10-QPeriod: Q2 FY2016

Blackstone Inc. Quarterly Report for Q2 Ended Jun 30, 2016

Filed August 4, 2016For Securities:BX

Summary

Blackstone Inc. (BX) reported its financial results for the quarter ended June 30, 2016. Total Revenues saw a slight decrease of 3% year-over-year to $1.2 billion, primarily driven by a significant drop in Performance Fees, which were down 21% to $449 million. This was partially offset by a 6% increase in Management and Advisory Fees, Net, reaching $608 million, and a notable 85% surge in Investment Income to $105 million. Expenses decreased by 22% to $713 million, largely due to lower compensation and benefits, reflecting reduced performance-based compensation following the decline in performance fees. Net Income Attributable to The Blackstone Group L.P. increased by 48% to $199 million, or $0.30 per diluted common unit, compared to $134 million, or $0.21 per diluted common unit, in the prior year period. This improvement in net income, despite lower revenues, was largely driven by the significant reduction in operating expenses, particularly compensation. The company's total Assets Under Management (AUM) grew to $356.3 billion, up 4% from the previous quarter and 7% year-over-year, indicating continued growth in assets managed by the firm.

Financial Highlights

33 data points
Beta

Revenue

$1.19B

Net Income

$198.63M

16.7% Net Margin

EPS (Diluted)

$0.30

Total Assets

$23.04B

Cash & Equivalents

$1.50B

Free Cash Flow

$20.49M

Financial Statements
Beta
Revenue$1.19B
Operating Expenses-$712.60M
Interest Expense$36.88M
Net Income$198.63M
EPS (Basic)$0.31
EPS (Diluted)$0.30
Shares Outstanding (Basic)646.93M
Shares Outstanding (Diluted)1.19B

Key Highlights

  • 1Total Revenues decreased by 3% year-over-year to $1.2 billion.
  • 2Performance Fees declined significantly by 21% to $449 million, mainly due to lower realized carried interest.
  • 3Investment Income increased by 85% to $105 million, driven by stronger performance in Real Estate and Credit segments.
  • 4Total Expenses decreased by 22% to $713 million, primarily due to lower compensation and benefits costs.
  • 5Net Income Attributable to The Blackstone Group L.P. increased by 48% to $199 million.
  • 6Diluted Earnings Per Common Unit rose to $0.30, up from $0.21 in the prior year period.
  • 7Total Assets Under Management (AUM) grew to $356.3 billion, up 4% sequentially and 7% year-over-year.

Frequently Asked Questions

The decrease in Performance Fees was primarily driven by lower realized carried interest, particularly in the Private Equity and Real Estate segments, reflecting slightly lower appreciation compared to the prior year period despite positive net returns.

Blackstone significantly reduced its total expenses by 22% year-over-year to $713 million. This reduction was largely due to a substantial decrease in Compensation and Benefits, which fell by 22%, reflecting lower performance-based compensation linked to the decline in performance fees, as well as the full vesting and expensing of certain IPO-related equity awards.

Blackstone's Assets Under Management continued to grow, reaching $356.3 billion at the end of the second quarter of 2016. This represents a 4% increase from the previous quarter and a 7% increase year-over-year, driven by inflows from new fund commitments and market appreciation across its segments.

Net Income Attributable to The Blackstone Group L.P. increased by 48% to $199 million. This translated to a Diluted Earnings Per Common Unit of $0.30, a significant improvement from $0.21 in the same period last year, largely due to expense management and improved investment income.