Washington, DC – Global private equity firm The Carlyle Group today released a summary of its investment activity for calendar year 2004, including $5.3 billion returned to investors, $2.7 billion invested and $7.8 billion raised.

William E. Conway, Jr., Co-founder and Managing Director of The Carlyle Group, said, “This was Carlyle’s best year ever. We both invested more money than ever before and returned more money to our investors through 71 exits and partial exits. We have been extremely active in all of our asset classes and geographic regions. We expect 2005 to be a challenging year.”

• Dollars returned to Carlyle investors: $5.3 billion
• Dollars invested in buyouts, venture, real estate and leveraged finance: $2.7 billion
• Dollars raised for investing: $7.8 billion
• 71 exits and partial exits
• 107 investments

In 2003, Carlyle returned $2.3 billion, invested $2.6 billion, and raised $2 billion.)

Carlyle conducted final closings on two funds:

• Carlyle/Riverstone Global Energy and Power Fund II – $1.1 billion
• Carlyle High Yield Partners VI, Ltd. – $400 million

Summary of 2004 Investment Activity

Global Buyout Activity

North America Buyout

Invested

• Loews Cineplex Entertainment Corp. – Exhibits feature films in theaters; acquired 7/04
• Garrett Aviation Services and Piedmont/Hawthorne Holdings, Inc. – Provides aftermarket services to the general aviation market; acquired 8/04
• Standard Aero –Provides aftermarket services for gas turbine engines; acquired 8/04
• PanAmSat Corporation – Provides video, broadcasting and network distribution and delivery services; acquired 8/04; recapitalization 10/04
• DDI Pocket, Inc.* – Provides wireless data and voice services; acquired 10/04

Exits and Partial Exits

• Dex Media, Inc. – Provides local and national advertisers with directory, Internet and direct marketing solutions; recapitalization 1/04; IPO 7/04
• Aviall Services, Inc. – Provides supply-chain management for the aviation industry; partial exit 5/04
• United Defense Industries, Inc. – Designs, develops and produces combat vehicles, artillery, naval guns, missile launchers and precision munitions; exited 5/04
• Align Technology, Inc. – Produces orthodontic devices; block sale 5/04
• Horizon Lines, LLC – Provides port-to-port container transportation; exited 7/04
• Grand Vehicle Works LLC – Manufactures transportation products for truck fleets and specialty and recreational vehicles; recapitalization 7/04
• Empi, Inc. – Produces rehabilitative medical devices; exited 10/04
• Epsilon (subsidiary of Relizon) – Provides outsourced business communication services; exited 10/04
• Honsel International Technologies, Sarl* – Manufactures light metal automotive parts; exited 11/04
• Casema NV* – Provides cable television; recapitalization 12/04
• Duratek, Inc. – Provides radioactive waste remediation; exited 12/04
• Firth Rixson plc* – Manufactures highly engineered forged, cast and other specialty metal products; recapitalization 12/04
• Panolam Industries International – Manufactures decorative laminate panels; recapitalization 12/04
• Sippican, Inc. – Provides anti-ship missile defense systems; exited 12/04

Carlyle Management Group

Exits and Partial Exits

• Key Plastics – Supplies engineered plastic components and assemblies; exited 6/04
• Key Safety Systems – Supplies automotive safety components and systems; exited 6/04
• Key Automotive Group – Supplies automotive parts and systems; recapitalization 6/04; exited 8/04

Europe Buyout

Invested

• Saprogal – Produces animal nutrition products; acquired 5/04
• AZ Electronic Materials – Supplies electronic materials to the semiconductor and flat panel display markets; acquired 9/04
• HT Troplast – Manufactures vinyl window profiles; acquired 12/04

Exits and Partial Exits

• Aprovia – Publishes business documents in the French language market; partial exit through progressive sales of divisions 8/04
• Andritz, AG – Produces machinery for the pulp and paper, steel and water treatment industries; exited 8/04
• Medimedia – Provides healthcare educational materials and services; partial exit through progressive sales of divisions 10/04
• Beru AG – Manufactures cold-start diesel engine ignition systems; exited 11/04
• Firth Rixson plc* – Manufactures highly engineered forged, cast and other specialty metal products; recapitalization 12/04
• Casema NV* – Provides cable television; recapitalization 12/04
• Terreal – Manufactures tiles and bricks; recapitalization 12/04
• Riello SpA –Manufactures heating products; exited 12/04
• Honsel International Technologies, Sarl* – Manufactures automotive castings; exited 12/04
• Tecnoforge – Manufactures pipes and flanges for oil industry; exited 12/04
• Messer Eutectic Castolin – Manufactures cutting and welding tools; exited 12/04

Asia Buyout

Invested

• Caribbean Investment Holdings – Sells and administers offshore holding companies in a variety of jurisdictions worldwide; acquired 08/04
• DDI Pocket, Inc.* – Provides wireless data and voice services; acquired 10/04

Exits and Partial Exits

• KorAm Bank – Commercial bank; exited 5/04
• Taiwan Broadband Communications – Provides cable television; recapitalization 08/04

Japan Buyout

Invested

• DDI Pocket, Inc.* – Provides wireless data and voice services; acquired 10/04
• Rhythm Corporation – Manufactures automobile steering and suspension components; acquired 12/04

Global Venture Activity

North America Venture

Invested

• Liquid Engines, Inc. – Develops tax planning and optimization software for large corporate taxpayers; invested 1/04; follow-on investment 3/04
• Ventaso, Inc. – Develops sales and marketing software; follow-on investment 2/04
• BlackBoard, Inc. – Provides e-education infrastructure; follow-on investment 2/04
• Panasas, Inc. – Develops highly scalable and agile storage networks; follow-on investments 2/04, 3/04, 5/04 & 10/04
• Sonitrol, Inc. – Provides alarm/security systems and monitoring services to commercial enterprises; invested 3/04
• ISR Solutions, Inc. – Integrates security systems; follow-on investment 3/04; exited 12/04
• Adesso Systems, Inc. – Provides software solutions for mobile application development; invested 3/04
• Secure Elements, Inc. – Develops network security vulnerability remediation management software; follow-on investments 3/04 & 10/04
• Proteus Biomedical, Inc. – Develops medical devices that treat congestive heart failure; invested 4/04; follow-on investment 5/04
• TrenStar, Inc. – Provides outsourced logistics and supply-chain infrastructure to manufacturers; follow-on investment 5/04
• BNX Systems Corporation – Provides e-business security, infrastructure and authentification management; follow-on investments 5/04 & 7/04
• NeoVista, Inc. – Develops device-based therapy for age-related macular degeneration (AMD); follow-on investments 5/04 & 11/04
• AuthenTec, Inc. – Designs and produces placement and swipe sensors for fingerprint biometrics; invested 6/04
• StarBAK Communications, Inc. – Provides streaming media infrastructure services; follow-on investment 6/04
• DHS Technologies, LLC – Develops quick-erect/strike tactical soft-walled shelter systems and related peripherals; invested 7/04
• The Innovation Factory (LipoSonix) – Incubates medical device technology; follow-on investment 7/04
• Transport Pharmaceuticals, Inc. – Develops electrical-based technology for trans-dermal drug delivery; invested 8/04 & 10/04
• Mainstream Data, Inc. – Provides text, news, stock quotations, digital images, video files and streaming media; follow-on investment 9/04
• Cellutions, Inc. – Develops electricity-based therapy for the cosmetic reduction of cellulite; invested 9/04
• Verari Systems, Inc. – Develops powerful, flexible and scalable platform-independent blade computing systems; invested 9/04
• StrionAir, Inc. – Designs air filtration & purification technology for commercial & residential HVAC systems; invested 9/04
• Tradebeam Holdings, Inc. – Provides Global Trade Management (GTM) software and services; invested 11/04

Exits and Partial Exits

• Indigo Systems, Inc. – Manufactures infrared sensors and camera systems; exited 1/04
• Varsity Group, Inc. – Provides marketing services and online textbooks to colleges; sold shares 1/04, 2/04 & 6/04
• Realeum, Inc. – Provides property management solutions for the multi-family real estate industry; exited 4/04
• Sight Resource Corporation – Provides primary eye care products and services; exercised put options of shares 5/04
• Heritage Health Systems, Inc. – Provides local healthcare management solutions; exited 6/04
• Matrics, Inc. – Develops radio frequency identification technologies; exited 9/04
• WCI Cable, Inc. – Provides submarine connectivity within Alaska and between Alaska and the continental U.S.; dividend 10/04

Europe Venture

Invested

• Fennel Technologies AG – Manufactures automobile interior design packages; acquired 1/04
• Inmedia Communications – Provides satellite services; acquired 4/04
• Solsoft S.A. – Develops network security software; follow-on investment 6/04
• Personal & Informatik AG – Provides human resources software and services; invested 8/04
• Orthogon Systems – Develops high capacity fixed wireless access systems; follow-on investment 10/04
• Trema Group – Provides software solutions for the financial services industry; follow-on investment 12/04

Exits and Partial Exits

• Omiris – Facilitates cross-border equity transactions; exited 3/04
• Trellis Photonics, Ltd. – Provides photonic switching; exited 3/04
• Egencia, S.A. – Provides online corporate travel services; exited 3/04
• Surplex – Consolidates surplus assets; exited 07/04
• Casema NV* – Provides cable TV; recapitalization 12/04

Asia Venture

Invested

• Epivalley Company Limited – Manufactures gallium nitride epiwafers for use in high brightness LEDs; invested 1/04 & 12/04
• Awaken Limited – Develops content in the wireless data industry; invested 2/04
• Enorbus Technologies Limited – Develops games and entertainment content for wireless phones; invested 4/04
• Nulife Private Limited – Develops low-power processors for use in medical devices such as hearing aids; invested 6/04
• Amperex Technology Limited – Manufactures lithium-ion polymer batteries; follow-on investment 8/04
• Target Media Limited – Provides in-building interactive advertising; invested 8/04
• Newgen Imaging Systems Private Limited – Provides e-publishing services; invested 10/04
• Huaya Microelectronics Limited (HuayaMicro) – Designs ICs for digital video display market; follow-on investment 11/04
• Runstar International, Ltd. – Develops online games; invested 11/04

Exits and Partial Exits

• LinkAir Communications, Inc. – Develops high speed wireless chip technology; exited 1/04
• eAccess Limited – Provides broadband access; exited 3/04
• Ritechoice Technologies Pte. Limited – Provides software solutions for financial services and securities industry; exited 8/04
• Ctrip.com International, Ltd. – Provides online travel services; private stock sale 7/07; block sales 11/04 & 12/04

Global Energy & Power Activity

Invested

• Legend Natural Gas, L.P. – Oil and gas exploration and production; follow-on investment 1/04; exited 9/04
• InTank – In-service fuel tank cleaning and inspection; follow-on investments 2/04, 3/04 & 4/04; exited 10/04
• Frontier Drilling ASA – Norwegian drillship operator; follow-on investments 2/04, 3/04, 4/04, 8/04 & 12/04
• Mariner Energy – Oil and gas exploration and production; acquired 3/04
• CDM Resource Management – Natural gas compression services, follow-on investments 3/04, 5/04 & 11/04
• Buckeye Partners – Energy products pipeline and terminal services; acquired 5/04; profit distribution 12/04
• Belden & Blake – Oil and gas exploration and production; acquired 7/04
• Topaz Power Group – Texas power generation portfolio; acquired 7/04; follow-on investment 12/04
• Legend Natural Gas II, L.P. – Oil and gas exploration and production; acquired 10/04

Exits and Partial Exits

• Magellan Midstream Holdings, L.P. – Energy product pipeline and terminal services; profit distributions 1/04, 9/04 & 12/04

Global Real Estate Activity

North America Real Estate

Invested

• 261 5th Avenue, New York, NY – Office building; acquired 2/04
• Toll Brothers Golf Portfolio, Michigan – Two golf courses; acquired 3/04
• Parris Landing, Boston, MA – Condominium conversion; acquired 3/04
• Clarendon 1021, Arlington, VA – Condominium development; forward purchase agreement 4/04
• Pasadena Hilton, Pasadena, CA – Hotel; acquired 5/04
• Park Terrace, San Diego, CA – Condominium development; acquired 5/04
• Savoy at Little Neck, Long Island, NY – Assisted living facility; acquired 6/04
• Palmetto Lakes, FL – Nine industrial buildings; acquired 6/04
• 3883 Connecticut Ave, NW, Washington, DC – Residential conversion to condominium; acquired 8/04
• Quincy Court, Washington, DC – Condominium development; equity interests 8/04
• 8th Avenue Hotel Portfolio, New York, NY – Hotels and parking garage; acquired 8/04
• High Pointe at Jefferson Park, Fairfax, VA – Condominium conversion; acquired 8/04
• 1010 Massachusetts Ave, NW, Washington, DC – Condominium development; acquired 8/04
• Sunrise of Yorba Linda, Yorba Linda, CA – Assisted living facility; acquired 9/04
• Heights at Carmel Valley, San Diego, CA – Condominium conversion; acquired 10/04
• 1275 K Street, NW, Washington, DC – Office building; acquired 10/04
• Strand at New River Village, Fort Lauderdale, FL – Condominium development; forward purchase agreement 10/04
• The Whitman, Washington, DC – Condominium development; acquired 11/04
• Atria (101 Market), San Diego, CA – Condominium conversion; acquired 11/04
• Park Place, Annapolis, MD – Multi-use development; acquired 11/04
• 350 West 42nd Street, New York, NY – Condominium development; acquired 12/04
• Renaissance, Falls Church, VA – Condominium conversion; acquired 12/04

Exits and Partial Exits

• Cypress Equities Venture/Largo Landing, Largo, FL – Retail; exited 7/04
• Market Tower, Indianapolis, IN – Office building; exited 7/04
• Sierra Pointe II, San Francisco, CA – Office building; exited 8/04
• Cypress Equities Venture/Parkway Crossing East, Woodbridge, VA – Retail; exited 8/04
• Toll Brothers Golf Portfolio, Michigan – One of two courses in the portfolio; exited 8/04
• Airport Technology Center, Phoenix, AZ – Office building; exited 8/04

Europe Real Estate

Invested

• Islands-Brygge – Danish development of residential apartments; invested 3/04
• Valmy – East of Paris office building development; invested 4/04
• Cumbernauld – UK development of retail park; invested 6/04
• La Chapelle – Paris office building; acquired 7/04
• Louveciennes – Paris office building; acquired 7/04
• Loi 15 – Belgian office building; acquired 7/04
• San Paolo portfolio – Italian portfolio of 230 buildings; acquired 11/04 & 197 exited 12/04

Exits and Partial Exits

• Thalès – ten-story Paris office building; exited 5/04
• Ivry (aka Metrosud) – Paris office building; exited 5/04
• Astralis (aka Montrouge 2) – Paris office/activity building; exited 5/04
• Daumesnil – Paris office building; exited 6/04
• Chiusa – Milan office and retail complex; exited 9/04
• Jupiter portfolio – Italian portfolio of properties; 19 exited throughout 2004

Asia Real Estate

Invested

• Omiya Center Building, Tokyo – Office building; acquired 10/04

Exits and Partial Exits

• Century Tower, Seoul – 298,000 square foot, 20-story office building; exited 8/04

Global Leveraged Finance Activity

Carlyle High Yield Partners VI, Ltd.

• $400 million cash flow collateralized debt obligation (CDO) that closed in July 2004, investing primarily in leveraged loans.

Carlyle Strategic Partners

Invested

• Stellex Aerostructures, Inc. – Manufactures highly engineered titanium and aluminum aerostructure components and subsystems; acquired 10/04

Carlyle Mezzanine Partners

Invested

• Sanitors – Provides janitorial and landscaping services; invested 9/04

* * * * *

Notes:

*Casema NV – Three Carlyle funds participated in this investment: Carlyle Partners III, Carlyle Europe Partners and Carlyle Europe Venture Partners.

*DDI Pocket – Three Carlyle funds participated in this investment: Carlyle Partners III, Carlyle Asia Partners and Carlyle Japan Partners.

*Firth Rixson plc – Two Carlyle funds participated in this investment: Carlyle Partners III and Carlyle Europe Partners.

*Honsel International Technologies, Sarl – Two Carlyle funds participated in this investment: Carlyle Partners II and Carlyle Europe Partners.

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