Attached files
file | filename |
---|---|
8-K - 8-K - Blackstone Group Inc | d860638d8k.htm |
EX-99.1 - EX-99.1 - Blackstone Group Inc | d860638dex991.htm |
Blackstones Full Year and Fourth Quarter
2014 Earnings
January 29, 2015
Exhibit 99.2 |
Blackstones
Full Year and Fourth Quarter 2014 Highlights Blackstone reported record full
year earnings, assets, and distributions in 2014. Economic
Net
Income
(ENI)
was
$4.3
billion
($3.76/unit)
for
the
year,
up
24%
from
last
year,
as
Blackstones
funds
appreciated
$24.5
billion,
outperforming
the
relevant
market
indices
by
a
wide
margin.
Distributable
Earnings
(DE)
continued
to
accelerate
to
a
record
$3.1
billion
($2.51/unit),
up
64%
year-over-year on $44.6 billion of realizations from IPOs, secondary
sales, and distributions for 2014. Fund activity generated $2.7 billion of
Realized Performance Fees during the year, up 91% from $1.4
billion in the prior year.
GAAP Net Income was $1.6 billion for the year, net of certain non-cash IPO
and transaction related expenses and net income attributable to
non-controlling interests, primarily inside ownership. Total AUM was a
record $290 billion, up 9% year-over-year, despite returning $56.8 billion of capital to
investors during the year.
Capital raised totaled $19.1 billion for the fourth quarter and $56.9 billion for
the year. Increased
investment
activity
led
to
$8.1
billion
of
capital
invested
during
the
fourth
quarter
of
2014,
bringing
the
full
year
total
to
$26.4
billion,
up
73%.
Of the $26.4 billion, 47% was deployed outside of North America and 48% was
deployed in products launched since the IPO, reflecting the firms
unique geographic and product diversification. Blackstone declared a fourth
quarter distribution of $0.78 per common unit payable on February
17,
2015,
bringing
the
full
year
distribution
to
$2.12
per
common
unit,
up
58%
from
last
year.
Blackstone
1 |
Blackstones
Full Year and Fourth Quarter 2014 Earnings (a)
4Q13 includes the impact of the Hilton IPO.
Blackstone
2
% Change
% Change
(Dollars in Thousands, Except per Unit Data)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
648,246
$
715,851
$
10%
2,367,322
$
2,673,789
$
13%
Performance Fees
1,688,219
1,323,338
(22)%
3,556,373
4,391,877
23%
Investment Income
(a)
356,743
98,424
(72)%
687,805
471,628
(31)%
Total Revenues
2,693,208
$
2,137,613
$
(21)%
6,611,500
$
7,537,294
$
14%
Total Expenses
1,109,921
607,231
(45)%
3,015,461
2,992,796
(1)%
Taxes
41,189
83,649
103%
82,164
199,512
143%
Economic
Net
Income
(ENI)
1,542,098
$
1,446,733
$
(6)%
3,513,875
$
4,344,986
$
24%
ENI per Unit
1.35
$
1.25
$
(7)%
3.07
$
3.76
$
22%
GAAP Net Income
621,255
$
551,451
$
(11)%
1,171,202
$
1,584,589
$
35%
Fee
Related
Earnings
(FRE)
260,706
$
374,210
$
44%
745,469
$
967,438
$
30%
Distributable
Earnings
(DE)
820,629
$
1,129,780
$
38%
1,862,699
$
3,057,833
$
64%
DE per Common Unit
0.68
$
0.92
$
35%
1.56
$
2.51
$
61%
Total Assets Under Management
265,757,630
290,381,069
9%
265,757,630
290,381,069
9%
Fee-Earning Assets Under Management
197,981,739
216,691,799
9%
197,981,739
216,691,799
9% |
Blackstone
3
44%
CAGR
Sustained Outperformance and Strong Forward Indicators
Total Revenues and Economic Income
(Dollars in Billions)
Distributable Earnings
(Dollars in Billions)
Performance Fee Receivable
(Dollars in Billions)
16%
CAGR
60%
Margin
90%
CAGR
Net Realization Activity
Fee Related Earnings
Total Revenues
Economic Income
$1.9
$1.1
$0.8
$0.8
$0.5
Totals may not add due to rounding. CAGR = Compound Annual Growth Rate.
$3.1
$0.7
$1.6
$1.6
$2.0
$3.6
$4.5
$1.8
$3.1
$3.3
$4.1
$6.6
$7.5
2009
2010
2011
2012
2013
2014
$0.5
$0.5
$0.5
$0.7
$0.7
$1.0
$0.3
$0.2
$0.4
$1.1
$2.1
2009
2010
2011
2012
2013
2014
Net Realized Performance Fees
(Dollars in Billions)
$0.1
$0.2
$0.1
$0.4
$1.0
$1.8
2009
2010
2011
2012
2013
2014
2009
2010
2011
2012
2013
2014
$0.4
$0.7
$1.5
$2.2
$3.4
$4.6 |
Walkdown of
Financial Metrics (Dollars in Thousands, Except per Unit Data)
4Q'14
FY'14
Results
Per Unit
Results
Per Unit
Base Management Fees
508,588
$
1,987,529
$
Advisory Fees
151,837
420,845
Transaction and Other Fees, Net
46,446
246,437
Management Fee Offsets
(27,146)
(86,771)
Interest Income and Other Revenue
31,467
106,691
Compensation
(199,525)
(1,153,511)
Other Operating Expenses
(137,457)
(553,782)
Fee Related Earnings
374,210
$
0.33
$
967,438
$
0.85
$
Net Realized Incentive Fees
82,851
151,646
Net Realized Carried Interest
616,621
1,634,953
Net Realized Investment Income
153,862
536,358
Taxes and Related Payables
(108,456)
(280,788)
Equity-Based Compensation
10,692
48,226
Distributable Earnings
1,129,780
$
0.92
$
3,057,833
$
2.51
$
Net Unrealized Incentive Fees
(82,439)
(10,149)
Net Unrealized Carried Interest
436,056
1,329,924
Net Unrealized Investment Loss
(50,779)
(65,672)
Add Back: Related Payables
24,807
81,276
Less: Equity-Based Compensation
(10,692)
(48,226)
Economic Net Income
1,446,733
$
1.25
$
4,344,986
$
3.76
$
See page 31, Walkdown of Financial Metrics Calculation of Certain Non-GAAP
Financial Metric Components for the calculation of the amounts presented herein that are not the respective
captions on page 20, Total Segments. 4Q14 Fee Related Earnings per Unit is based on
1,148,024,427 DE Units Outstanding; DE per Unit is based on 611,480,457 Total Common Units
Outstanding; and ENI per Unit is based on 1,159,309,726 and 1,155,729,493 Weighted-Average
ENI Adjusted Units for 4Q14 and FY14, respectively (see page 32, Unit Rollforward).
Blackstone
4 |
Blackstone
5
Private Equity
21.6%
FY14 increase in fund carrying value
$1.1 billion
increase in 2014 Economic Income
$1.7 billion
Net Accrued Performance Fees
Record Total Revenues and Economic Income of $2.7 billion and $1.8 billion for the
year, respectively. % Change
% Change
(Dollars in Thousands)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
123,044
$
123,384
$
0%
479,312
$
559,889
$
17%
Performance Fees
486,641
754,388
55%
728,225
1,977,230
172%
Investment Income
116,112
27,162
(77)%
249,775
178,805
(28)%
Total Revenues
725,797
904,934
25%
1,457,312
2,715,924
86%
Compensation
56,370
51,095
(9)%
236,120
276,447
17%
Performance Fee Compensation
276,207
114,924
(58)%
381,686
476,839
25%
Other Operating Expenses
32,767
36,590
12%
124,137
142,898
15%
Total Expenses
365,344
202,609
(45)%
741,943
896,184
21%
Economic Income
360,453
$
702,325
$
95%
715,369
$
1,819,740
$
154%
Total AUM
65,675,031
$
73,073,252
$
11%
65,675,031
$
73,073,252
$
11%
Fee-Earning AUM
42,600,515
$
43,890,167
$
3%
42,600,515
$
43,890,167
$
3%
(a)
4Q14 and FY14 Total Capital Invested: Corporate Private Equity $1.1 billion and
$6.4 billion, tactical opportunities funds $1.2 billion and $2.6 billion, Strategic Partners $1.3 billion and
$2.1 billion, respectively.
Raised $6.0 billion of new capital during the quarter: second energy fund,
tactical opportunities and the new high net worth focused total
alternative solutions fund. Appreciation of 4.2% during the quarter and
21.6% during the year on strong operating performance in BCP V (up 27.2%)
and continued positive performance of BCP VI (up 21.9%). BCP V generated
$834 million of Performance Fees during the quarter and $1.6 billion for the year.
Realization activity remained strong with $4.2 billion during the quarter and
$15.4 billion during the year driven by public and strategic exits in the
corporate private equity funds. Fourth
quarter
realizations
included
the
sale
of
United
Biscuits
and
the
secondary
sales
of
Pinnacle,
Hilton, Merlin,
Nielsen and Kosmos. 41%, or $14.1 billion, of the Corporate Private Equity
portfolio is publicly traded. Investment
activity
remained
robust,
with
$3.6
billion
total
capital
invested
during
the
quarter
and
$11.2
billion during the
year, up 170% and 280%, respectively
(a)
.
At quarter end, an additional $2.9 billion of capital was committed not yet
deployed. Commenced fundraising for seventh global private equity
fund. Total Private Equity net returns inception-to-date were 16% as
of year end. |
Blackstone
6
Real Estate
20.9%
FY14 increase in fund carrying value
$1.5 billion
FY14 Realized Performance Fees
$2.6 billion
Net Accrued Performance Fees
Total Revenues and Economic Income of $3.0 billion and $1.9 billion for the year,
respectively, reflecting strong operating fundamentals and demand across
the global real estate portfolio. Record realizations of $19.9 billion for
the year resulted in Realized Performance Fees nearly tripling to
$1.5
billion.
24%,
or
$15.2
billion,
of
the
opportunistic
Real
Estate
portfolio
is
publicly
traded.
$5.8
billion
of
realizations
were
under
contract
at
year
end
or
have
closed
since
year
end.
Investment
activity
continued
at
a
record
pace
with
$3.6
billion
of
total
capital
invested
in
the
quarter
and
$11.5
billion invested in 2014.
At quarter end, an additional $2.5 billion of capital was committed not yet
deployed.
62% of capital deployed in 2014 was invested outside of North America,
highlighting the platforms ability to opportunistically deploy
capital in scale across geographies. Raised
$9.7
billion
of
new
capital
during
the
year:
fourth
European
fund,
Asia
fund,
debt
strategies,
and
Core+.
BXMT, the commercial mortgage REIT, increased its quarterly dividend to $0.52 per
share (7.1% annualized yield), and concluded 2014 with a market
capitalization of $1.7 billion, up from $800 million a year ago. % Change
% Change
(Dollars in Thousands)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
187,081
$
184,619
$
(1)%
646,983
$
718,729
$
11%
Performance Fees
958,463
603,109
(37)%
2,155,582
2,017,786
(6)%
Investment Income
224,926
77,537
(66)%
402,560
250,165
(38)%
Total Revenues
1,370,470
865,265
(37)%
3,205,125
2,986,680
(7)%
Compensation
75,625
69,916
(8)%
294,222
326,317
11%
Performance Fee Compensation
333,047
177,691
(47)%
724,537
633,399
(13)%
Other Operating Expenses
29,698
40,296
36%
116,391
146,083
26%
Total Expenses
438,370
287,903
(34)%
1,135,150
1,105,799
(3)%
Economic Income
932,100
$
577,362
$
(38)%
2,069,975
$
1,880,881
$
(9)%
Total AUM
79,410,788
$
80,863,187
$
2%
79,410,788
$
80,863,187
$
2%
Fee-Earning AUM
50,792,803
$
52,563,068
$
3%
50,792,803
$
52,563,068
$
3%
Opportunistic
Real
Estate
funds
carrying
value
appreciated
6.6%
for
the
quarter
and
20.9%
for
the
year.
Inception-to-date net returns were 17% as of year end.
|
Blackstone
7
Hedge Fund Solutions
7.0%
FY14 Gross Composite Return
$34.7 billion
Incentive Fee Eligible AUM at FY14
$12.0 billion
FY14 Fee-Earning Gross Inflows
Total Revenues and Economic Income of $658 million and $398 million for the year,
respectively, driven by a 16%
increase in Fee-Earning AUM from sustained growth in organic net
inflows. Despite more difficult markets globally, the composite gross return
was up 0.7% for the quarter and 7.0% for the year which generated $141
million of Realized Performance Fees. Fee-Earning gross inflows of $1.9
billion during the quarter and $12.0 billion for the year, driven by significant
investments in customized and commingled strategies.
Following
record
second
quarter
and
third
quarter
gross
inflows,
BAAM
continued
to
raise
assets
across
all
business lines during the quarter driven by significant investments in customized
and commingled strategies and individual investor solutions.
January 1 subscriptions of $622 million are not yet included in Fee-Earning
AUM. Total AUM for BAAMs registered product platform reached
$3.2 billion during the year. The BAAM Principal Solutions (BPS) Composite
does not include BAAMs individual investor solutions (i.e., liquid alternatives), long-only equity, long-biased commodities, ventures
(i.e., seeding and minority interests) and strategic opportunities (i.e., co-investments)
platforms except where a BPS fund invests directly into those platforms. BAAMs advisory platforms and
liquidating funds are also excluded. On a net of fees basis, the BPS Composite was up 0.5% for
the quarter and 5.9% for the full year. % Change
% Change
(Dollars in Thousands)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
114,389
$
128,950
$
13%
414,850
$
491,505
$
18%
Performance Fees
76,881
11,035
(86)%
215,453
139,650
(35)%
Investment Income
6,087
455
(93)%
18,307
26,682
46%
Total Revenues
197,357
140,440
(29)%
648,610
657,837
1%
Compensation
28,147
5,806
(79)%
136,470
131,658
(4)%
Performance Fee Compensation
18,878
(3,114)
n/m
68,649
42,178
(39)%
Other Operating Expenses
15,697
21,068
34%
66,966
86,129
29%
Total Expenses
62,722
23,760
(62)%
272,085
259,965
(4)%
Economic Income
134,635
$
116,680
$
(13)%
376,525
$
397,872
$
6%
Total AUM
55,657,463
$
63,585,670
$
14%
55,657,463
$
63,585,670
$
14%
Fee-Earning AUM
52,865,837
$
61,417,558
$
16%
52,865,837
$
61,417,558
$
16% |
Blackstone
8
Credit
$72.9 billion
4Q14 Total AUM
Investment Performance
Gross Returns
CLOs
Customized Credit
Strategies
Mezzanine
Funds
Rescue
Lending
Funds
Hedge Fund
Strategies
Fee
Revenues up 16% year-over-year, reflecting strong Fee-Earning AUM
growth however Performance Fees were 44% lower due to challenging market
conditions largely in the fourth quarter.
Certain credit-focused fund performance was impacted by weaker market
conditions for lower rated credits in the fourth quarter.
Launched nine CLOs totaling $5.6 billion in Fee-Earning AUM during the year,
including three during the fourth quarter which totaled $1.7 billion.
Raised capital for a new energy fund, additional credit alpha funds and a
European senior debt fund during the quarter, totaling $2.0 billion.
Realized
proceeds
in
drawdown
funds
of
$349
million
in
the
fourth
quarter
and
$3.1
billion
during
the
year
while
achieving
record
total
AUM
of
$72.9
billion.
Fee-Earning AUM up 14% year-over-year to $58.8 billion due to robust
net inflows throughout the year.
% Change
% Change
(Dollars in Thousands)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
80,873
$
123,735
$
53%
405,088
$
470,928
$
16%
Performance Fees
166,234
(45,194)
n/m
457,113
257,211
(44)%
Investment Income (Loss)
8,892
(6,417)
n/m
18,049
14,409
(20)%
Total Revenues
255,999
72,124
(72)%
880,250
742,548
(16)%
Compensation
31,802
31,261
(2)%
186,514
188,200
1%
Performance Fee Compensation
89,930
(19,252)
n/m
238,310
133,087
(44)%
Other Operating Expenses
29,566
14,666
(50)%
96,940
90,524
(7)%
Total Expenses
151,298
26,675
(82)%
521,764
411,811
(21)%
Economic Income
104,701
$
45,449
$
(57)%
358,486
$
330,737
$
(8)%
Total AUM
65,014,348
$
72,858,960
$
12%
65,014,348
$
72,858,960
$
12%
Fee-Earning AUM
51,722,584
$
58,821,006
$
14%
51,722,584
$
58,821,006
$
14%
4Q'14
FY'14
Mezzanine
Funds
(0.3)%
25.4%
Rescue
Lending Funds
(4.5)%
15.4%
Hedge Fund
Strategies
(4.1)%
0.2%
$8.5
$8.3
$10.8
$25.8
$19.4
Investment Performance represents weighted-average performance of the assets of the
respective flagship funds within each strategy as of December 31, 2014. Hedge Fund Strategies net
returns were (4.1)% for 4Q14 and (1.5)% for FY14, Mezzanine Funds net returns were
(0.7)% for 4Q14 and 19.0% for FY14 and Rescue Lending Funds net returns were (3.9)% for 4Q14
and 11.9% for FY14. Customized Credit Strategies includes business development companies
(BDCs), closed-end funds, commingled funds, the exchange traded fund and separately
managed accounts. |
Blackstone
9
Financial Advisory
Total Revenues reached a record $434 million during the year, primarily from
increased activity in Blackstone Advisory Partners.
Blackstone Advisory Partners Fee Revenues increased year-over-year by
almost 40% due to improving global mergers
and
acquisitions
activity
as
well
as
a
greater
number
of
closed
transactions.
While Restructuring Fee Revenues decreased 20% compared to the prior year due to
the timing of a number of deal closings, 2014 was one of the groups
best years in its history. Park Hills placement business revenue was
a record and up slightly year-over-year led by a significant increase in
secondary advisory activity, which was partially offset by a decline in real
estate revenue. Blackstone
Capital
Markets
had
another
positive
year
as
it
acted
as
an
underwriter
or
arranger
on
over
25
deals,
including the IPOs for Catalent, La Quinta and Vivint Solar, as well as the debt
financings for Gates, Ipreo, and Cheniere.
% Change
% Change
(Dollars in Thousands)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Fee Revenues
142,859
$
155,163
$
9%
421,089
$
432,738
$
3%
Investment Income (Loss)
726
(313)
n/m
(886)
1,567
n/m
Total Revenues
143,585
154,850
8%
420,203
434,305
3%
Compensation
70,744
41,447
(41)%
262,314
230,889
(12)%
Other Operating Expenses
21,443
24,837
16%
82,205
88,148
7%
Total Expenses
92,187
66,284
(28)%
344,519
319,037
(7)%
Economic Income
51,398
$
88,566
$
72%
75,684
$
115,268
$
52%
On October 10, 2014, Blackstone announced the tax-free spin-off of its
financial advisory business (excluding capital markets) to Blackstone
unitholders. The business will combine with PJT Partners to create an independent,
world-class, publicly traded advisory firm. |
Blackstone
10
Assets Under Management
Total AUM by Segment
(Dollars in Billions)
$265.8
$290.4
$210.2
Fee-Earning AUM by Segment
(Dollars in Billions)
$198.0
$216.7
$167.9
Private Equity
Real Estate
Hedge Fund Solutions
Credit
Record
Fee-Earning
AUM
of
$216.7
billion
was
up
9%
over
the
last
year
as
$49.9
billion
of
gross
inflows
outpaced
$31.5 billion of realizations and outflows.
Fee-Earning AUM drove Base Management Fees up 14% to $2.0 billion in
2014. Total AUM increased 9% year-over-year to $290.4 billion
driven by $56.9 billion from gross inflows and $24.5
billion from consistently strong market appreciation.
$37.1
$42.6
$43.9
$41.9
$50.8
$52.6
$43.5
$52.9
$61.4
$45.4
$51.7
$58.8
4Q'12
4Q'13
4Q'14
$51.0
$65.7
$73.1
$56.7
$79.4
$80.9
$46.1
$55.7
$63.6
$56.4
$65.0
$72.9
4Q'12
4Q'13
4Q'14 |
Fee-Earning
Assets Under Management 4Q14 Fee-Earning AUM Rollforward
(Dollars in Millions)
FY14 Fee-Earning AUM Rollforward
(Dollars in Millions)
Inflows:
Customized solutions ($876 million); commingled products ($290 million);
specialized solutions ($228 million); individual investor solutions ($514
million). Private
Equity
Real
Estate
Hedge
Fund
Solutions
Credit
Inflows include contributions, capital raised, other increases in available capital, purchases
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 impact of foreign
exchange rate fluctuations.
Blackstone
11
Inflows:
secondary infrastructure fund capital raised ($100 million).
Realizations:
Hilton, Merlin, Nielsen and Kosmos.
BCP V and BCP IV strategic and public dispositions including sale of United
Biscuits and secondary sales of Pinnacle, Inflows:
Fourth
European
fund
($1.7
billion);
Asia
fund
($0.4
billion);
Core+
($0.3
billion);
BREDS
capital
raised
and/or
invested
($0.6 billion).
Realizations:
BREP
V
($0.2
billion);
BREP
VI
($0.9
billion);
BREP
Europe
III
($0.3
billion);
BREP
Co-Investment
($0.5
billion);
BREDS
($1.1 billion).
Outflows:
Redemptions reflect seasonally higher activity in commingled and
customized products due to investors
liquidity needs
Inflows:
CLOs ($564 million U.S., $1.1 billion European); BDCs ($1.7 billion); Hedge Fund
Strategies ($999 million); Carry Funds ($832
million).
Outflows:
BDCs ($269
million); BTS ($434 million); hedge fund strategies ($358 million).
and certain strategic shifts in their programs.
Tactical opportunities investment vehicles ($723 million); total alternative
solutions fund capital raised ($441 million);
Private
Real
Hedge Fund
Equity
Estate
Solutions
3Q'14
43,818
$
52,308
$
62,037
$
56,657
$
214,820
$
Inflows
1,175
3,461
1,908
5,586
12,130
Outflows
(3)
(69)
(2,147)
(1,306)
(3,525)
Realizations
(1,225)
(2,737)
(11)
(922)
(4,895)
Net Inflows (Outflows)
(53)
655
(250)
3,358
3,710
Market Activity
125
(400)
(369)
(1,194)
(1,838)
4Q'14
43,890
$
52,563
$
61,418
$
58,821
$
216,692
$
QoQ Increase (Decrease)
0%
0%
(1)%
4%
1%
Credit
Total
Private
Real
Hedge Fund
Equity
Estate
Solutions
4Q'13
42,601
$
50,793
$
52,866
$
51,723
$
197,982
$
Inflows
6,757
11,536
12,021
19,536
49,850
Outflows
(1,124)
(295)
(5,363)
(3,915)
(10,697)
Realizations
(4,734)
(8,720)
(312)
(7,029)
(20,795)
Net Inflows
899
2,521
6,346
8,592
18,358
Market Activity
390
(750)
2,206
(1,494)
352
4Q'14
43,890
$
52,563
$
61,418
$
58,821
$
216,692
$
YoY Increase
3%
3%
16%
14%
9%
Credit
Total |
Blackstone
12
Total Assets Under Management
Private
Equity
Real
Estate
Hedge
Fund
Solutions
Credit
Inflows include contributions, capital raised, other increases in available capital, purchases
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 impact
of foreign exchange rate fluctuations. Market Activity:
(up 6.8% or $2.6 billion) and public portfolio appreciation (up 6.0% or $1.1
billion). Record realization activity of $6.8 billion in the quarter and
$20.4 billion for the year. Market Activity:
Composite gross return was up 0.7% for the quarter and 7.0% for the year.
Realizations:
Inflows:
Realizations:
($359 million), and Tactical Opportunities ($344 million).
Realizations:
fund ($446 million).
4Q14 Total AUM Rollforward
(Dollars in Millions)
FY14 Total AUM Rollforward
(Dollars in Millions)
Fundraising for second energy fund ($4.5 billion), tactical opportunities fund
($1.0 billion) and total alternative solutions 6.6% appreciation, driven
by sustained strong operating fundamentals in the BREP private portfolio
Returns to CLO investors ($146 million U.S., $510 million European); carry funds
($349 million). Disposition activity across the segment including BCP V
($2.9 billion), Strategic Partners ($401 million), BCP IV Private
Real
Hedge Fund
Equity
Estate
Solutions
4Q'13
65,675
$
79,411
$
55,657
$
65,014
$
265,758
$
Inflows
13,677
11,080
11,429
20,764
56,950
Outflows
(1,624)
(896)
(5,430)
(4,221)
(12,171)
Realizations
(15,379)
(20,390)
(417)
(8,433)
(44,619)
Net Inflows (Outflows)
(3,326)
(10,206)
5,582
8,110
160
Market Activity
10,724
11,658
2,347
(266)
24,463
4Q'14
73,073
$
80,863
$
63,586
$
72,859
$
290,381
$
YoY Increase
11%
2%
14%
12%
9%
Credit
Total
Private
Real
Hedge Fund
Equity
Estate
Solutions
3Q'14
69,890
$
80,189
$
64,184
$
70,152
$
284,415
$
Inflows
6,166
4,477
1,957
6,520
19,120
Outflows
(865)
(186)
(2,181)
(1,472)
(4,704)
Realizations
(4,165)
(6,799)
(15)
(1,006)
(11,985)
Net Inflows (Outflows)
1,136
(2,508)
(239)
4,042
2,431
Market Activity
2,047
3,182
(359)
(1,335)
3,535
4Q'14
73,073
$
80,863
$
63,586
$
72,859
$
290,381
$
QoQ Increase (Decrease)
5%
1%
(1)%
4%
2%
Credit
Total |
Additional
Capital Detail Undrawn capital (Total Dry Powder) of $46.1
billion remains stable, despite $30.6 billion of total capital invested
and/or committed over the last year. Performance Fee Eligible AUM reached
$205.1 billion at the end of the quarter, up 13% year-over-year.
Net inflows and strong investment performance drove a 34% year-over-year
increase in assets currently earning Performance Fees to $149.6
billion.
$46.1 billion 4Q14 Total Dry Powder
$205 billion Performance Fee Eligible AUM
Uninvested
Not Earning
Fees
Currently
Earning Fees
Credit
Hedge
Fund
Solutions
Private
Equity
Real
Estate
$73.8
$112.1
$149.6
$26.7
$25.8
$12.9
$33.7
$43.1
$42.5
$134.2
$181.0
$205.1
4Q'12
4Q'13
4Q'14
$19.6
$14.1
$2.4
$10.0
Blackstone
13 |
Capital
Invested Blackstone continues to raise and deploy capital at an offsetting
pace, keeping dry powder amounts steady and maintaining Blackstones
ability to make opportunistic investments. Invested $26.4 billion of
capital in 2014, up 73% from $15.3 billion in 2013.
47% of capital invested in 2014 was deployed outside of North America, up 3% from
44% in 2013.
48%
of capital invested in 2014 was invested by products that did not exist at the
time of the IPO. Capital Invested by Segment
(Dollars in Billions)
2014 Capital Invested by Region
Global and
Other
Asia
North
America
Europe
Blackstone
14
$3.0
$11.2
$10.2
$11.5
$1.6
$2.8
$15.3
$26.4
2013
2014
Private Equity
Real Estate
Hedge Fund Solutions
Credit
$14.0
$7.7
$2.4
$2.3
(Dollars in Billions) |
Blackstone
15
At
December
31,
2014,
Blackstone
had
$3.4
billion
in
total
cash,
corporate
treasury
and
liquid
investments
and
$10.4
billion of total net value, or $9.05 per DE unit, up 24% from $7.29 a year
ago. Illiquid investments of $2.4 billion, down 11% from last year.
Long-term debt of $2.1 billion at quarter end contributed to a Debt to
Adjusted EBITDA ratio of 0.61x FY14. There are currently no
borrowings outstanding against the $1.1 billion revolving credit facility expiring in 2019.
Balance Sheet Highlights
4Q14
$
1,412
1,804
176
2,445
4,552
$
10,389
Outstanding Bonds (at par)
$
2,135
A+/A+
rated by S&P and Fitch
$1.1
billion
undrawn credit revolver with
May 2019 maturity
$3.4 billion
total cash, corporate treasury
and liquid investments
Cash and Investments
Net
Performance
Fees
Total Cash
and Liquids
Illiquids
$9.05
$7.29
$5.95
$1.99
$3.00
$3.97
$1.95
$2.41
$2.13
$2.01
$1.88
$2.95
4Q'12
4Q'13
4Q'14
(Dollars in Millions)
Cash and Cash Equivalents
Treasury Cash
Management Strategies
Liquid Investments
Illiquid Investments
Total Net Value
Net Accrued Performance
Fees
Balance Sheet Highlights are preliminary, and exclude the consolidated Blackstone funds.
Liquid Investments are primarily Blackstone investments in Hedge Fund Solutions and
non-drawdown Credit. Illiquid Investments include Blackstone investments in Private Equity, Real Estate and Other, which were $935 million, $1.2 billion, and $288 million, respectively, as of
December 31, 2014, $963 million, $1.5 billion and $291 million, respectively, as of December
31, 2013 and $942 million, $1.0 billion and $210 million, respectively, as of December 31,
2012. Cash and Investments are calculated using 1,148,024,427 DE Units Outstanding. |
Despite Net Realized Performance Fees of $1.8 billion, asset appreciation across
all investing businesses drove Net Accrued Performance Fees to a record
$4.6 billion ($3.97/unit), up $1.2 billion from the prior year. Net
Accrued
Performance
Fees
grew
at
a
43%
CAGR
since
the
fourth
quarter
of
2012,
primarily
driven
by
continued appreciation in Real Estate and Private Equity.
Performance Fees
Net Realized Performance Fees
(Dollars in Millions)
$960
$1,787
$392
Net Accrued Performance Fees
(Dollars in Millions)
$3,400
$4,552
$2,238
Private Equity
Real Estate
Credit
Hedge Fund Solutions
$4.6 billion
Record Net Accrued
Performance Fees
61%
Net Accrued
Performance Fees
Related to Publics/Pending Exits
$1.8 billion
Record FY Net Realized
Performance Fees
$291
$488
$360
$1,060
$167
FY'12
FY'13
FY'14
$644
$632
$1,657
$1,265
$2,347
$2,612
$262
$277
$207
4Q'12
4Q'13
4Q'14
Blackstone
16 |
Blackstone
17
Unitholder Distribution
A
detailed
description
of
Blackstones
distribution
policy
and
the
definition
of
Distributable
Earnings
can
be
found
on
page
33,
Definitions
and
Distribution
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 Unit calculations are based on Total Common Units Outstanding
(page
32,
Unit
Rollforward);
actual
distributions
are
paid
to
applicable
unitholders
as
of
the
record
date.
For
the
periods
presented,
Net
Cash
Available
for
Distribution
per
Common
Unit
equals
the
Actual
Distribution
per
Common
Unit.
Retained
capital
is
withheld
pro-rata
from
common
and
Blackstone
Holdings
Partnership
unitholders.
Common
unitholders
share
was
$85.6
million
for
4Q14.
Generated
$0.92
of
Distributable
Earnings
per
common
unit
during
the
quarter,
up
35%
year-over-year.
Record full year Distributable Earnings per common unit of $2.51, up 61% from the
last year. Declared a quarterly distribution of $0.78 per common unit to
record holders as of February 9, 2015; payable on February
17, 2015.
Full year distribution of $2.12, up 58% from the prior year period.
% Change
(Dollars in Thousands, Except per Unit Data)
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
vs. FY'13
Distributable Earnings (DE)
485,112
$
770,797
$
672,144
$
1,129,780
$
1,862,699
$
3,057,833
$
64%
Add: Other Payables Attributable to
Common Unitholders
19,856
29,884
69,707
87,977
106,499
207,424
95%
DE before Certain Payables
504,968
800,681
741,851
1,217,757
1,969,198
3,265,257
66%
Percent to Common Unitholders
53%
53%
53%
53%
51%
53%
DE before Certain Payables Attributable to
Common Unitholders
265,378
423,209
393,197
648,623
1,012,971
1,730,407
71%
Less: Other Payables Attributable to
Common Unitholders
(19,856)
(29,884)
(69,707)
(87,977)
(106,499)
(207,424)
(95)%
DE Attributable to Common Unitholders
245,522
393,325
323,490
560,646
906,472
1,522,983
68%
DE per Common Unit
0.41
$
0.65
$
0.53
$
0.92
$
1.56
$
2.51
$
61%
Less: Retained Capital per Common Unit
(0.06)
$
(0.10)
$
(0.09)
$
(0.14)
$
(0.22)
$
(0.39)
$
(77)%
Actual Distribution per Common Unit
0.35
$
0.55
$
0.44
$
0.78
$
1.34
$
2.12
$
58%
Record Date
Feb 9, 2015
Payable Date
Feb 17, 2015 |
Blackstone
18
GAAP Statement of Operations
% Change
% Change
(Dollars in Thousands, Except per Unit Data) (Unaudited)
4Q'13
4Q'14
vs. 4Q'13
FY'13
FY'14
vs. FY'13
Revenues
Management and Advisory Fees, Net
602,034
$
663,620
$
10%
2,193,985
$
2,497,252
$
14%
Performance Fees
Realized Carried Interest
283,846
836,124
195%
943,958
2,450,082
160%
Realized Incentive Fees
334,109
130,262
(61)%
464,838
249,005
(46)%
Unrealized Carried Interest
1,233,905
491,743
(60)%
2,158,010
1,704,924
(21)%
Unrealized Incentive Fees
(167,198)
(142,458)
15%
(22,749)
(29,749)
(31)%
Total Performance Fees
1,684,662
1,315,671
(22)%
3,544,057
4,374,262
23%
Investment Income
Realized
51,294
63,857
24%
188,644
523,735
178%
Unrealized
348,523
(52,489)
n/m
611,664
10,265
(98)%
Total Investment Income
399,817
11,368
(97)%
800,308
534,000
(33)%
Interest and Dividend Revenue
18,248
22,293
22%
64,511
69,809
8%
Other
4,619
7,822
69%
10,307
9,405
(9)%
Total Revenues
2,709,380
2,020,774
(25)%
6,613,168
7,484,728
13%
Expenses
Compensation and Benefits
Compensation
448,443
357,783
(20)%
1,844,485
1,868,868
1%
Performance Fee Compensation
Realized Carried Interest
31,485
219,941
599%
257,201
815,643
217%
Realized Incentive Fees
140,794
48,926
(65)%
200,915
110,099
(45)%
Unrealized Carried Interest
616,080
59,879
(90)%
966,717
379,037
(61)%
Unrealized Incentive Fees
(70,297)
(58,497)
17%
(11,651)
(19,276)
(65)%
Total Compensation and Benefits
1,166,505
628,032
(46)%
3,257,667
3,154,371
(3)%
General, Administrative and Other
128,336
149,402
16%
474,442
549,463
16%
Interest Expense
27,687
35,395
28%
107,973
121,524
13%
Fund Expenses
7,944
10,257
29%
26,658
30,498
14%
Total Expenses
1,330,472
823,086
(38)%
3,866,740
3,855,856
(0)%
Other Income
Reversal of Tax Receivable Agreement Liability
20,469
-
(100)%
20,469
-
(100)%
Net Gains from Fund Investment Activities
185,536
140,432
(24)%
381,664
357,854
(6)%
Income Before Provision for Taxes
1,584,913
$
1,338,120
$
(16)%
3,148,561
$
3,986,726
$
27%
Provision for Taxes
91,090
74,686
(18)%
255,642
291,173
14%
Net Income
1,493,823
$
1,263,434
$
(15)%
2,892,919
$
3,695,553
$
28%
Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated
Entities 47,445
29,844
(37)%
183,315
74,794
(59)%
Net Income Attributable to Non-Controlling Interests in Consolidated Entities
149,834
95,557
(36)%
198,557
335,070
69%
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings
675,289
586,582
(13)%
1,339,845
1,701,100
27%
Net Income Attributable to The Blackstone Group L.P. ("BX")
621,255
$
551,451
$
(11)%
1,171,202
$
1,584,589
$
35%
Net Income per Common Unit, Basic
1.05
$
0.90
$
(14)%
2.00
$
2.60
$
30%
Net Income per Common Unit, Diluted
1.04
$
0.89
$
(14)%
1.98
$
2.58
$
30% |
Appendix |
Blackstone
Total Segments
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Management and Advisory Fees, Net
Base Management Fees
469,092
$
476,878
$
496,570
$
505,493
$
508,588
$
1,740,807
$
1,987,529
$
Advisory Fees
139,158
69,963
114,914
84,131
151,837
410,514
420,845
Transaction and Other Fees, Net
59,733
59,910
49,196
90,885
46,446
206,977
246,437
Management Fee Offsets
(43,752)
(16,644)
(20,218)
(22,763)
(27,146)
(72,220)
(86,771)
Total Management and Advisory Fees, Net
624,231
590,107
640,462
657,746
679,725
2,286,078
2,568,040
Performance Fees
Realized Carried Interest
283,846
333,623
641,659
638,752
836,562
943,958
2,450,596
Realized Incentive Fees
343,501
53,837
39,291
36,840
131,777
474,333
261,745
Unrealized Carried Interest
1,233,905
330,288
660,712
222,026
495,935
2,158,010
1,708,961
Unrealized Incentive Fees
(173,033)
61,266
56,776
(6,531)
(140,936)
(19,928)
(29,425)
Total Performance Fees
1,688,219
779,014
1,398,438
891,087
1,323,338
3,556,373
4,391,877
Investment Income (Loss)
Realized
66,283
111,917
202,199
75,832
153,477
170,471
543,425
Unrealized
290,460
4,550
(26,228)
4,934
(55,053)
517,334
(71,797)
Total Investment Income
356,743
116,467
175,971
80,766
98,424
687,805
471,628
Interest Income and Dividend Revenue
19,394
22,362
22,094
23,585
28,303
70,936
96,344
Other
4,621
869
(6)
719
7,823
10,308
9,405
Total Revenues
2,693,208
1,508,819
2,236,959
1,653,903
2,137,613
6,611,500
7,537,294
Expenses
Compensation
262,688
306,545
323,015
324,426
199,525
1,115,640
1,153,511
Performance Fee Compensation
Realized Carried Interest
31,485
149,398
260,301
186,003
219,941
257,201
815,643
Realized Incentive Fees
140,794
23,635
18,509
19,029
48,926
200,915
110,099
Unrealized Carried Interest
616,080
40,690
114,336
164,132
59,879
966,717
379,037
Unrealized Incentive Fees
(70,297)
23,531
24,692
(9,002)
(58,497)
(11,651)
(19,276)
Total Compensation and Benefits
980,750
543,799
740,853
684,588
469,774
2,528,822
2,439,014
Other Operating Expenses
129,171
139,774
145,111
131,440
137,457
486,639
553,782
Total Expenses
1,109,921
683,573
885,964
816,028
607,231
3,015,461
2,992,796
Economic Income
1,583,287
$
825,246
$
1,350,995
$
837,875
$
1,530,382
$
3,596,039
$
4,544,498
$
Economic Net Income
1,542,098
$
813,934
$
1,325,963
$
758,356
$
1,446,733
$
3,513,875
$
4,344,986
$
Fee Related Earnings
260,706
$
174,829
$
201,108
$
217,291
$
374,210
$
745,469
$
967,438
$
Distributable Earnings
820,629
$
485,112
$
770,797
$
672,144
$
1,129,780
$
1,862,699
$
3,057,833
$
Total Assets Under Management
265,757,630
$
271,745,583
$
278,917,713
$
284,414,936
$
290,381,069
$
265,757,630
$
290,381,069
$
Fee-Earning Assets Under Management
197,981,739
$
203,599,604
$
209,913,760
$
214,819,600
$
216,691,799
$
197,981,739
$
216,691,799
$
Weighted Average Fee-Earning AUM
196,309,547
$
200,246,002
$
209,251,436
$
213,525,423
$
215,196,253
$
186,133,604
$
212,324,209
$
LP Capital Invested
5,382,770
$
4,468,527
$
5,426,511
$
6,664,365
$
7,810,098
$
14,179,704
$
24,369,501
$
Total Capital Invested
6,115,856
$
4,807,663
$
5,858,210
$
7,619,737
$
8,090,350
$
15,250,286
$
26,375,960
$
20 |
Blackstone
Private Equity
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Management Fees, Net
Base Management Fees
99,998
$
98,584
$
103,204
$
108,236
$
105,817
$
368,146
$
415,841
$
Transaction and Other Fees, Net
18,135
42,847
27,616
48,996
15,183
96,988
134,642
Management Fee Offsets
(1,173)
(1,713)
(4,246)
(5,837)
(7,350)
(5,683)
(19,146)
Total Management Fees, Net
116,960
139,718
126,574
151,395
113,650
459,451
531,337
Performance Fees
Realized Carried Interest
101,081
119,805
212,394
124,913
297,290
329,993
754,402
Unrealized Carried Interest
385,560
167,065
502,210
96,455
457,098
398,232
1,222,828
Total Performance Fees
486,641
286,870
714,604
221,368
754,388
728,225
1,977,230
Investment Income (Loss)
Realized
30,783
60,535
74,812
20,421
46,951
88,026
202,719
Unrealized
85,329
(9,033)
17,662
(12,754)
(19,789)
161,749
(23,914)
Total Investment Income
116,112
51,502
92,474
7,667
27,162
249,775
178,805
Interest Income and Dividend Revenue
4,136
5,228
4,666
5,346
6,743
15,602
21,983
Other
1,948
864
564
2,150
2,991
4,259
6,569
Total Revenues
725,797
484,182
938,882
387,926
904,934
1,457,312
2,715,924
Expenses
Compensation
56,370
73,307
73,038
79,007
51,095
236,120
276,447
Performance Fee Compensation
Realized Carried Interest
2,006
85,771
112,720
30,944
36,958
38,953
266,393
Unrealized Carried Interest
274,201
(27,148)
66,194
93,434
77,966
342,733
210,446
Total Compensation and Benefits
332,577
131,930
251,952
203,385
166,019
617,806
753,286
Other Operating Expenses
32,767
33,006
39,193
34,109
36,590
124,137
142,898
Total Expenses
365,344
164,936
291,145
237,494
202,609
741,943
896,184
Economic Income
360,453
$
319,246
$
647,737
$
150,432
$
702,325
$
715,369
$
1,819,740
$
Total Assets Under Management
65,675,031
$
66,142,945
$
68,294,162
$
69,890,367
$
73,073,252
$
65,675,031
$
73,073,252
$
Fee-Earning Assets Under Management
42,600,515
$
41,150,728
$
42,888,756
$
43,817,741
$
43,890,167
$
42,600,515
$
43,890,167
$
Weighted Average Fee-Earning AUM
43,290,792
$
41,815,672
$
43,702,379
$
43,838,483
$
42,899,791
$
43,977,145
$
44,178,572
$
LP Capital Invested
1,017,985
$
2,029,019
$
1,857,330
$
2,277,861
$
3,459,063
$
2,568,582
$
9,623,273
$
Total Capital Invested
1,330,606
$
2,271,273
$
2,159,178
$
3,172,660
$
3,593,887
$
2,950,129
$
11,196,998
$
21 |
Blackstone
Real Estate
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Management Fees, Net
Base Management Fees
153,115
$
159,336
$
157,869
$
155,089
$
156,208
$
565,182
$
628,502
$
Transaction and Other Fees, Net
32,317
13,564
13,514
38,312
26,220
79,675
91,610
Management Fee Offsets
(6,838)
(9,224)
(7,702)
(8,977)
(8,540)
(22,821)
(34,443)
Total Management Fees, Net
178,594
163,676
163,681
184,424
173,888
622,036
685,669
Performance Fees
Realized Carried Interest
180,641
194,658
417,826
349,237
526,041
486,773
1,487,762
Realized Incentive Fees
7,931
(26)
6,070
1,159
4,296
45,862
11,499
Unrealized Carried Interest
771,246
140,237
119,461
187,175
77,173
1,651,700
524,046
Unrealized Incentive Fees
(1,355)
2,737
(3,483)
(374)
(4,401)
(28,753)
(5,521)
Total Performance Fees
958,463
337,606
539,874
537,197
603,109
2,155,582
2,017,786
Investment Income (Loss)
Realized
23,320
31,357
122,664
49,173
105,901
52,359
309,095
Unrealized
201,606
5,379
(50,437)
14,492
(28,364)
350,201
(58,930)
Total Investment Income
224,926
36,736
72,227
63,665
77,537
402,560
250,165
Interest Income and Dividend Revenue
6,809
6,110
8,009
7,135
8,943
21,563
30,197
Other
1,678
317
(218)
976
1,788
3,384
2,863
Total Revenues
1,370,470
544,445
783,573
793,397
865,265
3,205,125
2,986,680
Expenses
Compensation
75,625
80,233
85,582
90,586
69,916
294,222
326,317
Performance Fee Compensation
Realized Carried Interest
29,027
51,833
143,442
64,187
173,534
148,837
432,996
Realized Incentive Fees
4,502
(16)
3,081
592
2,323
23,878
5,980
Unrealized Carried Interest
299,853
56,985
27,339
108,789
4,061
566,837
197,174
Unrealized Incentive Fees
(335)
1,382
(1,783)
(123)
(2,227)
(15,015)
(2,751)
Total Compensation and Benefits
408,672
190,417
257,661
264,031
247,607
1,018,759
959,716
Other Operating Expenses
29,698
33,107
36,542
36,138
40,296
116,391
146,083
Total Expenses
438,370
223,524
294,203
300,169
287,903
1,135,150
1,105,799
Economic Income
932,100
$
320,921
$
489,370
$
493,228
$
577,362
$
2,069,975
$
1,880,881
$
Total Assets Under Management
79,410,788
$
81,333,562
$
80,410,988
$
80,188,858
$
80,863,187
$
79,410,788
$
80,863,187
$
Fee-Earning Assets Under Management
50,792,803
$
53,490,834
$
52,823,975
$
52,308,175
$
52,563,068
$
50,792,803
$
52,563,068
$
Weighted Average Fee-Earning AUM
50,568,609
$
50,954,956
$
53,233,974
$
52,764,267
$
52,236,610
$
45,326,937
$
53,589,873
$
LP Capital Invested
3,986,610
$
1,692,232
$
3,017,193
$
3,046,867
$
3,478,850
$
9,741,277
$
11,235,142
$
Total Capital Invested
4,333,419
$
1,746,460
$
3,128,232
$
3,071,425
$
3,584,035
$
10,249,733
$
11,530,152
$
22 |
Blackstone
Hedge Fund Solutions
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Management Fees, Net
Base Management Fees
113,025
$
113,384
$
123,008
$
121,484
$
125,105
$
409,321
$
482,981
$
Transaction and Other Fees, Net
263
93
126
161
189
623
569
Management Fee Offsets
(1,149)
(1,455)
(1,531)
(1,099)
(929)
(3,387)
(5,014)
Total Management Fees, Net
112,139
112,022
121,603
120,546
124,365
406,557
478,536
Performance Fees
Realized Incentive Fees
174,861
39,845
7,973
6,683
86,028
207,735
140,529
Unrealized Incentive Fees
(97,980)
18,085
30,556
25,473
(74,993)
7,718
(879)
Total Performance Fees
76,881
57,930
38,529
32,156
11,035
215,453
139,650
Investment Income (Loss)
Realized
13,691
16,820
2,394
2,693
(357)
27,613
21,550
Unrealized
(7,604)
4,431
1,057
(1,168)
812
(9,306)
5,132
Total Investment Income
6,087
21,251
3,451
1,525
455
18,307
26,682
Interest Income and Dividend Revenue
1,988
2,661
2,340
2,724
3,389
7,605
11,114
Other
262
122
(203)
740
1,196
688
1,855
Total Revenues
197,357
193,986
165,720
157,691
140,440
648,610
657,837
Expenses
Compensation
28,147
40,571
43,341
41,940
5,806
136,470
131,658
Performance Fee Compensation
Realized Incentive Fees
53,701
13,271
2,918
2,312
23,950
65,793
42,451
Unrealized Incentive Fees
(34,823)
6,761
11,252
8,778
(27,064)
2,856
(273)
Total Compensation and Benefits
47,025
60,603
57,511
53,030
2,692
205,119
173,836
Other Operating Expenses
15,697
19,480
25,101
20,480
21,068
66,966
86,129
Total Expenses
62,722
80,083
82,612
73,510
23,760
272,085
259,965
Economic Income
134,635
$
113,903
$
83,108
$
84,181
$
116,680
$
376,525
$
397,872
$
Total Assets Under Management
55,657,463
$
58,262,659
$
60,672,759
$
64,183,863
$
63,585,670
$
55,657,463
$
63,585,670
$
Fee-Earning Assets Under Management
52,865,837
$
55,571,357
$
58,084,020
$
62,037,082
$
61,417,558
$
52,865,837
$
61,417,558
$
Weighted Average Fee-Earning AUM
51,794,518
$
54,715,882
$
56,793,206
$
60,009,283
$
61,730,313
$
48,431,911
$
58,548,866
$
LP Capital Invested
8,681
$
167,170
$
188,236
$
473,233
$
25,489
$
431,275
$
854,128
$
Total Capital Invested
8,681
$
202,674
$
196,348
$
487,398
$
12,137
$
454,990
$
898,557
$
23 |
Blackstone
Credit
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Management Fees, Net
Base Management Fees
102,954
$
105,574
$
112,489
$
120,684
$
121,458
$
398,158
$
460,205
$
Transaction and Other Fees, Net
8,152
3,344
7,064
3,025
4,728
28,586
18,161
Management Fee Offsets
(34,592)
(4,252)
(6,739)
(6,850)
(10,327)
(40,329)
(28,168)
Total Management Fees, Net
76,514
104,666
112,814
116,859
115,859
386,415
450,198
Performance Fees
Realized Carried Interest
2,124
19,160
11,439
164,602
13,231
127,192
208,432
Realized Incentive Fees
160,709
14,018
25,248
28,998
41,453
220,736
109,717
Unrealized Carried Interest
77,099
22,986
39,041
(61,604)
(38,336)
108,078
(37,913)
Unrealized Incentive Fees
(73,698)
40,444
29,703
(31,630)
(61,542)
1,107
(23,025)
Total Performance Fees
166,234
96,608
105,431
100,366
(45,194)
457,113
257,211
Investment Income (Loss)
Realized
(627)
3,071
2,223
3,040
1,020
4,098
9,354
Unrealized
9,519
3,079
4,521
4,892
(7,437)
13,951
5,055
Total Investment Income (Loss)
8,892
6,150
6,744
7,932
(6,417)
18,049
14,409
Interest Income and Dividend Revenue
4,240
5,861
4,892
5,968
6,319
18,146
23,040
Other
119
(259)
11
(3,619)
1,557
527
(2,310)
Total Revenues
255,999
213,026
229,892
227,506
72,124
880,250
742,548
Expenses
Compensation
31,802
50,752
51,310
54,877
31,261
186,514
188,200
Performance Fee Compensation
Realized Carried Interest
452
11,794
4,139
90,872
9,449
69,411
116,254
Realized Incentive Fees
82,591
10,380
12,510
16,125
22,653
111,244
61,668
Unrealized Carried Interest
42,026
10,853
20,803
(38,091)
(22,148)
57,147
(28,583)
Unrealized Incentive Fees
(35,139)
15,388
15,223
(17,657)
(29,206)
508
(16,252)
Total Compensation and Benefits
121,732
99,167
103,985
106,126
12,009
424,824
321,287
Other Operating Expenses
29,566
32,839
22,159
20,860
14,666
96,940
90,524
Total Expenses
151,298
132,006
126,144
126,986
26,675
521,764
411,811
Economic Income
104,701
$
81,020
$
103,748
$
100,520
$
45,449
$
358,486
$
330,737
$
Total Assets Under Management
65,014,348
$
66,006,417
$
69,539,804
$
70,151,848
$
72,858,960
$
65,014,348
$
72,858,960
$
Fee-Earning Assets Under Management
51,722,584
$
53,386,685
$
56,117,009
$
56,656,602
$
58,821,006
$
51,722,584
$
58,821,006
$
Weighted Average Fee-Earning AUM
50,655,628
$
52,759,492
$
55,521,877
$
56,913,390
$
58,329,539
$
48,397,611
$
56,006,898
$
LP Capital Invested
369,494
$
580,106
$
363,752
$
866,404
$
846,696
$
1,438,570
$
2,656,958
$
Total Capital Invested
443,150
$
587,256
$
374,452
$
888,254
$
900,291
$
1,595,434
$
2,750,253
$
24 |
Blackstone
Financial Advisory
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Revenues
Advisory Fees
139,158
$
69,963
$
114,914
$
84,131
$
151,837
$
410,514
$
420,845
$
Transaction and Other Fees, Net
866
62
876
391
126
1,105
1,455
Total Advisory and Transaction Fees
140,024
70,025
115,790
84,522
151,963
411,619
422,300
Investment Income (Loss)
Realized
(884)
134
106
505
(38)
(1,625)
707
Unrealized
1,610
694
969
(528)
(275)
739
860
Total Investment Income (Loss)
726
828
1,075
(23)
(313)
(886)
1,567
Interest Income and Dividend Revenue
2,221
2,502
2,187
2,412
2,909
8,020
10,010
Other
614
(175)
(160)
472
291
1,450
428
Total Revenues
143,585
73,180
118,892
87,383
154,850
420,203
434,305
Expenses
Compensation
70,744
61,682
69,744
58,016
41,447
262,314
230,889
Total Compensation and Benefits
70,744
61,682
69,744
58,016
41,447
262,314
230,889
Other Operating Expenses
21,443
21,342
22,116
19,853
24,837
82,205
88,148
Total Expenses
92,187
83,024
91,860
77,869
66,284
344,519
319,037
Economic Income (Loss)
51,398
$
(9,844)
$
27,032
$
9,514
$
88,566
$
75,684
$
115,268
$
25 |
Blackstone
Net Accrued Performance Fees
Net Accrued Performance Fees are presented net of performance fee compensation and do not
include clawback amounts, if any, which are disclosed in the 10-K/Q. Net Realized Performance Fees are
included
in
DE.
When
these
fees
are
received,
the
receivable
is
reduced
without
further
impacting
DE.
Per
Unit
calculations
are
based
on
1,148,024,427
DE
Units
Outstanding
(see
page
32,
Unit
Rollforward).
Blackstone had $4.6 billion of accrued performance fees, net of performance fee
compensation and distributed Realized Performance Fees, at the end of the
year. $4.6 billion
Net Accrued Performance Fees at 4Q14
$3.97 per unit
Net Accrued Performance Fees at 4Q14
34% increase
in Net Accrued Performance Fees since 4Q13
Change vs.
(Dollars in Millions, Except per Unit Data)
3Q'14
4Q'14
Per Unit
3Q'14
Private Equity
BCP IV Carried Interest
343
$
282
$
0.25
$
(61)
$
BCP V Carried Interest
572
1,050
0.91
478
BCP VI Carried Interest
265
233
0.20
(32)
BEP Carried Interest
79
63
0.05
(16)
Tactical Opportunities
Carried Interest 32
24
0.02
(8)
SP V Carried
Interest 2
4
0.00
2
Korea Carried Interest
1
1
0.00
-
Total Private Equity
1,294
1,657
1.44
363
Real Estate
BREP IV Carried Interest
4
18
0.02
14
BREP V Carried
Interest 679
602
0.52
(77)
BREP VI Carried
Interest 1,244
1,113
0.97
(131)
BREP VII Carried Interest
545
605
0.53
60
BREP Europe III
Carried Interest 187
183
0.16
(4)
BREP Europe IV
Carried Interest 25
37
0.03
12
BREP Asia Carried
Interest 12
17
0.01
5
Core+ Carried Interest
8
14
0.01
6
BREDS Carried Interest
16
14
0.01
(2)
BREDS Incentive
Fees 2
2
0.00
-
Asia Platform Incentive
Fees 8
7
0.01
(1)
Total Real
Estate 2,730
2,612
2.28
(118)
Hedge Fund Solutions
Incentive Fees
70
76
0.07
6
Total
Hedge Fund Solutions 70
76
0.07
6
Credit
Carried Interest
186
175
0.15
(11)
Incentive Fees
54
32
0.03
(22)
Total Credit
240
207
0.18
(33)
Total Blackstone
Carried Interest
4,200
4,435
3.86
235
Incentive Fees
134
117
0.10
(17)
Net Accrued Performance
Fees 4,334
$
4,552
$
3.97
$
218
$
Memo: Net Realized Performance Fees
241
$
106
$
0.09
$
(135)
$
Net Accrued Performance Fees
26 |
Blackstone
Investment Records as of December 31, 2014
Notes on next page.
Committed
Available
Unrealized Investments
Realized Investments
Total Investments
Net IRRs (d)
(Dollars in Thousands, Except Where Noted)
Capital
Capital (b)
Value
MOIC (c)
% Public
Value
MOIC (c)
Value
MOIC (c)
Realized
Total
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 (June 2000 / Jun 2006)
2,137,330
199,298
247,105
1.2x
-
2,619,040
1.4x
2,866,145
1.3x
7%
6%
BCP IV (Nov 2002 / Dec 2005)
6,773,138
225,775
3,167,450
1.7x
51%
18,005,120
3.2x
21,172,570
2.8x
45%
36%
BCP V (Dec 2005 / Jan 2011)
21,032,374
1,267,725
18,119,940
1.7x
55%
17,472,685
1.8x
35,592,625
1.8x
11%
8%
BCP VI (Jan 2011 / Jan 2017)
15,178,376
6,553,978
10,597,000
1.3x
17%
1,473,840
1.8x
12,070,840
1.4x
48%
15%
BEP (Aug 2011 / Aug 2017)
2,426,176
732,659
2,329,663
1.4x
30%
533,002
2.0x
2,862,665
1.5x
55%
34%
BEP II (TBD)
4,500,000
4,500,000
-
n/a
-
-
n/a
-
n/a
n/a
n/a
Total Corporate Private Equity
58,234,997
$
13,479,435
$
34,461,158
$
1.5x
41%
54,286,932
$
2.2x
88,748,090
$
1.9x
22%
16%
Tactical Opportunities
6,554,659
3,270,974
3,761,107
1.1x
3%
676,885
1.4x
4,437,992
1.1x
30%
15%
Strategic Partners
16,593,144
5,096,371
6,319,537
1.8x
11,504,389
1.4x
17,823,926
1.5x
n/a
15%
Other Funds and Co-Invest
1,787,472
447,796
832,486
0.8x
49%
84,054
1.8x
916,540
0.9x
n/a
n/a
Total Private Equity
83,170,272
$
22,294,576
$
45,374,288
$
1.5x
32%
66,552,260
$
2.0x
111,926,548
$
1.8x
20%
16%
Real Estate
Dollar
Pre-BREP
140,714
$
-
$
-
$
n/a
n/a
345,190
$
2.5x
345,190
$
2.5x
33%
33%
BREP I (Sep 1994 / Oct 1996)
380,708
-
-
n/a
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
n/a
2,531,612
2.1x
2,531,612
2.1x
19%
19%
BREP III (Apr 1999 / Apr 2003)
1,522,708
-
-
n/a
n/a
3,328,504
2.4x
3,328,504
2.4x
21%
21%
BREP IV (Apr 2003 / Dec 2005)
2,198,694
-
1,313,362
1.0x
24%
3,322,039
2.3x
4,635,401
1.7x
57%
14%
BREP V (Dec 2005 / Feb 2007)
5,539,418
-
6,220,311
2.1x
16%
5,879,814
2.1x
12,100,125
2.1x
16%
11%
BREP VI (Feb 2007 / Aug 2011)
11,059,495
586,397
15,444,660
2.3x
48%
10,016,132
2.3x
25,460,792
2.3x
16%
14%
BREP VII (Aug 2011 / Feb 2017)
13,467,015
3,224,238
17,079,584
1.6x
2%
2,324,240
1.6x
19,403,824
1.6x
36%
27%
Total Global Real Estate Funds
35,507,091
$
3,810,635
$
40,057,917
$
1.8x
23%
29,075,239
$
2.2x
69,133,156
$
2.0x
24%
18%
Euro
BREP Int'l (Jan 2001 / Sep 2005)
824,172
-
125,722
1.5x
92%
1,250,606
2.2x
1,376,328
2.1x
25%
23%
BREP Int'l II (Sep 2005 / Jun 2008)
1,629,748
52,437
1,466,176
1.3x
36%
567,022
1.8x
2,033,198
1.5x
12%
4%
BREP Europe III (Jun 2008 / Dec 2013)
3,204,714
511,596
4,037,370
1.7x
7%
1,136,487
2.4x
5,173,857
1.8x
32%
20%
BREP Europe IV (Sep 2013 / Mar 2019)
6,504,848
4,321,605
2,852,176
1.1x
-
247,017
1.3x
3,099,193
1.2x
40%
19%
Total Euro Real Estate Funds
12,163,482
4,885,638
8,481,444
1.4x
11%
3,201,132
2.1x
11,682,576
1.5x
23%
13%
BREP Co-Investment (f)
5,546,294
$
-
$
8,138,959
$
1.9x
61%
3,125,556
$
2.3x
11,264,515
$
2.0x
14%
17%
BREP Asia (Jun 2013 / Dec 2017)
5,072,903
3,334,671
2,042,699
1.1x
-
4,400
1.0x
2,047,099
1.1x
n/a
14%
Total Real Estate
61,994,079
$
13,055,951
$
61,533,703
$
1.7x
24%
36,462,326
$
2.2x
97,996,029
$
1.9x
23%
17%
Core+
3,477,888
$
1,585,560
$
2,227,949
$
1.2x
-
-
$
n/a
2,227,949
$
1.2x
n/a
n/a
BREDS (g)
6,745,544
$
1,668,642
$
2,854,216
$
1.2x
-
3,664,923
$
1.3x
6,519,139
$
1.3x
14%
12%
Credit (h)
Mezzanine I (Jul 2007 / Jul 2012)
2,000,000
$
139,685
$
820,393
$
1.7x
-
3,999,452
$
1.6x
4,819,845
$
1.6x
n/a
18%
Mezzanine II (Nov 2011 / Nov 2016)
4,120,000
2,304,528
2,368,630
1.2x
-
1,216,870
1.5x
3,585,500
1.3x
n/a
24%
Rescue Lending I (Sep 2009 / May 2013)
3,253,143
493,489
2,667,696
1.5x
-
3,165,504
1.4x
5,833,200
1.4x
n/a
15%
Rescue Lending II (Jun 2013 / Jun 2018)
5,125,000
3,827,459
1,616,850
1.2x
-
3,795
1.0x
1,620,645
1.2x
n/a
n/m
Total Credit
14,498,143
$
6,765,161
$
7,473,569
$
1.3x
-
8,385,621
$
1.5x
15,859,190
$
1.4x
n/a
27 |
Blackstone
Investment
Records
as
of
December
31,
2014
Notes
The returns presented herein represent those of the applicable Blackstone Funds and not those of
The Blackstone Group L.P. n/m
Not meaningful.
n/a
Not applicable.
(a)
Preliminary.
(b)
Available Capital represents total investable capital commitments, including
side-by-side, adjusted for certain expenses and expired or recallable capital,
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 Carried Interest, divided by invested capital.
(d)
Net Internal Rate of Return (IRR) represents the annualized inception to December
31, 2014 IRR on total invested capital based on realized proceeds and unrealized value,
as applicable, after management fees, expenses and Carried Interest. Net IRRs for BREP
Europe IV, BREP Asia and BREDS II are calculated from commencement of their respective investment periods
which, being less than one year, are not annualized.
(e)
Returns for Other Funds and Co-Invest are not meaningful as these funds have limited
transaction activity. (f)
BREP Co-Investment represents co-investment capital raised for various BREP
investments. The Net IRR reflected is calculated by aggregating each
co-investments realized proceeds and unrealized value, as applicable, after management fees, expenses
and Carried Interest.
(g)
Excludes Capital Trust drawdown funds.
(h)
The Total Investments MOIC for Mezzanine I, Mezzanine II, Rescue Lending I and Rescue Lending
II Funds, excluding recycled capital during the investment period, was 2.0x, 1.7x, 1.6x
and 1.4x, respectively. Funds presented represent the flagship credit drawdown funds
only. 28 |
Blackstone
Reconciliation of GAAP to Non-GAAP Measures
Notes on next page.
(Dollars in Thousands)
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Net Income Attributable to The Blackstone Group L.P.
621,255
$
265,617
$
517,016
$
250,505
$
551,451
$
1,171,202
$
1,584,589
$
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings
675,289
299,505
543,819
271,194
586,582
1,339,845
1,701,100
Net Income Attributable to Non-Controlling Interests in Consolidated Entities
149,834
43,961
140,061
55,491
95,557
198,557
335,070
Net Income (Loss) Attributable to Redeemable Non-Controlling
Interests in Consolidated Entities
47,445
45,792
22,486
(23,328)
29,844
183,315
74,794
Net Income
1,493,823
$
654,875
$
1,223,382
$
553,862
$
1,263,434
$
2,892,919
$
3,695,553
$
Provision for Taxes
91,090
54,097
83,282
79,108
74,686
255,642
291,173
Income Before Provision for Taxes
1,584,913
$
708,972
$
1,306,664
$
632,970
$
1,338,120
$
3,148,561
$
3,986,726
$
166,514
177,024
178,568
209,240
291,550
722,707
856,382
29,139
29,003
28,310
27,828
26,113
106,643
111,254
(197,279)
(89,753)
(162,547)
(32,163)
(125,401)
(381,872)
(409,864)
Economic Income
1,583,287
$
825,246
$
1,350,995
$
837,875
$
1,530,382
$
3,596,039
$
4,544,498
$
Taxes
(d)
(41,189)
(11,312)
(25,032)
(79,519)
(83,649)
(82,164)
(199,512)
Economic Net Income
1,542,098
$
813,934
$
1,325,963
$
758,356
$
1,446,733
$
3,513,875
$
4,344,986
$
Taxes
(d)
41,189
11,312
25,032
79,519
83,649
82,164
199,512
(1,688,219)
(779,014)
(1,398,438)
(891,087)
(1,323,338)
(3,556,373)
(4,391,877)
(356,743)
(116,467)
(175,971)
(80,766)
(98,424)
(687,805)
(471,628)
4,319
7,810
6,684
(8,893)
(4,659)
(19,574)
942
718,062
237,254
417,838
360,162
270,249
1,413,182
1,285,503
Fee Related Earnings
260,706
$
174,829
$
201,108
$
217,291
$
374,210
$
745,469
$
967,438
$
455,068
214,427
402,140
470,560
699,472
960,175
1,786,599
66,283
111,917
202,199
75,832
153,477
170,471
543,425
Adjustment Related to Realized Investment (Income) Loss -
8,873
(1,344)
(1,059)
(5,049)
385
13,194
(7,067)
(68,610)
(31,054)
(44,841)
(96,437)
(108,456)
(156,734)
(280,788)
98,309
16,337
11,250
9,947
10,692
130,124
48,226
Distributable Earnings
820,629
$
485,112
$
770,797
$
672,144
$
1,129,780
$
1,862,699
$
3,057,833
$
Interest Expense
26,607
30,398
34,082
34,221
34,154
103,904
132,855
68,610
31,054
44,841
96,437
108,456
156,734
280,788
Depreciation and Amortization
8,726
10,373
7,170
7,557
7,200
35,441
32,300
Adjusted EBITDA
924,572
$
556,937
$
856,890
$
810,359
$
1,279,590
$
2,158,778
$
3,503,776
$
IPO and Acquisition-Related Charges
(a)
Amortization of Intangibles
(b)
(Income) Associated with Non-Controlling Interests of Consolidated Entities
(c)
Performance Fee Adjustment
(e)
Investment (Income) Adjustment
(f)
Investment
Income
(Loss)
-
Blackstone's
Treasury
Cash
Management
Strategies
(g)
Performance Fee Compensation and Benefits Adjustment
(h)
Realized Performance Fees
(i)
Realized Investment Income
(j)
Blackstone's Treasury Cash Management Strategies
(k)
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(l)
Equity-Based Compensation
(m)
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(l)
29 |
Reconciliation
of
GAAP
to
Non-GAAP
Measures
Notes
Note:
See page 33, Definitions and Distribution Policy.
(a)
This adjustment adds back to Income (Loss) Before Provision (Benefit) for Taxes amounts for
Transaction-Related Charges which include principally equity-based compensation
charges associated with Blackstones initial public offering and long-term retention
programs outside of annual deferred compensation and other corporate actions.
(b)
This adjustment adds back to Income (Loss) Before Provision (Benefit) for Taxes amounts for
the Amortization of Intangibles which are associated with Blackstones initial
public offering and other corporate actions. (c)
This adjustment adds back to Income (Loss) Before Provision (Benefit) for Taxes the amount of
(Income) Loss Associated with Non- Controlling Interests of Consolidated Entities
and includes the amount of Management Fee Revenues associated with Consolidated CLO
Entities. (d)
Taxes represent the current tax provision (benefit) calculated on Income (Loss) Before
Provision (Benefit) for Taxes. (e)
This adjustment removes from EI the total segment amount of Performance Fees.
(f)
This adjustment removes from EI the total segment amount of Investment Income (Loss).
(g)
This adjustment represents the realized and unrealized gain on Blackstones Treasury Cash
Management Strategies which are a component of Investment Income (Loss) but included in
Fee Related Earnings. (h)
This adjustment removes from expenses the compensation and benefit amounts related to
Blackstones profit sharing plans related to Performance Fees.
(i)
Represents the adjustment for realized Performance Fees net of corresponding actual amounts
due under Blackstones profit sharing plans related thereto.
(j)
Represents
the
adjustment
for
Blackstones
Investment
Income
(Loss)
-
Realized.
(k)
Represents the elimination of Realized Investment Income (Loss) attributable to
Blackstones Treasury Cash Management Strategies which is a component of both Fee
Related Earnings and Realized Investment Income (Loss).
(l)
Taxes and Related Payables Including Payable Under Tax Receivable Agreement represent the
current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit)
for Taxes and the Payable Under Tax Receivable Agreement.
(m)
Represents equity-based award expense included in EI.
Blackstone
30 |
Blackstone
Walkdown
of
Financial
Metrics
Calculation
of
Certain
Non-GAAP
Financial
Metric
Components
Unless otherwise noted, all amounts are the respective captions from the Total Segment
information. (a)
See pages 29-30, Reconciliation of GAAP to Non-GAAP Measures for this adjustment. (b)
Represents equity-based award expense included in Economic Income. (c)
Represents tax-related payables including the Payable Under Tax Receivable
Agreement, which is a component of Taxes and Related Payables.
(Dollars in Thousands)
4Q'14
FY'14
Interest Income and Dividend Revenue
28,303
$
96,344
$
Other Revenue
7,823
9,405
(4,659)
942
Interest Income and Other Revenue
31,467
$
106,691
$
Realized Incentive Fees
131,777
261,745
Less: Realized Incentive Fee Compensation
(48,926)
(110,099)
Net Realized Incentive Fees
82,851
$
151,646
$
Realized Carried Interest
836,562
2,450,596
Less: Realized Carried Interest Compensation
(219,941)
(815,643)
Net Realized Carried Interest
616,621
$
1,634,953
$
Realized Investment Income
153,477
543,425
Adjustment
Related
to
Realized
Investment
(Income)
Loss -
Blackstone's
Treasury
Cash
Management
Strategies
(a)
385
(7,067)
Net Realized Investment Income
153,862
$
536,358
$
Equity-Based Compensation
(b)
10,692
$
48,226
$
Taxes
and
Related
Payables
(a)
(108,456)
$
(280,788)
$
Unrealized Incentive Fees
(140,936)
(29,425)
Less: Unrealized Incentive Fee Compensation
58,497
19,276
Net Unrealized Incentive Fees
(82,439)
$
(10,149)
$
Unrealized Carried Interest
495,935
1,708,961
Less: Unrealized Carried Interest Compensation
(59,879)
(379,037)
Net Unrealized Carried Interest
436,056
$
1,329,924
$
Unrealized Investment Income (Loss)
(55,053)
(71,797)
Less:
Investment
Income
(Loss)
-
Blackstone's
Treasury
Cash
Management
Strategies
(a)
4,659
(942)
Less:
Adjustment
Related
to
Realized
Investment
(Income)
Loss -
Blackstone's
Treasury
Cash
Management
Strategies
(a)
(385)
7,067
Net Unrealized Investment Income (Loss)
(50,779)
$
(65,672)
$
Related Payables
(c)
24,807
$
81,276
$
Investment
Income
(Loss)
-
Blackstone's
Treasury
Cash
Management
Strategies
(a)
31 |
Blackstone
Unit Rollforward
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
FY'13
FY'14
Total GAAP Weighted-Average Common Units Outstanding - Basic
592,129,570
601,527,299
606,690,740
611,684,213
615,492,620
587,018,828
608,803,111
Adjustments:
Weighted-Average Unvested Deferred Restricted Common Units
4,536,624
4,141,865
3,207,089
3,294,657
6,843,140
3,527,812
4,373,294
Total GAAP Weighted-Average Common Units Outstanding - Diluted
596,666,194
605,669,164
609,897,829
614,978,870
622,335,760
590,546,640
613,176,405
Adjustments:
Weighted-Average Blackstone Holdings Partnership Units
549,773,866
549,327,240
544,158,132
539,856,777
536,973,966
553,579,525
542,553,088
Weighted-Average Economic Net Income Adjusted Units
1,146,440,060
1,154,996,404
1,154,055,961
1,154,835,646
1,159,309,726
1,144,126,165
1,155,729,493
Economic Net Income Adjusted Units, End of Period
1,150,867,868
1,154,889,678
1,154,840,023
1,155,075,985
1,159,954,181
1,150,867,868
1,159,954,181
Total Common Units Outstanding
588,165,949
599,372,943
603,270,771
607,590,602
611,480,457
588,165,949
611,480,457
Adjustments:
Blackstone Holdings Partnership Units
547,021,277
541,129,472
538,074,958
538,760,225
536,543,970
547,021,277
536,543,970
Distributable Earnings Units Outstanding
1,135,187,226
1,140,502,415
1,141,345,729
1,146,350,827
1,148,024,427
1,135,187,226
1,148,024,427
Common Unitholders receive tax benefits from deductions taken by Blackstones 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.
Distributable Earnings Units Outstanding excludes units which are not entitled to distributions.
32 |
Blackstone
Definitions and Distribution Policy
Blackstone discloses the following 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:
Blackstone uses Economic Income, or EI, as a key measure of value creation, a
benchmark of its performance and in making resource deployment and compensation
decisions across its five segments. EI represents segment net income before taxes excluding transaction-related charges. Transaction-related
charges arise from Blackstones initial public offering (IPO) and
long-term retention programs outside of annual deferred compensation and other corporate
actions, including acquisitions. Transaction-related charges include equity-based
compensation charges, the amortization of intangible assets and contingent
consideration associated with acquisitions. EI presents revenues and expenses on a basis that
deconsolidates the investment funds Blackstone manages.
Economic Net Income, or ENI, represents EI adjusted to include current period
taxes. Taxes represent the current tax provision (benefit) calculated on Income (Loss)
Before Provision for Taxes.
Blackstone uses Fee Related Earnings, or FRE, as a key measure to highlight
earnings from operations excluding: (a) the income related to performance fees
and related carry plan costs, (b) income earned from Blackstones investments in the
Blackstone Funds, and (c) realized and unrealized gains (losses) from other investments
except for such gains (losses) from Blackstones Treasury cash management strategies. Blackstone uses FRE as a measure to assess whether
recurring revenue from its businesses is sufficient to adequately cover all of its operating
expenses and generate profits. FRE equals contractual fee revenues, investment income
from Blackstones Treasury cash management strategies and interest income, less (a) compensation expenses (which includes
amortization of non-IPO and non-acquisition-related equity-based awards, but
excludes amortization of IPO and acquisition-related equity-based awards,
carried interest and incentive fee compensation), and (b) other operating expenses.
Distributable Earnings, or DE, which is derived from Blackstones segment
reported results, is a supplemental measure to assess performance and amounts available
for distributions to Blackstone unitholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings
partnerships. DE is intended to show the amount of net realized earnings without the effects
of the consolidation of the Blackstone Funds. DE, which is a component of ENI, is the
sum across all segments of: (a) Total Management and Advisory Fees, (b) Interest and Dividend Revenue, (c) Other Revenue, (d)
Realized Performance Fees, and (e) Realized Investment Income (Loss); less (a) Compensation,
excluding the expense of equity-based awards, (b) Realized Performance Fee
Compensation, (c) Other Operating Expenses, and (d) Taxes and Related Payables Including the Payable Under Tax Receivable Agreement.
DE is reconciled to Blackstones Consolidated Statement of Operations.
Blackstone uses Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization, or
Adjusted EBITDA, as a measure of segment performance and an indicator of
its ability to cover recurring operating expenses. Adjusted EBITDA equals DE before segment interest expense, segment depreciation and
amortization, and the taxes and related payables including the Payable Under Tax Receivable
Agreement. Distribution Policy. Blackstones intention is to distribute quarterly approximately 85%
of The Blackstone Group L.P.s share of Distributable Earnings, subject to
adjustment by amounts determined by Blackstones general partner 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 distributions to
unitholders for any ensuing quarter. The amount to be distributed 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 distributions are at the
sole discretion of Blackstones general partner and may change at any time, including,
without limitation, to eliminate such distributions entirely. 33 |
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 Blackstones current views with respect to, among other things,
Blackstones operations and financial performance. 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. Blackstone believes these factors include but
are not limited to those described under the section entitled Risk Factors
in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2013, as such factors may be updated from time to time in its periodic
filings with the Securities and Exchange Commission, which are accessible on the
SECs 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
presentation and in the filings. Blackstone undertakes 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.
34 |