10-QPeriod: Q3 FY2012

Blackstone Inc. Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 2, 2012For Securities:BX

Summary

Blackstone Inc. (BX) reported strong financial performance for the nine months ended September 30, 2012, driven by significant increases in Performance Fees and Investment Income. Total revenues grew by 20% year-over-year to $2.8 billion, largely due to a 36% increase in Performance Fees, which benefited from favorable market conditions and strong appreciation in investments across its Private Equity, Real Estate, and Credit segments. Despite an increase in Performance Fee Compensation expenses, overall expenses decreased by 6% due to lower compensation and benefits, primarily driven by a reduction in equity-based compensation compared to the prior year. The company's assets under management (AUM) also saw substantial growth, reaching $204.6 billion, up 23% year-over-year, reflecting successful capital raises and market appreciation across its business segments. The company's balance sheet shows a significant increase in total assets to $27.8 billion, primarily driven by a $5.6 billion rise in investments. Total liabilities also increased to $17.0 billion, mainly due to a $4.0 billion rise in loans payable, reflecting the issuance of new senior notes and growth in consolidated CLO vehicles. Blackstone ended the period with $833.5 million in cash and a $1.1 billion revolving credit facility, demonstrating a healthy liquidity position to support ongoing operations and growth initiatives.

Financial Highlights

32 data points
Beta

Revenue

$1.22B

Net Income

$128.82M

10.5% Net Margin

EPS (Diluted)

$0.24

Total Assets

$27.80B

Cash & Equivalents

$833.51M

Free Cash Flow

$3.99M

Financial Statements
Beta
Revenue$1.22B
Operating Expenses$851.39M
Interest Expense$19.07M
Net Income$128.82M
EPS (Basic)$0.24
EPS (Diluted)$0.24
Shares Outstanding (Basic)544.72M
Shares Outstanding (Diluted)546.92M

Key Highlights

  • 1Total Revenues increased by 20% to $2.8 billion for the nine months ended September 30, 2012, compared to the same period in 2011.
  • 2Performance Fees surged by 36% year-over-year to $1.1 billion, driven by strong market appreciation and improved performance across Private Equity, Real Estate, and Credit segments.
  • 3Investment Income (Loss) increased significantly by 51% to $222.6 million for the nine months ended September 30, 2012.
  • 4Total Assets Under Management (AUM) grew by 23% year-over-year to $204.6 billion as of September 30, 2012.
  • 5Fee-Earning Assets Under Management (FEAUM) increased by 23% year-over-year to $168.6 billion as of September 30, 2012.
  • 6Total Assets increased by $5.9 billion to $27.8 billion, primarily due to a $5.6 billion increase in Investments.
  • 7Total Liabilities increased by $4.3 billion to $17.0 billion, primarily due to a $4.0 billion increase in Loans Payable.

Frequently Asked Questions

Blackstone's revenue performance significantly improved. Total Revenues for the nine months ended September 30, 2012, increased by 20% to $2.8 billion, driven by a substantial 36% rise in Performance Fees and a 51% increase in Investment Income (Loss). This reflects a strong performance environment and successful capital deployment across its key business segments.

Blackstone experienced robust growth in its AUM, which increased by 23% year-over-year to $204.6 billion as of September 30, 2012. This growth was fueled by capital inflows, particularly in the Credit and Real Estate segments, and positive market appreciation across its investment portfolios.

The primary driver for the increase in liabilities to $17.0 billion was a $4.0 billion rise in Loans Payable. This increase is largely attributable to the issuance of new senior notes in August 2012 and growth in borrowings related to consolidated CLO vehicles.

Total expenses decreased by 6% for the nine months ended September 30, 2012, to $2.4 billion, compared to the prior year period. This decrease was mainly due to a $321.5 million reduction in Compensation and Benefits, primarily as a result of lower equity-based compensation expenses compared to the prior year, which had been impacted by IPO-related awards.