Exhibit 99.1
Blackstone Reports Second Quarter 2019 Results
New York, July 18, 2019: Blackstone (NYSE:BX) today reported its second quarter 2019 results.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone’s strong second-quarter results were highlighted by $45 billion of new capital inflows from our limited partners. Total Assets Under Management rose to a record $545 billion, up 24% year over year, driven by an unprecedented $151 billion of inflows over the last twelve months and positive investment performance. These results reflect the enormous confidence our firm has earned with global investors through decades of delivering strong performance and innovation. We marked the firm’s final quarter as a publicly-traded partnership, culminating in our transition to a corporation as of July 1. Investor reception to the conversion has been exceedingly positive, and we are beginning to see the benefits of having a vastly larger universe of potential shareholders.”
Blackstone issued a full detailed presentation of its second quarter 2019 results, which can be viewed atwww.blackstone.com.
Dividend
Blackstone has declared a quarterly dividend of $0.48 per common share to record holders of common shares at the close of business on July 29, 2019. This dividend will be paid on August 5, 2019.
Quarterly Investor Call Details
Blackstone will host a conference call on July 18, 2019 at 9:00 a.m. ET to discuss second quarter 2019 results. The conference call can be accessed via the Shareholders section of Blackstone’s website atwww.blackstone.com or by dialing +1 (877) 391-6747 (U.S. domestic) or +1 (617) 597-9291 (international), passcode 149 943 55#. For those unable to listen to the live broadcast, a replay will be available onwww.blackstone.com or by dialing +1 (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international), passcode 109 924 29#.
About Blackstone
Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies in which we invest, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our businesses, with $545 billion in assets under management, include investment vehicles focused on private
The Blackstone Group Inc. 345 Park Avenue New York, New York 10154 T 212 583 5000 |
equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available atwww.blackstone.com. Follow Blackstone on twitter@Blackstone.
Forward-Looking Statements
This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
This presentation does not constitute an offer of any Blackstone Fund.
Investor and Media Relations Contacts
Joan Solotar Blackstone Tel: +1 (212)583-5068 solotar@blackstone.com | Weston Tucker Blackstone Tel: +1 (212)583-5231 tucker@blackstone.com | Christine Anderson Blackstone Tel: +1 (212)583-5182 Christine.Anderson@blackstone.com |
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July 18, 2019 Blackstone’s Second Quarter 2019 Earnings |
Blackstone 1 Blackstone’s Second Quarter 2019 GAAP Results GAAP Net Income was $647 million for the quarter and $1.7 billion year-to-date. GAAP Net Income Attributable to The Blackstone Group L.P. was $306 million for the quarter and $787 million year-to-date. Income Before Provision for Taxes Margin is calculated by dividing Income Before Provision for Taxes by Total Revenues. Effective July 1, 2019, The Blackstone Group L.P. converted from a Delaware limited partnership to a Delaware corporation, The Blackstone Group Inc. (the “Conversion”). This presentation includes results for The Blackstone Group L.P. prior to the Conversion and for the quarter ended June 30, 2019. As of any time prior to the Conversion, references to “Blackstone,” “the Company,” “our” and similar terms mean The Blackstone Group L.P. and its consolidated subsidiaries and, as of any time after the Conversion, The Blackstone Group Inc. and its consolidated subsidiaries. (Dollars in Thousands, Except per Unit Data) (Unaudited) 2Q'18 2Q'19 2Q'18 YTD 2Q'19 YTD 2Q'17 LTM 2Q'18 LTM 2Q'19 LTM Revenues Management and Advisory Fees, Net 721,384 $ 840,378 $ 1,450,233 $ 1,650,104 $ 2,575,989 $ 2,865,214 $ 3,227,667 $ Incentive Fees 19,378 21,915 31,944 34,047 179,504 187,644 59,643 Investment Income (Loss) Performance Allocations Realized 503,376 332,520 773,016 574,895 2,654,741 2,630,260 1,678,386 Unrealized 440,351 157,732 1,068,440 821,731 349,657 992,056 314,664 Principal Investments Realized 129,197 145,040 171,342 218,301 602,103 430,709 462,821 Unrealized 103,468 (37,345) 215,242 131,699 806 290,760 (33,626) Total Investment Income 1,176,392 597,947 2,228,040 1,746,626 3,607,307 4,343,785 2,422,245 Interest and Dividend Revenue 40,073 43,686 75,458 87,770 112,561 152,956 184,259 Other 675,343 (17,120) 616,026 (6,870) (11,446) 546,673 49,421 Total Revenues 2,632,570 1,486,806 4,401,701 3,511,677 6,463,915 8,096,272 5,943,235 Expenses Compensation and Benefits Compensation 427,479 438,521 816,882 909,918 1,352,773 1,540,575 1,702,993 Incentive Fee Compensation 9,743 8,886 16,405 14,292 83,870 78,187 31,803 Performance Allocations Compensation Realized 186,398 125,825 298,460 212,220 880,435 1,018,209 624,836 Unrealized 189,991 64,518 444,426 351,533 316,754 453,777 226,849 Total Compensation and Benefits 813,611 637,750 1,576,173 1,487,963 2,633,832 3,090,748 2,586,481 General, Administrative and Other 145,828 175,308 272,541 321,370 508,616 532,185 643,702 Interest Expense 39,320 43,596 77,991 85,598 159,755 194,142 171,597 Fund Expenses 17,622 5,586 72,607 8,473 112,105 131,649 14,352 Total Expenses 1,016,381 862,240 1,999,312 1,903,404 3,414,308 3,948,724 3,416,132 Other Income Reduction of Tax Receivable Agreement Liability - - - - - 403,855 - Net Gains from Fund Investment Activities 73,519 61,131 184,118 191,456 311,091 329,529 199,060 Income Before Provision for Taxes 1,689,708 $ 685,697 $ 2,586,507 $ 1,799,729 $ 3,360,698 $ 4,880,932 $ 2,726,163 $ Provision for Taxes 138,731 38,736 193,226 79,891 162,846 849,328 136,055 Net Income 1,550,977 $ 646,961 $ 2,393,281 $ 1,719,838 $ 3,197,852 $ 4,031,604 $ 2,590,108 $ Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities 905 1,095 (370) 3,575 15,418 10,445 1,841 Net Income Attributable to Non-Controlling Interests in Consolidated Entities 129,078 80,744 284,577 267,577 392,966 530,387 341,878 Net Income Attributable to Non-Controlling Interests in Blackstone Holdings 678,952 259,330 999,160 661,590 1,319,656 1,698,800 1,027,419 Net Income Attributable to The Blackstone Group L.P. ("BX") 742,042 $ 305,792 $ 1,109,914 $ 787,096 $ 1,469,812 $ 1,791,972 $ 1,218,970 $ Net Income per Common Unit, Basic 1.09 $ 0.45 $ 1.64 $ 1.17 $ 2.25 $ 2.66 $ 1.80 $ Net Income per Common Unit, Diluted 1.09 $ 0.45 $ 1.63 $ 1.16 $ 2.22 $ 2.66 $ 1.79 $ Income Before Provision for Taxes Margin 64.2% 46.1% 58.8% 51.2% 52.0% 60.3% 45.9% |
Blackstone 2 Blackstone’s Second Quarter 2019 Highlights The changes in carrying value, fund returns and composite returns presented throughout this presentation represent those of the applicable Blackstone Funds and not those of Blackstone. Common shares repurchased includes shares for which trades were executed in the second quarter and settlement occurred in the third quarter. All references to shares or per share amounts prior to the Conversion refer to Units or per Unit amounts. See pages 33-34, Definitions and Dividend Policy, for definitions of terms used throughout this presentation. Financial Measures Fee Related Earnings (“FRE”) of $422 million ($0.35/share) in the quarter, up 24% year- over-year • FRE was $796 million year-to-date ($0.66/share), up 18% year-over-year Distributable Earnings (“DE”) of $709 million ($0.57/share) in the quarter, up 1% year- over-year • DE was $1.2 billion year-to-date ($1.01/share), up 4% year-over-year Net Accrued Performance Revenues receivable of $4.0 billion ($3.39/share), up 4% year- over-year Capital Metrics Total Assets Under Management (“AUM”) of $545.5 billion, up 24% year-over-year Inflows of $45.1 billion in the quarter and a record $150.7 billion for the LTM Realizations of $10.6 billion in the quarter and $38.4 billion for the LTM Deployment of $18.3 billion in the quarter and a record $56.3 billion for the LTM Shareholder Dividends Dividend of $0.48 per common share payable on August 5, 2019 • Dividends of $0.85 per common share year-to-date Repurchased 7.0 million common shares in the quarter and 22.3 million common shares for the LTM • Increased share repurchase authorization to $1.0 billion Nearly $900 million distributed with respect to the second quarter to shareholders through dividends and share repurchases Corporate Structure Completed the conversion to a corporation on July 1, 2019 |
Blackstone 3 Blackstone’s Second Quarter 2019 Segment Earnings Fee Related Earnings per Share is based on end of period DE Shares Outstanding (see page 24, Share Summary). DE per Common Share is based on DE Attributable to Common Shareholders (see page 23, Shareholder Dividends) and end of period Participating Common Shares outstanding. YTD per Share amounts represent the sum of the last two quarters. See pages 31-32 for the Reconciliation of GAAP to Total Segment Measures. % Change % Change (Dollars in Thousands, Except per Share Data) 2Q'18 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Management and Advisory Fees, Net 722,994 $ 844,156 $ 17% 1,459,038 $ 1,658,218 $ 14% Fee Related Performance Revenues 45,515 13,624 (70)% 49,352 21,403 (57)% Fee Related Compensation (306,243) (293,834) (4)% (602,317) (617,865) 3% Other Operating Expenses (122,466) (142,121) 16% (229,558) (265,432) 16% Fee Related Earnings 339,800 $ 421,825 $ 24% 676,515 $ 796,324 $ 18% FRE per Share 0.28 $ 0.35 $ 25% 0.56 $ 0.66 $ 18% Realized Performance Revenues 477,544 341,386 (29)% 755,915 588,155 (22)% Realized Performance Compensation (172,894) (125,466) (27)% (287,723) (210,706) (27)% Realized Principal Investment Income 94,647 123,557 31% 123,340 149,465 21% Net Realizations 399,297 339,477 (15)% 591,532 526,914 (11)% Total Segment Distributable Earnings 739,097 $ 761,302 $ 3% 1,268,047 $ 1,323,238 $ 4% Net Interest Income 2,842 2,761 (3)% 989 7,822 691% Taxes and Related Payables (41,797) (55,201) 32% (66,839) (84,240) 26% Distributable Earnings 700,142 $ 708,862 $ 1% 1,202,197 $ 1,246,820 $ 4% DE per Common Share 0.56 $ 0.57 $ 2% 0.97 $ 1.01 $ 4% Total Segment Revenues 1,340,700 $ 1,322,723 $ (1)% 2,387,645 $ 2,417,241 $ 1% Total Assets Under Management 439,386,656 $ 545,482,337 $ 24% 439,386,656 $ 545,482,337 $ 24% Fee-Earning Assets Under Management 332,978,145 $ 387,864,642 $ 16% 332,978,145 $ 387,864,642 $ 16% |
Blackstone 4 Summary of Financials by Segment Fee Related Earnings (Dollars in Millions) Performance across segments generated LTM Fee Related Earnings of $1.6 billion and LTM Segment Distributable Earnings of $2.9 billion. • 2Q’19 LTM Distributable Earnings of $2.7 billion. Segment Distributable Earnings (Dollars in Millions) 2Q’19 LTM Total: $1,576 2Q’19 LTM Total: $2,881 Real Estate Private Equity Hedge Fund Solutions Credit $652 $421 $297 $205 $1,216 $1,062 $339 $264 |
Blackstone 5 Fee Related Earnings LTM Fee Related Earnings of $1.31 per share is up 15% year-over-year, and has increased 30% since 2Q’17 LTM. LTM Fee Related Earnings margin increased from 45.1% to 47.3% year-over-year, and has increased 260 basis points since 2Q’17 LTM. Fee Related Earnings (Per Share) Fee Related Earnings Margin $1.01 $1.14 $1.31 2Q'17 LTM 2Q'18 LTM 2Q'19 LTM FRE Margin is calculated by dividing Fee Related Earnings by Fee Related Revenues (defined as the sum of Total Segment Management and Advisory Fees, Net and Fee Related Performance Revenues). 44.7% 45.1% 47.3% 2Q'17 LTM 2Q'18 LTM 2Q'19 LTM |
Blackstone 6 2Q'19 2Q'19 LTM Real Estate Opportunistic Funds 4.4% 12.7% Core+ 0.8% 9.0% Private Equity Corporate Private Equity 0.7% 9.6% Tactical Opportunities 1.3% 7.9% Strategic Partners (2.6)% 7.9% Hedge Fund Solutions BPS Composite 2.0% 4.8% Credit Performing Credit 3.7% 9.8% Distressed (2.1)% (5.1)% Investment Performance and Net Accrued Performance Revenues Range of performance across strategies in the quarter; Net Accrued Performance Revenues were $4.0 billion ($3.39/share), up 4% year-over-year. • Appreciation generated $349 million of additional Net Accrued Performance Revenues, offsetting $162 million of Net Realized Distributions. Net Accrued Performance Revenues (Dollars in Millions) Investment Performance (Appreciation / Gross Returns) $3,872 $3,859 $4,044 $349 $162 2Q'18 1Q'19 Net Performance Revenues Net Realized Distributions 2Q'19 Investment Performance represents fund appreciation for Real Estate and Private Equity and gross returns for Hedge Fund Solutions and Credit. Appreciation for core+ funds excludes BREIT. BPS Composite net returns were 1.8% and 4.0% for 2Q’19 and 2Q’19 LTM, respectively. Performing Credit net returns were 2.8% and 6.9% for 2Q’19 and 2Q’19 LTM, respectively. Distressed net returns were (2.5)% and (5.2)% for 2Q’19 and 2Q’19 LTM, respectively. Net Realized Distributions excludes Net Performance Revenues realized, but not yet distributed as of the reporting date and included in the Net Accrued Performance Revenues balance. |
Blackstone 7 Capital Metrics Activity Inflows were $45.1 billion in the quarter, bringing LTM inflows to a record $150.7 billion. • Notable inflows in the quarter include $8.4 billion for the initial close for the sixth Real Estate European opportunistic fund and $7.2 billion raised for Infrastructure, bringing the Infrastructure platform to $14.0 billion. Realizations were $10.6 billion in the quarter and $38.4 billion for the LTM. Deployed $18.3 billion in the quarter and $56.3 billion for the LTM. • Committed an additional $8.4 billion during the quarter that is not yet deployed. (Dollars in Millions) Private Equity includes Corporate Private Equity, Core Private Equity, Life Sciences, and BTAS. Inflows Realizations Capital Deployed 2Q'19 2Q'19 LTM 2Q'19 2Q'19 LTM 2Q'19 2Q'19 LTM Total Real Estate 14,365 $ 42,130 $ 3,990 $ 14,729 $ 3,933 $ 16,807 $ Opportunistic 10,165 29,168 3,126 10,573 1,180 7,624 Core+ 3,002 8,591 505 2,421 2,364 6,915 BREDS 1,198 4,371 359 1,735 389 2,268 Total Private Equity 16,807 62,101 4,679 15,717 8,529 25,745 Private Equity 2,448 32,267 2,866 10,093 3,506 10,001 Tactical Opportunities 822 7,033 1,191 2,992 1,793 5,173 Strategic Partners 6,348 13,412 621 2,632 3,203 8,069 Infrastructure 7,189 9,388 - - 27 2,503 Hedge Fund Solutions BAAM 3,813 12,724 296 773 2,102 3,136 Credit GSO/BIS/Harvest 10,127 33,770 1,630 7,136 3,719 10,623 Total Blackstone 45,111 $ 150,725 $ 10,594 $ 38,355 $ 18,284 $ 56,312 $ Real Estate Private Equity |
Blackstone 8 $23.4 $27.8 $3.8 $5.2 $4.7 $14.3 $32.4 $44.5 $64.3 $91.7 2Q'18 2Q'19 $94.3 $104.5 $71.9 $74.7 $78.0 $96.5 $88.8 $112.3 $333.0 $387.9 2Q'18 2Q'19 $123.1 $139.3 $77.4 $81.4 $119.5 $171.2 $119.4 $153.6 $439.4 $545.5 2Q'18 2Q'19 Assets Under Management Total AUM increased to $545.5 billion, up 24% year-over-year, driven by $150.7 billion of inflows despite $65.1 billion of realizations and outflows. Fee-Earning AUM of $387.9 billion was up 16% year-over-year as $100.6 billion of inflows outpaced $52.0 billion of realizations and outflows. Perpetual Capital AUM reached $91.7 billion, up 43% year-over-year. Fee-Earning AUM (Dollars in Billions) Total AUM (Dollars in Billions) Real Estate Hedge Fund Solutions Credit Private Equity Perpetual Capital AUM (Dollars in Billions) |
Blackstone 9 $39.0 $22.0 $25.5 $38.8 $42.7 $45.0 $40.6 $54.4 $62.3 $64.7 $78.6 $93.8 $183.1 $197.8 $226.6 2Q'17 2Q'18 2Q'19 Additional Capital Detail Invested Performance Revenue Eligible AUM reached $226.6 billion at quarter end, up 15% year-over-year, and has increased 24% since the second quarter of 2017. Record undrawn capital (“Total Dry Powder”) available for investment of $150.3 billion, driven by fundraising activity for the latest flagship funds. Total Dry Powder (Dollars in Billions) 2Q’19 Total: $150.3 Invested Performance Revenue Eligible AUM (Dollars in Billions) Real Estate Private Equity Hedge Fund Solutions Credit Invested Performance Revenue Eligible AUM represents the fair value of invested assets that are eligible to earn performance revenues. $45.1 $74.9 $2.4 $27.9 |
Segment Highlights |
Blackstone 11 Real Estate Appreciation for core+ funds excludes BREIT. Total AUM: Increased 29% to a record $153.6 billion with inflows of $14.4 billion in the quarter and $42.1 billion for the LTM. • Held $8.4 billion initial close for the sixth European opportunistic fund; raised $2.0 billion in BREIT and $1.4 billion in BREP IX, which commenced its investment period on June 3rd. Realizations: $4.0 billion in the quarter and $14.7 billion for the LTM; realizations in the quarter included two secondary sales of Invitation Homes shares and the sale of Boca Resorts. Capital Deployed: $3.9 billion in the quarter and $16.8 billion for the LTM; deployment in the quarter included the acquisition of a Seattle office portfolio in BPP U.S. and an Australian office portfolio in BREP. • Committed an additional $6.1 billion during the quarter that is not yet deployed, driven by the acquisition of GLP’s 179 million square foot U.S. industrial portfolio, the largest ever private real estate transaction globally. Appreciation: Opportunistic funds and core+ funds increased 4.4% and 0.8% in the quarter, and 12.7% and 9.0% for the LTM, respectively. % Change % Change (Dollars in Thousands) 2Q'18 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Management Fees, Net 269,754 $ 277,940 $ 3% 517,700 $ 561,816 $ 9% Fee Related Performance Revenues 45,515 11,072 (76)% 50,018 17,748 (65)% Fee Related Compensation (120,783) (97,795) (19)% (221,393) (212,611) (4)% Other Operating Expenses (36,026) (40,114) 11% (65,443) (79,100) 21% Fee Related Earnings 158,460 $ 151,103 $ (5)% 280,882 $ 287,853 $ 2% Realized Performance Revenues 317,509 198,573 (37)% 468,690 275,755 (41)% Realized Performance Compensation (94,716) (67,742) (28)% (150,831) (97,642) (35)% Realized Principal Investment Income 50,199 47,420 (6)% 64,889 45,289 (30)% Net Realizations 272,992 178,251 (35)% 382,748 223,402 (42)% Segment Distributable Earnings 431,452 $ 329,354 $ (24)% 663,630 $ 511,255 $ (23)% Segment Revenues 682,977 $ 535,005 $ (22)% 1,101,297 $ 900,608 $ (18)% Total AUM 119,399,973 $ 153,604,820 $ 29% 119,399,973 $ 153,604,820 $ 29% Fee-Earning AUM 88,776,501 $ 112,287,094 $ 26% 88,776,501 $ 112,287,094 $ 26% |
Blackstone 12 Private Equity Total AUM: Increased 43% to a record $171.2 billion with inflows of $16.8 billion in the quarter and $62.1 billion for the LTM. • Raised $15.7 billion of capital primarily driven by Infrastructure and Strategic Partners in the quarter. Realizations: $4.7 billion in the quarter, including the sale of Cloverleaf, and $15.7 billion for the LTM. Capital Deployed: $8.5 billion in the quarter and $25.7 billion for the LTM, including the acquisition of Ultimate Software and Aadhar in the quarter. • Committed an additional $1.6 billion during the quarter that is not yet deployed, including Core Private Equity’s investment in Merlin Entertainments. Appreciation: Corporate Private Equity increased 0.7% in the quarter driven by underlying appreciation in the private portfolio, partially offset by decreases in the public portfolio and certain energy positions, and was up 9.6% for the LTM. % Change % Change (Dollars in Thousands) 2Q'18 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Management and Advisory Fees, Net 203,950 $ 278,976 $ 37% 394,812 $ 530,699 $ 34% Fee Related Compensation (94,170) (105,107) 12% (183,736) (212,694) 16% Other Operating Expenses (36,047) (40,429) 12% (67,198) (74,630) 11% Fee Related Earnings 73,733 $ 133,440 $ 81% 143,878 $ 243,375 $ 69% Realized Performance Revenues 138,171 122,907 (11)% 215,294 279,506 30% Realized Performance Compensation (68,513) (52,081) (24)% (101,558) (102,637) 1% Realized Principal Investment Income 32,600 42,906 32% 38,938 68,045 75% Net Realizations 102,258 113,732 11% 152,674 244,914 60% Segment Distributable Earnings 175,991 $ 247,172 $ 40% 296,552 $ 488,289 $ 65% Segment Revenues 374,721 $ 444,789 $ 19% 649,044 $ 878,250 $ 35% Total AUM 119,524,518 $ 171,171,687 $ 43% 119,524,518 $ 171,171,687 $ 43% Fee-Earning AUM 78,045,697 $ 96,467,272 $ 24% 78,045,697 $ 96,467,272 $ 24% |
Blackstone 13 Hedge Fund Solutions Total AUM: Increased 5% to a record $81.4 billion with inflows of $3.8 billion in the quarter and $12.7 billion for the LTM. • Increase primarily driven by platform diversification, as well as appreciation in customized strategies and individual investor and specialized solutions. • July 1 subscriptions of $1.1 billion are not yet included in Total AUM. Returns: BPS Composite gross returns of 2.0% in the quarter (1.8% net), outperforming on a net basis the HFRX Global HF Return Index which returned 1.6%. • Gross returns of 4.8% for the LTM (4.0% net) with less than one fifth of the volatility of broader markets, outperforming on a net basis the HFRX Global HF Return Index which returned (2.0)%. % Change % Change (Dollars in Thousands) 2Q'18 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Management Fees, Net 130,365 $ 137,713 $ 6% 259,938 $ 275,359 $ 6% Fee Related Compensation (40,533) (36,622) (10)% (80,172) (79,576) (1)% Other Operating Expenses (18,494) (21,112) 14% (37,279) (38,997) 5% Fee Related Earnings 71,338 $ 79,979 $ 12% 142,487 $ 156,786 $ 10% Realized Performance Revenues 7,270 11,960 65% 17,447 16,051 (8)% Realized Performance Compensation (2,546) (2,175) (15)% (5,469) (3,588) (34)% Realized Principal Investment Income 7,766 12,306 58% 8,406 12,023 43% Net Realizations 12,490 22,091 77% 20,384 24,486 20% Segment Distributable Earnings 83,828 $ 102,070 $ 22% 162,871 $ 181,272 $ 11% Segment Revenues 145,401 $ 161,979 $ 11% 285,791 $ 303,433 $ 6% Total AUM 77,403,078 $ 81,435,680 $ 5% 77,403,078 $ 81,435,680 $ 5% Fee-Earning AUM 71,889,290 $ 74,653,420 $ 4% 71,889,290 $ 74,653,420 $ 4% The BPS Composite gross and net returns are based on the BAAM Principal Solutions (“BPS”) Composite, which does not include BAAM's individual investor solutions (liquid alternatives), ventures (seeding and minority interests), strategic opportunities (co-invests), and advisory (non-discretionary) platforms, except for investments by BPS funds directly into those platforms. BAAM-managed funds in liquidation and non fee-paying assets (net returns only) are also excluded. The funds/accounts that comprise the BPS Composite are not managed within a single fund or account and are managed with different mandates. There is no guarantee that BAAM would have made the same mix of investments in a stand-alone fund/account. The BPS Composite is not an investible product and, as such, the performance of the BPS Composite does not represent the performance of an actual fund or account. |
Blackstone 14 Credit Total AUM: Increased 13% to $139.3 billion with inflows of $10.1 billion in the quarter and $33.8 billion for the LTM. • Concluded fundraising for the second energy credit fund strategy and held the second close for the second European senior debt fund strategy in the quarter. • Fundraising in the quarter brought Total AUM for U.S. direct lending strategies to $9.7 billion. • In the quarter, Insurance Solutions had $5.5 billion of gross inflows, including $2.8 billion of commitments for three private structured credit mandates, $705 million from the launch of a diversified alternatives product, and organic growth in existing relationships. Realizations: $1.6 billion in the quarter and $7.1 billion for the LTM. Capital Deployed: Record $3.7 billion in the quarter including Targa Badlands, Ultimate Software and Custom Ink and $10.6 billion for the LTM; committed an additional $336 million in the quarter that is not yet deployed. Returns: Strong gross returns of 3.7% in the quarter for Performing Credit; gross returns of (2.1)% in the quarter for Distressed driven by certain energy positions. % Change % Change (Dollars in Thousands) 2Q'18 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Management Fees, Net 118,925 $ 149,527 $ 26% 286,588 $ 290,344 $ 1% Fee Related Performance Revenues - 2,552 n/m (666) 3,655 n/m Fee Related Compensation (50,757) (54,310) 7% (117,016) (112,984) (3)% Other Operating Expenses (31,899) (40,466) 27% (59,638) (72,705) 22% Fee Related Earnings 36,269 $ 57,303 $ 58% 109,268 $ 108,310 $ (1)% Realized Performance Revenues 14,594 7,946 (46)% 54,484 16,843 (69)% Realized Performance Compensation (7,119) (3,468) (51)% (29,865) (6,839) (77)% Realized Principal Investment Income 4,082 20,925 413% 11,107 24,108 117% Net Realizations 11,557 25,403 120% 35,726 34,112 (5)% Segment Distributable Earnings 47,826 $ 82,706 $ 73% 144,994 $ 142,422 $ (2)% Segment Revenues 137,601 $ 180,950 $ 32% 351,513 $ 334,950 $ (5)% Total AUM 123,059,087 $ 139,270,150 $ 13% 123,059,087 $ 139,270,150 $ 13% Fee-Earning AUM 94,266,657 $ 104,456,856 $ 11% 94,266,657 $ 104,456,856 $ 11% Performing Credit includes mezzanine lending funds, middle market direct lending funds and other performing credit strategy funds. Distressed includes credit alpha strategies, stressed / distressed funds and energy strategies. The gross returns represent a weighted-average composite of the fee-earning funds exceeding $100 million of fair value at each respective quarter end for each strategy. Gross returns exclude the Blackstone Funds that were contributed to GSO as part of Blackstone’s acquisition of GSO in March 2008. Performing Credit net returns were 2.8% for 2Q’19. Distressed net returns were (2.5)% for 2Q’19. |
Supplemental Details |
Blackstone 16 Total Segments (Dollars in Thousands) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 YTD 2Q'19 YTD Management and Advisory Fees, Net Base Management Fees 692,915 $ 721,606 $ 722,648 $ 757,518 $ 805,315 $ 1,400,071 $ 1,562,833 $ Transaction, Advisory and Other Fees, Net 40,912 73,944 77,576 65,150 61,495 77,978 126,645 Management Fee Offsets (10,833) (16,331) (2,029) (8,606) (22,654) (19,011) (31,260) Total Management and Advisory Fees, Net 722,994 779,219 798,195 814,062 844,156 1,459,038 1,658,218 Fee Related Performance Revenues 45,515 30,299 44,185 7,779 13,624 49,352 21,403 Fee Related Compensation (306,243) (334,545) (279,284) (324,031) (293,834) (602,317) (617,865) Other Operating Expenses (122,466) (128,745) (130,025) (123,311) (142,121) (229,558) (265,432) Fee Related Earnings 339,800 $ 346,228 $ 433,071 $ 374,499 $ 421,825 $ 676,515 $ 796,324 $ Realized Performance Revenues 477,544 572,159 483,697 246,769 341,386 755,915 588,155 Realized Performance Compensation (172,894) (190,773) (199,645) (85,240) (125,466) (287,723) (210,706) Realized Principal Investment Income 94,647 65,620 47,098 25,908 123,557 123,340 149,465 Total Net Realizations 399,297 447,006 331,150 187,437 339,477 591,532 526,914 Total Segment Distributable Earnings 739,097 $ 793,234 $ 764,221 $ 561,936 $ 761,302 $ 1,268,047 $ 1,323,238 $ Net Interest Income (Loss) 2,842 9,013 11,923 5,061 2,761 989 7,822 Taxes and Related Payables (41,797) (32,963) (54,063) (29,039) (55,201) (66,839) (84,240) Distributable Earnings 700,142 $ 769,284 $ 722,081 $ 537,958 $ 708,862 $ 1,202,197 $ 1,246,820 $ Total Segment Revenues 1,340,700 $ 1,447,297 $ 1,373,175 $ 1,094,518 $ 1,322,723 $ 2,387,645 $ 2,417,241 $ Total Assets Under Management 439,386,656 $ 456,691,832 $ 472,242,317 $ 511,777,762 $ 545,482,337 $ 439,386,656 $ 545,482,337 $ Fee-Earning Assets Under Management 332,978,145 $ 342,261,123 $ 342,527,507 $ 352,993,394 $ 387,864,642 $ 332,978,145 $ 387,864,642 $ Weighted-Average Fee-Earning AUM 328,594,512 $ 340,994,284 $ 343,514,196 $ 349,589,269 $ 368,900,952 $ 334,643,503 $ 359,104,556 $ LP Capital Invested 8,026,698 $ 9,358,423 $ 14,218,797 $ 10,844,363 $ 15,057,660 $ 17,350,027 $ 25,902,023 $ Total Capital Invested 8,351,772 $ 9,894,470 $ 16,349,738 $ 11,783,583 $ 18,283,803 $ 18,471,291 $ 30,067,386 $ |
Blackstone 17 2Q’19 Total AUM Rollforward (Dollars in Millions) 2Q’19 LTM Total AUM Rollforward (Dollars in Millions) Inflows include contributions, capital raised, other increases in available capital, purchases, inter-segment allocations and acquisitions. Outflows represent redemptions, client withdrawals and other decreases in available capital. Realizations represent realizations from the disposition of assets. Market Activity represents gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations. AUM is reported in the segment where the assets are managed. Assets Under Management 2Q’19 Fee-Earning AUM Rollforward (Dollars in Millions) 2Q’19 LTM Fee-Earning AUM Rollforward (Dollars in Millions) Real Private Hedge Fund Estate Equity Solutions 1Q'19 140,334 $ 158,989 $ 80,183 $ 132,272 $ 511,778 $ Inflows 14,365 16,807 3,813 10,127 45,111 Outflows (600) (179) (4,115) (2,341) (7,235) Net Inflows (Outflows) 13,765 16,628 (302) 7,785 37,876 Realizations (3,990) (4,679) (296) (1,630) (10,594) Market Activity 3,496 234 1,851 842 6,423 2Q'19 153,605 $ 171,172 $ 81,436 $ 139,270 $ 545,482 $ QoQ Increase 9% 8% 2% 5% 7% Credit Total Real Private Hedge Fund Estate Equity Solutions 2Q'18 119,400 $ 119,525 $ 77,403 $ 123,059 $ 439,387 $ Inflows 42,130 62,101 12,724 33,770 150,725 Outflows (2,762) (1,260) (11,331) (11,346) (26,699) Net Inflows 39,367 60,842 1,393 22,424 124,026 Realizations (14,729) (15,717) (773) (7,136) (38,355) Market Activity 9,567 6,523 3,412 923 20,425 2Q'19 153,605 $ 171,172 $ 81,436 $ 139,270 $ 545,482 $ YoY Increase 29% 43% 5% 13% 24% Credit Total Real Private Hedge Fund Estate Equity Solutions 2Q'18 88,777 $ 78,046 $ 71,889 $ 94,267 $ 332,978 $ Inflows 36,337 28,021 11,372 24,871 100,601 Outflows (6,244) (1,974) (11,032) (9,522) (28,772) Net Inflows 30,093 26,047 340 15,349 71,829 Realizations (9,417) (7,658) (714) (5,432) (23,221) Market Activity 2,834 32 3,139 273 6,279 2Q'19 112,287 $ 96,467 $ 74,653 $ 104,457 $ 387,865 $ YoY Increase 26% 24% 4% 11% 16% Credit Total Real Private Hedge Fund Estate Equity Solutions 1Q'19 94,223 $ 85,447 $ 73,647 $ 99,676 $ 352,993 $ Inflows 25,130 13,724 3,578 7,549 49,981 Outflows (5,572) (444) (3,944) (2,232) (12,192) Net Inflows (Outflows) 19,559 13,279 (365) 5,317 37,789 Realizations (2,375) (2,104) (276) (1,201) (5,957) Market Activity 881 (155) 1,648 665 3,039 2Q'19 112,287 $ 96,467 $ 74,653 $ 104,457 $ 387,865 $ QoQ Increase 19% 13% 1% 5% 10% Credit Total |
$9.26 $8.94 2Q'18 2Q'19 At June 30, 2019, Blackstone had $4.8 billion in total cash, cash equivalents, and corporate treasury investments and $10.7 billion of cash and net investments, or $8.94 per share. Blackstone has no net debt, a $1.6 billion undrawn credit revolver and maintains A+/A+ ratings. • On April 10, 2019, Blackstone issued €600 million of 10-year notes at 1.5% coupon. Deconsolidated Balance Sheet Highlights Balance Sheet Highlights are preliminary, and exclude the consolidated Blackstone Funds. GP/Fund Investments include Blackstone investments in Real Estate, Private Equity, Hedge Fund Solutions, and Credit, which were $770 million, $691 million, $109 million, and $287 million, respectively, as of June 30, 2019. Cash and Net Investments per share amounts are calculated using period end DE Shares Outstanding (see page 24, Share Summary). A+/A+ Rated by S&P and Fitch $1.6 billion Undrawn Credit Revolver with September 2023 Maturity $4.8 billion Total Cash and Corporate Treasury Cash and Net Investments (Per Share) (Dollars in Millions) 2Q’19 Cash and Cash Equivalents $ 1,484 Corporate Treasury Investments 3,293 GP/Fund Investments 1,857 Net Accrued Performance Revenues 4,044 Cash and Net Investments $ 10,679 Outstanding Bonds (at par) $ 4,206 Blackstone 18 |
Net Accrued Performance Revenues Net Accrued Performance Revenues are presented net of performance compensation and do not include clawback amounts, if any, which are disclosed in the 10-K/Q. Net Realized Performance Revenues are included in DE. Net Realized Performance Revenues above represent Performance Revenues realized, but not yet distributed as of the reporting date and included in the Net Accrued Performance Revenues balance. When these fees are received, the receivable is reduced without further impacting DE. Per Share calculations are based on end of period DE Shares Outstanding (see page 24, Share Summary). 2Q’19 QoQ Rollforward (Dollars in Millions) 2Q’19 LTM Rollforward (Dollars in Millions) Blackstone 19 1Q'19 Net Performance Revenues Net Realized Distributions 2Q'19 Real Estate 1,978 $ 259 $ (103) $ 2,133 $ Private Equity 1,633 19 (53) 1,599 HFS 26 44 (1) 69 Credit 222 27 (5) 244 Total 3,859 $ 349 $ (162) $ 4,044 $ QoQ Increase 5% 2Q'18 Net Performance Revenues Net Realized Distributions 2Q'19 Real Estate 1,893 $ 758 $ (518) $ 2,133 $ Private Equity 1,657 443 (501) 1,599 HFS 23 56 (10) 69 Credit 299 (23) (32) 244 Total 3,872 $ 1,234 $ (1,061) $ 4,044 $ YoY Increase 4% Net Accrued Performance Revenues (Dollars in Millions, Except per Share Data) 2Q'18 1Q'19 2Q'19 2Q'19 Per Share QoQ Change YoY Change BREP IV 14 $ 1 $ 11 $ 0.01 $ 10 $ (3) $ BREP V 159 62 54 0.05 (8) (105) BREP VI 132 88 106 0.09 18 (26) BREP VII 592 552 542 0.45 (10) (50) BREP VIII 317 464 517 0.43 53 200 BREP International II - 7 25 0.02 18 25 BREP Europe III 33 - - - - (33) BREP Europe IV 211 213 209 0.18 (4) (2) BREP Europe V 61 137 161 0.13 24 100 BREP Asia I 110 137 159 0.13 22 49 BPP 194 245 242 0.20 (3) 48 BREIT 10 11 36 0.03 25 26 BREDS 29 23 28 0.02 5 (1) BTAS 31 38 41 0.03 3 10 Total Real Estate 1,893 $ 1,978 $ 2,133 $ 1.78 $ 155 $ 240 $ Private Equity BCP IV 99 42 37 0.03 (5) (62) BCP V 87 - - - - (87) BCP VI 911 789 755 0.63 (34) (156) BCP VII 94 256 293 0.25 37 199 BCP Asia - 6 6 - (0) 6 BEP I 142 131 134 0.11 3 (8) BEP II 50 70 54 0.05 (16) 4 Tactical Opportunities 152 158 140 0.12 (18) (12) Strategic Partners 91 109 98 0.08 (11) 7 BCEP - 21 30 0.03 9 30 BTAS 30 50 51 0.04 1 21 Other 1 1 0 - (1) (1) Total Private Equity 1,657 $ 1,633 $ 1,599 $ 1.34 $ (34) $ (58) $ Total Hedge Fund Solutions 23 $ 26 $ 69 $ 0.06 $ 43 $ 46 $ Total Credit 299 $ 222 $ 244 $ 0.20 $ 22 $ (55) $ Net Accrued Performance Revenues 3,872 $ 3,859 $ 4,044 $ 3.39 $ 185 $ 172 $ Memo: Net Realized Performance Revenues 33 $ 21 $ 71 $ 0.06 $ 50 $ 38 $ Real Estate |
Blackstone 20 Investment Records as of June 30, 2019 (a) Notes on page 22. (Dollars in Thousands, Except Where Noted) Committed Available Unrealized Investments Realized Investments Total Investments Net IRRs (d) Fund (Investment Period Beginning Date / Ending Date) Capital Capital (b) Value MOIC (c) % Public Value MOIC (c) Value MOIC (c) Realized Total Real Estate Pre-BREP 140,714 $ - $ - $ n/a - 345,190 $ 2.5x 345,190 $ 2.5x 33% 33% BREP I (Sep 1994 / Oct 1996) 380,708 - - n/a - 1,327,708 2.8x 1,327,708 2.8x 40% 40% BREP II (Oct 1996 / Mar 1999) 1,198,339 - - n/a - 2,531,614 2.1x 2,531,614 2.1x 19% 19% BREP III (Apr 1999 / Apr 2003) 1,522,708 - - n/a - 3,330,406 2.4x 3,330,406 2.4x 21% 21% BREP IV (Apr 2003 / Dec 2005) 2,198,694 - 85,178 0.1x 53% 4,493,255 2.2x 4,578,433 1.7x 28% 12% BREP V (Dec 2005 / Feb 2007) 5,539,418 - 519,637 1.6x 33% 12,804,964 2.3x 13,324,601 2.3x 12% 11% BREP VI (Feb 2007 / Aug 2011) 11,060,444 - 1,007,808 2.5x 53% 26,707,066 2.5x 27,714,874 2.5x 13% 13% BREP VII (Aug 2011 / Apr 2015) 13,496,564 1,906,353 8,990,819 1.7x 16% 20,543,254 2.1x 29,534,073 2.0x 24% 17% BREP VIII (Apr 2015 / Jun 2019) 16,585,073 5,069,766 15,875,492 1.4x 1% 5,251,374 1.6x 21,126,866 1.4x 27% 15% BREP IX (Jun 2019 / Dec 2024) 19,562,369 19,562,369 - n/a - - n/a - n/a n/a n/a Total Global BREP 71,685,031 $ 26,538,488 $ 26,478,934 $ 1.5x 9% 77,334,831 $ 2.2x 103,813,765 $ 2.0x 18% 16% BREP Int'l (Jan 2001 / Sep 2005) 824,172 € - € - € n/a - 1,370,659 € 2.1x 1,370,659 € 2.1x 23% 23% BREP Int'l II (Sep 2005 / Jun 2008) (e) 1,629,748 - 167,659 4.4x - 2,392,421 1.8x 2,560,080 1.8x 8% 8% BREP Europe III (Jun 2008 / Sep 2013) 3,205,167 465,609 665,111 0.9x - 5,496,293 2.5x 6,161,404 2.1x 21% 15% BREP Europe IV (Sep 2013 / Dec 2016) 6,709,145 1,346,165 4,161,915 1.6x 13% 7,564,756 2.0x 11,726,671 1.8x 24% 17% BREP Europe V (Dec 2016 / Jun 2022) 7,944,368 2,928,021 6,474,004 1.3x - 186,289 2.4x 6,660,293 1.3x 64% 17% BREP Europe VI (TBD) 7,525,683 7,525,681 - n/a - - n/a - n/a n/a n/a Total Euro BREP 27,838,283 € 12,265,476 € 11,468,689 € 1.4x 5% 17,010,418 € 2.1x 28,479,107 € 1.7x 16% 14% BREP Asia I (Jun 2013 / Dec 2017) 5,096,361 $ 1,728,965 $ 4,211,773 $ 1.5x 11% 3,312,116 $ 1.8x 7,523,889 $ 1.6x 21% 15% BREP Asia II (Dec 2017 / Jun 2023) 7,179,916 5,408,481 1,968,923 1.1x - 2,000 n/m 1,970,923 1.1x n/m 4% BREP Co-Investment (f) 7,045,918 157,335 1,767,526 1.9x 26% 12,666,695 2.1x 14,434,221 2.1x 16% 16% Total BREP 124,393,601 $ 47,740,949 $ 47,848,849 $ 1.4x 12% 114,954,153 $ 2.2x 162,803,002 $ 1.9x 18% 15% BPP (Various) (g) 26,737,038 1,222,865 30,407,207 1.2x - 4,504,405 2.3x 34,911,612 1.3x n/m 10% BREDS High-Yield (Various) (h) 12,053,117 2,422,012 3,554,670 1.1x - 10,742,370 1.3x 14,297,040 1.2x 11% 11% Private Equity BCP I (Oct 1987 / Oct 1993) 859,081 $ - $ - $ n/a - 1,741,738 $ 2.6x 1,741,738 $ 2.6x 19% 19% BCP II (Oct 1993 / Aug 1997) 1,361,100 - - n/a - 3,256,819 2.5x 3,256,819 2.5x 32% 32% BCP III (Aug 1997 / Nov 2002) 3,967,422 - - n/a - 9,184,688 2.3x 9,184,688 2.3x 14% 14% BCOM (Jun 2000 / Jun 2006) 2,137,330 24,575 13,723 n/a - 2,953,649 1.4x 2,967,372 1.4x 6% 6% BCP IV (Nov 2002 / Dec 2005) 6,773,182 204,794 169,034 2.6x - 21,417,730 2.9x 21,586,764 2.9x 36% 36% BCP V (Dec 2005 / Jan 2011) 21,013,586 1,039,733 803,327 0.8x 44% 37,188,995 1.9x 37,992,322 1.9x 9% 8% BCP VI (Jan 2011 / May 2016) 15,191,541 1,740,222 13,779,127 1.7x 38% 13,530,145 2.1x 27,309,272 1.9x 19% 13% BEP I (Aug 2011 / Feb 2015) 2,435,285 224,784 1,942,443 1.9x 58% 2,655,839 1.9x 4,598,282 1.9x 16% 14% BEP II (Feb 2015 / Feb 2021) 4,912,842 857,610 4,410,554 1.3x - 269,992 1.8x 4,680,546 1.3x 24% 9% BCP VII (May 2016 / May 2022) 18,787,568 7,414,455 12,744,292 1.4x 0% 1,167,223 1.7x 13,911,515 1.4x 42% 19% BCP Asia (Dec 2017 / Dec 2023) 2,389,096 1,495,423 565,977 1.3x - - n/a 565,977 1.3x n/a 37% BEP III (TBD) 3,808,631 3,808,631 - n/a - - n/a - n/a n/a n/a BCP VIII (TBD) 23,186,208 23,186,208 - n/a - - n/a - n/a n/a n/a Total Corporate Private Equity 106,822,872 $ 39,996,435 $ 34,428,477 $ 1.5x 19% 93,366,818 $ 2.1x 127,795,295 $ 1.9x 16% 15% |
Blackstone 21 Investment Records as of June 30, 2019 (a) – Continued Notes on page 22. (Dollars in Thousands, Except Where Noted) Committed Available Unrealized Investments Realized Investments Total Investments Net IRRs (d) Fund (Investment Period Beginning Date / Ending Date) Capital Capital (b) Value MOIC (c) % Public Value MOIC (c) Value MOIC (c) Realized Total Private Equity (continued) Tactical Opportunities (Various) 23,700,086 $ 10,574,775 $ 10,193,246 $ 1.2x 10% 7,679,719 $ 1.7x 17,872,965 $ 1.4x 21% 10% Tactical Opportunities Co-Investment and Other (Various) 5,938,806 1,955,170 3,777,453 1.2x 5% 1,767,187 1.5x 5,544,640 1.3x 24% 12% Total Tactical Opportunities 29,638,892 $ 12,529,945 $ 13,970,699 $ 1.2x 9% 9,446,906 $ 1.7x 23,417,605 $ 1.4x 21% 11% Strategic Partners I-V (Various) (i) 11,862,601 1,752,541 1,281,172 n/m - 16,352,178 n/m 17,633,350 1.5x n/a 13% Strategic Partners VI (Apr 2014 / Apr 2016) (i) 4,362,750 1,123,539 1,590,319 n/m - 2,956,879 n/m 4,547,198 1.5x n/a 17% Strategic Partners VII (May 2016 / Mar 2019) (i) 7,489,970 2,489,452 5,673,278 n/m - 885,791 n/m 6,559,069 1.4x n/a 25% Strategic Partners RA II (May 2017 / Mar 2022) (i) 1,749,807 684,257 730,741 n/m - 109,311 n/m 840,052 1.2x n/a 17% Strategic Partners VIII (Mar 2019 / Jul 2023) (i) 10,533,600 7,676,804 591,603 n/m - - n/a 591,603 1.0x n/a n/m Strategic Partners RE, SMA and Other (Various) (i) 5,665,536 1,881,140 1,926,558 n/m - 968,040 n/m 2,894,598 1.3x n/a 17% Total Strategic Partners 41,664,264 $ 15,607,733 $ 11,793,671 $ n/m - 21,272,199 $ n/m 33,065,870 $ 1.4x n/a 14% BCEP (Jan 2017 / Jan 2021) (j) 4,755,613 2,281,812 3,102,524 1.2x - 378,007 1.6x 3,480,531 1.3x 27% 14% BIP (Various) 13,659,163 12,471,902 1,187,262 1.0x 100% - n/a 1,187,262 1.0x n/a n/m Hedge Fund Solutions . Total Strategic Capital Holdings (Dec 2013 / Jun 2020) (k) 3,378,575 $ 730,855 $ 1,676,269 $ 1.1x - 392,301 $ n/m 2,068,570 $ 1.4x n/a 9% 2,000,000 $ 97,114 $ 22,864 $ 1.2x - 4,772,270 $ 1.6x 4,795,134 $ 1.6x n/a 17% Mezzanine II (Nov 2011 / Nov 2016) 4,120,000 1,078,506 1,898,494 1.0x 7% 4,816,985 1.6x 6,715,479 1.4x n/a 12% Mezzanine III (Sep 2016 / Sep 2021) 6,639,133 2,260,839 4,323,712 1.1x 2% 1,248,248 1.6x 5,571,960 1.2x n/a 13% Stressed / Distressed Investing I (Sep 2009 / May 2013) 3,253,143 135,000 201,288 0.4x 0% 5,744,873 1.6x 5,946,161 1.4x n/a 10% Stressed / Distressed Investing II (Jun 2013 / Jun 2018) 5,125,000 540,145 1,686,278 0.8x 18% 3,971,120 1.3x 5,657,398 1.1x n/a 5% Stressed / Distressed Investing III (Dec 2017/ Dec 2022) 7,356,380 5,447,806 1,780,427 1.0x 2% 553,681 1.3x 2,334,108 1.1x n/a 15% Energy Select Opportunities (Nov 2015 / Nov 2018) 2,856,867 884,658 2,022,053 1.2x - 670,729 1.6x 2,692,782 1.3x n/a 12% Energy Select Opportunities II (Feb 2019 / Feb 2024) 3,347,431 2,976,038 489,928 1.0x - - n/a 489,928 1.0x n/a n/m Euro European Senior Debt Fund (Feb 2015 / Feb 2019) 1,964,689 € 318,903 € 2,108,075 € 1.0x - 940,008 € 1.6x 3,048,083 € 1.2x n/a 10% European Senior Debt Fund II (Jun 2019 / Jun 2024) 629,740 € 476,310 € 152,443 € 1.0x - - € n/a 152,443 € 1.0x n/a n/m Total Credit 37,678,960 $ 14,325,694 $ 14,999,276 $ 1.0x 4% 22,853,291 $ 1.5x 37,852,567 $ 1.3x n/a 12% Credit (l) Mezzanine I (Jul 2007 / Oct 2011) . |
Blackstone 22 Investment Records as of June 30, 2019 – Notes The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group Inc. n/m Not meaningful generally due to the limited time since initial investment. n/a Not applicable. (a) Preliminary. Excludes investment vehicles where Blackstone does not earn fees. (b) Available Capital represents total investable capital commitments, including side-by-side, adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments. (c) Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital. (d) Net Internal Rate of Return (“IRR”) represents the annualized inception to June 30, 2019 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of limited partner cash flows. Initial inception date cash flow may differ from the Investment Period Beginning Date. (e) The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR. (f) BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. (g) BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT. (h) BREDS High-Yield represents the flagship real estate debt drawdown funds only and excludes BREDS High-Grade. (i) Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not meaningful. If information is not available on a timely basis, returns are calculated from results that are reported on a three month lag. (j) BCEP, or Blackstone Core Equity Partners, is a core private equity fund which invests with a more modest risk profile and longer hold period. (k) Represents Blackstone Strategic Capital Holdings (including Co-investment) which is focused on acquiring strategic minority positions in alternative asset managers. (l) Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented. |
Shareholder Dividends A detailed description of Blackstone’s dividend policy and the definition of Distributable Earnings can be found on pages 33-34, Definitions and Dividend Policy. DE before Certain Payables represents Distributable Earnings before the deduction for the Payable Under Tax Receivable Agreement and tax expense (benefit) of wholly-owned subsidiaries. Per Share calculations are based on end of period Participating Common Shares (page 24, Share Summary); actual dividends are paid to shareholders as of the applicable record date. Retained capital is withheld pro-rata from common and Blackstone Holdings Partnership shareholders. Common shareholders’ share was $60 million for 2Q’19 and $107 million for 2Q’19 YTD. Generated $0.57 of Distributable Earnings per common share during the quarter, bringing the year-to-date amount to $1.01 per common share. Blackstone declared a quarterly dividend of $0.48 per common share to record holders as of July 29, 2019; payable on August 5, 2019. Blackstone 23 % Change % Change (Dollars in Thousands, Except per Share Data) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 vs. 2Q'18 2Q'18 YTD 2Q'19 YTD vs. 2Q'18 YTD Distributable Earnings 700,142 $ 769,284 $ 722,081 $ 537,958 $ 708,862 $ 1% 1,202,197 $ 1,246,820 $ 4% Add: Other Payables Attributable to Common Shareholders 29,379 22,980 43,345 14,598 39,673 35% 36,407 54,271 49% DE before Certain Payables 729,521 792,264 765,426 552,556 748,535 3% 1,238,604 1,301,091 5% Percent to Common Shareholders 57% 56% 56% 56% 56% 56% 56% DE before Certain Payables Attributable to Common Shareholders 414,071 447,516 429,433 310,832 419,502 1% 699,704 730,334 4% Less: Other Payables Attributable to Common Shareholders (29,379) (22,980) (43,345) (14,598) (39,673) 35% (36,407) (54,271) 49% DE Attributable to Common Shareholders 384,692 424,536 386,088 296,234 379,829 (1)% 663,297 676,063 2% DE per Common Share 0.56 $ 0.63 $ 0.57 $ 0.44 $ 0.57 $ 2% 0.97 $ 1.01 $ 4% Less: Retained Capital per Common Share (0.08) $ (0.09) $ (0.09) $ (0.07) $ (0.09) $ 13% (0.14) $ (0.16) $ 14% Special Cash Dividend per Common Share 0.10 $ 0.10 $ 0.10 $ - $ - $ n/m 0.10 $ - $ n/m Actual Dividend per Common Share 0.58 $ 0.64 $ 0.58 $ 0.37 $ 0.48 $ (17)% 0.93 $ 0.85 $ (9)% Record Date Jul 29, 2019 Payable Date Aug 5, 2019 |
Share Summary Common Shareholders receive tax benefits from deductions taken by Blackstone’s corporate tax paying subsidiaries and bear responsibility for the deduction from Distributable Earnings of the Payable Under Tax Receivable Agreement and certain other tax-related payables. Participating Common Shares and Participating Partnership Shares include both issued and outstanding shares and unvested shares that participate in dividends. Common shares repurchased includes shares for which trades were executed in the second quarter and settlement occurred in the third quarter. Distributable Earnings Shares Outstanding as of quarter end of 1,195 million shares. • Repurchased 7.0 million common shares in the quarter and 22.3 million common shares for the LTM. • Increased share repurchase authorization to $1.0 billion. 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 Participating Common Shares 682,801,258 678,771,864 672,755,818 674,457,578 669,561,793 Participating Partnership Shares 520,175,306 522,898,542 526,370,654 524,504,626 525,165,724 Distributable Earnings Shares Outstanding 1,202,976,564 1,201,670,406 1,199,126,472 1,198,962,204 1,194,727,517 Blackstone 24 |
Reconciliations and Disclosures |
Blackstone 26 Notes on pages 27-28. Reconciliation of GAAP to Non-GAAP Measures QTD YTD LTM (Dollars in Thousands) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 Net Income (Loss) Attributable to The Blackstone Group L.P. 742,042 $ 442,742 $ (10,868) $ 481,304 $ 305,792 $ 1,109,914 $ 787,096 $ 1,469,812 $ 1,791,972 $ 1,218,970 $ Net Income Attributable to Non-Controlling Interests in Blackstone Holdings 678,952 360,576 5,253 402,260 259,330 999,160 661,590 1,319,656 1,698,800 1,027,419 Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities 129,078 143,101 (68,800) 186,833 80,744 284,577 267,577 392,966 530,387 341,878 Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities 905 2,569 (4,303) 2,480 1,095 (370) 3,575 15,418 10,445 1,841 Net Income (Loss) 1,550,977 $ 948,988 $ (78,718) $ 1,072,877 $ 646,961 $ 2,393,281 $ 1,719,838 $ 3,197,852 $ 4,031,604 $ 2,590,108 $ Provision for Taxes 138,731 26,798 29,366 41,155 38,736 193,226 79,891 162,846 849,328 136,055 Income (Loss) Before Provision for Taxes 1,689,708 $ 975,786 $ (49,352) $ 1,114,032 $ 685,697 $ 2,586,507 $ 1,799,729 $ 3,360,698 $ 4,880,932 $ 2,726,163 $ Transaction-Related Charges (a) (470,078) 79,242 76,431 89,451 106,994 (417,589) 196,445 245,655 (708,930) 352,118 Amortization of Intangibles (b) 14,873 14,856 15,392 16,483 16,483 29,746 32,966 60,738 55,355 63,214 Impact of Consolidation (c) (129,983) (145,670) 73,103 (189,313) (81,839) (284,207) (271,152) (408,384) (540,832) (343,719) Unrealized Performance Revenues (d) (440,424) (298,931) 806,531 (664,333) (157,398) (1,068,763) (821,731) (350,633) (991,702) (314,131) Unrealized Performance Allocations Compensation (e) 189,991 178,184 (302,868) 287,015 64,518 444,426 351,533 316,754 453,777 226,849 Unrealized Principal Investment (Income) Loss (f) (52,126) (28,704) 160,659 (139,925) 56,353 (66,104) (83,572) 101,233 (67,000) 48,383 Other Revenues (g) (94,416) (9,092) (46,854) (13,189) 20,150 (33,522) 6,961 18,342 35,773 (48,985) Equity-Based Compensation (h) 34,394 36,576 43,102 66,776 53,105 78,542 119,881 96,929 127,748 199,559 Taxes and Related Payables (i) (41,797) (32,963) (54,063) (29,039) (55,201) (66,839) (84,240) (197,382) (178,212) (171,266) Distributable Earnings 700,142 $ 769,284 $ 722,081 $ 537,958 $ 708,862 $ 1,202,197 $ 1,246,820 $ 3,243,950 $ 3,066,909 $ 2,738,185 $ Taxes and Related Payables (i) 41,797 32,963 54,063 29,039 55,201 66,839 84,240 197,382 178,212 171,266 Net Interest (Income) Loss (j) (2,842) (9,013) (11,923) (5,061) (2,761) (989) (7,822) 42,271 31,384 (28,758) Total Segment Distributable Earnings 739,097 $ 793,234 $ 764,221 $ 561,936 $ 761,302 $ 1,268,047 $ 1,323,238 $ 3,483,603 $ 3,276,505 $ 2,880,693 $ Realized Performance Revenues (k) (477,544) (572,159) (483,697) (246,769) (341,386) (755,915) (588,155) (2,731,564) (2,657,434) (1,644,011) Realized Performance Compensation (l) 172,894 190,773 199,645 85,240 125,466 287,723 210,706 909,329 1,009,830 601,124 Realized Principal Investment Income (m) (94,647) (65,620) (47,098) (25,908) (123,557) (123,340) (149,465) (460,081) (255,753) (262,183) Fee Related Earnings 339,800 $ 346,228 $ 433,071 $ 374,499 $ 421,825 $ 676,515 $ 796,324 $ 1,201,287 $ 1,373,148 $ 1,575,623 $ Adjusted EBITDA Reconciliation Distributable Earnings 700,142 $ 769,284 $ 722,081 $ 537,958 $ 708,862 $ 1,202,197 $ 1,246,820 $ 3,243,950 $ 3,066,909 $ 2,738,185 $ Interest Expense (n) 38,885 40,923 41,792 41,638 43,230 77,123 84,868 155,249 190,217 167,583 Taxes and Related Payables (i) 41,797 32,963 54,063 29,039 55,201 66,839 84,240 197,382 178,212 171,266 Depreciation and Amortization 5,986 5,681 5,964 5,789 6,000 12,237 11,789 31,956 24,857 23,434 Adjusted EBITDA 786,810 $ 848,851 $ 823,900 $ 614,424 $ 813,293 $ 1,358,396 $ 1,427,717 $ 3,628,537 $ 3,460,195 $ 3,100,468 $ |
Blackstone 27 Reconciliation of GAAP to Non-GAAP Measures – Notes Note: See pages 33-34, Definitions and Dividend Policy. (a) This adjustment removes Transaction-Related Charges, which are excluded from Blackstone's segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. (b) This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone's segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which is accounted for under the equity method. (c) This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone's segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. (d) This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation. (e) This adjustment removes Unrealized Performance Allocations Compensation. (f) This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. (g) This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges. For the three months ended June 30, 2018, Transaction-Related Charges included $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with (h) This adjustment removes Equity-Based Compensation on a segment basis. QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 GAAP Unrealized Performance Allocations 440,351 $ 299,238 $ (806,305) $ 663,999 $ 157,732 $ 1,068,440 $ 821,731 $ 349,657 $ 992,056 $ 314,664 $ Segment Adjustment 73 (307) (226) 334 (334) 323 - 976 (354) (533) Unrealized Performance Revenues 440,424 $ 298,931 $ (806,531) $ 664,333 $ 157,398 $ 1,068,763 $ 821,731 $ 350,633 $ 991,702 $ 314,131 $ FS Investments’ funds. QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 GAAP Other Revenue 675,343 $ 9,368 $ 46,923 $ 10,250 $ (17,120) $ 616,026 $ (6,870) $ (11,446) $ 546,673 $ 49,421 $ Segment Adjustment (580,927) (276) (69) 2,939 (3,030) (582,504) (91) (6,896) (582,446) (436) Other Revenues 94,416 $ 9,092 $ 46,854 $ 13,189 $ (20,150) $ 33,522 $ (6,961) $ (18,342) $ (35,773) $ 48,985 $ QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 GAAP Unrealized Principal Investment Income (Loss) 103,468 $ 52,840 $ (218,165) $ 169,044 $ (37,345) $ 215,242 $ 131,699 $ 806 $ 290,760 $ (33,626) $ Segment Adjustment (51,342) (24,136) 57,506 (29,119) (19,008) (149,138) (48,127) (102,039) (223,760) (14,757) Unrealized Principal Investment Income (Loss) 52,126 $ 28,704 $ (160,659) $ 139,925 $ (56,353) $ 66,104 $ 83,572 $ (101,233) $ 67,000 $ (48,383) $ |
Blackstone 28 Reconciliation of GAAP to Non-GAAP Measures – Notes Continued (i) Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and adjusted to exclude the tax impact of any divestitures. Related Payables represent tax-related payables including the amount payable under the Tax Receivable Agreement. (k) This adjustment removes the total segment amounts of Realized Performance Revenues. (l) This adjustment removes the total segment amounts of Realized Performance Compensation. (m) This adjustment removes the total segment amount of Realized Principal Investment Income. (n) This adjustment adds back Interest Expense on a segment basis. Reconciliation of GAAP Common Units Outstanding to Distributable Earnings Shares Outstanding Disclosure of Weighted-Average Units Outstanding (j) This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement. QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 Taxes 20,026 $ 12,793 $ 38,975 $ 15,344 $ 34,209 $ 38,254 $ 49,553 $ 97,208 $ 96,812 $ 101,321 $ Related Payables 21,771 20,170 15,088 13,695 20,992 28,585 34,687 100,174 81,400 69,945 Taxes and Related Payables 41,797 $ 32,963 $ 54,063 $ 29,039 $ 55,201 $ 66,839 $ 84,240 $ 197,382 $ 178,212 $ 171,266 $ QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 GAAP Interest and Dividend Revenue 40,073 $ 48,604 $ 47,885 $ 44,084 $ 43,686 $ 75,458 $ 87,770 $ 112,561 $ 152,956 $ 184,259 $ Segment Adjustment 1,654 1,332 5,830 2,615 2,305 2,654 4,920 417 5,877 12,082 Interest and Dividend Revenue 41,727 $ 49,936 $ 53,715 $ 46,699 $ 45,991 $ 78,112 $ 92,690 $ 112,978 $ 158,833 $ 196,341 $ GAAP Interest Expense 39,320 $ 41,355 $ 44,644 $ 42,002 $ 43,596 $ 77,991 $ 85,598 $ 159,755 $ 194,142 $ 171,597 $ Segment Adjustment (435) (432) (2,852) (364) (366) (868) (730) (4,506) (3,925) (4,014) Interest Expense 38,885 $ 40,923 $ 41,792 $ 41,638 $ 43,230 $ 77,123 $ 84,868 $ 155,249 $ 190,217 $ 167,583 $ Net Interest Income (Loss) 2,842 $ 9,013 $ 11,923 $ 5,061 $ 2,761 $ 989 $ 7,822 $ (42,271) $ (31,384) $ 28,758 $ QTD 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 GAAP Common Units Outstanding 673,544,082 669,411,215 663,212,830 665,331,887 660,588,369 Unvested Participating Common Shares 9,257,176 9,360,649 9,542,988 9,125,691 8,973,424 Participating Common Shares 682,801,258 678,771,864 672,755,818 674,457,578 669,561,793 Participating Partnership Shares 520,175,306 522,898,542 526,370,654 524,504,626 525,165,724 Distributable Earnings Shares Outstanding 1,202,976,564 1,201,670,406 1,199,126,472 1,198,962,204 1,194,727,517 QTD YTD LTM 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 Total GAAP Weighted-Average Common Units Outstanding - Basic 681,794,492 682,435,177 676,629,572 674,507,698 673,655,305 678,156,936 674,079,074 657,868,076 673,078,646 676,828,114 Weighted-Average Unvested Deferred Restricted Common Units 216,118 230,759 - 207,752 330,639 207,526 269,196 1,236,773 444,760 257,322 Weighted-Average Blackstone Holdings Partnership Units - 523,212,047 - 525,764,790 - 532,363,486 526,244,006 538,678,130 - 524,831,943 Total GAAP Weighted-Average Units Outstanding - Diluted 682,010,610 1,205,877,983 676,629,572 1,200,480,240 673,985,944 1,210,727,948 1,200,592,276 1,197,782,979 673,523,406 1,201,917,379 |
Blackstone 29 Blackstone’s Second Quarter 2019 GAAP Balance Sheet Results See page 30, Reconciliation of GAAP to Non-GAAP Balance Sheet Measures. (Dollars in Thousands) (Unaudited) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 Assets Cash and Cash Equivalents 1,710,251 $ 1,937,963 $ 2,207,841 $ 1,570,741 $ 1,484,444 $ Cash Held by Blackstone Funds and Other 288,675 408,561 337,320 217,625 324,609 Investments 22,008,182 22,094,920 20,377,031 21,180,950 22,242,040 Accounts Receivable 917,717 875,647 636,238 711,889 802,066 Due from Affiliates 2,015,949 2,017,637 1,994,123 2,320,291 2,211,737 Intangible Assets, Net 380,844 366,368 468,507 450,757 433,007 Goodwill 1,778,192 1,778,192 1,869,860 1,869,860 1,869,860 Other Assets 252,936 269,470 294,248 302,033 354,253 Right-of-Use Assets - - - 521,932 507,065 Deferred Tax Assets 722,551 711,599 739,482 728,873 743,132 Total Assets 30,075,297 $ 30,460,357 $ 28,924,650 $ 29,874,951 $ 30,972,213 $ Liabilities and Equity Loans Payable 10,195,403 $ 10,161,886 $ 9,951,862 $ 10,011,155 $ 10,676,138 $ Due to Affiliates 967,250 981,980 1,035,776 1,045,452 1,081,899 Accrued Compensation and Benefits 2,987,977 3,414,215 2,942,128 3,001,597 3,308,595 Securities Sold, Not Yet Purchased 155,780 166,309 142,617 128,106 128,512 Repurchase Agreements 182,489 199,488 222,202 218,865 207,676 Operating Lease Liabilities - - - 587,408 574,619 Accounts Payable, Accrued Expenses and Other Liabilities 950,802 829,496 875,979 735,667 929,688 Total Liabilities 15,439,701 15,753,374 15,170,564 15,728,250 16,907,127 Redeemable Non-Controlling Interests in Consolidated Entities 158,799 153,504 141,779 136,941 101,310 Equity Partners' Capital 7,105,225 7,024,079 6,415,700 6,501,072 6,335,897 Accumulated Other Comprehensive Loss (57,876) (36,562) (36,476) (32,430) (27,542) Non-Controlling Interests in Consolidated Entities 3,492,621 3,673,135 3,648,766 3,852,346 3,869,303 Non-Controlling Interests in Blackstone Entities 3,936,827 3,892,827 3,584,317 3,688,772 3,786,118 Total Equity 14,476,797 14,553,479 13,612,307 14,009,760 13,963,776 Total Liabilities and Equity 30,075,297 $ 30,460,357 $ 28,924,650 $ 29,874,951 $ 30,972,213 $ |
Blackstone 30 Reconciliation of GAAP to Non-GAAP Balance Sheet Measures (a) This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation. (b) Represents GAAP accrued performance revenue recorded within Due from Affiliates. (c) Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates. (d) This adjustment adds other assets related to Treasury Operations that are recorded within Accounts Receivable, reverse repurchase agreements and Due from Affiliates. (e) This adjustment adds other liabilities related to Treasury Operations that are recorded within Accounts Payable, Accrued Expenses and Other Liabilities, Repurchase Agreements and securities sold short, not yet purchased. (f) This adjustment removes amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests and adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation. (g) This adjustment removes amounts related to consolidated Blackstone Funds. (Dollars in Thousands) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 Investments of Consolidated Blackstone Funds 8,608,565 $ 8,503,423 $ 8,376,338 $ 8,603,847 $ 8,633,794 $ Equity Method Investments Partnership Investments 3,589,234 3,690,841 3,649,423 3,815,993 3,802,565 Accrued Performance Allocations 6,354,179 6,722,430 5,883,924 6,486,450 6,743,542 Corporate Treasury Investments 3,088,001 2,883,610 2,206,493 2,005,174 2,797,908 Other Investments 368,203 294,616 260,853 269,486 264,231 Total GAAP Investments 22,008,182 $ 22,094,920 $ 20,377,031 $ 21,180,950 $ 22,242,040 $ Accrued Performance Allocations - GAAP 6,354,179 $ 6,722,430 $ 5,883,924 $ 6,486,450 $ 6,743,542 $ Impact of Consolidation (a) 534 229 - 374 607 Due From Affiliates - GAAP (b) 26,365 13,546 33,419 9,483 25,022 Less: Accrued Performance Compensation - GAAP (c) (2,509,219) (2,700,828) (2,394,747) (2,638,374) (2,724,998) Net Accrued Performance Revenues 3,871,859 $ 4,035,377 $ 3,522,596 $ 3,857,933 $ 4,044,173 $ Corporate Treasury Investments - GAAP 3,088,001 $ 2,883,610 $ 2,206,493 $ 2,005,174 $ 2,797,908 $ Impact of Consolidation (a) 74,021 75,340 73,106 75,988 160,644 Other Assets (d) 462,321 586,527 438,454 519,884 425,823 Other Liabilities (e) (105,979) (91,406) (205,332) (101,605) (91,016) Corporate Treasury Investments - Deconsolidated 3,518,364 $ 3,454,071 $ 2,512,721 $ 2,499,441 $ 3,293,359 $ Partnership and Other Investments - GAAP 3,957,437 $ 3,985,457 $ 3,910,276 $ 4,085,479 $ 4,066,796 $ Impact of Consolidation (f) (1,919,052) (1,991,871) (2,015,417) (2,095,717) (2,209,825) GP/Fund Investments - Deconsolidated 2,038,385 $ 1,993,586 $ 1,894,859 $ 1,989,762 $ 1,856,971 $ Loans Payable - GAAP 10,195,403 $ 10,161,886 $ 9,951,862 $ 10,011,155 $ 10,676,138 $ Impact of Consolidation (g) (6,707,046) (6,679,598) (6,480,711) (6,561,111) (6,536,221) Outstanding Bonds (Carrying Value) 3,488,357 3,482,288 3,471,151 3,450,044 4,139,917 Unamortized Discount/Premium 63,886 62,755 60,879 59,576 66,033 Outstanding Bonds (at par) - Deconsolidated 3,552,243 $ 3,545,043 $ 3,532,030 $ 3,509,620 $ 4,205,950 $ |
Blackstone 31 Reconciliation of GAAP to Total Segment Measures QTD YTD LTM (Dollars in Thousands) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 Management and Advisory Fees, Net GAAP 721,384 $ 780,009 $ 797,554 $ 809,726 $ 840,378 $ 1,450,233 $ 1,650,104 $ 2,575,989 $ 2,865,214 $ 3,227,667 $ Segment Adjustment (a) 1,610 (790) 641 4,336 3,778 8,805 8,114 8,000 18,198 7,965 Total Segment 722,994 $ 779,219 $ 798,195 $ 814,062 $ 844,156 $ 1,459,038 $ 1,658,218 $ 2,583,989 $ 2,883,412 $ 3,235,632 $ GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues GAAP Incentive Fees 19,378 9,799 15,797 12,132 21,915 31,944 34,047 179,504 187,644 59,643 Investment Income - Realized Performance Allocations 503,376 592,103 511,388 242,375 332,520 773,016 574,895 2,654,741 2,630,260 1,678,386 GAAP 522,754 $ 601,902 $ 527,185 $ 254,507 $ 354,435 $ 804,960 $ 608,942 $ 2,834,245 $ 2,817,904 $ 1,738,029 $ Total Segment Less: Realized Performance Revenues (477,544) (572,159) (483,697) (246,769) (341,386) (755,915) (588,155) (2,731,564) (2,657,434) (1,644,011) Segment Adjustment (b) 305 556 697 41 575 307 616 2,173 2,757 1,869 Total Segment 45,515 $ 30,299 $ 44,185 $ 7,779 $ 13,624 $ 49,352 $ 21,403 $ 104,854 $ 163,227 $ 95,887 $ GAAP Compensation to Total Segment Fee Related Compensation GAAP Compensation 427,479 419,285 373,790 471,397 438,521 816,882 909,918 1,352,773 1,540,575 1,702,993 Incentive Fees Compensation 9,743 7,251 10,260 5,406 8,886 16,405 14,292 83,870 78,187 31,803 Realized Performance Allocations Compensation 186,398 200,442 212,174 86,395 125,825 298,460 212,220 880,435 1,018,209 624,836 GAAP 623,620 $ 626,978 $ 596,224 $ 563,198 $ 573,232 $ 1,131,747 $ 1,136,430 $ 2,317,078 $ 2,636,971 $ 2,359,632 $ Total Segment Less: Realized Performance Compensation (172,894) (190,773) (199,645) (85,240) (125,466) (287,723) (210,706) (909,329) (1,009,830) (601,124) (31,483) (33,514) (39,968) (63,708) (50,225) (71,731) (113,933) (88,024) (113,049) (187,415) (2,911) (3,062) (3,134) (3,068) (2,880) (6,811) (5,948) (8,905) (14,699) (12,144) Segment Adjustment (c) (110,089) (65,084) (74,193) (87,151) (100,827) (163,165) (187,978) (248,831) (278,026) (327,255) Total Segment 306,243 $ 334,545 $ 279,284 $ 324,031 $ 293,834 $ 602,317 $ 617,865 $ 1,061,989 $ 1,221,367 $ 1,231,694 $ GAAP General, Administrative and Other to Total Segment Other Operating Expenses GAAP 145,828 $ 168,813 $ 153,519 $ 146,062 $ 175,308 $ 272,541 $ 321,370 $ 508,616 $ 532,185 $ 643,702 $ Segment Adjustment (d) (23,362) (40,068) (23,494) (22,751) (33,187) (42,983) (55,938) (83,049) (80,061) (119,500) Total Segment 122,466 $ 128,745 $ 130,025 $ 123,311 $ 142,121 $ 229,558 $ 265,432 $ 425,567 $ 452,124 $ 524,202 $ Realized Performance Revenues GAAP Incentive Fees 19,378 9,799 15,797 12,132 21,915 31,944 34,047 179,504 187,644 59,643 Investment Income - Realized Performance Allocations 503,376 592,103 511,388 242,375 332,520 773,016 574,895 2,654,741 2,630,260 1,678,386 GAAP 522,754 $ 601,902 $ 527,185 $ 254,507 $ 354,435 $ 804,960 $ 608,942 $ 2,834,245 $ 2,817,904 $ 1,738,029 $ Total Segment Less: Fee Related Performance Revenues (45,515) (30,299) (44,185) (7,779) (13,624) (49,352) (21,403) (104,854) (163,227) (95,887) Segment Adjustment (b) 305 556 697 41 575 307 616 2,173 2,757 1,869 Total Segment 477,544 $ 572,159 $ 483,697 $ 246,769 $ 341,386 $ 755,915 $ 588,155 $ 2,731,564 $ 2,657,434 $ 1,644,011 $ Less: Equity-Based Compensation - Operating Compensation Less: Equity-Based Compensation - Performance Compensation |
Blackstone 32 Reconciliation of GAAP to Total Segment Measures – Continued This analysis reconciles the components of Total Segment Distributable Earnings (page 3) to their equivalent GAAP measures, reported on the Consolidated Statement of Operations (page 1). Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related Charges. (a) Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures. (b) Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation. (c) Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures. (d) Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures. (e) Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. (f) Represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement. QTD YTD LTM (Dollars in Thousands) 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 2Q'18 2Q'19 2Q'17 2Q'18 2Q'19 Realized Performance Compensation GAAP Incentive Fee Compensation 9,743 $ 7,251 $ 10,260 $ 5,406 $ 8,886 $ 16,405 $ 14,292 $ 83,870 $ 78,187 $ 31,803 $ Realized Performance Allocations Compensation 186,398 200,442 212,174 86,395 125,825 298,460 212,220 880,435 1,018,209 624,836 GAAP 196,141 $ 207,693 $ 222,434 $ 91,801 $ 134,711 $ 314,865 $ 226,512 $ 964,305 $ 1,096,396 $ 656,639 $ Total Segment Less: Fee Related Performance Compensation (20,336) (13,858) (19,655) (3,493) (6,365) (20,331) (9,858) (46,071) (71,867) (43,371) (2,911) (3,062) (3,134) (3,068) (2,880) (6,811) (5,948) (8,905) (14,699) (12,144) Total Segment 172,894 $ 190,773 $ 199,645 $ 85,240 $ 125,466 $ 287,723 $ 210,706 $ 909,329 $ 1,009,830 $ 601,124 $ Realized Principal Investment Income GAAP 129,197 $ 134,619 $ 109,901 $ 73,261 $ 145,040 $ 171,342 $ 218,301 $ 602,103 $ 430,709 $ 462,821 $ Segment Adjustment (e) (34,550) (68,999) (62,803) (47,353) (21,483) (48,002) (68,836) (142,022) (174,956) (200,638) Total Segment 94,647 $ 65,620 $ 47,098 $ 25,908 $ 123,557 $ 123,340 $ 149,465 $ 460,081 $ 255,753 $ 262,183 $ GAAP Interest and Dividend Revenue net of Interest Expense to Total Segment Net Interest Income (Loss) GAAP Interest and Dividend Revenue 40,073 48,604 47,885 44,084 43,686 75,458 87,770 112,561 152,956 184,259 Interest Expense (39,320) (41,355) (44,644) (42,002) (43,596) (77,991) (85,598) (159,755) (194,142) (171,597) GAAP 753 $ 7,249 $ 3,241 $ 2,082 $ 90 $ (2,533) $ 2,172 $ (47,194) $ (41,186) $ 12,662 $ Segment Adjustment (f) 2,089 1,764 8,682 2,979 2,671 3,522 5,650 4,923 9,802 16,096 Total Segment 2,842 $ 9,013 $ 11,923 $ 5,061 $ 2,761 $ 989 $ 7,822 $ (42,271) $ (31,384) $ 28,758 $ Less: Equity-Based Compensation - Performance Compensation |
Blackstone 33 Definitions and Dividend Policy Blackstone discloses the following operating metrics and financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“non-GAAP”) in this presentation: • Segment Distributable Earnings, or “Segment DE”, is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Segment DE represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates non-controlling ownership interests in Blackstone’s consolidated Operating Partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Segment DE excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. o Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation). o Total Segment Revenues and Segment Revenues represent Net Management and Advisory Fees, Fee Related Performance Revenues, Realized Performance Revenues and Realized Principal Investment Income. • Distributable Earnings, or “DE”, is derived from Blackstone’s segment reported results. DE is used to assess performance and amounts available for dividends to Blackstone shareholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. DE is the sum of Segment DE plus Net Interest Income (Loss) less Taxes and Related Payables. DE excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. o Net Interest Income (Loss) is presented on a segment basis and is equal to Interest and Dividend Revenue less Interest Expense, adjusted for the impact of consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement. o Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes excluding the tax impact of any divestitures and including the Payable under the Tax Receivable Agreement. • Fee Related Earnings, or “FRE”, is a performance measure used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. FRE equals management and advisory fees (net of management fee reductions and offsets) plus Fee Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. FRE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. o Fee Related Compensation is presented on a segment basis and refers to the compensation expense, excluding Equity-Based Compensation, directly related to (a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation. o Fee Related Performance Revenues refers to the realized portion of Performance Revenues from Perpetual Capital that are (a) measured and received on a recurring basis, and (b) not dependent on realization events from the underlying investments. o Perpetual Capital refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Includes co- investment capital with an investor right to convert into Perpetual Capital. refers to |
Blackstone 34 Definitions and Dividend Policy – Continued • Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization, or “Adjusted EBITDA”, is a supplemental measure used to assess performance derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. • Performance Revenues collectively refers to: (a) Incentive Fees, and (b) Performance Allocations. • Performance Compensation collectively refers to: (a) Incentive Fee Compensation, and (b) Performance Allocations Compensation. • Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. Dividend Policy. Blackstone’s intention is to dividend quarterly to common shareholders approximately 85% of The Blackstone Group Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by Blackstone’s board of directors to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and funds, to comply with applicable law, any of its debt instruments or other agreements, or to provide for future cash requirements such as tax-related payments, clawback obligations and dividends to shareholders for any ensuing quarter. The dividend amount could also be adjusted upward in any one quarter. All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of Blackstone’s board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to eliminate such dividends entirely. |
Blackstone 35 Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to, among other things, our operations, taxes , earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. This presentation does not constitute an offer of any Blackstone Fund. |