10-QPeriod: Q1 FY2020

Blackstone Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 8, 2020For Securities:BX

Summary

Blackstone Inc. reported a significant decline in its financial performance for the first quarter of 2020, primarily driven by the adverse economic impacts of the COVID-19 pandemic and a dislocation in energy markets. Total revenues decreased by approximately $5.1 billion year-over-year to a negative $3.1 billion, largely due to a substantial drop in Investment Income (Loss), which fell by $5.3 billion. This decline was primarily attributed to unrealized losses across its Private Equity and Real Estate segments, reflecting the widespread market downturn. Despite the revenue hit, Blackstone managed to control expenses, with total expenses decreasing by $1.7 billion year-over-year to $638.1 million. This reduction was largely driven by a significant decrease in Performance Allocations Compensation, which is tied to investment performance. The company ended the quarter with total assets of $26.9 billion and total liabilities of $15.4 billion, resulting in total equity of $11.5 billion. The firm maintained a strong liquidity position with $2.1 billion in cash and cash equivalents, and had no outstanding borrowings under its revolving credit facility at the end of the period.

Financial Highlights

37 data points
Beta

Revenue

-$3.08B

Net Income

-$1.07B

34.7% Net Margin

EPS (Diluted)

$-1.58

Total Assets

$26.95B

Cash & Equivalents

$2.07B

Free Cash Flow

$987.04M

Financial Statements
Beta
Revenue-$3.08B
Operating Expenses-$638.08M
Interest Expense$41.64M
Net Income-$1.07B
EPS (Basic)$-1.58
EPS (Diluted)$-1.58
Shares Outstanding (Basic)676.31M
Shares Outstanding (Diluted)676.31M

Key Highlights

  • 1Total Revenues decreased by 51% to a net loss of $3.1 billion for Q1 2020, primarily due to a $5.3 billion decrease in Investment Income (Loss) driven by unrealized losses.
  • 2Investment Income (Loss) declined significantly by $5.3 billion, reflecting the broad market downturn caused by COVID-19, with notable negative impacts in Private Equity and Real Estate.
  • 3Total Expenses decreased by 63% to $638.1 million, largely due to a $1.7 billion reduction in Compensation and Benefits, primarily Performance Allocations Compensation, which correlated with lower investment income.
  • 4Fee Related Earnings increased by 47% to $267.5 million for the Real Estate segment and by 4% to $114.8 million for the Private Equity segment, indicating resilience in recurring fee-based revenues.
  • 5Assets Under Management (AUM) decreased by $33.1 billion to $538.0 billion, primarily due to market depreciation of $47.1 billion, partially offset by inflows and other activities.
  • 6Blackstone maintained a strong liquidity position with $2.1 billion in cash and cash equivalents and $1.7 billion in corporate treasury investments as of March 31, 2020.
  • 7The company repurchased $253.5 million of its Class A common stock during the quarter under its $1.0 billion repurchase program.

Frequently Asked Questions

Blackstone reported a net loss of $2.6 billion for the three months ended March 31, 2020, a significant decrease from a net income of $1.1 billion in the same period of 2019. This loss was primarily driven by substantial unrealized investment losses.

The COVID-19 pandemic severely impacted Blackstone's performance in Q1 2020, leading to a significant decline in revenues, particularly from Investment Income (Loss). This was due to market disruptions and reduced valuations across many of its portfolio investments, especially in sectors like energy, hospitality, and retail.

Blackstone's total Assets Under Management decreased by $33.1 billion to $538.0 billion as of March 31, 2020. This decrease was mainly due to market depreciation of $47.1 billion, reflecting the adverse market conditions during the quarter.

The Real Estate segment showed resilience with Segment Distributable Earnings increasing by 47%, driven by Fee Related Earnings. However, Private Equity Segment Distributable Earnings decreased by 24% due to lower Net Realizations. Hedge Fund Solutions and Credit & Insurance segments also saw slight decreases in Segment Distributable Earnings.

Blackstone maintained a strong liquidity position, with $2.1 billion in cash and cash equivalents and $1.7 billion in corporate treasury investments as of March 31, 2020. The company also had access to a $1.6 billion revolving credit facility and had no outstanding borrowings under it at the end of the period.