Carlyle Group Inc.CG
Carlyle Group Inc. Commitments Disclosure
8. Commitments and ContingenciesCapital Commitments
Legal Matters
The Company and its unconsolidated affiliates have unfunded commitments totaling $3.9 billion as of December 31,
2025, of which approximately $3.2 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, 2025, the Company had no material commitments related to the origination and syndication of loans and
securities under the Carlyle Global Capital Markets platform.
Guaranteed LoansFrom 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 Carlyle AlpInvest 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, 2025, the Company had no outstanding guarantees under the credit facilities.
Certain consolidated subsidiaries of the Company were the guarantors of a credit agreement for a fund in the Carlyle
AlpInvest segment, with a maximum potential amount to be funded of $25.0 million. The credit agreement and related
guarantee expired in August 2025 with no funding required by the Company.
On February 25, 2026, the Company entered into an agreement pursuant to which it provided support for a credit
facility of a certain fund in the Global Credit segment. The maximum aggregate amount that could be funded under this
agreement was $120 million as of February 25, 2026. The Company has not funded any amounts under this agreement to date
and believes the likelihood of any material funding to be remote.Contingent ObligationsGiveback
A liability for potential repayment of previously received performance allocations of $72.8 million at December 31,
2025 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, 2025. 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 December 31,
2025 and 2024, the Company had $24.2 million and $11.5 million, respectively, 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,
$151.5 million and $144.8 million have been withheld from distributions of carried interest to senior Carlyle professionals and
employees for potential giveback obligations as of December 31, 2025 and 2024, 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, 2025, approximately $27.0 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
$45.8 million.
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.
Other
In connection with a consolidated investment fund in the Carlyle AlpInvest segment, the Company entered into an
arrangement with a third-party pursuant to which the Company may be required to make payments up to $50.0 million in the
aggregate in the event the fund does not achieve a specified return. As of December 31, 2025, the Company has concluded that
the likelihood of payment under this arrangement is not probable; therefore, no liability has been recorded.
LeasesThe 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 11 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:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
Operating lease cost | $60.5 | $61.3 | $58.5 | ||
Sublease income | (3.8) | (4.6) | (5.9) | ||
Total operating lease cost | $56.7 | $56.7 | $52.6 | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $73.7 | $69.1 | $68.3 | ||
Weighted-average remaining lease term | 8.1 | 9.8 | 10.4 | ||
Weighted-average discount rate | 4.4% | 4.4% | 4.3% | ||
Maturities of lease liabilities related to operating leases were as follows (Dollars in millions):
Year ending December 31, | |
2026 | $74.6 |
2027 | 75.3 |
2028 | 74.5 |
2029 | 73.7 |
2030 | 59.2 |
Thereafter | 197.8 |
Total lease payments | $555.1 |
Less imputed interest | (84.9) |
Total lease liabilities | $470.2 |
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. The plaintiffs appealed the decision to the Delaware Supreme Court on March 13, 2025. Oral argument on
the appeal was held on October 22, 2025, and a decision was rendered in favor of the Company and all other defendants on all
claims on November 5, 2025.
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 “original 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. As the original Plaintiff did
not actually own shares on the date of the Conversion, it stipulated to the dismissal of the derivative claims in October of 2025
and the Court has allowed Charles Blackburn (together with the original Plaintiff, “Plaintiffs”) to intervene as a new plaintiff
with respect to the derivative claims. The original Plaintiff continues as a plaintiff with respect to one direct claim.
Plaintiffs challenge 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.
Plaintiffs are 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 derivative 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 defendants’ motion to
dismiss on April 24, 2024, dismissing some of the original Plaintiff’s claims but allowing most of the claims to proceed to
discovery and possibly to trial. Plaintiffs filed a consolidated amended complaint on November 17, 2025. Defendants filed a
motion to dismiss the consolidated amended complaint on January 16, 2026. The Company intends to contest the direct claims
vigorously, and the officer and director defendants intend to continue contesting the derivative claims vigorously.
General
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 UK 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, 2025, the Company had recorded liabilities
aggregating to approximately $50 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 ($18.1 million as of December 31, 2025)
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.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 12, 2020 | |
| 2018 | Feb 13, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Feb 24, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.