Form 8-K Blackstone Group L.P. For: Apr 16
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 2015
The Blackstone Group L.P.
(Exact name of Registrant as specified in its charter)
| Delaware | 001-33551 | 20-8875684 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 345 Park Avenue New York, New York |
10154 | |
| (Address of principal executive offices) | (Zip Code) |
(212) 583-5000
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations. |
On April 16, 2015, The Blackstone Group L.P. issued a press release and detailed presentation announcing financial results for its first quarter ended March 31, 2015.
The press release and full detailed presentation are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively. All information in the press release and presentation is furnished but not filed.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release of The Blackstone Group L.P. dated April 16, 2015. | |
| 99.2 | Presentation of The Blackstone Group L.P. dated April 16, 2015. | |
i
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 16, 2015
| The Blackstone Group L.P. | ||
| By: | Blackstone Group Management L.L.C., | |
| its General Partner | ||
| By: | /s/ Laurence A. Tosi | |
| Name: | Laurence A. Tosi | |
| Title: | Chief Financial Officer | |
ii
Exhibit 99.1
Blackstone Reports First Quarter Results
New York, April 16, 2015: Blackstone (NYSE: BX) today reported its first quarter 2015 results.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone again broke all of our asset and earnings records in the first quarter. Economic Net Income doubled from the prior year, while Distributable Earnings rose nearly 160%. Realization activity continued to accelerate while, at the same time, we’ve been raising and investing funds at an unprecedented rate, creating the basis for future value. Our limited partners entrusted us with $30 billion of new capital in the quarter and $77 billion over the last twelve months, shattering our own record for the alternative asset management industry, and driving our Total Assets Under Management to $310 billion, up 14% year over year.”
Blackstone issued a full detailed presentation of its first quarter 2015 results, which can be viewed at www.Blackstone.com.
Distribution
Blackstone has declared a quarterly distribution of $0.89 per common unit to record holders of common units at the close of business on April 27, 2015. This distribution will be paid on May 4, 2015.
Quarterly Investor Call Details
Blackstone will host a conference call on April 16, 2015 at 11:00 a.m. ET to discuss first quarter 2015 results. The conference call can be accessed via the Investors section of Blackstone’s website at www.Blackstone.com or by dialing +1 (877) 384-4191 (U.S. domestic) or +1 (857) 244-7413 (international), pass code 197 089 58#. For those unable to listen to the live broadcast, a replay will be available on www.Blackstone.com or by dialing +1 (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international), pass code 538 280 93#.
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 over $300 billion in assets under management, include investment vehicles focused on
The Blackstone Group L.P.
345 Park Avenue
New York, New York 10154
T 212 583 5000
private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.Blackstone.com. Follow Blackstone on Twitter @Blackstone.
Forward-Looking Statements
This release 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 Blackstone’s current views with respect to, among other things, Blackstone’s operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “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, 2014, 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 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 release 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 release does not constitute an offer of any Blackstone Fund.
Investor and Media Relations Contacts
| Joan Solotar Blackstone Tel: +1 (212) 583-5068 |
Weston Tucker Blackstone Tel: +1 (212) 583-5231 |
Peter Rose Blackstone Tel: +1 (212) 583-5871 |
2
 Blackstone’s First Quarter 2015 Earnings
April 16, 2015
Exhibit 99.2 |
 Blackstone’s
First Quarter 2015 Highlights Economic Net Income (“ENI”) was a record $1.6 billion ($1.37/unit) in
the first quarter, up 99% from the same period last year, on continued
strong portfolio company operating performance and fund appreciation across
the investment businesses. Distributable
Earnings
(“DE”)
reached
a
record
$1.2
billion
($1.05/unit)
in
the
first
quarter
on
$13.5
billion
of realizations, up 159% from $479 million on $9.3 billion of realizations in the
same period last year.
Fund activity generated $1.2 billion of Realized Performance Fees, three times
the prior year period, while continuing to grow Net Accrued Performance
Fees to a record $4.9 billion ($4.17/unit). GAAP
Net
Income
was
$629
million
for
the
quarter,
net
of
certain
non-cash
IPO
and
transaction
related
expenses and net income attributable to non-controlling interests, primarily
inside ownership. Total AUM rose to $310.5 billion, making Blackstone the first alternative asset
manager to eclipse the $300
billion milestone.
Total AUM was up 14% year-over-year, despite returning $62.5 billion of
capital to investors over the last
twelve
months
as
asset
growth
and
appreciation
outpaced
the
impact
of
increased
realizations.
Gross inflows were $30.4 billion in the first quarter and $77.2 billion over the
last twelve months. Increased investment activity led to $5.1 billion of capital invested during the
first quarter, bringing the last
twelve
months
(“LTM”)
to
$26.6
billion,
up
5%
and
46%
from
the
respective
prior
year
periods.
Blackstone
declared
a
first
quarter
distribution
of
$0.89
per
common
unit
payable
on
May
4,
2015,
the
highest
quarterly
distribution
in
its
history
(up
154%
from
last
year).
Blackstone
1 |
 Blackstone
2
Blackstone’s First Quarter 2015 Earnings
% Change
% Change
(Dollars in Thousands, Except per Unit Data)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
590,976
$
614,891
$
4%
2,381,140
$
2,601,360
$
9%
Performance Fees
779,014
1,673,736
115%
3,731,388
5,286,599
42%
Investment Income
116,467
189,641
63%
669,501
544,802
(19)%
Interest Income and Dividend Revenue
22,362
30,451
36%
78,637
104,433
33%
Total Revenues
1,508,819
$
2,508,719
$
66%
6,860,666
$
8,537,194
$
24%
Total Expenses
683,573
876,936
28%
3,077,718
3,186,159
4%
Taxes
11,312
9,719
(14)%
83,445
197,919
137%
Economic Net Income (“ENI”)
813,934
$
1,622,064
$
99%
3,699,503
$
5,153,116
$
39%
ENI per Unit
0.70
$
1.37
$
96%
3.23
$
4.43
$
37%
GAAP Net Income
265,617
$
629,448
$
137%
1,269,184
$
1,948,420
$
54%
Fee Related Earnings (“FRE”)
175,055
$
180,624
$
3%
822,196
$
1,008,576
$
23%
Distributable Earnings (“DE”)
478,646
$
1,240,207
$
159%
1,951,264
$
3,825,519
$
96%
DE per Common Unit
0.40
$
1.05
$
163%
1.61
$
3.16
$
96%
Total Assets Under Management
271,745,583
310,451,289
14%
271,745,583
310,451,289
14%
Fee-Earning Assets Under Management
203,599,604
223,511,700
10%
203,599,604
223,511,700
10%
Fee Related Earnings, a Total Segment measure, has been redefined to exclude Interest Income
and Dividend Revenue, Interest Expense and Investment Income (Loss) – Blackstone
Treasury Cash Management Strategies. As a result, Distributable Earnings, a Total
Segment measure, has been redefined to exclude Unrealized Investment Income (Loss) –
Blackstone Treasury Cash Management Strategies. Calculated under the prior methodology, the
1Q’15 FRE and DE would have been $2.1 million greater and $11.3 million greater,
respectively, and the 1Q’15 LTM FRE and DE would have been $33.3 million lower and $1.3
million lower, respectively. |
 Walkdown of
Financial Metrics See
page
31-32,
Walkdown
of
Financial
Metrics
–
Calculation
of
Certain
Non-GAAP
Financial
Metrics
for
the
calculation
of
the
amounts
presented
herein
that
are
not
the
respective
captions
on page 16, Total
Segments. 1Q’15 Fee Related Earnings per Unit is based on end of period DE Units
Outstanding; 1Q’15 DE per Unit is based on end of period Total Common Units Outstanding; and 1Q’15 ENI per Unit is based on
Weighted-Average ENI Adjusted Units. 1Q’15 LTM per Unit represents the sum of the last
four quarters. See page 33, Unit Rollforward. (Dollars in Thousands, Except per Unit
Data) 1Q'15
1Q'15 LTM
Results
Per Unit
Results
Per Unit
Base Management Fees
516,397
$
2,027,048
$
Advisory Fees
84,238
435,120
Transaction and Other Fees, Net
37,073
223,600
Management Fee Offsets
(17,945)
(88,072)
Other Revenue
(4,872)
3,664
Compensation
(329,838)
(1,176,804)
Non-Interest Operating Expenses
(104,429)
(415,980)
Fee Related Earnings
180,624
$
0.15
$
1,008,576
$
0.88
$
Net Realized Incentive Fees
17,443
138,887
Net Realized Carried Interest
915,346
2,366,074
Realized Investment Income
107,792
539,300
Net Interest Income (Loss)
(8,402)
(36,877)
Taxes and Related Payables
(16,994)
(266,728)
Equity-Based Compensation
44,398
76,287
Distributable Earnings
1,240,207
$
1.05
$
3,825,519
$
3.16
$
Net Unrealized Incentive Fees
37,659
(10,225)
Net Unrealized Carried Interest
299,472
1,339,798
Unrealized Investment Income
81,849
5,502
Add Back: Related Payables
7,275
68,809
Less: Equity-Based Compensation
(44,398)
(76,287)
Economic Net Income
1,622,064
$
1.37
$
5,153,116
$
4.43
$
Blackstone
3 |
 Blackstone
4
Private Equity
21.1%
1Q’15 LTM increase in fund carrying value
$510 million
YoY increase in 1Q’15 Economic Income
$76.3 billion
Total AUM up 15% YoY
Record Total Revenues and Economic Income of $1.2 billion and $829 million for the
quarter, respectively. Performance Fees up over 200% to $950 million from
$287 million in the same period last year. Appreciation of 6.4% in the
quarter and 21.1% LTM on strong operating performance particularly in BCP V
(up
12.0% and 34.2% during the quarter and LTM, respectively).
Realizations remained strong with $3.3 billion during the quarter and $14.0
billion LTM driven by public and strategic exits in corporate private
equity funds. •
First quarter realizations: Catalent, Pinnacle Foods and Michaels (BCP V); Merlin
(BCP IV). •
Completed the successful IPO of Summit Materials and announced the strategic sale
of Freescale. Investment environment remains solid, with $2.5
billion total capital invested during the quarter.
Raised $2.4 billion of new capital for the second Tactical Opportunities platform
bringing total closings to date to $3.1 billion.
Currently fundraising for seventh global Private Equity fund; first close
expected in the second quarter of 2015. % Change
% Change
(Dollars in Thousands)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
140,582
$
121,968
$
(13)%
493,649
$
519,292
$
5%
Performance Fees
286,870
949,800
231%
959,157
2,640,160
175%
Investment Income
51,502
76,303
48%
245,404
203,606
(17)%
Interest Income and Dividend Revenue
5,228
7,617
46%
17,846
24,372
37%
Total Revenues
484,182
1,155,688
139%
1,716,056
3,387,430
97%
Compensation
73,307
70,089
(4)%
249,224
273,229
10%
Performance Fee Compensation
58,623
217,602
271%
407,444
635,818
56%
Other Operating Expenses
33,006
38,755
17%
127,975
148,647
16%
Total Expenses
164,936
326,446
98%
784,643
1,057,694
35%
Economic Income
319,246
$
829,242
$
160%
931,413
$
2,329,736
$
150%
Total AUM
66,142,945
$
76,327,189
$
15%
66,142,945
$
76,327,189
$
15%
Fee-Earning AUM
41,150,728
$
49,342,211
$
20%
41,150,728
$
49,342,211
$
20% |
 Blackstone
5
Real Estate
24.4%
1Q’15 LTM increase in fund carrying value
$812 million
1Q’15 Realized Performance Fees
$92.8 billion
Total AUM up 14% YoY
Total Revenues and Economic Income of $915 million and $638 million for the
quarter, up 68% and 99%, respectively, driven by continued strong operating
fundamentals across real estate asset classes. Opportunistic Real Estate
funds’ carrying value appreciated 8.2% for the quarter and 24.4%
LTM. Record realizations of $9.1 billion for the quarter, which generated
Realized Performance Fees of $812 million, up more than 4x from the prior
year period, bringing total realizations to $26.9 billion LTM. Raised a
record $16.4 billion during the quarter, including $14.5 billion from the first and only institutional limited
partner
closing
for
the
eighth
global
opportunistic real
estate
fund,
and
$1.6
billion
in
BPP
funds.
Capital invested of $1.4 billion in the quarter; $3.9 billion committed not yet
deployed as of quarter end. Subsequent to quarter end, announced
acquisition of GE Capital real estate assets, which will result in an estimated
$3 billion of capital invested across multiple vehicles, including inaugural
investment of the eighth global opportunistic real estate fund.
% Change
% Change
(Dollars in Thousands)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
163,993
$
158,721
$
(3)%
649,346
$
683,260
$
5%
Performance Fees
337,606
637,022
89%
2,138,847
2,317,202
8%
Investment Income
36,736
108,854
196%
369,459
322,283
(13)%
Interest Income and Dividend Revenue
6,110
9,997
64%
23,375
34,084
46%
Total Revenues
544,445
914,594
68%
3,181,027
3,356,829
6%
Compensation
80,233
84,834
6%
304,996
330,918
8%
Performance Fee Compensation
110,184
151,343
37%
717,043
674,558
(6)%
Other Operating Expenses
33,107
40,143
21%
121,036
153,119
27%
Total Expenses
223,524
276,320
24%
1,143,075
1,158,595
1%
Economic Income
320,921
$
638,274
$
99%
2,037,952
$
2,198,234
$
8%
Total AUM
81,333,562
$
92,785,658
$
14%
81,333,562
$
92,785,658
$
14%
Fee-Earning AUM
53,490,834
$
50,783,247
$
(5)%
53,490,834
$
50,783,247
$
(5)% |
 Blackstone
6
Hedge Fund Solutions
7.6%
1Q’15 LTM Composite Gross Return
$36.1 billion
Incentive Fee Eligible AUM at 1Q’15
$1.8 billion
1Q’15 Fee-Earning Net Inflows
Total Revenues and Economic Income of $185 million and $88 million for the
quarter, respectively, driven by an increase in Fee-Earning AUM from
sustained growth in organic net inflows which resulted in a 15% increase in Fee
Revenues year-over-year.
Despite more difficult markets globally, the composite gross return was up 2.7%
for the quarter and 7.6% LTM. Fee-Earning net inflows of $1.8 billion
during the quarter and $6.6 billion LTM, driven by significant investments
in customized and commingled strategies.
•
BAAM held an additional closing for its first permanent capital vehicle acquiring
general partner interests in hedge funds, bringing total commitments to
$3.0 billion. •
April 1 subscriptions of $839 million are not yet included in Fee-Earning
AUM. Total AUM reached a record $66.4 billion at the end of the quarter on
growth of customized strategies and continued diversification of the
platform. % Change
% Change
(Dollars in Thousands)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
112,144
$
128,775
$
15%
426,833
$
497,022
$
16%
Performance Fees
57,930
57,943
0%
204,173
139,663
(32)%
Investment Income (Loss)
21,251
(5,892)
n/m
34,793
(461)
n/m
Interest Income and Dividend Revenue
2,661
3,949
48%
9,050
12,402
37%
Total Revenues
193,986
184,775
(5)%
674,849
648,626
(4)%
Compensation
40,571
56,104
38%
143,173
147,191
3%
Performance Fee Compensation
20,032
19,121
(5)%
63,823
41,267
(35)%
Other Operating Expenses
19,480
21,206
9%
71,287
87,855
23%
Total Expenses
80,083
96,431
20%
278,283
276,313
(1)%
Economic Income
113,903
$
88,344
$
(22)%
396,566
$
372,313
$
(6)%
Total AUM
58,262,659
$
66,378,908
$
14%
58,262,659
$
66,378,908
$
14%
Fee-Earning AUM
55,571,357
$
64,114,498
$
15%
55,571,357
$
64,114,498
$
15%
The Composite Gross Return represents BAAM Principal Solutions (“BPS”) Composite and
does not include BAAM’s 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. BAAM’s advisory platforms and liquidating funds are also
excluded. On a net of fees basis, the BPS Composite was up 2.5% for the quarter and 6.6%
for the LTM. |
 Blackstone
7
Credit
Investment Performance
Gross Returns
Fee Revenues up 17% year-over-year on record Fee-Earning AUM.
•
Significant year-over-year Fee-Earning AUM growth of 35% in both of
the Performing Credit and Hedge Fund Strategies.
Total AUM reached a record level of $75.0 billion driven by new product
launches and inflows to existing strategies highlighting continued investor
demand in credit focused products.
•
Launched 11 CLOs (six U.S. and five European) in the LTM with $6.2 billion
of Total AUM, including three during the first quarter of 2015.
Deployed
$990
million
of
capital
during
the
first
quarter
in
the
drawdown
funds, while returning $447 million in proceeds to fund limited partners.
75%
of
the
capital
deployed
in
the
first
quarter
was
deployed
in
Europe,
reflecting strong private debt market opportunities.
Performing Credit
1Q'15
1Q’15 LTM
Mezzanine
Strategies
2.7%
20.9%
Rescue Lending
Funds
(0.6)%
8.5%
Hedge Fund
Strategies
1.6%
0.9%
$75.0 billion
1Q’15 Total AUM
Long
Only
Funds
Alternative
Strategies
Funds
% Change
% Change
(Dollars in Thousands)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
104,407
$
122,129
$
17%
395,355
$
465,610
$
18%
Performance Fees
96,608
28,971
(70)%
429,211
189,574
(56)%
Investment Income
6,150
9,124
48%
19,778
17,383
(12)%
Interest Income and Dividend Revenue
5,861
5,651
(4)%
19,460
22,830
17%
Total Revenues
213,026
165,875
(22)%
863,804
695,397
(19)%
Compensation
50,752
49,877
(2)%
191,745
187,325
(2)%
Performance Fee Compensation
48,415
15,750
(67)%
222,231
100,422
(55)%
Other Operating Expenses
32,839
21,836
(34)%
108,817
79,521
(27)%
Total Expenses
132,006
87,463
(34)%
522,793
367,268
(30)%
Economic Income
81,020
$
78,412
$
(3)%
341,011
$
328,129
$
(4)%
Total AUM
66,006,417
$
74,959,534
$
14%
66,006,417
$
74,959,534
$
14%
Fee-Earning AUM
53,386,685
$
59,271,744
$
11%
53,386,685
$
59,271,744
$
11%
15%
11%
34%
Hedge Fund Strategies
Rescue Lending
15%
25%
CCS
CLOs
For Mezzanine and Rescue Lending Strategies, Investment Performance represents the combined
returns of the fee-earning funds that have over $100 million of fair value as of 1Q’15 within each strategy. For
Hedge Fund Strategies, Investment Performance represents the weighted-average performance
of the fee-earning funds that have over $100 million of fair value as of 1Q’15. Mezzanine Strategies net returns were
2.3% for 1Q’15 and 15.9% for 1Q’15 LTM, Rescue Lending Strategies net returns were
(0.5)% for 1Q’15 and 6.9% for 1Q’15 LTM and Hedge Fund Strategies net returns were 1.1% for 1Q’15 and (0.8)% for 1Q’15
LTM. Performing Credit includes Mezzanine Funds and business development companies
(“BDCs”). Customized Credit Strategies (“CCS”) include closed-end funds, commingled funds, the exchange traded fund and
separately managed accounts.
|
 Blackstone
8
Financial Advisory
Total
Revenues
up
20%
for
the
quarter
and
6%
LTM,
primarily
from
increased
deal
activity.
Blackstone Advisory Partners first quarter Fee Revenues grew
year-over-year due to an increased number of closed
transactions.
While Restructuring Fee Revenues decreased in the first quarter compared to the
prior year due to fewer deal closings, the pipeline remains steady across
a diverse group of industries, most notably in the energy sector. Park
Hill’s Fee Revenues were up significantly in the first quarter year-over-year, led by an increase in the number
of transactions in the private equity and real estate businesses.
Blackstone Capital Markets had a good start to the year, with Fee Revenues up
slightly from the same period in the prior year.
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,
which
is
expected
to
occur
in
the
second
half
of
2015.
% Change
% Change
(Dollars in Thousands)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Fee Revenues
69,850
$
83,298
$
19%
415,957
$
436,176
$
5%
Investment Income
828
1,252
51%
67
1,991
n/m
Interest Income and Dividend Revenue
2,502
3,237
29%
8,906
10,745
21%
Total Revenues
73,180
87,787
20%
424,930
448,912
6%
Compensation
61,682
68,934
12%
266,070
238,141
(10)%
Other Operating Expenses
21,342
21,342
0%
82,854
88,148
6%
Total Expenses
83,024
90,276
9%
348,924
326,289
(6)%
Economic Income
(9,844)
$
(2,489)
$
75%
76,006
$
122,623
$
61%
(Loss) |
 Blackstone
9
Total AUM by Segment
(Dollars in Billions)
$271.7
$310.5
$218.2
Fee-Earning AUM by Segment
(Dollars in Billions)
$203.6
$223.5
$170.9
Private Equity
Real Estate
Hedge Fund Solutions
Credit
Record
Fee-Earning
AUM
of
$223.5
billion
was
up
10%
over
the
same
period
last
year
as
$56.0
billion
of
gross
inflows outpaced $34.4 billion of realizations and outflows.
•
Fee-Earning AUM drove Base Management Fees up 12% to $2.0 billion LTM.
Total AUM increased 14% year-over-year to $310.5 billion driven by $77.2
billion from gross inflows and $24.0
billion from consistently strong fund appreciation.
Assets Under Management
$36.8
$41.2
$49.3
$42.1
$53.5
$50.8
$45.6
$55.6
$64.1
$46.4
$53.4
$59.3
1Q'13
1Q'14
1Q'15
$52.5
$66.1
$76.3
$59.5
$81.3
$92.8
$48.2
$58.3
$66.4
$58.1
$66.0
$75.0
1Q'13
1Q'14
1Q'15 |
 Blackstone
10
Additional Capital Detail
Undrawn capital (“Total Dry Powder”) of $64.5 billion, up 34% from the
same period last year. •
Blackstone
now
has
a
record
amount
of
Total
Dry
Powder
to
invest
across
its
global
businesses,
leveraging
unique diversity and broad fund mandates.
Performance Fee Eligible AUM reached $211.1 billion at the end of the quarter, up
14% year-over-year, despite record realizations in Performance Fee
Earning funds over the same period. Net inflows and strong investment
performance drove a 30% year-over-year increase in assets currently earning
Performance
Fees
to
$150.8
billion.
$64 billion 1Q’15 Total Dry Powder
$211 billion Performance Fee Eligible AUM
Uninvested
Not Earning
Fees
Currently
Earning Fees
Credit
Hedge
Fund
Solutions
Private
Equity
Real
Estate
32%
45%
5%
18%
$88.5
$116.0
$150.8
$24.6
$25.3
$13.9
$34.3
$44.5
$46.4
$147.5
$185.8
$211.1
1Q'13
1Q'14
1Q'15 |
 Blackstone
Capital Invested
Blackstone continues to raise and deploy capital at an offsetting pace,
maintaining its ability to make opportunistic investments.
Invested $26.6 billion of capital over LTM, up 46% from $18.2 billion from the
year ago period. •
Invested $5.1 billion of capital in 1Q’15, up 5% from $4.8 billion year over
year. •
50% of capital invested over LTM was deployed outside of North America,
reflecting Blackstone’s global fund mandates which present an
opportunity to leverage its diversity. •
51%
of
capital
invested
over
LTM
was
by
products
that
did
not
exist
at
the
time
of
Blackstone’s
2007
IPO.
Capital Invested by Segment
(Dollars in Billions)
1Q’15 LTM Capital Invested by Region
(Dollars in Billions)
Global and
Other
Asia
North
America
Europe
$4.9
$11.4
$10.8
$11.2
$1.9
$3.2
$18.2
$26.6
1Q'14 LTM
1Q'15 LTM
Private Equity
Real Estate
Hedge Fund Solutions
Credit
50%
29%
9%
12%
11 |
 At March 31, 2015, Blackstone had $3.2 billion in total cash, corporate treasury
and liquid investments and $10.5
billion of total net value, or $8.94 per DE unit, up 24% from $7.20 a year
ago. Long-term debt of $2.1 billion at quarter end contributed to a
Debt to Adjusted EBITDA ratio of 0.50x for the first quarter LTM period,
well below the range of similarly rated companies. Balance Sheet Highlights
1Q’15
Cash and Cash Equivalents
$
1,135
1,838
183
2,458
4,910
$
10,524
Outstanding Bonds (at par)
$
2,135
A+/A+
rated by S&P and Fitch
$1.1
billion
undrawn credit revolver with
May 2019 maturity
$3.2 billion
total cash, corporate treasury
and liquid investments
Cash and Investments
Net
Performance
Fees
Total Cash
and Liquids
Illiquids
$8.94
$7.20
$5.93
Treasury Cash
Management Strategies
Liquid Investments
Illiquid Investments
Net Accrued Performance
Fees
Total Net Value
Blackstone
12
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 $961 million, $1.2 billion, and $270 million, respectively, as of
March 31, 2015, $966 million, $1.4 billion, and $389 million, respectively, as of March 31,
2014 and $907 million, $1.1 billion, and $201 million, respectively, as of March 31, 2013. Cash and
Investments per unit amounts are calculated using period end DE Units Outstanding (see page
33, Unit Rollforward). (Dollars in Millions)
$2.00
$3.11
$4.17
$1.97
$2.42
$2.09
$1.96
$1.67
$2.68
1Q'13
1Q'14
1Q'15 |
 Blackstone
13
Despite
Net
Realized
Performance
Fees
of
$2.5
billion
LTM,
asset
appreciation
across
all
investing
businesses
drove Net Accrued Performance Fees to a record $4.9 billion ($4.17/unit), up $1.4
billion from the same period last year driven in large part by gains in the
Private Equity segment. Net Accrued Performance Fees grew at a 47% CAGR
since the first quarter of 2013, primarily driven by continued
appreciation in Real Estate and Private Equity.
Performance Fees
Net Realized Performance Fees
(Dollars in Millions)
$956
$2,505
$605
Net Accrued Performance Fees
(Dollars in Millions)
$3,546
$4,910
$2,261
Private Equity
Real Estate
Credit
Hedge Fund Solutions
$4.9 billion
Record Net Accrued
Performance Fees
66%
$2.5 billion
Record 1Q’15 LTM Net Realized
Performance Fees
1Q'13 LTM
1Q'14 LTM
1Q'15 LTM
1Q'13
1Q'14
1Q'15
$545
$820
$2,027
$1,446
$2,424
$2,648
$210
$246
$195
$226
$201
$797
$155
$458
$1,483
$160
$156
$136
$146
Related to Publics/Pending Exits
Net
Accrued
Performance
Fees |
 GAAP Statement of
Operations % Change
% Change
(Dollars in Thousands, Except per Unit Data) (Unaudited)
1Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
vs. 1Q'14 LTM
Revenues
Management and Advisory Fees, Net
573,160
$
603,498
$
5%
2,285,012
$
2,527,590
$
11%
Performance Fees
Realized Carried Interest
333,623
1,206,425
262%
983,411
3,322,884
238%
Realized Incentive Fees
43,794
27,992
(36)%
484,891
233,203
(52)%
Unrealized Carried Interest
330,394
374,481
13%
2,311,057
1,749,011
(24)%
Unrealized Incentive Fees
64,233
61,860
(4)%
(64,314)
(32,122)
50%
Total Performance Fees
772,044
1,670,758
116%
3,715,045
5,272,976
42%
Investment Income
Realized
153,026
187,710
23%
299,317
558,419
87%
Unrealized
13,500
15,771
17%
518,934
12,536
(98)%
Total Investment Income
166,526
203,481
22%
818,251
570,955
(30)%
Interest and Dividend Revenue
14,069
21,499
53%
66,023
77,239
17%
Other
869
(5,656)
n/m
9,032
2,880
(68)%
Total Revenues
1,526,668
2,493,580
63%
6,893,363
8,451,640
23%
Expenses
Compensation and Benefits
Compensation
485,351
559,559
15%
1,878,406
1,943,076
3%
Performance Fee Compensation
Realized Carried Interest
149,398
292,248
96%
317,162
958,493
202%
Realized Incentive Fees
23,635
12,227
(48)%
214,042
98,691
(54)%
Unrealized Carried Interest
40,730
74,380
83%
911,975
412,687
(55)%
Unrealized Incentive Fees
23,531
24,961
6%
(32,598)
(17,846)
45%
Total Compensation and Benefits
722,645
963,375
33%
3,288,987
3,395,101
3%
General, Administrative and Other
135,554
130,973
(3)%
500,690
544,882
9%
Interest Expense
24,667
31,370
27%
105,578
128,227
21%
Fund Expenses
4,985
23,232
366%
24,235
48,745
101%
Total Expenses
887,851
1,148,950
29%
3,919,490
4,116,955
5%
Other Income
Reversal of Tax Receivable Agreement Liability
-
-
n/m
20,469
-
(100)%
Net Gains from Fund Investment Activities
70,155
238,972
241%
384,609
526,671
37%
Income Before Provision for Taxes
708,972
$
1,583,602
$
123%
3,378,951
$
4,861,356
$
44%
Provision for Taxes
54,097
99,344
84%
258,746
336,420
30%
Net Income
654,875
$
1,484,258
$
127%
3,120,205
$
4,524,936
$
45%
Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated
Entities 45,792
56,358
23%
166,791
85,360
(49)%
Net Income Attributable to Non-Controlling Interests in Consolidated Entities
43,961
153,222
249%
251,970
444,331
76%
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings
299,505
645,230
115%
1,432,260
2,046,825
43%
Net Income Attributable to The Blackstone Group L.P. ("BX")
265,617
$
629,448
$
137%
1,269,184
$
1,948,420
$
54%
Net Income per Common Unit, Basic
0.44
$
1.01
$
130%
n/a
n/a
n/m
Net Income per Common Unit, Diluted
0.44
$
1.00
$
127%
n/a
n/a
n/m
Blackstone
14 |
 Appendix |
 Blackstone
Total Segments
16
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Management and Advisory Fees, Net
Base Management Fees
476,878
$
496,570
$
505,493
$
508,588
$
516,397
$
1,808,938
$
2,027,048
$
Advisory Fees
69,963
114,914
84,131
151,837
84,238
413,457
435,120
Transaction and Other Fees, Net
59,910
49,196
90,885
46,446
37,073
228,913
223,600
Management Fee Offsets
(16,644)
(20,218)
(22,763)
(27,146)
(17,945)
(79,202)
(88,072)
Total Management and Advisory Fees, Net
590,107
640,462
657,746
679,725
619,763
2,372,106
2,597,696
Performance Fees
Realized Carried Interest
333,623
641,659
638,752
836,562
1,207,594
983,411
3,324,567
Realized Incentive Fees
53,837
39,291
36,840
131,777
29,670
503,443
237,578
Unrealized Carried Interest
330,288
660,712
222,026
495,935
373,852
2,310,951
1,752,525
Unrealized Incentive Fees
61,266
56,776
(6,531)
(140,936)
62,620
(66,417)
(28,071)
Total Performance Fees
779,014
1,398,438
891,087
1,323,338
1,673,736
3,731,388
5,286,599
Investment Income (Loss)
Realized
111,917
202,199
75,832
153,477
107,792
244,278
539,300
Unrealized
4,550
(26,228)
4,934
(55,053)
81,849
425,223
5,502
Total Investment Income
116,467
175,971
80,766
98,424
189,641
669,501
544,802
Interest Income and Dividend Revenue
22,362
22,094
23,585
28,303
30,451
78,637
104,433
Other
869
(6)
719
7,823
(4,872)
9,034
3,664
Total Revenues
1,508,819
2,236,959
1,653,903
2,137,613
2,508,719
6,860,666
8,537,194
Expenses
Compensation
306,545
323,015
324,426
199,525
329,838
1,155,208
1,176,804
Performance Fee Compensation
Realized Carried Interest
149,398
260,301
186,003
219,941
292,248
317,162
958,493
Realized Incentive Fees
23,635
18,509
19,029
48,926
12,227
214,042
98,691
Unrealized Carried Interest
40,690
114,336
164,132
59,879
74,380
911,935
412,727
Unrealized Incentive Fees
23,531
24,692
(9,002)
(58,497)
24,961
(32,598)
(17,846)
Total Compensation and Benefits
543,799
740,853
684,588
469,774
733,654
2,565,749
2,628,869
Other Operating Expenses
139,774
145,111
131,440
137,457
143,282
511,969
557,290
Total Expenses
683,573
885,964
816,028
607,231
876,936
3,077,718
3,186,159
Economic Income
825,246
$
1,350,995
$
837,875
$
1,530,382
$
1,631,783
$
3,782,948
$
5,351,035
$
Economic Net Income
813,934
$
1,325,963
$
758,356
$
1,446,733
$
1,622,064
$
3,699,503
$
5,153,116
$
Fee Related Earnings
175,055
$
206,412
$
236,820
$
384,720
$
180,624
$
822,196
$
1,008,576
$
Distributable Earnings
478,646
$
765,172
$
686,086
$
1,134,054
$
1,240,207
$
1,951,264
$
3,825,519
$
Total Assets Under Management
271,745,583
$
278,917,713
$
284,414,936
$
290,381,069
$
310,451,289
$
271,745,583
$
310,451,289
$
Fee-Earning Assets Under Management
203,599,604
$
209,913,760
$
214,819,600
$
216,691,799
$
223,511,700
$
203,599,604
$
223,511,700
$
Weighted Average Fee-Earning AUM
200,246,002
$
209,251,436
$
213,525,423
$
215,196,253
$
218,241,987
$
188,952,701
$
216,244,401
$
LP Capital Invested
4,468,527
$
5,426,511
$
6,664,365
$
7,810,098
$
4,765,536
$
16,863,768
$
24,666,510
$
Total Capital Invested
4,807,663
$
5,858,210
$
7,619,737
$
8,090,350
$
5,052,370
$
18,217,475
$
26,620,667
$ |
 Blackstone
Private Equity
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Management Fees, Net
Base Management Fees
98,584
$
103,204
$
108,236
$
105,817
$
108,383
$
380,484
$
425,640
$
Transaction and Other Fees, Net
42,847
27,616
48,996
15,183
20,359
115,382
112,154
Management Fee Offsets
(1,713)
(4,246)
(5,837)
(7,350)
(4,949)
(6,916)
(22,382)
Total Management Fees, Net
139,718
126,574
151,395
113,650
123,793
488,950
515,412
Performance Fees
Realized Carried Interest
119,805
212,394
124,913
297,290
382,978
309,906
1,017,575
Unrealized Carried Interest
167,065
502,210
96,455
457,098
566,822
649,251
1,622,585
Total Performance Fees
286,870
714,604
221,368
754,388
949,800
959,157
2,640,160
Investment Income (Loss)
Realized
60,535
74,812
20,421
46,951
44,816
124,399
187,000
Unrealized
(9,033)
17,662
(12,754)
(19,789)
31,487
121,005
16,606
Total Investment Income
51,502
92,474
7,667
27,162
76,303
245,404
203,606
Interest Income and Dividend Revenue
5,228
4,666
5,346
6,743
7,617
17,846
24,372
Other
864
564
2,150
2,991
(1,825)
4,699
3,880
Total Revenues
484,182
938,882
387,926
904,934
1,155,688
1,716,056
3,387,430
Expenses
Compensation
73,307
73,038
79,007
51,095
70,089
249,224
273,229
Performance Fee Compensation
Realized Carried Interest
85,771
112,720
30,944
36,958
39,482
108,478
220,104
Unrealized Carried Interest
(27,148)
66,194
93,434
77,966
178,120
298,966
415,714
Total Compensation and Benefits
131,930
251,952
203,385
166,019
287,691
656,668
909,047
Other Operating Expenses
33,006
39,193
34,109
36,590
38,755
127,975
148,647
Total Expenses
164,936
291,145
237,494
202,609
326,446
784,643
1,057,694
Economic Income
319,246
$
647,737
$
150,432
$
702,325
$
829,242
$
931,413
$
2,329,736
$
Total Assets Under Management
66,142,945
$
68,294,162
$
69,890,367
$
73,073,252
$
76,327,189
$
66,142,945
$
76,327,189
$
Fee-Earning Assets Under Management
41,150,728
$
42,888,756
$
43,817,741
$
43,890,167
$
49,342,211
$
41,150,728
$
49,342,211
$
Weighted Average Fee-Earning AUM
41,815,672
$
43,702,379
$
43,838,483
$
42,899,791
$
45,051,839
$
44,164,744
$
46,107,237
$
LP Capital Invested
2,029,019
$
1,857,330
$
2,277,861
$
3,459,063
$
2,374,599
$
4,320,614
$
9,968,853
$
Total Capital Invested
2,271,273
$
2,159,178
$
3,172,660
$
3,593,887
$
2,517,769
$
4,930,391
$
11,443,494
$
17 |
 Blackstone
Real Estate
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Management Fees, Net
Base Management Fees
159,336
$
157,869
$
155,089
$
156,208
$
152,348
$
586,172
$
621,514
$
Transaction and Other Fees, Net
13,564
13,514
38,312
26,220
15,216
84,099
93,262
Management Fee Offsets
(9,224)
(7,702)
(8,977)
(8,540)
(4,866)
(24,759)
(30,085)
Total Management Fees, Net
163,676
163,681
184,424
173,888
162,698
645,512
684,691
Performance Fees
Realized Carried Interest
194,658
417,826
349,237
526,041
811,249
612,658
2,104,353
Realized Incentive Fees
(26)
6,070
1,159
4,296
723
42,744
12,248
Unrealized Carried Interest
140,237
119,461
187,175
77,173
(181,019)
1,511,861
202,790
Unrealized Incentive Fees
2,737
(3,483)
(374)
(4,401)
6,069
(28,416)
(2,189)
Total Performance Fees
337,606
539,874
537,197
603,109
637,022
2,138,847
2,317,202
Investment Income (Loss)
Realized
31,357
122,664
49,173
105,901
71,344
74,182
349,082
Unrealized
5,379
(50,437)
14,492
(28,364)
37,510
295,277
(26,799)
Total Investment Income
36,736
72,227
63,665
77,537
108,854
369,459
322,283
Interest Income and Dividend Revenue
6,110
8,009
7,135
8,943
9,997
23,375
34,084
Other
317
(218)
976
1,788
(3,977)
3,834
(1,431)
Total Revenues
544,445
783,573
793,397
865,265
914,594
3,181,027
3,356,829
Expenses
Compensation
80,233
85,582
90,586
69,916
84,834
304,996
330,918
Performance Fee Compensation
Realized Carried Interest
51,833
143,442
64,187
173,534
246,496
174,807
627,659
Realized Incentive Fees
(16)
3,081
592
2,323
356
22,138
6,352
Unrealized Carried Interest
56,985
27,339
108,789
4,061
(98,084)
534,765
42,105
Unrealized Incentive Fees
1,382
(1,783)
(123)
(2,227)
2,575
(14,667)
(1,558)
Total Compensation and Benefits
190,417
257,661
264,031
247,607
236,177
1,022,039
1,005,476
Other Operating Expenses
33,107
36,542
36,138
40,296
40,143
121,036
153,119
Total Expenses
223,524
294,203
300,169
287,903
276,320
1,143,075
1,158,595
Economic Income
320,921
$
489,370
$
493,228
$
577,362
$
638,274
$
2,037,952
$
2,198,234
$
Total Assets Under Management
81,333,562
$
80,410,988
$
80,188,858
$
80,863,187
$
92,785,658
$
81,333,562
$
92,785,658
$
Fee-Earning Assets Under Management
53,490,834
$
52,823,975
$
52,308,175
$
52,563,068
$
50,783,247
$
53,490,834
$
50,783,247
$
Weighted Average Fee-Earning AUM
50,954,956
$
53,233,974
$
52,764,267
$
52,236,610
$
51,671,739
$
45,064,145
$
53,085,887
$
LP Capital Invested
1,692,232
$
3,017,193
$
3,046,867
$
3,478,850
$
1,443,163
$
10,257,734
$
10,986,073
$
Total Capital Invested
1,746,460
$
3,128,232
$
3,071,425
$
3,584,035
$
1,405,603
$
10,793,457
$
11,189,295
$
18 |
 Blackstone
Hedge Fund Solutions
19
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Management Fees, Net
Base Management Fees
113,384
$
123,008
$
121,484
$
125,105
$
130,637
$
429,914
$
500,234
$
Transaction and Other Fees, Net
93
126
161
189
25
712
501
Management Fee Offsets
(1,455)
(1,531)
(1,099)
(929)
(280)
(4,518)
(3,839)
Total Management Fees, Net
112,022
121,603
120,546
124,365
130,382
426,108
496,896
Performance Fees
Realized Incentive Fees
39,845
7,973
6,683
86,028
10,516
233,871
111,200
Unrealized Incentive Fees
18,085
30,556
25,473
(74,993)
47,427
(29,698)
28,463
Total Performance Fees
57,930
38,529
32,156
11,035
57,943
204,173
139,663
Investment Income (Loss)
Realized
16,820
2,394
2,693
(357)
(10,375)
43,581
(5,645)
Unrealized
4,431
1,057
(1,168)
812
4,483
(8,788)
5,184
Total Investment Income (Loss)
21,251
3,451
1,525
455
(5,892)
34,793
(461)
Interest Income and Dividend Revenue
2,661
2,340
2,724
3,389
3,949
9,050
12,402
Other
122
(203)
740
1,196
(1,607)
725
126
Total Revenues
193,986
165,720
157,691
140,440
184,775
674,849
648,626
Expenses
Compensation
40,571
43,341
41,940
5,806
56,104
143,173
147,191
Performance Fee Compensation
Realized Incentive Fees
13,271
2,918
2,312
23,950
3,470
74,042
32,650
Unrealized Incentive Fees
6,761
11,252
8,778
(27,064)
15,651
(10,219)
8,617
Total Compensation and Benefits
60,603
57,511
53,030
2,692
75,225
206,996
188,458
Other Operating Expenses
19,480
25,101
20,480
21,068
21,206
71,287
87,855
Total Expenses
80,083
82,612
73,510
23,760
96,431
278,283
276,313
Economic Income
113,903
$
83,108
$
84,181
$
116,680
$
88,344
$
396,566
$
372,313
$
Total Assets Under Management
58,262,659
$
60,672,759
$
64,183,863
$
63,585,670
$
66,378,908
$
58,262,659
$
66,378,908
$
Fee-Earning Assets Under Management
55,571,357
$
58,084,020
$
62,037,082
$
61,417,558
$
64,114,498
$
55,571,357
$
64,114,498
$
Weighted Average Fee-Earning AUM
54,715,882
$
56,793,206
$
60,009,283
$
61,730,313
$
62,910,553
$
50,438,845
$
59,945,488
$
LP Capital Invested
167,170
$
188,236
$
473,233
$
25,489
$
133,351
$
542,596
$
820,309
$
Total Capital Invested
202,674
$
196,348
$
487,398
$
12,137
$
139,223
$
598,664
$
835,106
$ |
 Blackstone
Credit
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Management Fees, Net
Base Management Fees
105,574
$
112,489
$
120,684
$
121,458
$
125,029
$
412,368
$
479,660
$
Transaction and Other Fees, Net
3,344
7,064
3,025
4,728
1,457
27,556
16,274
Management Fee Offsets
(4,252)
(6,739)
(6,850)
(10,327)
(7,850)
(43,009)
(31,766)
Total Management Fees, Net
104,666
112,814
116,859
115,859
118,636
396,915
464,168
Performance Fees
Realized Carried Interest
19,160
11,439
164,602
13,231
13,367
60,847
202,639
Realized Incentive Fees
14,018
25,248
28,998
41,453
18,431
226,828
114,130
Unrealized Carried Interest
22,986
39,041
(61,604)
(38,336)
(11,951)
149,839
(72,850)
Unrealized Incentive Fees
40,444
29,703
(31,630)
(61,542)
9,124
(8,303)
(54,345)
Total Performance Fees
96,608
105,431
100,366
(45,194)
28,971
429,211
189,574
Investment Income (Loss)
Realized
3,071
2,223
3,040
1,020
2,237
3,841
8,520
Unrealized
3,079
4,521
4,892
(7,437)
6,887
15,937
8,863
Total Investment Income (Loss)
6,150
6,744
7,932
(6,417)
9,124
19,778
17,383
Interest Income and Dividend Revenue
5,861
4,892
5,968
6,319
5,651
19,460
22,830
Other
(259)
11
(3,619)
1,557
3,493
(1,560)
1,442
Total Revenues
213,026
229,892
227,506
72,124
165,875
863,804
695,397
Expenses
Compensation
50,752
51,310
54,877
31,261
49,877
191,745
187,325
Performance Fee Compensation
Realized Carried Interest
11,794
4,139
90,872
9,449
6,270
33,877
110,730
Realized Incentive Fees
10,380
12,510
16,125
22,653
8,401
117,862
59,689
Unrealized Carried Interest
10,853
20,803
(38,091)
(22,148)
(5,656)
78,204
(45,092)
Unrealized Incentive Fees
15,388
15,223
(17,657)
(29,206)
6,735
(7,712)
(24,905)
Total Compensation and Benefits
99,167
103,985
106,126
12,009
65,627
413,976
287,747
Other Operating Expenses
32,839
22,159
20,860
14,666
21,836
108,817
79,521
Total Expenses
132,006
126,144
126,986
26,675
87,463
522,793
367,268
Economic Income
81,020
$
103,748
$
100,520
$
45,449
$
78,412
$
341,011
$
328,129
$
Total Assets Under Management
66,006,417
$
69,539,804
$
70,151,848
$
72,858,960
$
74,959,534
$
66,006,417
$
74,959,534
$
Fee-Earning Assets Under Management
53,386,685
$
56,117,009
$
56,656,602
$
58,821,006
$
59,271,744
$
53,386,685
$
59,271,744
$
Weighted Average Fee-Earning AUM
52,759,492
$
55,521,877
$
56,913,390
$
58,329,539
$
58,607,856
$
49,284,967
$
57,105,789
$
LP Capital Invested
580,106
$
363,752
$
866,404
$
846,696
$
814,423
$
1,742,824
$
2,891,275
$
Total Capital Invested
587,256
$
374,452
$
888,254
$
900,291
$
989,775
$
1,894,963
$
3,152,772
$
20 |
 Blackstone
Financial Advisory
(Dollars in Thousands)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
1Q'14 LTM
1Q'15 LTM
Revenues
Advisory Fees
69,963
$
114,914
$
84,131
$
151,837
$
84,238
$
413,457
$
435,120
$
Transaction and Other Fees, Net
62
876
391
126
16
1,164
1,409
Total Advisory and Transaction Fees
70,025
115,790
84,522
151,963
84,254
414,621
436,529
Investment Income (Loss)
Realized
134
106
505
(38)
(230)
(1,725)
343
Unrealized
694
969
(528)
(275)
1,482
1,792
1,648
Total Investment Income (Loss)
828
1,075
(23)
(313)
1,252
67
1,991
Interest Income and Dividend Revenue
2,502
2,187
2,412
2,909
3,237
8,906
10,745
Other
(175)
(160)
472
291
(956)
1,336
(353)
Total Revenues
73,180
118,892
87,383
154,850
87,787
424,930
448,912
Expenses
Compensation
61,682
69,744
58,016
41,447
68,934
266,070
238,141
Total Compensation and Benefits
61,682
69,744
58,016
41,447
68,934
266,070
238,141
Other Operating Expenses
21,342
22,116
19,853
24,837
21,342
82,854
88,148
Total Expenses
83,024
91,860
77,869
66,284
90,276
348,924
326,289
Economic Income (Loss)
(9,844)
$
27,032
$
9,514
$
88,566
$
(2,489)
$
76,006
$
122,623
$
21 |
 Blackstone
Unitholder Distribution
Generated
$1.05
of
Distributable
Earnings
per
common
unit
during
the
quarter,
up
163%
year-over-year.
Declared a quarterly distribution of $0.89 per common unit to record holders as of
April 27, 2015; payable on May 4, 2015.
% Change
(Dollars in Thousands, Except per Unit Data)
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
vs. 1Q'14
1Q'14 LTM
1Q'15 LTM
Distributable Earnings (“DE”)
478,646
$
765,172
$
686,086
$
1,134,054
$
1,240,207
$
159%
1,951,264
$
3,825,519
$
Add: Other Payables Attributable to
Common Unitholders
19,856
29,884
69,707
87,977
7,288
(63)%
124,151
194,856
DE before Certain Payables
498,502
795,056
755,793
1,222,031
1,247,495
150%
2,075,415
4,020,375
Percent to Common Unitholders
53%
53%
53%
53%
53%
52%
53%
DE before Certain Payables Attributable to
Common Unitholders
261,980
420,236
400,587
650,899
663,608
153%
1,075,452
2,135,330
Less: Other Payables Attributable to
Common Unitholders
(19,856)
(29,884)
(69,707)
(87,977)
(7,288)
63%
(124,151)
(194,856)
DE Attributable to Common Unitholders
242,124
390,352
330,880
562,922
656,320
171%
951,301
1,940,474
DE per Common Unit
0.40
$
0.65
$
0.54
$
0.92
$
1.05
$
163%
1.61
$
3.16
$
Less: Retained Capital per Common Unit
(0.05)
$
(0.10)
$
(0.10)
$
(0.14)
$
(0.16)
$
(220)%
(0.22)
$
(0.50)
$
Actual Distribution per Common Unit
0.35
$
0.55
$
0.44
$
0.78
$
0.89
$
154%
1.39
$
2.66
$
Record Date
April 27, 2015
Payable Date
May 4, 2015
22
A detailed description of Blackstone’s distribution policy and the definition of
Distributable Earnings can be found on page 34, 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 end of period Total Common Units
Outstanding (page 33, Unit Rollforward); actual distributions are paid to unitholders as of the
applicable 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 $100.2 million for 1Q’15.
|
 Blackstone
23
Capital raised in BPP Funds ($1.0 billion) and BREP Europe IV ($193 million). 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.
1Q’15 Fee-Earning AUM Rollforward
(Dollars in Millions)
1Q’15 LTM Fee-Earning AUM Rollforward
(Dollars in Millions)
Private
Equity
Real
Estate
Hedge
Fund
Solutions
Credit
Inflows:
Realizations:
Inflows:
Outflows:
Inflows:
Outflows:
Inflows:
Realizations:
Fee-Earning Assets Under Management
Private
Real
Hedge Fund
Equity
Estate
Solutions
1Q'14
41,151
$
53,491
$
55,571
$
53,387
$
203,600
$
Inflows
14,021
9,674
12,725
19,630
56,050
Outflows
(1,767)
(237)
(6,022)
(5,016)
(13,042)
Realizations
(4,401)
(10,641)
(146)
(6,157)
(21,345)
Net Inflows (Outflows)
7,853
(1,204)
6,557
8,457
21,663
Market Activity
338
(1,504)
1,987
(2,572)
(1,751)
1Q'15
49,342
$
50,783
$
64,115
$
59,272
$
223,512
$
YoY Increase (Decrease)
20%
(5)%
15%
11%
10%
Credit
Total
Blackstone Energy Partners II ($4.4 billion) and Blackstone Tactical
Opportunities second vintage ($3.0 billion) investment
period commencement. BCP
IV, BCP V and Tactical Opportunities and public and strategic dispositions including Merlin, Catalent, Pinnacle,
Michaels Stores, Bayview Asset Management and Milestone; Strategic
Partners realizations.
BREP VI ($1.3 billion); BREP V ($353 million); BREDS ($513 million).
Customized solutions ($1.3 billion); commingled products ($369 million);
specialized solutions ($936 million); individual
investor solutions ($476 million). Driven
by investors’ liquidity needs and certain strategic shifts in their programs.
CLOs ($1.0 billion U.S., $431 million European); BDCs ($765 million); Hedge Fund
Strategies ($366 million);
Carry Funds ($762 million). BDCs
($256 million); Long Only separately managed accounts ($1.2 billion); Hedge Fund Strategies ($227 million).
Private
Real
Hedge Fund
Equity
Estate
Solutions
4Q'14
43,890
$
52,563
$
61,418
$
58,821
$
216,692
$
Inflows
7,647
1,444
3,070
3,924
16,085
Outflows
(985)
(33)
(1,266)
(1,972)
(4,256)
Realizations
(1,247)
(2,494)
(21)
(776)
(4,538)
Net Inflows (Outflows)
5,415
(1,083)
1,783
1,176
7,291
Market Activity
37
(697)
914
(725)
(471)
1Q'15
49,342
$
50,783
$
64,115
$
59,272
$
223,512
$
QoQ Increase (Decrease)
12%
(3)%
4%
1%
3%
Credit
Total |
 Blackstone
24
1Q’15 Total AUM Rollforward
(Dollars in Millions)
1Q’15 LTM Total AUM Rollforward
(Dollars in Millions)
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.
Total Assets Under Management
Private
Real
Hedge Fund
Equity
Estate
Solutions
4Q'14
73,073
$
80,863
$
63,586
$
72,859
$
290,381
$
Inflows
2,870
18,362
3,083
6,124
30,439
Outflows
(25)
(169)
(1,275)
(2,273)
(3,742)
Realizations
(3,314)
(9,155)
(26)
(1,006)
(13,501)
Net Inflows (Outflows)
(469)
9,038
1,782
2,845
13,196
Market Activity
3,722
2,885
1,011
(744)
6,874
1Q'15
76,327
$
92,786
$
66,379
$
74,960
$
310,451
$
QoQ Increase
4%
15%
4%
3%
7%
Credit
Total
Private
Real
Hedge Fund
Equity
Estate
Solutions
1Q'14
66,143
$
81,334
$
58,263
$
66,006
$
271,746
$
Inflows
14,442
27,035
12,225
23,492
77,194
Outflows
(1,482)
(485)
(6,093)
(5,591)
(13,651)
Realizations
(14,011)
(27,499)
(167)
(7,167)
(48,844)
Net Inflows (Outflows)
(1,051)
(949)
5,965
10,734
14,699
Market Activity
11,234
12,401
2,151
(1,780)
24,006
1Q'15
76,327
$
92,786
$
66,379
$
74,960
$
310,451
$
YoY Increase
15%
14%
14%
14%
14%
Credit
Total |
 Blackstone
25
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 end of period DE Units
Outstanding
(see
page
33,
Unit
Rollforward).
Blackstone had $4.9 billion of accrued performance fees, net of performance fee
compensation and distributed Realized Performance Fees, at the end of the
quarter. $4.9 billion
Net Accrued Performance Fees at 1Q’15
$4.17 per unit
Net Accrued Performance Fees at 1Q’15
38% increase
in Net Accrued Performance Fees since 1Q’14
Net Accrued Performance Fees
Change vs.
(Dollars in Millions, Except per Unit Data)
4Q'14
1Q'15
Per Unit
4Q'14
Private Equity
BCP IV Carried Interest
282
$
178
$
0.15
$
(104)
$
BCP V Carried Interest
1,050
1,479
1.26
429
BCP VI Carried Interest
233
270
0.23
37
BEP Carried Interest
63
64
0.05
1
Tactical Opportunities Carried Interest
24
24
0.02
-
Strategic Partners Carried Interest
4
11
0.01
7
Other
1
1
0.00
-
Total Private Equity
1,657
2,027
1.72
370
Real Estate
BREP IV Carried Interest
18
30
0.03
12
BREP V Carried Interest
602
652
0.55
50
BREP VI Carried Interest
1,113
1,109
0.94
(4)
BREP VII Carried Interest
605
527
0.45
(78)
BREP Int'l I Carried Interest
-
1
0.00
1
BREP Europe III Carried Interest
183
201
0.17
18
BREP Europe IV Carried Interest
37
56
0.05
19
BREP Asia Carried Interest
17
30
0.03
13
BPP Carried Interest
14
14
0.01
-
BREDS Carried Interest
14
17
0.01
3
BREDS Incentive Fees
2
4
0.00
2
Asia Platform Incentive Fees
7
7
0.01
-
Total Real Estate
2,612
2,648
2.25
36
Hedge Fund Solutions
Incentive Fees
76
40
0.03
(36)
Total Hedge Fund Solutions
76
40
0.03
(36)
Credit
Carried Interest
175
165
0.14
(10)
Incentive Fees
32
30
0.03
(2)
Total Credit
207
195
0.17
(12)
Total Blackstone
Carried Interest
4,435
4,829
4.10
394
Incentive Fees
117
81
0.07
(36)
Net Accrued Performance Fees
4,552
$
4,910
$
4.17
$
358
$
Memo: Net Realized Performance Fees
106
$
130
$
0.11
$
24
$
|
 Blackstone
26
Investment Records as of March 31, 2015
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
-
3,256,818
2.5x
3,256,818
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
244,522
1.1x
-
2,619,040
1.4x
2,863,562
1.3x
7%
6%
BCP IV (Nov 2002 / Dec 2005)
6,773,182
223,589
2,498,337
1.4x
36%
18,651,078
3.2x
21,149,415
2.8x
45%
36%
BCP V (Dec 2005 / Jan 2011)
21,032,061
1,311,618
18,361,782
1.8x
61%
19,291,650
1.9x
37,653,432
1.9x
11%
9%
BCP VI (Jan 2011 / Jan 2017)
15,182,144
5,980,880
11,696,775
1.3x
16%
1,548,216
1.8x
13,244,991
1.4x
50%
14%
BEP (Aug 2011 / Aug 2017)
2,437,287
372,131
2,713,049
1.4x
24%
535,189
2.0x
3,248,238
1.4x
56%
29%
BEP II (Feb 2015 / Feb 2021)
4,864,865
4,864,865
-
n/a
-
-
n/a
-
n/a
n/a
n/a
Total Corporate Private Equity
58,614,472
$
12,952,381
$
35,514,465
$
1.6x
41%
56,828,417
$
2.3x
92,342,882
$
1.9x
22%
16%
Tactical Opportunities
8,858,500
5,128,542
4,232,095
1.1x
2%
980,853
1.4x
5,212,948
1.2x
27%
14%
Strategic Partners
16,693,422
4,553,811
6,549,585
1.6x
n/a
11,673,083
1.3x
18,222,668
1.4x
n/a
15%
Other Funds and Co-Invest
1,621,886
169,977
1,187,250
1.1x
55%
103,859
1.7x
1,291,109
1.1x
n/a
n/a
Total Private Equity
85,788,280
$
22,804,711
$
47,483,395
$
1.5x
32%
69,586,212
$
2.0x
117,069,607
$
1.8x
20%
16%
Real Estate
Dollar
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
-
2,531,612
2.1x
2,531,612
2.1x
19%
19%
BREP III (Apr 1999 / Apr 2003)
1,522,708
-
-
n/a
-
3,328,504
2.4x
3,328,504
2.4x
21%
21%
BREP IV (Apr 2003 / Dec 2005)
2,198,694
-
1,053,344
0.9x
16%
3,619,482
2.2x
4,672,826
1.7x
48%
14%
BREP V (Dec 2005 / Feb 2007)
5,539,418
-
5,775,716
2.2x
11%
6,922,979
2.2x
12,698,695
2.2x
16%
12%
BREP VI (Feb 2007 / Aug 2011)
11,059,494
586,765
12,817,654
2.7x
62%
14,006,819
2.3x
26,824,473
2.5x
17%
15%
BREP VII (Aug 2011 / April 2015)
13,476,021
4,089,253
15,523,310
1.5x
2%
5,036,944
1.9x
20,560,254
1.6x
39%
26%
BREP VIII (April 2015 / October 2020)
14,556,000
14,556,000
-
n/a
n/a
-
n/a
-
n/a
n/a
n/a
Total Global Real Estate Funds
50,072,096
$
19,232,018
$
35,170,024
$
1.9x
26%
37,119,238
$
2.2x
72,289,262
$
2.0x
23%
18%
Euro
BREP Int'l (Jan 2001 / Sep 2005)
824,172
€
-
€
9,364
€
0.5x
-
1,359,864
€
2.1x
1,369,228
€
2.1x
25%
23%
BREP Int'l II (Sep 2005 / Jun 2008)
1,629,748
54,198
1,681,289
1.5x
41%
567,022
1.8x
2,248,311
1.6x
12%
6%
BREP Europe III (Jun 2008 / Sep 2013)
3,204,714
525,539
4,307,781
1.8x
9%
1,149,471
2.5x
5,457,252
1.9x
32%
20%
BREP Europe IV (Sep 2013 / Mar 2019)
6,509,841
4,382,570
3,385,545
1.2x
-
247,017
1.3x
3,632,562
1.2x
40%
21%
Total Euro Real Estate Funds
12,168,475
€
4,962,307
€
9,383,979
€
1.5x
11%
3,323,374
€
2.1x
12,707,353
€
1.6x
23%
14%
BREP Co-Investment (f)
5,556,716
$
-
$
7,834,007
$
2.1x
67%
4,357,984
$
2.3x
12,191,991
$
2.2x
17%
18%
BREP Asia (Jun 2013 / Dec 2017)
5,076,119
3,111,174
2,347,061
1.2x
-
4,400
1.0x
2,351,461
1.2x
n/a
15%
Total Real Estate
76,577,457
$
27,712,904
$
57,810,842
$
1.8x
27%
45,894,528
$
2.2x
103,705,370
$
1.9x
22%
17%
BPP
5,063,701
$
3,008,012
$
2,449,050
$
1.2x
-
-
$
n/a
2,449,050
$
1.2x
n/a
n/a
BREDS (g)
7,142,206
$
2,092,436
$
2,713,830
$
1.2x
-
3,947,173
$
1.3x
6,661,003
$
1.3x
13%
12%
Credit (h)
Mezzanine I (Jul 2007 / Jul 2012)
2,000,000
$
134,024
$
841,926
$
1.7x
-
3,999,712
$
1.6x
4,841,638
$
1.6x
n/a
18%
Mezzanine II (Nov 2011 / Nov 2016)
4,120,000
2,590,229
2,588,856
1.2x
-
1,217,175
1.5x
3,806,031
1.3x
n/a
22%
Rescue Lending I (Sep 2009 / May 2013)
3,253,143
558,165
2,414,948
1.4x
-
3,397,415
1.4x
5,812,363
1.4x
n/a
14%
Rescue Lending II (Jun 2013 / Jun 2018)
5,125,000
3,797,864
1,727,755
1.2x
-
3,795
1.0x
1,731,550
1.2x
n/a
n/m
Total Credit
14,498,143
$
7,080,282
$
7,573,485
$
1.3x
-
8,618,097
$
1.5x
16,191,582
$
1.4x
n/a
17% |
 Blackstone
27
Investment
Records
as
of
March
31,
2015
–
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 March 31,
2015 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-investment’s 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 1.3x, respectively. Funds
presented represent the flagship credit drawdown funds only. The Total Credit Net
IRR is the combined IRR of the four flagship credit drawdown funds presented.
|
 Blackstone
28
Reconciliation
of
GAAP
to
Non-GAAP
Measures
-
Quarters
Notes on page 30.
(Dollars in Thousands)
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
Net Income Attributable to The Blackstone Group L.P.
167,635
$
211,148
$
171,164
$
621,255
$
265,617
$
517,016
$
250,505
$
551,451
$
629,448
$
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone
207,090
249,134
208,332
675,289
299,505
543,819
271,194
586,582
645,230
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
(9,452)
27,944
30,231
149,834
43,961
140,061
55,491
95,557
153,222
Net Income (Loss) Attributable to Redeemable Non-Controlling
Interests in Consolidated Entities
62,316
22,366
51,188
47,445
45,792
22,486
(23,328)
29,844
56,358
Net Income
427,589
$
510,592
$
460,915
$
1,493,823
$
654,875
$
1,223,382
$
553,862
$
1,263,434
$
1,484,258
$
Provision for Taxes
50,993
56,082
57,477
91,090
54,097
83,282
79,108
74,686
99,344
Income Before Provision for Taxes
478,582
$
566,674
$
518,392
$
1,584,913
$
708,972
$
1,306,664
$
632,970
$
1,338,120
$
1,583,602
$
IPO and Acquisition-Related Charges
(a)
186,962
178,706
190,525
166,514
177,024
178,568
209,240
291,550
231,862
Amortization of Intangibles
(b)
25,657
24,322
27,525
29,139
29,003
28,310
27,828
26,113
25,899
(Income) Associated with Non-Controlling Interests of Consolidated Entities
(c)
(52,864)
(50,310)
(81,419)
(197,279)
(89,753)
(162,547)
(32,163)
(125,401)
(209,580)
Economic Income
638,337
$
719,392
$
655,023
$
1,583,287
$
825,246
$
1,350,995
$
837,875
$
1,530,382
$
1,631,783
$
Taxes
(d)
(10,031)
(16,152)
(14,792)
(41,189)
(11,312)
(25,032)
(79,519)
(83,649)
(9,719)
Economic Net Income
628,306
$
703,240
$
640,231
$
1,542,098
$
813,934
$
1,325,963
$
758,356
$
1,446,733
$
1,622,064
$
Taxes
(d)
10,031
16,152
14,792
41,189
11,312
25,032
79,519
83,649
9,719
Performance Fee Adjustment
(e)
(603,999)
(719,219)
(544,936)
(1,688,219)
(779,014)
(1,398,438)
(891,087)
(1,323,338)
(1,673,736)
Investment (Income) Adjustment
(f)
(134,771)
(97,119)
(99,172)
(356,743)
(116,467)
(175,971)
(80,766)
(98,424)
(189,641)
Net Interest Loss
(g)
11,408
10,618
3,729
7,213
8,036
11,988
10,636
5,851
8,402
Performance Fee Compensation and Benefits Adjustment
(h)
239,895
286,832
168,393
718,062
237,254
417,838
360,162
270,249
403,816
Fee Related Earnings
150,870
$
200,504
$
183,037
$
263,600
$
175,055
$
206,412
$
236,820
$
384,720
$
180,624
$
Net Realized Performance Fees
(i)
218,952
147,231
138,924
455,068
214,427
402,140
470,560
699,472
932,789
Realized Investment Income
(j)
38,110
54,586
11,492
66,283
111,917
202,199
75,832
153,477
107,792
Net Interest (Loss)
(g)
(11,408)
(10,618)
(3,729)
(7,213)
(8,036)
(11,988)
(10,636)
(5,851)
(8,402)
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(k)
(12,148)
(44,220)
(31,756)
(68,610)
(31,054)
(44,841)
(96,437)
(108,456)
(16,994)
Equity-Based Compensation
(l)
12,085
10,985
8,745
98,309
16,337
11,250
9,947
10,692
44,398
Distributable Earnings
396,461
$
358,468
$
306,713
$
807,437
$
478,646
$
765,172
$
686,086
$
1,134,054
$
1,240,207
$
Interest Expense
26,069
25,960
25,268
26,607
30,398
34,082
34,221
34,154
38,853
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(k)
12,148
44,220
31,756
68,610
31,054
44,841
96,437
108,456
16,994
Depreciation and Amortization
8,643
9,116
8,956
8,726
10,373
7,170
7,557
7,200
6,927
Adjusted EBITDA
443,321
$
437,764
$
372,693
$
911,380
$
550,471
$
851,265
$
824,301
$
1,283,864
$
1,302,981
$
Holdings |
 Blackstone
29
Notes on page 30.
Reconciliation
of
GAAP
to
Non-GAAP
Measures
-
Years
(Dollars in Thousands)
2010
2011
2012
2013
2014
1Q'14 LTM
1Q'15 LTM
Net Income (Loss) Attributable to The Blackstone Group L.P.
(370,028)
$
(168,303)
$
218,598
$
1,171,202
$
1,584,589
$
1,269,184
$
1,948,420
$
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings
(668,444)
(83,234)
407,727
1,339,845
1,701,100
1,432,260
2,046,825
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated
Entities 343,498
7,953
99,959
198,557
335,070
251,970
444,331
Net Income (Loss) Attributable to Redeemable Non-Controlling
Interests in Consolidated Entities
87,651
(24,869)
103,598
183,315
74,794
166,791
85,360
Net Income
(607,323)
$
(268,453)
$
829,882
$
2,892,919
$
3,695,553
$
3,120,205
$
4,524,936
$
Provision for Taxes
84,669
345,711
185,023
255,642
291,173
258,746
336,420
Income Before Provision for Taxes
(522,654)
$
77,258
$
1,014,905
$
3,148,561
$
3,986,726
$
3,378,951
$
4,861,356
$
IPO and Acquisition-Related Charges
(a)
2,369,195
1,269,932
1,079,511
722,707
856,382
712,769
911,220
Amortization of Intangibles
(b)
220,865
150,148
106,643
111,254
109,989
108,150
(Income) Loss Associated with Non-Controlling Interests of Consolidated
Entities (c)
(431,149)
16,916
(203,557)
(381,872)
(409,864)
(418,761)
(529,691)
Economic Income
1,580,770
$
1,584,971
$
2,041,007
$
3,596,039
$
4,544,498
$
3,782,948
$
5,351,035
$
Taxes
(d)
(28,932)
(45,763)
(45,708)
(82,164)
(199,512)
(83,445)
(197,919)
Economic Net Income
1,551,838
$
1,539,208
$
1,995,299
$
3,513,875
$
4,344,986
$
3,699,503
$
5,153,116
$
Taxes
(d)
28,932
45,763
45,708
82,164
199,512
83,445
197,919
Performance Fee Adjustment
(e)
(926,289)
(1,174,526)
(1,593,765)
(3,556,373)
(4,391,877)
(3,731,388)
(5,286,599)
Investment (Income) Adjustment
(f)
(548,549)
(185,264)
(286,244)
(687,805)
(471,628)
(669,501)
(544,802)
Net Interest Loss
(g)
570
14,357
22,522
32,968
36,511
29,596
36,877
Performance Fee Compensation and Benefits Adjustment
(h)
356,962
316,712
513,546
1,413,182
1,285,503
1,410,541
1,452,065
Fee Related Earnings
463,464
$
556,250
$
697,066
$
798,011
$
1,003,007
$
822,196
$
1,008,576
$
Net Realized Performance Fees
(i)
233,347
128,409
392,411
960,175
1,786,599
955,650
2,504,961
Realized Investment Income
(j)
46,915
102,575
95,398
170,471
543,425
244,278
539,300
Net Interest (Loss)
(g)
(570)
(14,357)
(22,522)
(32,968)
(36,511)
(29,596)
(36,877)
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(k)
(48,867)
(74,696)
(132,325)
(156,734)
(280,788)
(175,640)
(266,728)
Equity-Based Compensation
(l)
68,900
84,626
90,040
130,124
48,226
134,376
76,287
Distributable Earnings
763,189
$
782,807
$
1,120,068
$
1,869,079
$
3,063,958
$
1,951,264
$
3,825,519
$
Interest Expense
36,666
53,201
69,152
103,904
132,855
108,233
141,310
Taxes and Related Payables Including Payable Under Tax Receivable Agreement
(k)
48,867
74,696
132,325
156,734
280,788
175,640
266,728
Depreciation and Amortization
26,629
32,764
42,235
35,441
32,300
37,171
28,854
Adjusted EBITDA
875,351
$
943,468
$
1,363,780
$
2,165,158
$
3,509,901
$
2,272,308
$
4,262,411
$
165,378 |
 Blackstone
30
Reconciliation
of
GAAP
to
Non-GAAP
Measures
–
Notes
Note:
See page 34, 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 Blackstone’s 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 Blackstone’s 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 Interest Income and Dividend Revenue less Interest Expense.
(h)
This adjustment removes from expenses the compensation and benefit amounts related to
Blackstone’s profit sharing plans related to Performance Fees.
(i)
Represents the adjustment for realized Performance Fees net of corresponding actual amounts
due under Blackstone’s profit sharing plans related thereto.
(j)
Represents the adjustment for Blackstone’s Investment Income (Loss) -
Realized.
(k)
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.
(l)
Represents equity-based award expense included in EI. |
 Blackstone
31
Walkdown
of
Financial
Metrics
–
Calculation
of
Certain
Non-GAAP
Financial
Metric
–
Quarters
Unless otherwise noted, all amounts are the respective captions from the Total Segment
information. (a)
See pages 28-30, 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)
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
Operating Expenses
114,444
120,152
122,872
129,171
139,774
145,111
131,440
137,457
143,282
Less: Interest Expense
(26,069)
(25,960)
(25,268)
(26,607)
(30,398)
(34,082)
(34,221)
(34,154)
(38,853)
Non-Interest Operating Expenses
88,375
$
94,192
$
97,604
$
102,564
$
109,376
$
111,029
$
97,219
$
103,303
$
104,429
$
Realized Incentive Fees
24,727
74,867
31,238
343,501
53,837
39,291
36,840
131,777
29,670
Less: Realized Incentive Fee Compensation
(10,508)
(35,014)
(14,599)
(140,794)
(23,635)
(18,509)
(19,029)
(48,926)
(12,227)
Net Realized Incentive Fees
14,219
$
39,853
$
16,639
$
202,707
$
30,202
$
20,782
$
17,811
$
82,851
$
17,443
$
Realized Carried Interest
294,170
183,288
182,654
283,846
333,623
641,659
638,752
836,562
1,207,594
Less: Realized Carried Interest Compensation
(89,437)
(75,910)
(60,369)
(31,485)
(149,398)
(260,301)
(186,003)
(219,941)
(292,248)
Net Realized Carried Interest
204,733
$
107,378
$
122,285
$
252,361
$
184,225
$
381,358
$
452,749
$
616,621
$
915,346
$
Interest Income and Dividend Revenue
14,661
15,342
21,539
19,394
22,362
22,094
23,585
28,303
30,451
Less: Interest Expense
(26,069)
(25,960)
(25,268)
(26,607)
(30,398)
(34,082)
(34,221)
(34,154)
(38,853)
Net Interest Income (Loss)
(11,408)
$
(10,618)
$
(3,729)
$
(7,213)
$
(8,036)
$
(11,988)
$
(10,636)
$
(5,851)
$
(8,402)
$
Equity-Based Compensation
(b)
12,085
$
10,985
$
8,745
$
98,309
$
16,337
$
11,250
$
9,947
$
10,692
$
44,398
$
Taxes and Related Payables
(a)
(12,148)
$
(44,220)
$
(31,756)
$
(68,610)
$
(31,054)
$
(44,841)
$
(96,437)
$
(108,456)
$
(16,994)
$
Unrealized Incentive Fees
107,755
4,358
40,992
(173,033)
61,266
56,776
(6,531)
(140,936)
62,620
Less: Unrealized Incentive Fee Compensation
(44,478)
(3,084)
(11,084)
70,297
(23,531)
(24,692)
9,002
58,497
(24,961)
Net Unrealized Incentive Fees
63,277
$
1,274
$
29,908
$
(102,736)
$
37,735
$
32,084
$
2,471
$
(82,439)
$
37,659
$
Unrealized Carried Interest
177,347
456,706
290,052
1,233,905
330,288
660,712
222,026
495,935
373,852
Less: Unrealized Carried Interest Compensation
(95,472)
(172,824)
(82,341)
(616,080)
(40,690)
(114,336)
(164,132)
(59,879)
(74,380)
Net Unrealized Carried Interest
81,875
$
283,882
$
207,711
$
617,825
$
289,598
$
546,376
$
57,894
$
436,056
$
299,472
$
Related Payables
(c)
2,117
$
28,068
$
16,964
$
27,421
$
19,742
$
19,809
$
16,918
$
24,807
$
7,275
$ |
 Blackstone
32
Walkdown
of
Financial
Metrics
–
Calculation
of
Certain
Non-GAAP
Financial
Metrics
–
Years
Unless otherwise noted, all amounts are the respective captions from the Total Segment
information. (a)
See pages 28-30, 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)
2010
2011
2012
2013
2014
1Q'14 LTM
1Q'15 LTM
Operating Expenses
344,516
421,342
481,445
486,639
553,782
511,969
557,290
Less: Interest Expense
(36,666)
(53,201)
(69,152)
(103,904)
(132,855)
(108,233)
(141,310)
Non-Interest Operating Expenses
307,850
$
368,141
$
412,293
$
382,735
$
420,927
$
403,736
$
415,980
$
Realized Incentive Fees
116,700
89,029
301,464
474,333
261,745
503,443
237,578
Less: Realized Incentive Fee Compensation
(57,600)
(55,912)
(140,042)
(200,915)
(110,099)
(214,042)
(98,691)
Net Realized Incentive Fees
59,100
$
33,117
$
161,422
$
273,418
$
151,646
$
289,401
$
138,887
$
Realized Carried Interest
244,963
138,907
327,422
943,958
2,450,596
983,411
3,324,567
Less: Realized Carried Interest Compensation
(70,716)
(43,615)
(96,433)
(257,201)
(815,643)
(317,162)
(958,493)
Net Realized Carried Interest
174,247
$
95,292
$
230,989
$
686,757
$
1,634,953
$
666,249
$
2,366,074
$
Interest Income and Dividend Revenue
46,630
70,936
96,344
78,637
104,433
Less: Interest Expense
(69,152)
(103,904)
(132,855)
(108,233)
(141,310)
Net Interest Income (Loss)
(570)
$
(14,357)
$
(22,522)
$
(32,968)
$
(36,511)
$
(29,596)
$
(36,877)
$
Equity-Based Compensation
(b)
68,900
$
84,626
$
90,040
$
130,124
$
48,226
$
134,376
$
76,287
$
Taxes and Related Payables
(a)
(48,867)
$
(74,696)
$
(132,325)
$
(156,734)
$
(280,788)
$
(175,640)
$
(266,728)
$
Unrealized Incentive Fees
107,624
(24,928)
(29,311)
(19,928)
(29,425)
(66,417)
(28,071)
Less: Unrealized Incentive Fee Compensation
(63,306)
20,759
44,528
11,651
19,276
32,598
17,846
Net Unrealized Incentive Fees
44,318
$
(4,169)
$
15,217
$
(8,277)
$
(10,149)
$
(33,819)
$
(10,225)
$
Unrealized Carried Interest
457,002
971,518
994,190
2,158,010
1,708,961
2,310,951
1,752,525
Less: Unrealized Carried Interest Compensation
(165,340)
(237,944)
(321,599)
(966,717)
(379,037)
(911,935)
(412,727)
Net Unrealized Carried Interest
291,662
$
733,574
$
672,591
$
1,191,293
$
1,329,924
$
1,399,016
$
1,339,798
$
Related Payables
(c)
19,935
$
28,933
$
86,617
$
74,570
$
81,276
$
92,195
$
68,809
$
36,096
(36,666)
38,844
(53,201) |
 Blackstone
33
Unit Rollforward
Weighted-Average
Economic
Net
Income
Adjusted
Units,
were
1.2
billion,
up
20.8
million
from
the
prior
quarter,
partially attributable to the buy out of partnership holdings interests, which is
expected to be accretive to the segments and earnings per unit in the
future. Common Unitholders 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.
Distributable Earnings Units Outstanding excludes units which are not entitled to distributions.
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
Total
GAAP
Weighted-Average
Common
Units
Outstanding
-
Basic
601,527,299
606,690,740
611,684,213
615,492,620
625,276,969
Adjustments:
Weighted-Average Unvested Deferred Restricted Common Units
4,141,865
3,207,089
3,294,657
6,843,140
5,955,072
Total
GAAP
Weighted-Average
Common
Units
Outstanding
-
Diluted
605,669,164
609,897,829
614,978,870
622,335,760
631,232,041
Adjustments:
Weighted-Average Blackstone Holdings Partnership Units
549,327,240
544,158,132
539,856,777
536,973,966
548,837,150
Weighted-Average Economic Net Income Adjusted Units
1,154,996,404
1,154,055,961
1,154,835,647
1,159,309,726
1,180,069,191
Economic Net Income Adjusted Units, End of Period
1,154,889,678
1,154,840,023
1,155,075,985
1,159,954,181
1,192,529,251
Total Common Units Outstanding
599,372,943
603,270,771
607,590,602
611,480,457
625,985,058
Adjustments:
Blackstone Holdings Partnership Units
541,129,472
538,074,958
538,760,225
536,543,970
550,783,119
Distributable Earnings Units Outstanding
1,140,502,415
1,141,345,729
1,146,350,827
1,148,024,427
1,176,768,177 |
 Blackstone
34
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:
Definitions and Distribution Policy
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 Blackstone’s 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 Blackstone’s investments in the
Blackstone Funds, and (c) realized and unrealized gains (losses) from other investments
except for such gains (losses) from Blackstone’s 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 Blackstone’s 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 Blackstone’s 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 Blackstone’s 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. Blackstone’s 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 Blackstone’s 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 Blackstone’s general partner and may change at any time, including,
without limitation, to eliminate such distributions entirely. |
 Blackstone
35
Forward-Looking Statements
This presentation may contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
which reflect Blackstone’s current views with respect to, among other things,
Blackstone’s 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, 2014, 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
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
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. |