Carlyle Group Inc.CG
Carlyle Group Inc. Income Taxes Disclosure
10. Income Taxes
The income (loss) before provision for income taxes consists of the following:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
U.S. domestic income (loss) | $954.5 | $1,163.5 | $(857.6) | ||
Foreign income | 204.7 | 230.2 | 256.7 | ||
Total income (loss) before provision for income taxes | $1,159.2 | $1,393.7 | $(600.9) | ||
The provision for income taxes consists of the following:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
Current | |||||
Federal income tax | $162.4 | $132.2 | $186.0 | ||
State and local income tax | 29.2 | 27.0 | 29.1 | ||
Foreign income tax | 51.4 | 55.5 | 46.2 | ||
Total current | 243.0 | 214.7 | 261.3 | ||
Deferred | |||||
Federal income tax | (24.3) | 102.5 | (333.4) | ||
State and local income tax | (1.3) | (0.8) | (26.0) | ||
Foreign income tax | (2.9) | (13.8) | (6.1) | ||
Total deferred | (28.5) | 87.9 | (365.5) | ||
Total provision (benefit) for income taxes | $214.5 | $302.6 | $(104.2) | ||
The following table summarizes the effective income tax rate:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
Income (loss) before provision for income taxes | $1,159.2 | $1,393.7 | $(600.9) | ||
Provision (benefit) for income taxes | $214.5 | $302.6 | $(104.2) | ||
Effective income tax rate | 18.5% | 21.7% | 17.3% | ||
The effective tax rate is impacted by a variety of factors, including, but not limited to, changes in the sources of
income or loss during the period and whether such income or loss is taxable to the Company and its subsidiaries. The following
table reconciles the total tax provision for income taxes and effective income tax rate to the U.S. federal statutory tax rate:
Year Ended December 31, | ||||||||
2025 | 2024 | 2023 | ||||||
(Dollars in millions) | ||||||||
Statutory U.S. federal income tax rate | $243.4 | 21.0% | $292.7 | 21.0% | $(126.2) | 21.0% | ||
State and local income taxes, net of federal effect(1) | 20.5 | 1.8% | 25.1 | 1.8% | (9.3) | 1.5% | ||
Foreign tax effects | ||||||||
Netherlands | 17.4 | 1.5% | 17.5 | 1.3% | 15.7 | (2.6)% | ||
United Kingdom | 18.8 | 1.6% | 13.9 | 1.0% | 15.9 | (2.6)% | ||
Other foreign jurisdictions | 10.2 | 0.9% | 7.2 | 0.4% | 10.5 | (1.7)% | ||
Effect of cross-border tax laws | ||||||||
Foreign tax credits | (36.4) | (3.1)% | (52.1) | (3.7)% | (30.4) | 5.1% | ||
Basis difference in investments | (14.3) | (1.2)% | — | —% | — | —% | ||
Other | (5.7) | (0.5)% | 6.3 | 0.4% | 1.5 | (0.3)% | ||
Tax credits | (4.2) | (0.4)% | (5.3) | (0.4)% | (0.1) | 0.0% | ||
Changes in valuation allowances | 13.9 | 1.2% | 1.4 | 0.1% | 0.3 | 0.0% | ||
Nontaxable or nondeductible items | ||||||||
Nontaxable income to non-controlling interest holders | (26.2) | (2.3)% | (11.7) | (0.8)% | (19.0) | 3.2% | ||
Officer compensation limitation | 26.5 | 2.3% | 19.4 | 1.4% | 23.6 | (3.9)% | ||
Other nontaxable or nondeductible items | (2.4) | (0.2)% | 3.1 | 0.2% | 1.3 | (0.2)% | ||
Changes in unrecognized tax benefits(2) | 2.2 | 0.2% | (1.8) | (0.1)% | 6.8 | (1.1)% | ||
Net excess tax benefits on equity-based compensation | (46.0) | (4.0)% | (18.7) | (1.3)% | (1.0) | 0.2% | ||
Other | (3.2) | (0.3)% | 5.6 | 0.4% | 6.2 | (1.3)% | ||
Effective income tax rate | $214.5 | 18.5% | $302.6 | 21.7% | $(104.2) | 17.3% | ||
(1)The majority of the state and local income taxes, net of federal effect, are in New York, New York City, and California for all years presented.
(2)The changes in unrecognized tax benefits include the net tax effect of tax positions taken in the current period and changes related to prior periods.
The following table summarizes the income taxes paid (net of refunds) and by jurisdiction if amount is equal to or
greater than 5% of the total:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
Federal income tax | $61.2 | $146.5 | $172.2 | ||
State and local income tax | 26.5 | 23.0 | 18.9 | ||
Foreign income tax | |||||
Netherlands | 28.3 | 22.4 | 30.3 | ||
United Kingdom | 17.9 | 15.0 | 18.4 | ||
Other foreign income tax | 19.2 | 11.9 | 10.3 | ||
Total | $153.1 | $218.8 | $250.1 | ||
Deferred income taxes reflect the net tax effects of temporary differences that may exist between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted tax rates in
effect for the year in which the differences are expected to reverse. The following table summarizes the tax effects of the
temporary differences:
As of December 31, | |||
2025 | 2024 | ||
(Dollars in millions) | |||
Deferred tax assets | |||
Federal foreign tax credit carryforward | $70.6 | $47.9 | |
State net operating loss carryforwards | 2.4 | 5.1 | |
Foreign net operating loss carryforwards | 6.5 | 7.8 | |
Tax basis goodwill and intangibles | 203.4 | 218.3 | |
Depreciation and amortization | 68.4 | 76.3 | |
Deferred equity-based compensation | 65.3 | 83.1 | |
Lease liabilities | 111.7 | 114.7 | |
Accrued compensation | 1,128.0 | 1,045.8 | |
Other | 147.8 | 98.8 | |
Deferred tax assets before valuation allowance | 1,804.1 | 1,697.8 | |
Valuation allowance | (74.0) | (62.7) | |
Total deferred tax assets | $1,730.1 | $1,635.1 | |
Deferred tax liabilities(1) | |||
Unrealized appreciation on investments | $1,600.4 | $1,517.3 | |
Lease right-of-use assets | 85.1 | 87.4 | |
Basis difference in investments | 48.0 | 100.2 | |
Other | 70.7 | 39.6 | |
Total deferred tax liabilities | $1,804.2 | $1,744.5 | |
Net deferred tax assets (liabilities) | $(74.1) | $(109.4) | |
(1)As of December 31, 2025 and 2024, $1,697.9 million and $1,607.5 million, respectively, of deferred tax assets were offset and presented as a single
deferred tax liability amount on the Company’s consolidated balance sheets as these deferred tax assets and liabilities relate to the same jurisdiction.
The tax credit and net operating loss carryforwards consist of the following:
December 31, 2025 | |||
(Dollars in millions) | Expiration Year(1) | ||
Federal foreign tax credit | $70.6 | 2030 | |
State net operating loss | 2.4 | 2026 | |
Foreign net operating loss | 6.5 | 2037 | |
(1)Represents year tax attributes begin to expire.
The Company evaluated positive and negative sources of evidence in determining the realizability of its deferred tax
assets including the character, sourcing, and timing of projected future taxable income. As of December 31, 2025 and 2024, the
Company established a total valuation allowance of $74.0 million and $62.7 million, respectively, which are primarily related to
foreign tax credit (“FTC”) deferred tax assets, with the net increase primarily due to an increase in the FTC carryforward and
related deferred tax assets. For all other deferred tax assets, the Company has concluded it is more likely than not that they will
be realized and that a valuation allowance is not needed as of December 31, 2025.
As of December 31, 2025 and 2024, the Company had federal, state, local, and foreign taxes payable of $141.4 million
and $46.2 million, respectively, which is recorded as a component of accounts payable, accrued expenses and other liabilities
on the accompanying consolidated balance sheets.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign
tax regulators. As of December 31, 2025, the Company’s U.S. federal income tax returns for the years 2022 through 2024 are
generally open under the normal three-year statute of limitations and therefore subject to examination. State and local tax
returns are generally subject to audit from 2020 to 2024. Foreign tax returns are generally subject to audit from 2011 to 2024.
Certain of the Company’s affiliates are currently under audit by federal, state and foreign tax authorities. The Company does
not believe that the outcome of the audits will require it to record material reserves for uncertain tax positions or that the
outcome will have a material impact on the consolidated financial statements.
Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more
likely than not” to be sustained upon examination. The Company has recorded unrecognized tax benefits of $41.4 million and
$38.0 million as of December 31, 2025 and 2024, respectively, which is reflected in accounts payable, accrued expenses and
other liabilities in the accompanying consolidated balance sheets. These balances include $17.6 million and $16.7 million
related to interest and penalties associated with uncertain tax positions as of December 31, 2025 and 2024, respectively. During
the years ended December 31, 2025, 2024 and 2023, the Company accrued penalties and interest expense, net of reductions,
related to unrecognized tax benefits of $0.9 million, $(0.8) million, and $4.8 million, respectively. If recognized, $29.2 million
of uncertain tax positions would be recorded as a reduction in the provision for income taxes.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of penalties and interest,
is as follows:
As of December 31, | |||||
2025 | 2024 | 2023 | |||
(Dollars in millions) | |||||
Balance at January 1 | $21.3 | $24.5 | $26.2 | ||
Additions based on tax positions related to current year | 1.3 | 1.3 | 1.5 | ||
Additions for tax positions of prior years | 2.6 | — | 1.6 | ||
Reductions for tax position of prior years | (0.4) | (1.2) | (0.2) | ||
Reductions due to lapse of statute of limitations | (1.0) | (0.4) | (4.6) | ||
Reductions due to settlements | — | (2.9) | — | ||
Balance at December 31 | $23.8 | $21.3 | $24.5 | ||
On October 8, 2021, the OECD introduced a 15% global minimum tax under the Pillar Two GloBE model rules. On
January 5, 2026, the OECD announced a “side-by-side” system under which U.S.-parented groups would be able to elect to be
exempt from certain Pillar Two provisions. Additional guidance on the “side-by-side” system and implementation of such
system remain subject to further discussions and clarifications from the OECD and local implementation by each OECD
member country. Pillar Two has not had a material impact to the Company’s provision for income taxes; however, the
Company will continue to monitor as additional guidance is released by the OECD, OECD member countries based on their
enacted law changes, and other standard-setting bodies.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA extends several
provisions from the 2017 Tax Cuts and Jobs Act along with other domestic and international corporate tax provisions. The
OBBBA did not have a material impact on the Company’s provision for income taxes for the year ended December 31, 2025,
but the Company will continue to monitor as additional guidance is released by U.S. Department of the Treasury, the Internal
Revenue Service, and other standard-setting bodies.
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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 Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.