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| 8-K - FORM 8-K - Blackstone Group Inc | d18681d8k.htm |
Exhibit 99.1
Blackstone Reports Second Quarter 2020 Results
New York, July 23, 2020: Blackstone (NYSE:BX) today reported its second quarter 2020 results.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “It was a strong quarter for our firm despite the continued market volatility. Investment performance rebounded sharply, we continued to deploy capital in high conviction sectors and our limited partners entrusted us with another $20 billion of inflows across our expanding platform. We are very well positioned to navigate the road ahead with our long-term committed capital model and an industry-record $156 billion of dry powder.”
Blackstone issued a full detailed presentation of its second quarter 2020 results, which can be viewed at www.blackstone.com.
Dividend
Blackstone has declared a quarterly dividend of $0.37 per share to record holders of Class A common stock at the close of business on August 3, 2020. This dividend will be paid on August 10, 2020.
Quarterly Investor Call Details
Blackstone will host its second quarter 2020 investor conference via public webcast on July 23, 2020 at 9:00 a.m. ET. To register, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1339494&tp_key=55ac978e77. For those unable to listen to the live broadcast, there will be a webcast replay on the Shareholders section of Blackstone’s website at https://ir.blackstone.com/.
Blackstone
345 Park Avenue New York NY 10154
T 212 583 5000
www.blackstone.com
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 we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with $564 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.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 the impact of the novel coronavirus (“COVID-19”) and energy market dislocation, as well as those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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.
2
This presentation does not constitute an offer of any Blackstone Fund.
Investor and Media Relations Contacts
| Weston Tucker Blackstone Tel: +1 (212) 583-5231 tucker@blackstone.com |
Christine Anderson Blackstone Tel: +1 (212) 583-5182 christine.anderson@blackstone.com |
3
 Blackstone’s Second Quarter 2020 Earnings JULY 23, 2020 |
 Blackstone | 1 BLACKSTONE’S SECOND QUARTER 2020 GAAP RESULTS GAAP Net Income (Loss) was $1.4 billion for the quarter and $(1.3) billion year-to-date (“YTD”). GAAP Net Income
(Loss) Attributable to The Blackstone Group Inc. was $568
million for the quarter and $(498) million
year-to-date.
Throughout this presentation, all current period amounts are
preliminary. Totals may not add due to rounding. See pages 34-35, Definitions and Dividend Policy, for definitions of terms used throughout this presentation. See additional notes on page 32.
($ in thousands, except per share data. unaudited)
2Q'19 2Q'20 2Q'19 YTD 2Q'20 YTD 2Q'19 LTM 2Q'20 LTM Revenues Management and Advisory Fees, Net 840,378 $ 969,728 $ 1,650,104 $ 1,904,560 $ 3,227,667 $ 3,726,611 $ Incentive Fees 21,915 15,300 34,047 27,461 59,643 123,325 Investment Income (Loss) Performance Allocations Realized 332,520 101,910 574,895 269,440 1,678,386 1,433,545 Unrealized 157,732 1,067,923 821,731 (2,385,158) 314,664 (2,080,557) Principal Investments Realized 145,040 61,102 218,301 109,797 462,821 284,974 Unrealized (37,345) 331,762 131,699 (627,603) (33,626) (544,299) Total Investment Income (Loss) 597,947 1,562,697 1,746,626 (2,633,524) 2,422,245 (906,337) Interest and Dividend Revenue 43,686 23,924 87,770 59,008 184,259 153,636 Other (17,120) (55,580) (6,870) 82,600 49,421 169,463 Total Revenues 1,486,806 $ 2,516,069 $ 3,511,677 $ (559,895) $ 5,943,235 $ 3,266,698 $ Expenses Compensation and Benefits Compensation 438,521 458,457 909,918 935,000 1,702,993 1,845,412 Incentive Fee Compensation 8,886 8,432 14,292 14,954 31,803 44,962 Performance Allocations Compensation Realized 125,825 38,569 212,220 110,992 624,836 561,714 Unrealized 64,518 454,813 351,533 (942,565) 226,849 (753,813) Total Compensation and Benefits 637,750 960,271 1,487,963 118,381 2,586,481 1,698,275 General, Administrative and Other 175,308 169,051 321,370 326,617 643,702 684,655 Interest Expense 43,596 39,276 85,598 80,920 171,597 194,970 Fund Expenses 5,586 4,083 8,473 8,688 14,352 17,953 Total Expenses 862,240 $ 1,172,681 $ 1,903,404 $ 534,606 $ 3,416,132 $ 2,595,853 $ Other Income Change in Tax Receivable Agreement Liability - 76 - (519) - 161,048 Net Gains (Losses) from Fund Investment Activities 61,131 158,297 191,456 (169,077) 199,060 (77,704) Income (Loss) Before Provision (Benefit) for Taxes 685,697 $ 1,501,761 $ 1,799,729 $ (1,264,097) $ 2,726,163 $ 754,189 $ Provision (Benefit) for Taxes 38,736 147,415 79,891 (11,288) 136,055 (139,131) Net Income (Loss) 646,961 $ 1,354,346 $ 1,719,838 $ (1,252,809) $ 2,590,108 $ 893,320 $ Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in
Consolidated Entities
1,095 (3,426) 3,575 (18,895) 1,841 (22,591) Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
80,744
294,378
267,577
(350,699)
341,878
(141,497)
Net Income (Loss) Attributable to Non-Controlling Interests in
Blackstone Holdings 259,330
495,128
661,590
(384,989)
1,027,419
293,048
Net Income (Loss) Attributable to The Blackstone Group Inc.
(“BX”) 305,792
$
568,266 $ 787,096 $ (498,226) $ 1,218,970 $ 764,360 $ Net Income (Loss) Per Share of Class A Common Stock, Basic 0.45 $ 0.81 $ 1.17 $ (0.74) $ 1.80 $ 1.12 $ Net Income (Loss) Per Share of Class A Common Stock, Diluted 0.45 $ 0.81 $ 1.16 $ (0.74) $ 1.79 $ 1.12 $ Income (Loss) Before Provision (Benefit) for Taxes Margin 46.1% 59.7% 51.2% 225.8% 45.9% 23.1% |
 Blackstone | 2 BLACKSTONE’S SECOND QUARTER 2020 HIGHLIGHTS Financial Measures Fee Related Earnings (“FRE”) of $541 million ($0.45/share) in the quarter, up 28% year- over-year – FRE was $2.0 billion for the last twelve months (“LTM”)
($1.67/share), up 27% year-
over-year
Distributable Earnings (“DE”) of $548 million ($0.43/share)
in the quarter –
DE was $2.7 billion for the LTM ($2.19/share)
Net Accrued Performance Revenues of $2.7 billion
($2.25/share) Capital Metrics
Total Assets Under Management (“AUM”) of $564.3 billion, up
3% year-over-year –
Fee-Earning AUM of $435.8 billion, up 12%
year-over-year Inflows of $20.3 billion in the
quarter and $93.9 billion for the LTM Realizations of $7.4
billion in the quarter and $35.1 billion for the LTM
Deployment of $12.8 billion in the quarter and $61.1 billion for the
LTM Capital Returned
to Shareholders
Dividend of $0.37 per common share payable on August 10,
2020 –
Dividends of $1.86 per common share for the LTM
Repurchased 2.0 million common shares in the quarter and 11.2 million
common shares for the LTM
$590 million to be distributed to shareholders with respect to the
second quarter through dividends and share repurchases,
and $2.9 billion for the LTM Notes on page 32.
|
 Blackstone | 3 BLACKSTONE’S SECOND QUARTER 2020 SEGMENT EARNINGS Fee Related Earnings per Share is based on end of period DE Shares Outstanding (see page 23, Share Summary). DE per Common Share
is based on DE Attributable to Common Shareholders (see
page 22, Shareholder Dividends) and end of period Participating Common Shares outstanding. YTD per Share amounts represent the sum of the last two quarters. See pages 30-31 for the Reconciliation of GAAP to Total Segment Measures. %
Change % Change
($ in thousands, except per share data)
2Q'19 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Management and Advisory Fees, Net 844,156 $ 976,733 $ 16% 1,658,218 $ 1,917,300 $ 16% Fee Related Performance Revenues 13,624 15,033 10% 21,403 27,499 28% Fee Related Compensation (293,834) (306,904) 4% (617,865) (653,168) 6% Other Operating Expenses (142,121) (143,583) 1% (265,432) (282,468) 6% Fee Related Earnings 421,825 $ 541,279 $ 28% 796,324 $ 1,009,163 $ 27% Realized Performance Revenues 341,386 102,177 (70)% 588,155 269,410 (54)% Realized Performance Compensation (125,466) (37,787) (70)% (210,706) (109,089) (48)% Realized Principal Investment Income 123,557 18,938 (85)% 149,465 39,228 (74)% Net Realizations 339,477 83,328 (75)% 526,914 199,549 (62)% Total Segment Distributable Earnings 761,302 $ 624,607 $ (18)% 1,323,238 $ 1,208,712 $ (9)% Net Interest Income (Loss) 2,761 (12,634) n/m 7,822 (16,575) n/m Taxes and Related Payables (55,201) (63,990) 16% (84,240) (87,043) 3% Distributable Earnings 708,862 $ 547,983 $ (23)% 1,246,820 $ 1,105,094 $ (11)% Additional Metrics: FRE per Share 0.35 $ 0.45 $ 29% 0.66 $ 0.84 $ 27% DE per Common Share 0.57 $ 0.43 $ (25)% 1.01 $ 0.89 $ (12)% Total Segment Revenues 1,322,723 $ 1,112,881 $ (16)% 2,417,241 $ 2,253,437 $ (7)% Total Assets Under Management 545,482,337 $ 564,330,088 $ 3% 545,482,337 $ 564,330,088 $ 3% Fee-Earning Assets Under Management 387,864,642 $ 435,825,935 $ 12% 387,864,642 $ 435,825,935 $ 12% |
 Blackstone | 4 SUMMARY OF FINANCIALS LTM Fee Related Earnings of $1.67 per share, an increase of 27% year-over-year.
LTM Total Segment Distributable Earnings were $3.0 billion, an increase
of 3% year-over-year. FRE Margin is calculated by
dividing Fee Related Earnings by Fee Related Revenues (defined as the sum of Total Segment Management and Advisory Fees, Net and Fee Related Performance Revenues). Fee Related Earnings per Share Segment Distributable Earnings ($ in millions) FRE/Share FRE Margin Private Equity Real Estate Hedge Fund Solutions Credit & Insurance 2Q’20 LTM total: $2,955 $1.31 $1.67 47.3% 50.5% 2Q'19 LTM 2Q'20 LTM $1,539 $730 $434 $252 |
 Blackstone | 5 INVESTMENT PERFORMANCE AND NET ACCRUED PERFORMANCE REVENUES Unrealized appreciation across strategies led to a 24% increase in Net Accrued Performance Revenues to $2.7 billion ($2.25/share) quarter-over-quarter. Investment Performance (appreciation / gross returns) Net Accrued Performance Revenues ($ in millions) Investment Performance represents fund appreciation for Real Estate and Private Equity and gross returns for Hedge Fund Solutions
and Credit & Insurance. BPS Composite net returns were
5.8% and (1.4)% for 2Q’20 and 2Q’20 LTM, respectively. Credit Composite net returns were 9.6% and (2.3)% for 2Q’20 and 2Q’20 LTM, respectively. See notes on pages 32-33 for additional details on investment performance.
$2,187
$2,708
$595
$74 1Q'20 Net Performance Revenues Net Realized Distributions 2Q'20 2Q'20 2Q'20 LTM Real Estate Opportunistic 1.6% 0.6% Core+ 3.0% 4.7% Private Equity Corporate Private Equity 12.8% (7.7)% Tactical Opportunities 10.8% 1.9% Secondaries 3.8% 20.8% Hedge Fund Solutions BPS Composite 6.0% (0.6)% Credit & Insurance Credit Composite 10.1% (2.1)% |
 Blackstone | 6 CAPITAL METRICS – ADDITIONAL DETAIL Corporate Private Equity also includes Core Private Equity, Life Sciences, and BTAS.
($ in millions)
2Q'20 2Q'20 LTM 2Q'20 2Q'20 LTM 2Q'20 2Q'20 LTM Real Estate 4,885 $ 32,330 $ 2,264 $ 15,833 $ 5,855 $ 26,619 $ Opportunistic 516 4,936 1,215 10,143 4,078 14,610 Core+ 1,457 15,735 698 3,287 1,421 10,600 BREDS 2,912 11,658 351 2,403 355 1,409 Private Equity 5,203 25,630 2,990 10,141 5,038 22,157 Corporate Private Equity 701 14,937 1,661 4,634 2,263 10,708 Tactical Opportunities 367 3,769 876 2,876 533 4,673 Secondaries 3,246 6,036 454 2,631 896 5,430 Infrastructure 888 888 - - 1,346 1,346
Hedge Fund Solutions
3,324 12,432 517 1,445 877 2,854 Credit & Insurance 6,858 23,549 1,580 7,668 1,062 9,517 Total Blackstone 20,269 $ 93,941 $ 7,351 $ 35,087 $ 12,832 $ 61,147 $ Inflows Realizations Capital Deployed Inflows were $20.3 billion in the quarter, bringing LTM inflows to $93.9 billion. Realizations were $7.4 billion in the quarter and $35.1 billion for the LTM.
Deployed $12.8 billion in the quarter and $61.1 billion for the
LTM. –
Committed an additional $2.8 billion during the quarter that is not yet
deployed. |
 Blackstone | 7 ASSETS UNDER MANAGEMENT Total AUM increased to $564.3 billion, up 3% year-over-year, with $20.3 billion of inflows in the quarter
and $93.9 billion for the LTM.
Fee-Earning AUM of $435.8 billion was up 12% year-over-year,
with $15.6 billion of inflows in the quarter and $111.7
billion for the LTM. Perpetual Capital AUM reached $109.5
billion, up 19% year-over-year. $139.3
$137.8
$81.4
$75.7
$171.2
$184.1
$153.6
$166.7
$545.5
$564.3
2Q'19 2Q'20 $104.5 $102.1 $74.7 $70.2 $96.5 $129.3 $112.3 $134.3 $387.9 $435.8 2Q'19 2Q'20 $27.8 $30.4 $5.2 $6.7 $14.3 $15.1 $44.5 $57.3 $91.7 $109.5 2Q'19 2Q'20 Total AUM ($ in billions) Fee-Earning AUM ($ in billions) Perpetual Capital AUM ($ in billions) Private Equity Real Estate Hedge Fund Solutions Credit & Insurance |
 Blackstone | 8 ADDITIONAL CAPITAL DETAIL Invested Performance Eligible AUM reached $248.9 billion at quarter end, up 10% year-over-year.
Undrawn capital (“Total Dry Powder”) available for investment
of $155.9 billion, driven by fundraising activity for the
latest flagship funds. Private Equity
Real Estate
Hedge Fund Solutions
Credit & Insurance
Invested Performance Eligible AUM
($ in billions)
Total Dry Powder
($ in billions)
Private
Equity
Real
Estate
Hedge Fund
Solutions
Credit &
Insurance
2Q’20 total:
$155.9 Invested Performance Eligible AUM represents the fair value of invested assets that are eligible to earn performance
revenues. $25.5
$24.7
$45.0
$43.9
$62.3
$72.0
$93.8
$108.2
$226.6
$248.9
2Q'19
2Q'20
$46.0
$76.4
$3.4
$30.0 |
 Blackstone | 9 Segment Highlights |
 Blackstone | 10 REAL ESTATE Total AUM: Increased 9% to $166.7 billion with inflows of $4.9 billion in the quarter and $32.3
billion for the LTM.
– Raised $2.1 billion in BREDS IV and $945 million in BREIT. – Fee-Earning AUM increased 20% to $134.3 billion with inflows of $3.6 billion in the quarter and $37.6 billion for
the LTM.
Realizations:
$2.3 billion in the quarter and $15.8 billion for the LTM; realizations
in the quarter were primarily driven by public sales in
BREP, including the first secondary offering for Embassy India Office REIT. Capital Deployed: $5.9 billion in the quarter and $26.6 billion for the LTM; diverse investment activity in the
quarter was driven by the acquisition of a U.K. student housing
portfolio, a Japanese residential portfolio and a minority
stake in a public Australian casino operator.
– Committed an additional $650 million in the quarter that is not yet deployed; commitments in the quarter
included BPP’s partnership interest in a studio and Class A office
portfolio in Hollywood, CA. Appreciation:
Opportunistic funds and Core+ funds appreciated 1.6% and 3.0% in the
quarter, respectively, reflecting portfolio positioning
and strong performance from sectors less impacted by COVID-19. % Change % Change ($ in thousands) 2Q'19 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Management Fees, Net 277,940 $ 412,307 $ 48% 561,816 $ 798,428 $ 42% Fee Related Performance Revenues 11,072 6,505 (41)% 17,748 11,056 (38)% Fee Related Compensation (97,795) (116,640) 19% (212,611) (236,936) 11% Other Operating Expenses (40,114) (44,525) 11% (79,100) (85,001) 7% Fee Related Earnings 151,103 $ 257,647 $ 71% 287,853 $ 487,547 $ 69% Realized Performance Revenues 198,573 34,209 (83)% 275,755 77,929 (72)% Realized Performance Compensation (67,742) (12,547) (81)% (97,642) (25,939) (73)% Realized Principal Investment Income 47,420 1,573 (97)% 45,289 8,873 (80)% Net Realizations 178,251 23,235 (87)% 223,402 60,863 (73)% Segment Distributable Earnings 329,354 $ 280,882 $ (15)% 511,255 $ 548,410 $ 7% Segment Revenues 535,005 $ 454,594 $ (15)% 900,608 $ 896,286 $ (0)% Total AUM 153,604,820 $ 166,723,844 $ 9% 153,604,820 $ 166,723,844 $ 9% Fee-Earning AUM 112,287,094 $ 134,260,348 $ 20% 112,287,094 $ 134,260,348 $ 20% |
 Blackstone | 11 PRIVATE EQUITY Total AUM: Increased 8% to $184.1 billion with inflows of $5.2 billion in the quarter and $25.6 billion for the LTM.
– Inflows in the quarter included a $2.8 billion close of the third infrastructure Secondaries’ fund, bringing total
commitments to $3.75 billion including a close subsequent
to quarter end. –
Fee-Earning AUM up 34% to $129.3 billion, driven by commencement of
investment periods for BCP VIII, BEP III, and BXLS V in
the first quarter. Realizations:
$3.0 billion in the quarter and $10.1 billion for the LTM.
Capital Deployed:
$5.0 billion in the quarter and $22.2 billion for the LTM across
regions, including the acquisition of HealthEdge in the
quarter. –
Committed an additional $1.1 billion that was not yet deployed in the
quarter. Appreciation:
Corporate Private Equity increased 12.8% in the quarter, driven by
strong publics performance and partial recovery in the
private portfolio. –
Tactical Opportunities increased 10.8% in the quarter; Secondaries’
appreciated 3.8% in the quarter. Secondaries’
appreciation reflects a reporting lag of its underlying funds.
% Change
% Change
($ in thousands)
2Q'19 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Management and Advisory Fees, Net 278,976 $ 269,560 $ (3)% 530,699 $ 535,732 $ 1% Fee Related Compensation (105,107) (92,825) (12)% (212,694) (203,193) (4)% Other Operating Expenses (40,429) (44,827) 11% (74,630) (85,828) 15% Fee Related Earnings 133,440 $ 131,908 $ (1)% 243,375 $ 246,711 $ 1% Realized Performance Revenues 122,907 64,513 (48)% 279,506 176,589 (37)% Realized Performance Compensation (52,081) (25,016) (52)% (102,637) (79,659) (22)% Realized Principal Investment Income 42,906 17,416 (59)% 68,045 27,763 (59)% Net Realizations 113,732 56,913 (50)% 244,914 124,693 (49)% Segment Distributable Earnings 247,172 $ 188,821 $ (24)% 488,289 $ 371,404 $ (24)% Segment Revenues 444,789 $ 351,489 $ (21)% 878,250 $ 740,084 $ (16)% Total AUM 171,171,687 $ 184,118,135 $ 8% 171,171,687 $ 184,118,135 $ 8% Fee-Earning AUM 96,467,272 $ 129,284,112 $ 34% 96,467,272 $ 129,284,112 $ 34% |
 Blackstone | 12 HEDGE FUND SOLUTIONS Total AUM: $75.7 billion with inflows of $3.3 billion in the quarter and $12.4
billion for the
LTM. – Total AUM growth in the quarter principally driven by record market appreciation of $3.8 billion across products,
offsetting net flows of $(1.3) billion.
– July 1 subscriptions of $181 million are not yet included in Total AUM.
Returns:
BPS Composite gross return of 6.0% in the quarter (5.8% net), was
highest quarterly gross return since
2000. – Gross returns of (3.1)% year-to-date ((3.5)% net) in line with the S&P 500 Total Return, with less than one half the volatility. % Change % Change ($ in thousands) 2Q'19 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Management Fees, Net 137,713 $ 146,318 $ 6% 275,359 $ 286,690 $ 4% Fee Related Compensation (36,622) (40,353) 10% (79,576) (86,544) 9% Other Operating Expenses (21,112) (17,807) (16)% (38,997) (36,474) (6)% Fee Related Earnings 79,979 $ 88,158 $ 10% 156,786 $ 163,672 $ 4% Realized Performance Revenues 11,960 1,482 (88)% 16,051 3,249 (80)% Realized Performance Compensation (2,175) 0 (100)% (3,588) (945) (74)% Realized Principal Investment Income 12,306 (331) n/m 12,023 (940) n/m Net Realizations 22,091 1,151 (95)% 24,486 1,364 (94)% Segment Distributable Earnings 102,070 $ 89,309 $ (13)% 181,272 $ 165,036 $ (9)% Segment Revenues 161,979 $ 147,469 $ (9)% 303,433 $ 288,999 $ (5)% Total AUM 81,435,680 $ 75,668,139 $ (7)% 81,435,680 $ 75,668,139 $ (7)% Fee-Earning AUM 74,653,420 $ 70,200,141 $ (6)% 74,653,420 $ 70,200,141 $ (6)% |
 Blackstone | 13 CREDIT & INSURANCE Total AUM: $137.8 billion with inflows of $6.9 billion in the quarter and $23.5
billion for the
LTM. – U.S. Direct Lending strategy had inflows of $1.6 billion in the quarter and priced a $400 million senior unsecured
notes offering for the BDC subsequent to quarter end, bringing total
investable capital to $15.8 billion, inclusive of
anticipated leverage. –
Launched 4 CLOs (2 U.S. and 2 European) in the quarter for $1.7 billion
and priced 1 additional CLO for $400
million.
– Raised $795 million for the fourth mezzanine / opportunistic fund in the quarter and $450 million subsequent to
quarter end.
Realizations:
$1.6 billion in the quarter and $7.7 billion for the LTM.
Capital Deployed:
$1.1 billion in the quarter and $9.5 billion for the LTM; committed an
additional $533 million in the quarter that is not yet
deployed. Returns:
Gross Credit Composite return of 10.1% for the quarter, driven by broad
recovery in public credit markets and resilient
performance across the private portfolio. Credit Composite
net return was 9.6% for 2Q’20. % Change
% Change
($ in thousands)
2Q'19 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Management Fees, Net 149,527 $ 148,548 $ (1)% 290,344 $ 296,450 $ 2% Fee Related Performance Revenues 2,552 8,528 234% 3,655 16,443 350% Fee Related Compensation (54,310) (57,086) 5% (112,984) (126,495) 12% Other Operating Expenses (40,466) (36,424) (10)% (72,705) (75,165) 3% Fee Related Earnings 57,303 $ 63,566 $ 11% 108,310 $ 111,233 $ 3% Realized Performance Revenues 7,946 1,973 (75)% 16,843 11,643 (31)% Realized Performance Compensation (3,468) (224) (94)% (6,839) (2,546) (63)% Realized Principal Investment Income 20,925 280 (99)% 24,108 3,532 (85)% Net Realizations 25,403 2,029 (92)% 34,112 12,629 (63)% Segment Distributable Earnings 82,706 $ 65,595 $ (21)% 142,422 $ 123,862 $ (13)% Segment Revenues 180,950 $ 159,329 $ (12)% 334,950 $ 328,068 $ (2)% Total AUM 139,270,150 $ 137,819,970 $ (1)% 139,270,150 $ 137,819,970 $ (1)% Fee-Earning AUM 104,456,856 $ 102,081,334 $ (2)% 104,456,856 $ 102,081,334 $ (2)% |
 Blackstone | 14 Supplemental Details |
 Blackstone | 15 TOTAL SEGMENTS ($ in thousands) 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 YTD 2Q'20 YTD Base Management Fees 805,315 $ 809,729 $ 873,368 $ 910,396 $ 941,794 $ 1,562,833 $ 1,852,190 $ Transaction, Advisory and Other Fees, Net 61,495 92,702 95,073 50,665 48,292 126,645 98,957 Management Fee Offsets (22,654) (22,086) (22,768) (20,494) (13,353) (31,260) (33,847) Total Management and Advisory Fees, Net 844,156 880,345 945,673 940,567 976,733 1,658,218 1,917,300 Fee Related Performance Revenues 13,624 34,225 156,373 12,466 15,033 21,403 27,499 Fee Related Compensation (293,834) (329,834) (388,879) (346,264) (306,904) (617,865) (653,168) Other Operating Expenses (142,121) (144,351) (161,359) (138,885) (143,583) (265,432) (282,468) Fee Related Earnings 421,825 $ 440,385 $ 551,808 $ 467,884 $ 541,279 $ 796,324 $ 1,009,163 $ Realized Performance Revenues 341,386 420,840 651,647 167,233 102,177 588,155 269,410 Realized Performance Compensation (125,466) (143,870) (249,359) (71,302) (37,787) (210,706) (109,089) Realized Principal Investment Income 123,557 36,148 38,542 20,290 18,938 149,465 39,228 Total Net Realizations 339,477 313,118 440,830 116,221 83,328 526,914 199,549 Total Segment Distributable Earnings 761,302 $ 753,503 $ 992,638 $ 584,105 $ 624,607 $ 1,323,238 $ 1,208,712 $ Net Interest Income (Loss) 2,761 (7,767) (2,496) (3,941) (12,634) 7,822 (16,575) Taxes and Related Payables (55,201) (35,815) (76,104) (23,053) (63,990) (84,240) (87,043) Distributable Earnings 708,862 $ 709,921 $ 914,038 $ 557,111 $ 547,983 $ 1,246,820 $ 1,105,094 $ Additional Metrics: Total Segment Revenues 1,322,723 $ 1,371,558 $ 1,792,235 $ 1,140,556 $ 1,112,881 $ 2,417,241 $ 2,253,437 $ Total Assets Under Management 545,482,337 $ 554,022,343 $ 571,122,463 $ 538,007,285 $ 564,330,088 $ 545,482,337 $ 564,330,088 $ Fee-Earning Assets Under Management 387,864,642 $ 394,138,443 $ 408,074,852 $ 423,055,037 $ 435,825,935 $ 387,864,642 $ 435,825,935 $ |
 Blackstone | 16 Total AUM Rollforward ($ in millions) Fee-Earning AUM Rollforward ($ 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.
Three Months Ended June 30, 2020
Twelve Months Ended June 30, 2020
Real Private Hedge Fund Credit & Real Private Hedge Fund Credit & Estate Equity Solutions Insurance Estate Equity Solutions Insurance Beginning Balance 160,935 $ 174,696 $ 73,721 $ 128,656 $ 538,007 $ 153,605 $ 171,172 $ 81,436 $ 139,270 $ 545,482 $ Inflows 4,885 5,203 3,324 6,858 20,269 32,330 25,630 12,432 23,549 93,941 Outflows (714) (669) (4,619) (2,347) (8,348) (2,422) (1,711) (14,711) (9,921) (28,765) Net Flows 4,171 4,534 (1,295) 4,511 11,921 29,908 23,919 (2,280) 13,628 65,175 Realizations (2,264) (2,990) (517) (1,580) (7,351) (15,833) (10,141) (1,445) (7,668) (35,087) Market Activity 3,882 7,879 3,759 6,233 21,753 (956) (832) (2,043) (7,411) (11,241) Ending Balance 166,724 $ 184,118 $ 75,668 $ 137,820 $ 564,330 $ 166,724 $ 184,118 $ 75,668 $ 137,820 $ 564,330 $ % Change 4% 5% 3% 7% 5% 9% 8% (7)% (1)% 3% Total Total Three Months Ended June 30, 2020 Twelve Months Ended June 30, 2020 Real Private Hedge Fund Credit & Real Private Hedge Fund Credit & Estate Equity Solutions Insurance Estate Equity Solutions Insurance Beginning Balance 130,424 $ 128,301 $ 68,214 $ 96,115 $ 423,055 $ 112,287 $ 96,467 $ 74,653 $ 104,457 $ 387,865 $ Inflows 3,573 3,981 3,481 4,552 15,586 37,562 44,181 12,123 17,843 111,709 Outflows (730) (1,946) (4,548) (2,081) (9,305) (5,595) (6,738) (13,118) (8,415) (33,866) Net Flows 2,843 2,035 (1,068) 2,471 6,282 31,967 37,443 (995) 9,428 77,844 Realizations (998) (1,118) (512) (1,078) (3,707) (10,461) (4,592) (1,360) (5,969) (22,382) Market Activity 1,992 66 3,566 4,573 10,196 467 (35) (2,098) (5,835) (7,501) Ending Balance 134,260 $ 129,284 $ 70,200 $ 102,081 $ 435,826 $ 134,260 $ 129,284 $ 70,200 $ 102,081 $ 435,826 $ % Change 3% 1% 3% 6% 3% 20% 34% (6)% (2)% 12% Total Total ASSETS UNDER MANAGEMENT - ROLLFORWARD |
 Blackstone | 17 $8.88 $7.51 2Q'19 2Q'20 DECONSOLIDATED BALANCE SHEET HIGHLIGHTS At June 30, 2020, Blackstone had $4.5 billion in total cash, cash equivalents, and corporate treasury investments
and $9.0
billion of cash and net investments, or $7.51 per share.
Blackstone has a $1.6 billion undrawn credit revolver and maintains
A+/A+ ratings. Balance Sheet Highlights exclude the
consolidated Blackstone Funds. GP/Fund Investments include Blackstone investments in Real Estate, Private Equity, Hedge Fund Solutions, and Credit & Insurance, which were $768 million, $676 million, $107 million, and $241 million,
respectively, as of June 30, 2020. Cash and Net Investments
per share amounts are calculated using period end DE Shares Outstanding (see page 23, Share Summary). A+ / A+ rated by S&P and Fitch $1.6B undrawn credit revolver with September 2023 maturity $4.5B total cash and corporate treasury Cash and Net Investments (per share) ($ in millions) 2Q'20 Cash and Cash Equivalents 1,977 $ Corporate Treasury Investments 2,550 GP/Fund Investments 1,792 Net Accrued Performance Revenues 2,708 Cash and Net Investments 9,026 $ Outstanding Bonds (at par) 4,685 |
 Blackstone | 18 2Q’20 QoQ Rollforward ($ in millions) 2Q’20 LTM Rollforward ($ in millions) Net Accrued Performance Revenues (“NAPR”) are presented net of performance compensation and do not include clawback
amounts, if any, which are disclosed in the 10-K/Q.
See additional notes on page 33. 1Q'20 Net Performance Revenues Net Realized Distributions 2Q'20 Real Estate 1,446 $ 21 $
(25) $
1,441
$
Private Equity
720 520 (42) 1,199 HFS 15 12 (1) 26 Credit & Insurance 6 42 (6) 42 Total 2,187 $ 595 $ (74) $
2,708 $ QoQ Change 24% 2Q'19 Net Performance Revenues Net Realized Distributions 2Q'20 Real Estate 2,093 $ 3 $
(655)
$
1,441
$
Private Equity
1,573
(169)
(205)
1,199
HFS 64 53 (92) 26 Credit & Insurance 242 (151) (49) 42 Total 3,973 $ (264) $ (1,001) $ 2,708 $ YoY Change (32)% NET ACCRUED PERFORMANCE REVENUES – ADDITIONAL DETAIL
($ in millions, except per share data)
2Q'19 1Q'20 2Q'20 2Q'20 Per Share Real Estate BREP IV 11 $
8 $
7 $
0.01 $ BREP V 54 - 1 0.00 BREP VI 88 51 45 0.04 BREP VII 536 309 238 0.20 BREP VIII 517 517 604 0.50 BREP IX - - 6 0.00 BREP International II 25 - - - BREP Europe IV 209 123 105 0.09 BREP Europe V 161 110 99 0.08 BREP Asia I 154 85 85 0.07 BPP 240 196 225 0.19 BREIT 36 - - - BREDS 20 2 3 0.00 BTAS 41 45 22 0.02 Real Estate 2,093 $ 1,446 $ 1,441 $ 1.20 $ Private Equity BCP IV 24 23 19 0.02 BCP VI 755 283 521 0.43 BCP VII 293 115 307 0.26 BCP Asia 6 14 18 0.02 BEP I 134 - 63 0.05 BEP II 54 - - - BEP III - - 3 0.00 BCEP 30 33 43 0.04 Tactical Opportunities 128 36 55 0.05 Secondaries 98 136 155 0.13 Life Sciences - 7 8 0.01 BTAS/Other 52 73 7 0.01 Private Equity 1,573 $ 720 $ 1,199 $ 1.00 $ Hedge Fund Solutions 64 $
15 $
26 $
0.02 $ Credit & Insurance 242 $ 6 $
42 $
0.03 $ Net Accrued Performance Revenues 3,973 $ 2,187 $ 2,708 $ 2.25 $ |
 Blackstone | 19 ($ 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) 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 - 28,986
0.0x
4,544,926
2.2x 4,573,912 1.7x 28% 12% BREP V (Dec 2005 / Feb 2007) 5,539,418 - 161,954
0.6x
13,047,811
2.4x 13,209,765 2.3x 12% 11% BREP VI (Feb 2007 / Aug 2011) 11,060,444 - 559,459
2.2x
27,131,368
2.5x 27,690,827 2.5x 13% 13% BREP VII (Aug 2011 / Apr 2015) 13,496,823 1,693,447 5,596,958 1.2x 22,816,881 2.1x 28,413,839 1.9x 22% 15% BREP VIII (Apr 2015 / Jun 2019) 16,567,310 2,644,464 17,563,805 1.4x 7,132,698 1.7x 24,696,503 1.5x 26% 12% *BREP IX (Jun 2019 / Dec 2024) 20,891,658 14,814,901 6,240,053 1.0x 983,331 1.4x 7,223,384 1.1x n/m 8% Total Global BREP 72,996,816 $ 19,152,812 $ $30,151,215 1.2x 83,191,933 $ 2.2x 113,343,148 $ 1.8x 18% 15% BREP Int'l (Jan 2001 / Sep 2005) 824,172 €
- €
- €
n/a 1,373,170 € 2.1x 1,373,170 €
2.1x 23% 23% BREP Int'l II (Sep 2005 / Jun 2008) (e) 1,629,748 - -
n/a 2,576,670 1.8x 2,576,670 1.8x 8% 8% BREP Europe III (Jun 2008 / Sep 2013) 3,205,167 467,119 410,184
0.6x
5,737,320
2.5x 6,147,504 2.1x 20% 14% BREP Europe IV (Sep 2013 / Dec 2016) 6,709,145 1,337,987 2,594,032 1.4x 8,988,619 2.0x 11,582,651 1.8x 23% 15% BREP Europe V (Dec 2016 / Oct 2019) 7,949,959 1,595,473 7,454,498 1.2x 721,076 2.7x 8,175,574 1.3x 53% 8% *BREP Europe VI (Oct 2019 / Apr 2025) 9,794,768 7,638,299 2,121,888 1.0x - n/a 2,121,888 1.0x n/m n/m Total BREP Europe 30,112,959 € 11,038,878 € 12,580,602 € 1.2x 19,396,855 € 2.1x 31,977,457 € 1.6x 16% 12% BREP Asia I (Jun 2013 / Dec 2017) 5,096,753 $ 1,728,257 $ 3,139,012 $ 1.3x 4,129,266 $ 1.9x 7,268,278 $
1.6x 21% 11% *BREP Asia II (Dec 2017 / Jun 2023) 7,302,307 4,416,827 3,054,983 1.1x 207,162 1.5x 3,262,145 1.1x 36% 0% BREP Co-Investment (f) 7,055,974 154,594 1,787,693
2.4x
13,289,404
2.1x 15,077,097 2.1x 15% 16% Total BREP 126,131,248 $ 37,853,566 $ 52,536,503 $ 1.2x 125,287,061 $ 2.2x 177,823,564 $ 1.8x 17% 15% *Core+ BPP (Various) (g) n/a n/a 33,191,570 n/a 7,089,382 n/a 40,280,952 n/a n/m 8% *Core+ BREIT (Various) (h) n/a n/a 17,384,357 n/a 465,068 n/a 17,849,425 n/a n/a 7% *BREDS High-Yield (Various) (i) 18,600,464 8,894,151 3,013,387 1.0x 12,492,057 1.3x 15,505,444 1.2x 11% 10% Private Equity Corporate 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 11,891
n/a
2,953,649
1.4x 2,965,540 1.4x 6% 6% BCP IV (Nov 2002 / Dec 2005) 6,773,182 195,824 161,183
2.2x
21,417,821
2.9x 21,579,004 2.9x 36% 36% BCP V (Dec 2005 / Jan 2011) 21,013,658 1,039,805 627,552 0.7x 37,166,512 1.9x 37,794,064 1.9x 9% 8% BCP VI (Jan 2011 / May 2016) 15,202,400 1,239,853 9,921,527 1.4x 16,493,176 2.1x 26,414,703 1.8x 18% 11% BCP VII (May 2016 / Feb 2020) 18,865,679 3,397,863 18,925,185 1.3x 1,685,595 1.8x 20,610,780 1.3x 47% 10% *BCP VIII (Feb 2020 / Feb 2026) 24,985,447 24,985,447 - n/a
- n/a - n/a
n/a n/a Energy I (Aug 2011 / Feb 2015) 2,441,558 157,049 1,211,172
1.2x
2,744,604
1.9x 3,955,776 1.6x 17% 10% Energy II (Feb 2015 / Feb 2020) 4,914,044 263,873 3,447,078
0.8x
332,436
2.0x
3,779,514
0.8x
58% (15)% *Energy III (Feb 2020 / Feb 2026) 4,227,166 4,087,226 127,103 1.8x - n/a 127,103 1.8x n/a n/m *BCP Asia (Dec 2017 / Dec 2023) 2,394,966 1,393,730 1,241,822 1.3x 54,308 1.7x 1,296,130 1.3x 92% 14% *Core Private Equity (Jan 2017 / Jan 2021) (j) 4,756,707 1,381,730 4,260,653 1.2x 418,053 1.6x 4,678,706 1.3x 36% 10% Total Corporate Private Equity 113,899,740 $ 38,166,975 $ 39,935,166 $ 1.2x 97,449,399 $ 2.1x 137,384,565 $ 1.7x 16% 14% (a) INVESTMENT RECORDS AS OF JUNE 30, 2020
Notes on page 21. BREP – Blackstone Real Estate Partners, BREIT
– Blackstone Real Estate Income Trust, BPP – Blackstone Property Partners, BREDS – Blackstone Real Estate Debt Strategies, BCP – Blackstone Capital Partners, BCOM – Blackstone Communications. * Represents funds that are currently in their investment period and open ended funds. |
 Blackstone | 20 Notes on page 21. BXLS – Blackstone Life Sciences. * Represents funds that are currently in their investment period and open ended funds.
INVESTMENT RECORDS AS OF JUNE 30, 2020 (a) – (CONT’D) ($ 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) Value MOIC (c) Value MOIC (c) Realized Total Private Equity (continued) Tactical Opportunities *Tactical Opportunities (Various) 22,555,525 $ 8,618,210 $ 9,886,307 $ 1.0x 10,267,342 $ 1.7x 20,153,649 $ 1.3x 18% 7% *Tactical Opportunities Co-Investment and Other (Various) 8,515,156 2,201,908 5,435,077 1.3x 2,075,769 1.5x 7,510,846 1.4x 22% 14% Total Tactical Opportunities 31,070,681 $ 10,820,118 $ 15,321,384 $ 1.1x 12,343,111 $ 1.7x 27,664,495 $ 1.3x 19% 9% Strategic Partners (Secondaries) Strategic Partners I-V (Various) (k) 11,865,053 1,696,017 933,357 n/m 16,866,422 n/m 17,799,779 1.5x n/a 13% Strategic Partners VI (Apr 2014 / Apr 2016) (k) 4,362,750 1,201,160 1,423,216 n/m 3,244,976 n/m 4,668,192 1.5x n/a 15% Strategic Partners VII (May 2016 / Mar 2019) (k) 7,489,970 2,511,941 5,499,667 n/m 1,812,567 n/m 7,312,234 1.5x n/a 20% Strategic Partners Real Assets II (May 2017 / Jun 2020) (k) 1,749,807 264,740 1,161,342 n/m 394,475 n/m 1,555,817 1.2x n/a 16% *Strategic Partners VIII (Mar 2019 / Jul 2023) (k) 10,763,600 5,469,228 3,418,251 n/m 188,363 n/m 3,606,614 1.4x n/a 58% *Strategic Partners Real Estate, SMA and Other (Various) (k) 7,678,402 2,963,642 2,742,203 n/m 1,354,601 n/m 4,096,804 1.3x n/a 17% *Strategic Partners Infra III (Jun 2020 / Jul 2024) (k) 3,240,000 2,941,474 - n/a - n/a - n/a n/a n/a Total Strategic Partners (Secondaries) 47,149,582 $ 17,048,202 $ 15,178,036 $ n/m 23,861,404 $ n/m 39,039,440 $ 1.5x n/a 14% *Infrastructure (Various) 13,658,063 11,307,674 2,201,896 0.9x - n/a 2,201,896 0.9x n/a (11)% Life Sciences Clarus IV (Jan 2018 / Jan 2020) 910,000 440,014 570,869 1.4x 20,207 1.3x 591,076 1.4x 6% 18% *BXLS V (Jan 2020 / Jan 2025) 4,385,171 4,182,973 240,675 1.2x - n/a 240,675 1.2x n/a n/m Credit (l) Mezzanine / Opportunistic I (Jul 2007 / Oct 2011) 2,000,000 $ 97,114 $
15,554
$
0.8x
4,774,329
$
1.6x 4,789,883 $ 1.6x n/a 17% Mezzanine / Opportunistic II (Nov 2011 / Nov 2016) 4,120,000 1,033,255 884,201 0.6x 5,492,318 1.6x 6,376,519 1.3x n/a 9% *Mezzanine / Opportunistic III (Sep 2016 / Sep 2021) 6,639,133 2,497,919 4,260,490 1.0x 2,202,749 1.6x 6,463,239 1.2x n/a 8% Stressed / Distressed I (Sep 2009 / May 2013) 3,253,143 76,000 10,770 0.0x 5,772,930 1.6x 5,783,700 1.3x n/a 9% Stressed / Distressed II (Jun 2013 / Jun 2018) 5,125,000 555,590 903,246 0.6x 4,376,500 1.2x 5,279,746 1.0x n/a (3)% *Stressed / Distressed III (Dec 2017 / Dec 2022) 7,356,380 4,167,110 1,720,727 0.8x 1,217,223 1.4x 2,937,950 1.0x n/a (9)% Energy I (Nov 2015 / Nov 2018) 2,856,867 1,072,376 1,409,774 0.9x 1,046,757 1.7x 2,456,531 1.1x n/a 2% *Energy II (Feb 2019 / Feb 2024) 3,616,081 3,017,574 621,160 1.0x 176,873 1.4x 798,033 1.1x n/a 12% Euro European Senior Debt I (Feb 2015 / Feb 2019) 1,964,689 € 305,089 € 1,661,274 € 1.0x 1,376,818 € 1.5x 3,038,092 € 1.1x n/a 4% *European Senior Debt II (Jun 2019 / Jun 2024) 4,088,344 € 3,672,670 € 413,190 € 1.0x 101,399 € 1.5x 514,589 € 1.1x n/a n/m Total Credit 41,872,262 $ 16,984,573 $ 12,155,856 $ 0.8x 26,728,090 $ 1.5x 38,883,946 $ 1.2x n/a 8% |
 Blackstone | 21 n/m Not meaningful generally due to the limited time since initial investment. n/a Not applicable. (a) 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, 2020 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. Committed Capital
and Available
Capital are not regularly reported to investors in our Core+ strategy
and are not applicable in the context of these funds.
(h) Unrealized Investment Value reflects BREIT’s net asset value as of June 30, 2020. Realized Investment Value represents
BREIT’s cash distributions, net of servicing fees.
BREIT net return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns
are not
representative of the returns experienced by any particular investor or
share class. Inception to date net returns are presented
on an annualized
basis and are from January 1, 2017. Committed Capital and Available Capital are not regularly reported to investors in our Core+ strategy and are not applicable in the context of this vehicle. (i) BREDS High-Yield represents the flagship real estate debt drawdown funds only and excludes BREDS High-Grade.
(j) Blackstone Core Equity Partners is a core private equity fund which invests with a more modest risk profile and longer hold
period. (k)
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 and therefore do
not include the impact of economic and market activities
in the quarter in which such events occur. (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.
The returns presented herein represent those of the applicable Blackstone
Funds and not those of The Blackstone Group Inc. INVESTMENT
RECORDS AS OF JUNE 30, 2020 – NOTES |
 Blackstone | 22 SHAREHOLDER DIVIDENDS Generated $0.43 of Distributable Earnings per common share during the quarter, bringing the year-to-date amount
to $0.89 per common share.
Blackstone declared a quarterly dividend of $0.37 per common share to
record holders as of August 3, 2020; payable on August 10,
2020. A
detailed
description
of Blackstone’s dividend policy and the definition of Distributable Earnings can be found on pages 34-35, Definitions and Dividend Policy. See additional notes on page 33. % Change % Change ($ in thousands, except per share data) 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 vs. 2Q'19 2Q'19 YTD 2Q'20 YTD vs. 2Q'19 YTD Distributable Earnings 708,862 $ 709,921 $ 914,038 $ 557,111 $ 547,983 $ (23)% 1,246,820 $ 1,105,094 $ (11)% Add: Other Payables Attributable to Common Shareholders 39,673 24,578 63,796 9,200 45,673 15% 54,271 54,873 1% DE before Certain Payables 748,535 734,499 977,834 566,311 593,656 (21)% 1,301,091 1,159,967 (11)% Percent to Common Shareholders 56% 56% 57% 58% 58% 56% 58% DE before Certain Payables Attributable to Common Shareholders 419,502 413,900 556,133 325,990 344,390 (18)% 730,334 670,380 (8)% Less: Other Payables Attributable to Common Shareholders (39,673) (24,578) (63,796) (9,200) (45,673) 15% (54,271) (54,873) 1% DE Attributable to Common Shareholders 379,829 389,322 492,337 316,790 298,717 (21)% 676,063 615,507 (9)% DE per Common Share 0.57 $ 0.58 $ 0.72 $ 0.46 $ 0.43 $ (25)% $1.01 $0.89 (12)% Less: Retained Capital per Common Share (0.09) $ (0.09) $ (0.11) $ (0.07) $ (0.06) $ (33)% (0.16) $ (0.13) $ (19)% Actual Dividend per Common Share 0.48 $ 0.49 $ 0.61 $ 0.39 $ 0.37 $ (23)% 0.85 $ 0.76 $ (11)% Record Date Aug 3, 2020 Payable Date Aug 10, 2020 |
 Blackstone | 23 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 Participating Common Shares 669,561,793 675,640,119 680,457,424 687,869,905 697,597,036 Participating Partnership Units 525,165,724 523,338,040 515,973,657 507,101,000 504,912,855 Distributable Earnings Shares Outstanding 1,194,727,517 1,198,978,159 1,196,431,081 1,194,970,905 1,202,509,891 SHARE SUMMARY Distributable Earnings Shares Outstanding as of quarter end of 1,203 million shares.
– Repurchased 2.0 million common shares in the quarter and 11.2 million common shares for the LTM.
– Available authorization remaining was $413 million at June 30, 2020.
Notes on page 33. |
 Blackstone | 24 Reconciliations and Disclosures |
 Blackstone | 25 RECONCILIATION OF GAAP TO NON-GAAP MEASURES Notes on page 26-27. QTD YTD LTM ($ in thousands) 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 Net Income (Loss) Attributable to The Blackstone Group Inc. 305,792 $ 779,437 $ 483,149 $ (1,066,492) $ 568,266 $ 787,096 $ (498,226) $ 1,218,970 $ 764,360 $ Net Income (Loss) Attributable to Non- Controlling Interests in Blackstone Holdings 259,330 299,900 378,137 (880,117) 495,128 661,590 (384,989) 1,027,419 293,048 Net Income (Loss) Attributable to Non- Controlling Interests in Consolidated Entities 80,744 88,406 120,796 (645,077) 294,378 267,577 (350,699) 341,878 (141,497) Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities 1,095 (8) (3,688) (15,469) (3,426) 3,575 (18,895) 1,841 (22,591) Net Income (Loss) 646,961 $ 1,167,735 $ 978,394 $ (2,607,155) $ 1,354,346 $ 1,719,838 $ (1,252,809) $ 2,590,108 $ 893,320 $ Provision (Benefit) for Taxes 38,736 (156,786) 28,943 (158,703) 147,415 79,891 (11,288) 136,055 (139,131) Income (Loss) Before Provision (Benefit) for Taxes 685,697 $ 1,010,949 $ 1,007,337 $ (2,765,858) $ 1,501,761 $ 1,799,729 $ (1,264,097) $ 2,726,163 $ 754,189 $ Transaction-Related Charges (a) 106,994 (82,547) 94,715 46,994 76,160 196,445 123,154 352,118 135,322 Amortization of Intangibles (b) 16,483 16,483 16,482 16,483 16,483 32,966 32,966 63,214 65,931 Impact of Consolidation (c) (81,839) (88,398) (117,108) 660,546 (290,952) (271,152) 369,594 (343,719) 164,088 Unrealized Performance Revenues (d) (157,398) (176,604) (128,333) 3,453,446 (1,067,923) (821,731) 2,385,523 (314,131) 2,080,586 Unrealized Performance Allocations Compensation (e) 64,518 94,907 93,845 (1,397,378) 454,813 351,533 (942,565) 226,849 (753,813) Unrealized Principal Investment (Income) Loss (f) 56,353 5,219 (34,974) 616,610 (223,316) (83,572) 393,294 48,383 363,539 Other Revenues (g) 20,150 (92,843) 6,435 (138,151) 55,606 6,961 (82,545) (48,985) (168,953) Equity-Based Compensation (h) 53,105 58,570 51,743 87,472 89,341 119,881 176,813 199,559 287,126 Taxes and Related Payables (i) (55,201) (35,815) (76,104) (23,053) (63,990) (84,240) (87,043) (171,266) (198,962) Distributable Earnings 708,862 $ 709,921 $ 914,038 $ 557,111 $ 547,983 $ 1,246,820 $ 1,105,094 $ 2,738,185 $ 2,729,053 $ Taxes and Related Payables (i) 55,201 35,815 76,104 23,053 63,990 84,240 87,043 171,266 198,962 Net Interest (Income) Loss (j) (2,761) 7,767 2,496 3,941 12,634 (7,822) 16,575 (28,758) 26,838 Total Segment Distributable Earnings 761,302 $ 753,503 $ 992,638 $ 584,105 $ 624,607 $ 1,323,238 $ 1,208,712 $ 2,880,693 $ 2,954,853 $ Realized Performance Revenues (k) (341,386) (420,840) (651,647) (167,233) (102,177) (588,155) (269,410) (1,644,011) (1,341,897) Realized Performance Compensation (l) 125,466 143,870 249,359 71,302 37,787 210,706 109,089 601,124 502,318 Realized Principal Investment Income (m) (123,557) (36,148) (38,542) (20,290) (18,938) (149,465) (39,228) (262,183) (113,918) Fee Related Earnings 421,825 $ 440,385 $ 551,808 $ 467,884 $ 541,279 $ 796,324 $ 1,009,163 $ 1,575,623 $ 2,001,356 $ Adjusted EBITDA Reconciliation Distributable Earnings 708,862 $ 709,921 $ 914,038 $ 557,111 $ 547,983 $ 1,246,820 $ 1,105,094 $ 2,738,185 $ 2,729,053 $ Interest Expense (n) 43,230 52,815 57,351 41,540 38,924 84,868 80,464 167,583 190,630 Taxes and Related Payables (i) 55,201 35,815 76,104 23,053 63,990 84,240 87,043 171,266 198,962 Depreciation and Amortization 6,000 6,895 7,666 7,512 8,110 11,789 15,622 23,434 30,183 Adjusted EBITDA 813,293 $ 805,446 $ 1,055,159 $ 629,216 $ 659,007 $ 1,427,717 $ 1,288,223 $ 3,100,468 $ 3,148,828 $ |
 Blackstone | 26 Note: See pages 34-35, 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. QTD
YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 GAAP Unrealized Performance Allocations 157,732 $ 176,370 $ 128,231 $ (3,453,081) $ 1,067,923 $ 821,731 $ (2,385,158) $ 314,664 $ (2,080,557) $ Segment Adjustment (334) 234 102 (365) - - (365) (533) (29) Unrealized Performance Revenues
157,398
$
176,604
$
128,333
$
(3,453,446)
$
1,067,923
$
821,731
$
(2,385,523)
$
314,131
$
(2,080,586)
$
(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. QTD
YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 GAAP Unrealized Principal Investment Income (Loss) (37,345) $ 15,391 $ 67,913 $ (959,365) $ 331,762 $ 131,699 $ (627,603) $ (33,626) $ (544,299) $ Segment Adjustment (19,008) (20,610) (32,939) 342,755 (108,446) (48,127) 234,309 (14,757) 180,760 Unrealized Principal Investment Income (Loss) (56,353) $ (5,219) $ 34,974 $ (616,610) $ 223,316 $ 83,572 $ (393,294) $ (48,383) $ (363,539) $ (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. QTD YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 GAAP Other Revenue (17,120) $ 93,273 $ (6,410) $ 138,180 $ (55,580) $ (6,870) $ 82,600 $ 49,421 $ 169,463 $ Segment Adjustment (3,030) (430) (25) (29) (26) (91) (55) (436) (510) Other Revenues
(20,150)
$
92,843
$
(6,435)
$
138,151
$
(55,606)
$
(6,961)
$
82,545
$
48,985
$
168,953
$
(h) This adjustment removes Equity-Based Compensation on a segment basis.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES – NOTES |
 Blackstone | 27 RECONCILIATION OF GAAP TO NON-GAAP MEASURES – NOTES (i) Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income
(Loss) Before Provision (Benefit) 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. (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. (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. QTD YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 Taxes 34,209 $ 26,933 $ 63,930 $ 16,274 $ 48,462 $ 49,553 $ 64,736 $ 101,321 $ 155,599 $ Related Payables 20,992 8,882 12,174
6,779
15,528
34,687
22,307
69,945
43,363
Taxes and Related Payables
55,201
$
35,815
$
76,104
$
23,053
$
63,990
$
84,240
$
87,043
$
171,266
$
198,962
$
QTD YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 GAAP Interest and Dividend Revenue 43,686 $ 42,482 $ 52,146 $ 35,084 $ 23,924 $ 87,770 $ 59,008 $ 184,259 $ 153,636 $ Segment Adjustment 2,305 2,566
2,709
2,515
2,366
4,920
4,881
12,082
10,156
Interest and Dividend Revenue
45,991
$
45,048
$
54,855
$
37,599
$
26,290
$
92,690
$
63,889
$
196,341
$
163,792
$
GAAP Interest Expense
43,596
$
53,362
$
60,688
$
41,644
$
39,276
$
85,598
$
80,920
$
171,597
$
194,970
$
Segment Adjustment
(366)
(547)
(3,337)
(104)
(352)
(730)
(456)
(4,014)
(4,340)
Interest Expense
43,230
$
52,815
$
57,351
$
41,540
$
38,924
$
84,868
$
80,464
$
167,583
$
190,630
$
Net Interest Income (Loss)
2,761
$
(7,767)
$
(2,496)
$
(3,941)
$
(12,634)
$
7,822
$
(16,575)
$
28,758
$
(26,838)
$
Reconciliation of GAAP Shares of Class A Common Stock Outstanding to
Distributable Earnings Shares Outstanding QTD
2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 GAAP Shares of Class A Common Stock Outstanding 660,588,369 666,257,305 671,157,692 676,630,489 676,874,583 Unvested Participating Common Shares 8,973,424 9,382,814 9,299,732 11,239,416 20,722,453 Total Participating Common Shares 669,561,793 675,640,119 680,457,424 687,869,905 697,597,036 Participating Partnership Units 525,165,724 523,338,040 515,973,657 507,101,000 504,912,855 Distributable Earnings Shares Outstanding 1,194,727,517 1,198,978,159 1,196,431,081 1,194,970,905 1,202,509,891 Disclosure of Weighted-Average Shares of Class A Common Stock Outstanding
QTD YTD LTM 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 Total GAAP Weighted-Average Shares of Class A Common Stock Outstanding - Basic 673,655,305 675,963,129 679,420,988 676,305,359 698,534,168 674,079,074 677,041,769 676,828,114 685,032,993 Weighted-Average Shares of Unvested Deferred Restricted
Class A Common Stock
330,639
256,629
274,520
-
123,340
269,196
-
257,322
262,625
Weighted-Average Blackstone Holdings Partnership
Units -
- - - 505,754,449
526,244,006
- 524,831,943
- Total GAAP Weighted-Average Shares of Class A Common
Stock Outstanding - Diluted
673,985,944
676,219,758
679,695,508
676,305,359
1,204,411,957
1,200,592,276 677,041,769 1,201,917,379 685,295,618 |
 Blackstone | 28 BLACKSTONE’S SECOND QUARTER 2020 GAAP BALANCE SHEET RESULTS See page 29, Reconciliation of GAAP to Non-GAAP Balance Sheet Measures.
($ in thousands) (Unaudited)
2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 Assets Cash and Cash Equivalents 1,484,444 $ 2,468,563 $ 2,172,441 $ 2,068,326 $ 1,976,512 $ Cash Held by Blackstone Funds and Other 324,609 375,981
351,210
318,003
343,201
Investments
22,242,040
22,204,460
22,281,682
16,430,701
18,973,373
Accounts Receivable
802,066
755,777
975,075
696,729
498,600
Due from Affiliates
2,211,737
2,464,163
2,594,873
2,706,112
2,431,512
Intangible Assets, Net
433,007
415,257
397,508
379,758
362,008
Goodwill
1,869,860
1,869,860
1,869,860
1,869,860
1,869,860
Other Assets
354,253
402,670
382,493
541,896
501,351
Right-of-Use Assets
507,065
490,882
471,059
542,757
568,663
Deferred Tax Assets
743,132
938,158
1,089,305
1,392,352
1,319,301
Total Assets
30,972,213
$
32,385,771
$
32,585,506
$
26,946,494
$
28,844,381
$
Liabilities and Equity
Loans Payable
10,676,138
$
11,270,245
$
11,080,723
$
10,392,903
$
10,839,568
$
Due to Affiliates
1,081,899
984,969
1,026,871
1,247,098
1,268,571
Accrued Compensation and Benefits
3,308,595
3,623,258
3,796,044
1,965,237
2,551,056
Securities Sold, Not Yet Purchased
128,512
87,051
75,545
51,498
51,395
Repurchase Agreements
207,676
163,059
154,118
105,133
80,620
Operating Lease Liabilities
574,619
558,253
542,994
605,809
637,946
Accounts Payable, Accrued Expenses and Other
Liabilities 929,688
1,069,475
806,159
1,000,708
919,195
Total Liabilities
16,907,127
17,756,310
17,482,454
15,368,386
16,348,351
Redeemable Non-Controlling Interests in Consolidated
Entities 101,310
93,667
87,651
72,066
68,564
Equity
The Blackstone Group L.P. Partners’ Capital
6,335,897
-
-
-
-
Class A Common
Stock, $0.00001 par value (676,874,583 shares issued and
outstanding as of June 30, 2020) -
7
7 7
7 Class B Common Stock, $0.00001 par value (1 share
issued and outstanding as of June 30, 2020)
-
-
-
-
-
Class C Common
Stock, $0.00001 par value (1 share issued and outstanding
as of June 30, 2020) -
-
-
-
-
Additional
Paid-in-Capital -
6,292,765
6,428,647
6,298,093
6,272,040
Retained Earnings
-
456,814
609,625
(871,948)
(574,295)
Accumulated Other Comprehensive Loss
(27,542)
(35,173)
(28,495)
(41,533)
(36,758)
Non-Controlling Interests in Consolidated
Entities 3,869,303
4,035,513
4,186,069
3,591,160
3,900,429
Non-Controlling Interests in Blackstone Holdings
3,786,118
3,785,868
3,819,548
2,530,263
2,866,043
Total Equity
13,963,776
14,535,794
15,015,401
11,506,042
12,427,466
Total Liabilities and Equity
30,972,213
$
32,385,771
$
32,585,506
$
26,946,494
$
28,844,381
$ |
 Blackstone | 29 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 Performance Revenues realized but not yet distributed as of the reporting date and are included in Distributable
Earnings in the period they are realized. (d)
Represents GAAP accrued performance compensation associated with Accrued
Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates. (e) This adjustment adds other assets related to Treasury Operations that are recorded within Accounts Receivable, reverse repurchase
agreements and Due from Affiliates.
(f) 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. (g)
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.
(h) This adjustment removes amounts related to consolidated Blackstone Funds.
($ in thousands)
2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 Investments of Consolidated Blackstone Funds 8,633,794 $ 8,481,233 $ 8,380,698 $ 7,275,752 $ 7,943,531 $ Equity Method Investments Partnership Investments 3,802,565 3,864,453 4,035,675 3,553,538 3,873,346 Accrued Performance Allocations 6,743,542 7,003,889 7,180,449 3,761,585 4,715,510 Corporate Treasury Investments 2,797,908 2,588,529 2,419,587 1,653,950 2,205,843 Other Investments 264,231 266,356 265,273 185,876 235,143 Total GAAP Investments 22,242,040 $ 22,204,460 $ 22,281,682 $ 16,430,701 $ 18,973,373 $ Accrued Performance Allocations - GAAP 6,743,542 $ 7,003,889 $ 7,180,449 $ 3,761,585 $ 4,715,510 $ Impact of Consolidation (a) 607 237 384 19 19 Due from Affiliates - GAAP (b) 25,022 18,955 154,980 20,910 20,642 Less: Net Realized Performance Revenues (c) (71,352) (129,129) (214,662) (31,719) (38,592) Less: Accrued Performance Compensation - GAAP (d) (2,724,998) (2,851,817) (3,021,899) (1,563,672) (1,989,219) Net Accrued Performance Revenues 3,972,821 $ 4,042,135 $ 4,099,252 $ 2,187,123 $ 2,708,360 $ Corporate Treasury Investments - GAAP 2,797,908 $ 2,588,529 $ 2,419,587 $ 1,653,950 $ 2,205,843 $ Impact of Consolidation (a) 160,644 163,183 164,243 131,248 141,371 Other Assets (e) 425,823 440,982 602,707 374,064 271,615 Other Liabilities (f) (91,016) (80,086) (74,898) (46,635) (69,326) Corporate Treasury Investments - Deconsolidated 3,293,359 $ 3,112,608 $ 3,111,639 $ 2,112,627 $ 2,549,503 $ Partnership and Other Investments - GAAP 4,066,796 $ 4,130,809 $ 4,300,948 $ 3,739,414 $ 4,108,489 $ Impact of Consolidation (g) (2,209,825) (2,289,139) (2,409,218) (2,111,945) - (2,316,855) GP/Fund Investments - Deconsolidated 1,856,971 $ 1,841,670 $ 1,891,730 $ 1,627,469 $ 1,791,634 $ Loans Payable - GAAP 10,676,138 $ 11,270,245 $ 11,080,723 $ 10,392,903 $ 10,839,568 $ Impact of Consolidation (h) (6,536,221) (6,492,686) (6,479,867) (5,817,702) (6,232,787) Outstanding Bonds - Carrying Value 4,139,917 4,777,559 4,600,856 4,575,201 4,606,781 Unamortized Discount 66,033 82,336 81,094 79,449 78,319 Outstanding Bonds (at par) - Deconsolidated 4,205,950 $ 4,859,895 $ 4,681,950 $ 4,654,650 $ 4,685,100 $ |
 Blackstone | 30 QTD YTD LTM ($ in thousands) 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 Management and Advisory Fees, Net GAAP 840,378 $ 878,151 $ 943,900 $ 934,832 $ 969,728 $ 1,650,104 $ 1,904,560 $ 3,227,667 $ 3,726,611 $ Segment Adjustment (a) 3,778 2,194 1,773 5,735 7,005 8,114 12,740 7,965 16,707 Total Segment 844,156 $ 880,345 $ 945,673 $ 940,567 $ 976,733 $ 1,658,218 $ 1,917,300 $ 3,235,632 $ 3,743,318 $ GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
GAAP Incentive Fees 21,915 8,254 87,610 12,161 15,300 34,047 27,461 59,643 123,325 Investment Income - Realized Performance Allocations 332,520 446,550 717,555 167,530 101,910 574,895 269,440 1,678,386 1,433,545 GAAP 354,435 $ 454,804 $ 805,165 $ 179,691 $ 117,210 $ 608,942 $ 296,901 $ 1,738,029 $ 1,556,870 $ Total Segment Less: Realized Performance Revenues (341,386) (420,840) (651,647) (167,233) (102,177) (588,155) (269,410) (1,644,011) (1,341,897) Segment Adjustment (b) 575 261 2,855 8 - 616 8 1,869 3,124 Total Segment 13,624 $ 34,225 $ 156,373 $ 12,466 $ 15,033 $ 21,403 $ 27,499 $ 95,887 $ 218,097 $ GAAP Compensation to Total Segment Fee Related Compensation GAAP Compensation 438,521 462,766 447,646 476,543 458,457 909,918 935,000 1,702,993 1,845,412 Incentive Fees Compensation 8,886 5,419 24,589 6,522 8,432 14,292 14,954 31,803 44,962 Realized Performance Allocations Compensation 125,825 155,663 295,059 72,423 38,569 212,220 110,992 624,836 561,714 GAAP 573,232 $ 623,848 $ 767,294 $ 555,488 $ 505,458 $ 1,136,430 $ 1,060,946 $ 2,359,632 $ 2,452,088 $ Total Segment Less: Realized Performance Compensation (125,466) (143,870) (249,359) (71,302) (37,787) (210,706) (109,089) (601,124) (502,318) Less: Equity-Based Compensation - Operating Compensation (50,225) (56,139) (51,612) (85,334) (87,205) (113,933) (172,539) (187,415) (280,290) Less: Equity-Based Compensation - Performance Compensation (2,880) (2,431) (131) (2,138) (2,136) (5,948) (4,274) (12,144) (6,836) Segment Adjustment (c) (100,827) (91,574) (77,313) (50,450) (71,426) (187,978) (121,876) (327,255) (290,763) Total Segment 293,834 $ 329,834 $ 388,879 $ 346,264 $ 306,904 $ 617,865 $ 653,168 $ 1,231,694 $ 1,371,881 $ GAAP General, Administrative and Other to Total Segment Other Operating Expenses
GAAP 175,308 $ 171,067 $ 186,971 $ 157,566 $ 169,051 $ 321,370 $ 326,617 $ 643,702 $ 684,655 $ Segment Adjustment (d) (33,187) (26,716) (25,612) (18,681) (25,468) (55,938) (44,149) (119,500) (96,477) Total Segment 142,121 $ 144,351 $ 161,359 $ 138,885 $ 143,583 $ 265,432 $ 282,468 $ 524,202 $ 588,178 $ Realized Performance Revenues GAAP Incentive Fees 21,915 8,254 87,610 12,161 15,300 34,047 27,461 59,643 123,325 Investment Income - Realized Performance Allocations 332,520 446,550 717,555 167,530 101,910 574,895 269,440 1,678,386 1,433,545 GAAP 354,435 $ 454,804 $ 805,165 $ 179,691 $ 117,210 $ 608,942 $ 296,901 $ 1,738,029 $ 1,556,870 $ Total Segment Less: Fee Related Performance Revenues (13,624) (34,225) (156,373) (12,466) (15,033) (21,403) (27,499) (95,887) (218,097) Segment Adjustment (b) 575 261 2,855 8 - 616 8 1,869 3,124 Total Segment 341,386 $ 420,840 $ 651,647 $ 167,233 $ 102,177 $ 588,155 $ 269,410 $ 1,644,011 $ 1,341,897 $ RECONCILIATION OF GAAP TO TOTAL SEGMENTS |
 Blackstone | 31 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.
RECONCILIATION
OF GAAP TO TOTAL SEGMENTS – (CONT’D) QTD YTD LTM ($ in thousands) 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 2Q'19 2Q'20 2Q'19 2Q'20 Realized Performance Compensation GAAP Incentive Fee Compensation 8,886 $ 5,419 $ 24,589 $ 6,522 $ 8,432 $ 14,292 $ 14,954 $ 31,803 $ 44,962 $ Realized Performance Allocations Compensation 125,825 155,663 295,059 72,423 38,569 212,220 110,992 624,836 561,714 GAAP 134,711 $ 161,082 $ 319,648 $ 78,945 $ 47,001 $ 226,512 $ 125,946 $ 656,639 $ 606,676 $ Total Segment Less: Fee Related Performance Compensation (6,365) (14,781) (70,158) (5,505) (7,078) (9,858) (12,583) (43,371) (97,522) Less: Equity-Based Compensation - Performance Compensation (2,880) (2,431) (131) (2,138) (2,136) (5,948) (4,274) (12,144) (6,836) Total Segment 125,466 $ 143,870 $ 249,359 $ 71,302 $ 37,787 $ 210,706 $ 109,089 $ 601,124 $ 502,318 $ Realized Principal Investment Income GAAP 145,040 $ 74,642 $ 100,535 $ 48,695 $ 61,102 $ 218,301 $ 109,797 $ 462,821 $ 284,974 $ Segment Adjustment (e) (21,483) (38,494) (61,993) (28,405) (42,164) (68,836) (70,569) (200,638) (171,056) Total Segment 123,557 $ 36,148 $ 38,542 $ 20,290 $ 18,938 $ 149,465 $ 39,228 $ 262,183 $ 113,918 $ GAAP Interest and Dividend Revenue net of Interest Expense to Total Segment Net Interest Income (Loss)
GAAP Interest and Dividend Revenue 43,686 42,482 52,146 35,084 23,924 87,770 59,008 184,259 153,636 Interest Expense (43,596) (53,362) (60,688) (41,644) (39,276) (85,598) (80,920) (171,597) (194,970) GAAP 90 $
(10,880)
$
(8,542) $ (6,560) $ (15,352) $ 2,172 $ (21,912) $ 12,662 $ (41,334) $ Segment Adjustment (f) 2,671 3,113 6,046 2,619 2,718 5,650 5,337 16,096 14,496 Total Segment 2,761 $ (7,767) $ (2,496) $ (3,941) $ (12,634) $ 7,822 $ (16,575) $ 28,758 $ (26,838) $ |
 Blackstone | 32 NOTES Notes to page 1 - Blackstone’s Second Quarter 2020 GAAP Results 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. 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. All references to shares or per share amounts prior to the Conversion refer to units or per unit amounts. Unless otherwise noted,
references to “common stock” and “common
shares” refer to Class A common stock.
Income (Loss) Before Provision (Benefit) for Taxes Margin is calculated by dividing Income (Loss) Before Provision (Benefit) for Taxes by Total Revenues. Notes to page 2 - Blackstone’s Second Quarter 2020 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.
See Notes to page 18 regarding Net Accrued Performance
Revenue redefinition. Notes to page 5 -
Investment Performance and Net Accrued Performance Revenues
Effective 1Q’20, the Credit segment was renamed Credit &
Insurance; however, there was no change to the composition of the segment or historical results. Effective 1Q’20, Core+ appreciation was updated to include BREIT and represents a weighted average of BREIT’s per share
appreciation and BPP appreciation for the period. The
returns are weighted based on the average of BREIT’s monthly net asset values and the average of BPP’s quarterly adjusted beginning period market values for the period. This presentation provides a more holistic view of Core+ by including BREIT performance. Effective 1Q’20, Corporate Private Equity appreciation was updated to include Core Private Equity appreciation. This presentation provides a more holistic view of Corporate Private Equity by including Core Private Equity performance.
Results
for the Secondaries business (also referred to as Strategic Partners) are reported on a three month lag from the Secondaries’ fund financial statements, which generally report based on a three month lag from the underlying fund investments unless information is
available on a more timely basis. As a result, the
appreciation presented herein does not include the impact of economic and market activity in the current quarter. Current market activity is expected to affect reported results in upcoming quarters.
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), strategic capital (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 | 33 NOTES – (CONT’D) Notes to page 5 - Investment Performance and Net Accrued Performance Revenues (Cont’d) Effective 1Q’20, Credit returns are presented as a composite return instead of separate returns for performing credit and
distressed. The Credit Composite
now also includes the long only strategy. The Credit Composite return is a weighted average of (a) the return based on the combined quarterly cash flows of performing credit and distressed fee-earning funds and (b) the weighted average quarterly return of
all long only strategy fee-earning funds. Only
fee-earning funds exceeding $100 million of fair value at the beginning of each respective quarter-end are included and funds in liquidation are excluded. Credit returns exclude Blackstone Funds that were contributed to GSO as part of
Blackstone’s acquisition of GSO in March 2008.
Notes
to page 18 – Net Accrued Performance Revenues – Additional Detail Effective 1Q’20, NAPR has been redefined to exclude Performance Revenues realized but not yet distributed as of the reporting date. This update aligns the presentation of DE and NAPR. All prior periods have been recast to reflect this definition.
Per Share calculations are based on end of period DE Shares Outstanding
(see page 23, Share Summary). Notes
to page 22 – Shareholder Dividends 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 23, 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 unitholders. Common shareholders’ share was $42 million for 2Q’20 and $90 million for 2Q’20 YTD. 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. Notes to page 23 – Share Summary Participating Common Shares and Participating Partnership Units include both issued and outstanding shares and unvested shares
that participate in dividends.
|
 Blackstone | 34 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 (Benefit) for Taxes.
– Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which refers to 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). – 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
(Benefit) for Taxes.
– 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.
–
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 (Benefit) 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 (Benefit) for Taxes.
– 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.
– 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.
|
 Blackstone | 35 – 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. 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 (Benefit) 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 pay to holders of Class A common stock a quarterly dividend representing 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. DEFINITIONS AND DIVIDEND POLICY – (CONT’D)
|
 Blackstone | 36 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 the impact of COVID-19 and energy market dislocation, as well as those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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. |