early

payment is agreed upon by the fund’s partners (see Note 2, Summary of Significant Accounting Policies). As of both

December 31, 2024 and 2023, the Company had $11.5 million of unbilled receivables from former and current employees and

senior Carlyle professionals related to giveback obligations. Any such receivables are collateralized by investments made by

individual senior Carlyle professionals and employees in Carlyle-sponsored funds. In addition, $144.8 million and

$145.4 million have been withheld from distributions of carried interest to senior Carlyle professionals and employees for

potential giveback obligations as of December 31, 2024 and 2023, respectively. Such amounts are held on behalf of the

respective current and former Carlyle employees to satisfy any givebacks they may owe and are held by entities not included in

the accompanying consolidated balance sheets. Current and former senior Carlyle professionals and employees are personally

responsible for their giveback obligations. As of December 31, 2024, approximately $11.5 million of the Company’s accrued

giveback obligation is the responsibility of various current and former senior Carlyle professionals and other former limited

partners of the Carlyle Holdings partnerships, and the net accrued giveback obligation attributable to the Company is $32.5

million.

If, at December 31, 2024, 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

$1.4 billion, on an after-tax basis where applicable, of which approximately $0.5 billion would be the responsibility of current

and former senior Carlyle professionals.

Leases

The Company’s leases primarily consist of operating leases for office space in various countries around the world,

including its largest offices in Washington, D.C., New York City, London and Hong Kong. These leases have remaining lease

terms of one year to 12 years, some of which include options to extend for up to five years and some of which include an option

to terminate the leases within one year. The Company also has operating leases for office equipment and vehicles, which are not

significant.

The following table summarizes the Company’s lease cost, cash flows and other supplemental information related to

its operating leases (Dollars in millions):


	Year Ended December 31,
	2024	2023
Operating lease cost	$61.3	$58.5
Sublease income	(4.6)	(5.9)
Total operating lease cost	$56.7	$52.6

Cash paid for amounts included in the measurement of operating lease liabilities	$69.1	$68.3

Weighted-average remaining lease term	9.8	10.4
Weighted-average discount rate	4.4%	4.3%

Maturities of lease liabilities related to operating leases were as follows (Dollars in millions):


Year ending December 31,
2025	$70.7
2026	68.1
2027	68.4
2028	67.7
2029	67.6
Thereafter	249.6
Total lease payments	$592.1
Less imputed interest	(103.5)
Total lease liabilities	$488.6

Rent expense was approximately $61.3 million, $58.5 million and $56.3 million for the years ended December 31,

2024, 2023 and 2022, respectively, and is included in general, administrative and other expenses in the consolidated statements

of operations.

Legal Matters

In the ordinary course of business, the Company is a party to litigation, investigations, inquiries, employment-related

matters, disputes, and other potential claims. Certain of these matters are described below. The Company is not currently able to

estimate the reasonably possible amount of loss or range of loss, in excess of amounts accrued, for the matters that have not

been resolved. The Company does not believe it is probable that the outcome of any existing litigation, investigations, disputes,

or other potential claims will materially affect the Company or these financial statements in excess of amounts accrued.

The Authentix Matter

Authentix, Inc. (“Authentix”) was a majority-owned portfolio company in one of the Company’s investment funds,

Carlyle U.S. Growth Fund III, L.P. (“CGF III”). When Authentix was owned by CGF III, two of the Company’s employees

served on Authentix’s board of directors. After a lengthy sale process, Authentix was sold for an aggregate sale price of

$87.5 million. On August 7, 2020, certain of the former minority shareholders in Authentix filed suit in Delaware Chancery

Court, alleging that the Authentix board of directors, CGF III, and the Company breached various fiduciary duties by agreeing

to a sale of Authentix at an inopportune time and at a price that was too low. A trial before the Delaware Court of Chancery was

completed in early February 2024, and a decision was rendered in favor of the Company and all other defendants on all claims

on January 8, 2025. At this time, it is unclear whether the plaintiffs will appeal the decision.

The Tax Receivable Agreement Matter

The Company came into existence on January 1, 2020, when its predecessor, The Carlyle Group, L.P. (the “PTP”),

converted from a partnership into a corporation (the “Conversion”). On July 29, 2022, an alleged stockholder of the Company,

the City of Pittsburgh Comprehensive Municipal Trust Fund (the “Plaintiff”), filed suit in the Delaware Court of Chancery,

alleging a direct claim against the Company for breach of its certificate of incorporation and a derivative claim on behalf of the

Company against certain current and former officers and directors of the Company. Plaintiff challenges the receipt, by certain

officers of the PTP and certain directors of the general partner of the PTP, of a right to cash payments associated with the

elimination of a tax receivable agreement in connection with the Conversion. Plaintiff is seeking monetary damages, restitution,

and an injunction preventing the Company from making any future cash payments for the elimination of the tax receivable

agreement in connection with the Conversion. By virtue of the derivative nature of the primary claims (i.e., that the claims are

aimed primarily at certain officers and directors), it is unlikely that the Company itself will pay material damage awards based

on the Plaintiff’s claims, although the Company is expected to incur legal defense fees to the extent not covered by insurance.

The Delaware Court issued a ruling on the defendant’s motion to dismiss on April 24, 2024, dismissing some of the Plaintiff’s

claims but allowing most of the claims to proceed to discovery and possibly to trial. The Company intends to contest the direct

claims vigorously, and the officer and director defendants intend to continue contesting the derivative claims vigorously.

SEC Investigation

As part of a sweep investigation of financial services and investment advisory firms, in October 2022, the Company

received from the SEC a request for information related to the preservation of certain types of electronic business

communications (e.g., text messages and messages on WhatsApp, WeChat, and similar applications) as part of the Company’s

books and records. On January 13, 2025, the SEC announced a settlement with several of the firms that were part of the sweep

investigation, including the Company. Under the settlement, the Company paid a civil penalty of $8.5 million in January 2025

and agreed to implement certain limited remedial measures, for failure to maintain and preserve such electronic

communications in its books and records under the Advisers Act. The Company accrued for the civil penalty during the year

ended December 31, 2024.

The Company currently is and expects to continue to be, from time to time, subject to examinations, formal and

informal inquiries, and investigations by various U.S. and non-U.S. governmental and regulatory agencies, including but not

limited to, the SEC, Department of Justice, state attorneys general, FINRA, National Futures Association, and the U.K.

Financial Conduct Authority. The Company routinely cooperates with such examinations, inquiries and investigations, and they

may result in the commencement of civil, criminal, or administrative or other proceedings against the Company or its personnel.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings and employment-

related matters, and some of the matters discussed above involve claims for potentially large and/or indeterminate amounts of

damages. Based on information known by management, management does not believe that as of the date of this filing the final

resolutions of the matters above will have a material effect upon the Company’s consolidated financial statements. However,

given the potentially large and/or indeterminate amounts of damages sought in certain of these matters and the inherent

unpredictability of investigations and litigations, it is possible that an adverse outcome in certain matters could, from time to

time, have a material effect on the Company’s financial results in any particular period.

The Company accrues an estimated loss contingency liability when it is probable that such a liability has been incurred

and the amount of the loss can be reasonably estimated. As of December 31, 2024, the Company had recorded liabilities

aggregating to approximately $44 million for litigation-related contingencies, regulatory examinations and inquiries, and other

matters. The Company evaluates its outstanding legal and regulatory proceedings and other matters each quarter to assess its

loss contingency accruals, and makes adjustments in such accruals, upward or downward, as appropriate, based on

management’s best judgment after consultation with counsel. There is no assurance that the Company’s accruals for loss

contingencies will not need to be adjusted in the future or that, in light of the uncertainties involved in such matters, the ultimate

resolution of these matters will not significantly exceed the accruals that the Company has recorded.

Indemnifications

In the normal course of business, the Company and its subsidiaries enter into contracts that contain a variety of

representations and warranties and provide general indemnifications. The Company’s maximum exposure under these

arrangements is unknown as this would involve future claims that may be made against the Company that have not yet

occurred. However, based on experience, the Company believes the risk of material loss to be remote.

In connection with the sale of the Company’s interest in its local Brazilian management entity in August 2021, the

Company provided a guarantee to the acquiring company of up to BRL 100.0 million ($16.2 million as of December 31, 2024)

for liabilities arising from tax-related indemnifications. This guarantee, which will expire in August 2027, would only come

into effect after all alternative remedies have been exhausted. The Company believes the likelihood of any material funding

under this guarantee to be remote.

Risks and Uncertainties

Carlyle’s funds seek investment opportunities that offer the possibility of attaining substantial capital appreciation.

Certain events particular to each industry in which the underlying investees conduct their operations, as well as general

economic, political, regulatory, and public health conditions, may have a significant negative impact on the Company’s

investments and profitability. The funds managed by the Company may also experience a slowdown in the deployment of

capital, which could adversely affect the Company’s ability to raise capital for new or successor funds and could also impact the

management fees the Company earns on its carry funds and managed accounts, and/or result in the impairment of intangible

assets and/or goodwill the case of the Company’s acquired businesses. Such events are beyond the Company’s control, and the

likelihood that they may occur and the effect on the Company cannot be predicted.

Furthermore, certain of the funds’ investments are made in private companies and there are generally no public

markets for the underlying securities at the current time. The funds’ ability to liquidate their publicly-traded investments are

often subject to limitations, including discounts that may be required to be taken on quoted prices due to the number of shares

being sold. The funds’ ability to liquidate their investments and realize value is subject to significant limitations and

uncertainties, including among others currency fluctuations and natural disasters.

The Company and the funds make investments outside of the United States. Investments outside the United States may

be subject to less developed bankruptcy, corporate, partnership and other laws (which may have the effect of disregarding or

otherwise circumventing the limited liability structures potentially causing the actions or liabilities of one fund or a portfolio

company to adversely impact the Company or an unrelated fund or portfolio company). Non-U.S. investments are subject to the

same risks associated with the Company’s U.S. investments as well as additional risks, such as fluctuations in foreign currency

exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability,

difficulties in managing non-U.S. investments, potentially adverse tax consequences and the burden of complying with a wide

variety of foreign laws.

Furthermore, Carlyle is exposed to economic risk concentrations related to certain large investments as well as

concentrations of investments in certain industries and geographies.

Additionally, the Company encounters credit risk. Credit risk is the risk of default by a counterparty in the Company’s

investments in debt securities, loans, leases and derivatives that result from a borrower’s, lessee’s or derivative counterparty’s

inability or unwillingness to make required or expected payments. The Company is subject to credit risk should a financial

institution be unable to fulfill its obligations.

The Company considers cash, cash equivalents, securities, receivables, principal equity method investments, accounts

payable, accrued expenses, other liabilities, loans, senior notes, assets and liabilities of Consolidated Funds and contingent and

other consideration for acquisitions to be its financial instruments. Except for the senior notes, subordinated notes and

compensatory contingent and other consideration for acquisitions, the carrying amounts reported in the consolidated balance

sheets for these financial instruments equal or closely approximate their fair values. The fair value of the senior and

subordinated notes is disclosed in Note 6, Borrowings.