The Carlyle Group (CG) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 8, 2022 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and thank you for standing-by. Welcome to the Carlyle Group Third Quarter 2022 Earnings Conference Call.

At this time I would like to turn the conference over to Mr. Daniel Harris, Head of Investor Relations. Mr. Harris, you may begin, sir.

Daniel Harris

Thank you, Harris. Good morning and welcome to Carlyle's third quarter 2022 earnings call.

With me on the call this morning is our Interim Chief Executive Officer, Bill Conway; our Chief Financial Officer, Curt Buser and several leaders from the office of our CEO. Pete Clare, Chief Investment Officer for Corporate Private Equity; Mark Jenkins, Head of Global Credit; and Ruulke Bagijn Head of Global Investment Solutions. Bill and Curt will begin with some prepared remarks and then the entire call, our team will be available for your Q&A.

This call is being webcast and a replay will be available on our website. We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with Generally Accepted Accounting Principles. We have provided reconciliation of these measures to GAAP in our earnings release.

Any forward-looking statements made today do not guarantee future performance and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our Annual Report on Form 10-K that could cause actual results to differ materially from those indicated. Carlyle assumes no obligation to update any forward-looking statements at any time.

Earlier this morning, we issued a press release and detailed earnings presentation, which is also available on our Investor Relations website. I'm going to begin with a quick discussion of our results and then hand the call over to Bill.

In the third quarter, we generated $213 million in fee-related earnings and $644 million in distributable earnings. Fee-related earnings of $213 million increased 40% compared to the third quarter of 2021. Year-to-date FRE is $632 million is 49% higher year-over-year, through a combination of strong organic growth as well as the positive impact of various strategic transactions completed earlier this year.

FRE declined sequentially from the second-quarter, largely due to two items we see in the last quarter, catchup management fees totaled $10 million compared to $19 million in the second-quarter and fee related performance revenue was also lower sequentially. Distributable earnings of $644 million this quarter and year-to-date DE of $1.5 billion, is 10% ahead of last year's $1.3 billion and is already more than double any prior full-year results other than our record result from last year. On an after tax basis, we generated $1.42 and DE per share for the third quarter and $3.33 year-to-date. We declared a quarterly dividend of $0.325 per common share.