BLUE OWL CAPITAL INC. 10-Q

Item 5. Other Information. Rule 10b5-1 Trading Plans During the fiscal quarter ended March 31, 2024, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.” Item 6. Exhibits See Exhibit Index on the following page. 27 Table of Contents Exhibit Index Exhibit Number Description 3.1 Certificate of Domestication of Altimar Acquisition Corporation (incorporated by reference to Exhibit 3.1 of Blue Owl Capital Inc. Current Report on Form 8-K filed on May 21, 2021) 3.2 Certificate of Incorporation of Blue Owl Capital Inc., as amended (incorporated by reference to Exhibit 3.1 of Blue Owl Capital Inc. Current Report on Form 10-Q filed on May 5, 2022) 4.1 Indenture, dated as of June 10, 2021, by and among Blue Owl Finance LLC, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 of Blue Owl Capital Inc. Current Report on Form 8-K filed on June 10, 2021) 4.2 Fifth Supplemental Indenture dated as of April 18, 2024 among Blue Owl Finance LLC, as issuer, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.5 of Blue Owl Capital Inc. Current Report on Form 8-K filed on April 18, 2024) 4.3 Indenture dated as of April 18, 2024 among Blue Owl Finance LLC, as issuer, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 of Blue Owl Capital Inc. Current Report on Form 8-K filed on April 18, 2024) 4.4 First Supplemental Indenture dated as of April 18, 2024 among Blue Owl Finance LLC, as issuer, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 of Blue Owl Capital Inc. Current Report on Form 8-K filed on April 18, 2024) 4.5 Form of 6.250% Senior Note due 2034 (incorporated by reference to Exhibit 4.3 of Blue Owl Capital Inc. Current Report on Form 8-K filed on April 18, 2024) 31.1 * Certification of the Co-Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 * Certification of the Co-Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.3 * Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 ** Certification of the Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 ** Certification of the Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.3 ** Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101* Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition as of March 31, 2024 and December 31, 2023, (ii) the Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (iii) the Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023 (iv) the Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023, and (v) the Notes to the Consolidated Financial Statements 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith ** Furnished herewith. This certification is not deemed filed by the SEC and is not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings 28 Table of Contents SIGNATURES 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 thereunto duly authorized. Date: May 3, 2024 Blue Owl Capital Inc. By: /s/ Alan Kirshenbaum Alan Kirshenbaum Chief Financial Officer 29 Table of Contents INDEX TO FINANCIAL STATEMENTS Page Consolidated Statements of Financial Condition as of March 31, 2024 and December 31, 2023 F- 2 Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 F- 3 Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023 F- 4 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 F- 6 Notes to Consolidated Financial Statements F- 7 F-1 Table of Contents Blue Owl Capital Inc. Consolidated Statements of Financial Condition (Unaudited) (Dollars in Thousands, Except Per Share Data) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 155,759 $ 104,160 Due from related parties 383,951 367,136 Investments (includes $ 88,059 and $ 78,779 at fair value and $ 351,236 and $ 337,595 of investments in the Company’s products, respectively) 357,774 344,265 Operating lease assets 276,862 281,669 Strategic Revenue-Share Purchase consideration, net 406,421 417,081 Deferred tax assets 930,108 781,694 Intangible assets, net 2,053,813 2,110,008 Goodwill 4,224,153 4,224,153 Other assets, net 196,636 187,455 Total Assets $ 8,985,477 $ 8,817,621 Liabilities Debt obligations, net $ 2,072,119 $ 1,681,241 Accrued compensation 157,198 370,726 Operating lease liabilities 334,586 319,532 TRA liability (includes $ 107,311 and $ 116,398 at fair value, respectively) 1,017,379 879,509 Warrant liability, at fair value 37,300 22,600 Earnout liability, at fair value 10,619 92,909 Deferred tax liabilities 33,174 34,419 Accounts payable, accrued expenses and other liabilities 151,536 138,754 Total Liabilities 3,813,911 3,539,690 Commitments and Contingencies (Note 8) Stockholders’ Equity Class A Shares, par value $ 0.0001 per share, 2,500,000,000 authorized, 500,879,131 and 464,425,386 issued and outstanding, respectively 50 46 Class C Shares, par value $ 0.0001 per share, 1,500,000,000 authorized, 611,908,856 and 632,486,822 issued and outstanding, respectively 61 63 Class D Shares, par value $ 0.0001 per share, 350,000,000 authorized, 316,016,619 and 317,089,623 issued and outstanding, respectively 32 32 Additional paid-in capital 2,568,949 2,410,982 Accumulated deficit ( 922,988 ) ( 882,884 ) Total Stockholders’ Equity Attributable to Blue Owl Capital Inc. 1,646,104 1,528,239 Stockholders’ equity attributable to noncontrolling interests 3,525,462 3,749,692 Total Stockholders’ Equity 5,171,566 5,277,931 Total Liabilities and Stockholders’ Equity $ 8,985,477 $ 8,817,621 The accompanying notes are an integral part of these consolidated financial statements. F-2 Table of Contents Blue Owl Capital Inc. Consolidated Statements of Operations (Unaudited) (Dollars in Thousands, Except Per Share Data) Three Months Ended March 31, 2024 2023 Revenues Management fees, net (includes Part I Fees of $ 120,161 and $ 85,864 respectively) $ 447,898 $ 358,825 Administrative, transaction and other fees 63,397 31,655 Performance revenues 2,045 506 Total Revenues, Net 513,340 390,986 Expenses Compensation and benefits 224,791 197,618 Amortization of intangible assets 56,195 70,891 General, administrative and other expenses 76,748 56,134 Total Expenses 357,734 324,643 Other Loss Net gains on investments 3,173 612 Interest and dividend income 4,755 4,789 Interest expense ( 22,484 ) ( 18,362 ) Change in TRA liability 1,019 ( 1,964 ) Change in warrant liability ( 14,700 ) ( 1,950 ) Change in earnout liability ( 585 ) ( 994 ) Total Other Loss ( 28,822 ) ( 17,869 ) Income Before Income Taxes 126,784 48,474 Income tax expense 14,771 6,440 Consolidated Net Income 112,013 42,034 Net income attributable to noncontrolling interests ( 86,922 ) ( 33,717 ) Net Income Attributable to Blue Owl Capital Inc. $ 25,091 $ 8,317 Earnings per Class A Share Basic $ 0.05 $ 0.02 Diluted $ 0.04 $ 0.02 Weighted-Average Class A Shares Basic (1) 488,435,221 456,189,118 Diluted 498,738,547 461,911,117 (1) Included in the weighted-average Class A Shares outstanding are RSUs that have vested but have not been settled in Class A Shares. These RSUs do not participate in dividends until settled in Class A Shares. See Note 12. The accompanying notes are an integral part of these consolidated financial statements. F-3 Table of Contents Blue Owl Capital Inc. Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (Dollars in Thousands, Except Per Share Data) Three Months Ended March 31, 2024 2023 Class A Shares Par Value Beginning balance $ 46 $ 45 Shares delivered on vested RSUs 1 — Class C Shares and Common Units exchanged for Class A Shares 3 — Ending Balance $ 50 $ 45 Class C Shares Par Value Beginning balance $ 63 $ 63 Settlement of Earnout Securities 1 1 Class C Shares and Common Units exchanged for Class A Shares ( 3 ) — Ending Balance $ 61 $ 64 Class D Shares Par Value Beginning balance $ 32 $ 32 Ending Balance $ 32 $ 32 Additional Paid-in Capital Beginning balance $ 2,410,982 $ 2,293,903 Deferred taxes on capital transactions 158,788 ( 8,053 ) TRA liability on capital transactions ( 166,763 ) ( 988 ) Equity-based compensation 5,081 4,508 Withholding taxes on vested RSUs ( 6,112 ) ( 1,395 ) Reallocation between additional paid-in capital and noncontrolling interests due to changes in Blue Owl Operating Group ownership 166,973 40,541 Ending Balance $ 2,568,949 $ 2,328,516 Accumulated Deficit Beginning balance $ ( 882,884 ) $ ( 689,345 ) Cash dividends declared on Class A Shares ( 65,195 ) ( 57,921 ) Comprehensive income 25,091 8,317 Ending Balance $ ( 922,988 ) $ ( 738,949 ) Total Stockholders’ Equity Attributable to Blue Owl Capital Inc. $ 1,646,104 $ 1,589,708 Stockholders’ Equity Attributable to Noncontrolling Interests Beginning balance $ 3,749,692 $ 3,944,188 Equity-based compensation 63,374 64,805 Contributions 7,972 9,825 Distributions ( 204,202 ) ( 129,358 ) Withholding taxes on vested RSUs ( 11,323 ) ( 3,006 ) Reallocation between additional paid-in capital and noncontrolling interests due to changes in Blue Owl Operating Group ownership ( 166,973 ) ( 40,541 ) Comprehensive income 86,922 33,717 Ending Balance $ 3,525,462 $ 3,879,630 Total Stockholders’ Equity $ 5,171,566 $ 5,469,338 Cash Dividends Paid per Class A Share $ 0.14 $ 0.13 F-4 Table of Contents Blue Owl Capital Inc. Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (Dollars in Thousands, Except Per Share Data) Three Months Ended March 31, 2024 2023 Number of Class A Shares Beginning balance 464,425,386 445,131,351 Shares delivered on vested RSUs 1,252,343 424,933 Class C Shares and Common Units exchanged for Class A Shares 34,128,398 315,942 Class D Shares exchanged for Class A Shares 1,073,004 — Ending Balance 500,879,131 445,872,226 Number of Class C Shares Beginning balance 632,486,822 629,402,505 Class C Shares and Common Units exchanged for Class A Shares ( 34,128,398 ) ( 315,942 ) Shares delivered on vested Common Units 513,267 — Settlement of Oak Street Earnout Units 13,037,165 13,037,165 Ending Balance 611,908,856 642,123,728 Number of Class D Shares Beginning balance 317,089,623 319,132,127 Class D Shares exchanged for Class A Shares ( 1,073,004 ) — Ending Balance 316,016,619 319,132,127 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents Blue Owl Capital Inc. Consolidated Statements of Cash Flows (Unaudited) (Dollars in Thousands) Three Months Ended March 31, 2024 2023 Cash Flows from Operating Activities Consolidated net income $ 112,013 $ 42,034 Adjustments to reconcile consolidated net income to net cash from operating activities: Amortization of intangible assets 56,195 70,891 Equity-based compensation 65,713 73,275 Depreciation and amortization of fixed assets 2,809 1,922 Amortization of debt discounts and deferred financing costs 1,326 1,117 Non-cash lease expense 19,861 5,081 Payment of earnout liability in excess of acquisition-date fair value ( 13,137 ) ( 7,188 ) Net gains on investments, net of dividends on equity-method investments ( 818 ) ( 612 ) Change in TRA liability ( 1,019 ) 1,964 Change in warrant liability 14,700 1,950 Change in earnout liability 585 994 Deferred income taxes 9,130 1,619 Changes in operating assets and liabilities: Due from related parties ( 16,815 ) 58,301 Strategic Revenue-Share Purchase consideration 10,660 9,769 Other assets, net ( 634 ) ( 1,102 ) Accrued compensation ( 210,786 ) ( 168,804 ) Accounts payable, accrued expenses and other liabilities ( 2,536 ) 29,798 Net Cash Provided by Operating Activities 47,247 121,009 Cash Flows from Investing Activities Purchases of fixed assets ( 6,141 ) ( 5,672 ) Purchases of investments ( 12,940 ) ( 37,686 ) Proceeds from investment sales and maturities 3,750 8,998 Net Cash Used in Investing Activities ( 15,331 ) ( 34,360 ) Cash Flows from Financing Activities Proceeds from debt obligations 720,000 355,000 Debt issuance costs 66 — Repayments of debt obligations, including retirement costs ( 330,000 ) ( 215,000 ) Payment of earnout liability, up to acquisition-date fair value ( 69,738 ) ( 74,062 ) Payments under the TRA ( 28,166 ) — Withholding taxes on vested RSUs ( 17,435 ) ( 4,401 ) Dividends paid on Class A Shares ( 65,195 ) ( 57,921 ) Contributions from noncontrolling interests 14,535 8,927 Distributions to noncontrolling interests ( 204,384 ) ( 129,358 ) Net Cash Provided by (Used in) Financing Activities 19,683 ( 116,815 ) Net Increase (Decrease) in Cash and Cash Equivalents 51,599 ( 30,166 ) Cash and cash equivalents, beginning of period 104,160 68,079 Cash and Cash Equivalents, End of Period $ 155,759 $ 37,913 Supplemental Information Cash paid for interest $ 11,018 $ 11,254 Cash paid for income taxes $ 5,077 $ 1,828 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 1. ORGANIZATION Blue Owl Capital Inc. (the “Registrant”), a Delaware corporation, together with its consolidated subsidiaries (collectively, the “Company” or “Blue Owl”), is a global alternative asset manager. Anchored by a strong Permanent Capital base, the Company deploys private capital across Credit, GP Strategic Capital and Real Estate platforms on behalf of institutional and private wealth clients. The Company’s primary sources of revenues are management fees, which are generally based on the amount of the Company’s fee-paying assets under management. The Company generates substantially all of its revenues in the United States. The Company operates through one operating and reportable segment. This single reportable segment reflects how the chief operating decision makers allocate resources and assess performance under the Company’s “one-firm approach,” which includes operating collaboratively across product lines, with predominantly a single expense pool. The Company conducts its operations through Blue Owl Capital Holdings LP (“Blue Owl Holdings”) and Blue Owl Capital Carry LP (“Blue Owl Carry”). Blue Owl Holdings and Blue Owl Carry are referred to, collectively, as the “Blue Owl Operating Partnerships,” and collectively with their consolidated subsidiaries, as the “Blue Owl Operating Group.” The Registrant holds its controlling financial interests in the Blue Owl Operating Group indirectly through Blue Owl Capital GP Holdings LLC and Blue Owl Capital GP LLC (collectively, “Blue Owl GP”), which are directly or indirectly wholly owned subsidiaries of the Registrant. Business Combination, Including Dyal Acquisition The Registrant was initially incorporated in the Cayman Islands as Altimar Acquisition Corporation (“Altimar”), a special purpose acquisition company. Pursuant to the Business Combination Agreement dated December 23, 2020, as amended, modified, supplemented or waived from time to time (the “Business Combination Agreement”), on May 19, 2021 (“Business Combination Date”), (i) Altimar was redomiciled as a Delaware corporation and changed its name to Blue Owl Capital Inc., (ii) Altimar merged with the combined businesses of Blue Owl Capital Group LLC (formerly, Owl Rock Capital Group LLC) and Blue Owl Securities LLC (formerly, Owl Rock Securities LLC) (“Owl Rock”) (the “Altimar Merger”) and (iii) the Company acquired Dyal Capital Partners (“Dyal Capital”), a former division of Neuberger Berman Group LLC (the “Dyal Acquisition”) (collectively with the Altimar Merger, the “Business Combination”). As further discussed in Note 2, for both the Altimar Merger and the Dyal Acquisition, Owl Rock was deemed to be the acquirer for accounting purposes. Therefore, the predecessor to Blue Owl is “Owl Rock,” a combined carve-out of Owl Rock Capital Group LLC and Blue Owl Securities LLC (“Securities”). Oak Street Acquisition On December 29, 2021, the Company completed its acquisition of Blue Owl Real Estate Capital, LLC (f/k/a Oak Street Real Estate Capital, LLC, “Oak Street”) and its advisory business (the “Oak Street Acquisition”). Wellfleet Acquisition On April 1, 2022, the Company completed its acquisition of Blue Owl Liquid Credit Partners (f/k/a Wellfleet Credit Partners, LLC, “Wellfleet”), a manager of collateralized loan obligations (“CLOs”) (the “Wellfleet Acquisition”). Par Four Acquisition On August 15, 2023, the Company acquired the rights to certain CLO management agreements, related assets and personnel from Par Four CLO Management LLC (“Par Four”) (the “Par Four Acquisition”). F-7 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 CHI Acquisition On December 1, 2023, the Company acquired the rights to investment management agreements, investor relationships, related assets and personnel from Cowen Healthcare Investments (“CHI”) (the “CHI Acquisition,” and collectively with the Dyal Acquisition, Oak Street Acquisition, Wellfleet Acquisition, and Par Four Acquisition, the “Acquisitions”). Registrant’s Capital Structure The following table presents the number of shares of the Registrant, RSUs and warrants that were outstanding as of March 31, 2024: March 31, 2024 Class A Shares 500,879,131 Class C Shares 611,908,856 Class D Shares 316,016,619 RSUs 29,107,582 Private Placement Warrants 5,000,000 Class A Shares —Shares of Class A common stock that are publicly traded. Class A Stockholders are entitled to dividends declared on the Class A Shares by the Registrant’s board of directors (the “Board”). As of March 31, 2024, the Class A Shares and Class C Shares (collectively, the “Low-Vote Shares”) represent a combined 20 % of the total voting power of all shares. Class B Shares —Shares of Class B common stock that are not publicly traded. Class B Stockholders are entitled to dividends in the same amount per share as declared on Class A Shares. As of March 31, 2024, the Class B Shares and Class D Shares (collectively, the “High-Vote Shares”) represent a combined 80 % of the total voting power of all shares. Class C Shares —Shares of Class C common stock that are not publicly traded. Class C Stockholders do not participate in the earnings of the Registrant, as the holders of such shares participate in the economics of the Blue Owl Operating Group through their direct and indirect holdings of Common Units and Incentive Units (as defined below and subject to limitations on unvested units). For every Common Unit held directly or indirectly by non-Principals, one Class C Share is issued to grant a corresponding voting interest in the Registrant. The Class C Shares are Low-Vote Shares as described above. Class D Shares —Shares of Class D common stock that are not publicly traded. Class D Stockholders do not participate in the earnings of the Registrant, as the holders of such shares participate in the economics of the Blue Owl Operating Group through their direct or indirect holdings of Common Units and Incentive Units (subject to limitations on unvested units). For every Common Unit held directly and indirectly by Principals, one Class D Share is issued to grant a corresponding voting interest in the Registrant. The Class D Shares are High-Vote Shares as described above. RSUs —The Company grants Class A restricted share units (“RSUs”) to its employees and independent Board members. An RSU entitles the holder to receive a Class A Share, or cash equal to the fair value of a Class A Share at the election of the Board, upon completion of a requisite service period. RSUs granted to date do not accrue dividend equivalents. No RSUs were issued prior to the Business Combination. RSU grants are accounted for as equity-based compensation. See Note 10 and the Company’s Annual Report for additional information. Warrants —In connection with the Business Combination, the Company issued warrants to purchase Class A Shares at an original price of $ 11.50 per share (currently, $ 11.29 due to certain dividend adjustments). A portion of the outstanding warrants are held by the sponsor of Altimar (“Private Placement Warrants”) and the remaining warrants were held by other third-party investors (“Public Warrants”). The Private Placement Warrants will expire five years from the Business Combination Date. F-8 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 Blue Owl Operating Partnerships’ Capital Structure The following table presents the interests outstanding of the Blue Owl Operating Group that were outstanding as of March 31, 2024, which interests are collectively referred to as “Blue Owl Operating Group Units”: Units March 31, 2024 GP Units 500,879,131 Common Units 927,925,475 Incentive Units 34,665,699 GP Units —The Registrant indirectly holds a general partner interest and all of the GP Units in each of the Blue Owl Operating Partnerships. The GP Units are general partner interests in the Blue Owl Operating Partnerships that represent the Registrant’s economic ownership in the Blue Owl Operating Group. For each Class A Share and Class B Share outstanding, the Registrant indirectly holds an equal number of GP Units. References to GP Units refer collectively to a GP Unit in each of the Blue Owl Operating Partnerships. References to GP Units also include Common Units (as defined below) acquired and held directly or indirectly by the Registrant as a result of Common Units exchanged for Class A Shares. Common Units —Common Units are limited partner interests held by certain members of management, employees and other third parties in the Blue Owl Operating Partnerships. Subject to certain restrictions, Common Units are exchangeable on a one -for-one basis for either Class A Shares (if held by a non-Principal) or Class B Shares (if held by a Principal). Common Unit exchanges may be settled in cash at the election of the Company’s Exchange Committee (currently composed of independent members of the Board), and only if funded from proceeds of a new permanent equity offering. References to Common Units refer collectively to a Common Unit in each of the Blue Owl Operating Partnerships, but excludes any Common Units held directly or indirectly by the Registrant. Upon an exchange of Common Units for an equal number of Class A Shares or Class B Shares, a corresponding number of Class C Shares or Class D Shares, respectively, will be cancelled. Common Unitholders are entitled to distributions in the same amount per unit as declared on GP Units. Incentive Units —Incentive Units are Class P limited partner interests in the Blue Owl Operating Partnerships granted to certain members of management, employees and consultants (collectively, “Incentive Unit Grantees”) and are generally subject to vesting conditions, as further discussed in Note 10 to the Financial Statements and Note 8 to the financial statements in our Annual Report. Incentive Units are held indirectly through Blue Owl Management Vehicle LP on behalf of Incentive Unit Grantees. A vested Incentive Unit may convert into a Common Unit upon becoming economically equivalent on a tax basis to a Common Unit. Once vested, Incentive Unitholders are entitled to distributions in the same amount per unit as declared on GP Units and Common Units. Unvested Incentive Unitholders generally are not entitled to distributions; however, consistent with other Blue Owl Operating Group Units (other than Oak Street Earnout Units), unvested Incentive Units receive taxable income allocations that may subject holders to tax liabilities. As a result, Incentive Unitholders (consistent with other Blue Owl Operating Group Units other than Oak Street Earnout Units) may receive tax distributions on unvested units to cover a portion or all of such tax liabilities. Share Repurchases and RSUs Withheld for Tax Withholding On May 4, 2022, the Company’s Board authorized the repurchase of up to $ 150.0 million of Class A Shares. Under the repurchase program (the “Program”), repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of (i) the purchase of all shares available under the Program or (ii) December 31, 2024. There were no repurchases made under the Program during the three months ended March 31, 2024 and 2023. Pursuant to the terms of the Company’s RSU awards, upon the vesting of RSUs to employees, the Company net settles awards to satisfy employee tax withholding obligations. In such instances, the Company cancels a number of RSUs equivalent in value to the amount of tax withholding payments that the Company is making on behalf of employees out of available cash. F-9 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The following table presents RSUs withheld to satisfy tax withholding obligations during each of the indicated periods: Three Months Ended March 31, 2024 2023 Number of RSUs withheld to satisfy tax withholding obligations 969,149 319,306 Acquisitions-Related Earnouts In connection with the Oak Street Acquisition, the Company agreed to make additional payments of cash (“Oak Street Cash Earnout”) and Common Units (“Oak Street Earnout Units” and collectively with the Oak Street Cash Earnout, the “Oak Street Earnouts”) in two tranches upon the occurrence of certain “Oak Street Triggering Events.” The Oak Street Triggering Events are based on achieving a certain level of quarterly management fee revenues from the Company’s Real Estate products. In January 2023, the Oak Street Triggering Event occurred with respect to the First Oak Street Earnout. In January 2024, the Oak Street Triggering Event occurred with respect to the Second Oak Street Earnout. See Note 3 to the financial statements in the Company’s Annual Report for additional information. In connection with the Wellfleet Acquisition, the Company agreed to make additional payments of cash (“Wellfleet Earnout Cash”) and Class A Shares (“Wellfleet Earnout Shares” and collectively with the Wellfleet Earnout Cash, the “Wellfleet Earnouts”) to the sellers in three tranches at each anniversary following the closing of the transaction for three years , contingent upon the continued employment of certain Wellfleet employees (“Wellfleet Triggering Events”). In April 2023, the Company modified the Wellfleet Earnout Shares arrangement, such that the settlement of the Wellfleet Earnout Shares would be in cash at each payment date, including the settlement of the First Wellfleet Earnouts during the second quarter of 2023. In April 2024, the Wellfleet Triggering Event occurred with respect to the Second Wellfleet Earnout. See Note 3 to the financial statements in the Company’s Annual Report for additional information. Common Unit Exchanges From time to time, the Company exchanges Common Units and Class C Shares for an equal number of Class A Shares. As a result of these exchanges, the Company reallocates equity from noncontrolling interests to the Company’s additional paid-in capital and records additional deferred tax assets and TRA liability in connection with the exchanges. See the consolidated statement of stockholders’ equity for these amounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These unaudited, interim, consolidated financial statements (“Financial Statements”) are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation and combination. The notes are an integral part of the Company’s Financial Statements. In the opinion of management, all adjustments necessary for a fair presentation of the Company’s Financial Statements have been included and are of a normal and recurring nature. The Company’s comprehensive income (loss) is comprised solely of consolidated net income (loss) (i.e., the Company has no other comprehensive income). These interim Financial Statements should be read in conjunction with the annual report for the year ended December 31, 2023, filed with the SEC on Form 10-K (“Annual Report”). Prior to the Business Combination, Blue Owl’s financial statements were prepared on a consolidated basis. As part of the Business Combination, Securities was contributed to the Blue Owl Operating Group. Following the Business Combination, the financial statements are prepared on a consolidated basis. F-10 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The merger between Owl Rock and Altimar was accounted for as a reverse asset acquisition, with no step-up to fair value on any assets or liabilities, and therefore no goodwill or other intangible assets were recorded. The Acquisitions were accounted for using the acquisition method of accounting. As a result, the Company recorded the fair value of the net assets acquired as of the closing date of each respective acquisition, and operating results for each acquired business are included starting as of such each respective date. For details about Blue Owl’s significant accounting policies and accounting updates adopted in the prior year, see Note 2 to the financial statements in the Company’s Annual Report. During the three months ended March 31, 2024, there were no material updates to Blue Owl’s significant accounting policies. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the amounts reported in the Financial Statements. The most critical of these estimates are related to (i) the fair value of the investments held by the products the Company manages, as for many products, this impacts the amount of revenues the Company recognizes each period; (ii) the fair value of equity-based compensation grants; (iii) the fair values of liabilities with respect to the TRA (the portion considered contingent consideration), warrants and earnout liabilities; (iv) the estimate of future taxable income, which impacts the realizability and carrying amount of the Company’s deferred income tax assets; and (v) the qualitative and quantitative assessments of whether impairments of intangible assets and goodwill exist. Inherent in such estimates and judgements relating to future cash flows, which include the Company’s interpretation of current economic indicators and market valuations, are assumptions about the Company’s strategic plans with regard to its operations. While management believes that the estimates utilized in preparing the Financial Statements are reasonable and prudent, actual results could differ materially from those estimates. F-11 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 New Accounting Pronouncements The Company considers the applicability and impact of all ASUs issued by the FASB. ASUs not listed below were not applicable, not expected to have a material impact on the Company’s Financial Statements when adopted or did not have a significant impact on the Company’s Financial Statements upon adoption. Standard Description Effective Date and Method of Adoption Impact on Financial Statements ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures The guidance requires incremental disclosures related to a public entity’s reportable segment disclosure requirements. The amendments are as follows: • Introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”). • Extend certain annual disclosures to interim periods. • Clarify single reportable segment entities must apply ASC 280 in its entirety. • Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. • Permit more than one measure of segment profit or loss to be reported under certain conditions. The guidance does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. Effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. A public entity should apply the amendments in this update retrospectively to all prior periods presented in the financial statements. The Company plans to adopt the ASU beginning with the 2024 Form 10-K. The Company is currently evaluating the impact of the required disclosures for entities with a single reportable segment, as well as the nature of other new quantitative and qualitative disclosures in the ASU. ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures The ASU enhances income tax disclosures for public business entities by requiring entities to disclose: • A tabular rate reconciliation using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the statutory (i.e. expected) tax further broken out by nature and/or jurisdiction. • Income taxes paid (net of refunds received), broken out between federal (national), state/local and foreign, and amounts paid to individual jurisdictions when 5% or more of the total income taxes are paid. The ASU also includes other amendments, such as replacing the term ‘public entity’ with ‘public business entity’ and the removal of certain disclosures. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company plans to adopt the ASU beginning with the 2025 Form 10-K. The guidance will result in enhanced disclosures that will improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as well as income taxes paid disaggregated by jurisdiction. F-12 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 3. INTANGIBLE ASSETS, NET Intangible Assets, Net The following table summarizes the Company’s intangible assets, net: (dollars in thousands) March 31, 2024 December 31, 2023 Remaining Weighted-Average Amortization Period as of March 31, 2024 Intangible assets, gross: Investment management agreements $ 2,224,420 $ 2,224,420 11.5 years Investor relationships 460,300 460,300 8.4 years Total intangible assets, gross 2,684,720 2,684,720 Accumulated amortization: Investment management agreements ( 516,548 ) ( 471,104 ) Investor relationships ( 114,359 ) ( 103,608 ) Total accumulated amortization ( 630,907 ) ( 574,712 ) Total Intangible Assets, Net $ 2,053,813 $ 2,110,008 The following table presents expected future amortization of finite-lived intangible assets as of March 31, 2024: (dollars in thousands) Period Amortization April 1, 2024 to December 31, 2024 $ 169,819 2025 221,252 2026 207,408 2027 193,109 2028 189,458 Thereafter 1,072,767 Total $ 2,053,813 4. INVESTMENTS AND FAIR VALUE DISCLOSURES The following table presents the components of the Company’s investments: (dollars in thousands) March 31, 2024 December 31, 2023 Loans, at amortized cost (includes $ 207,500 and $ 207,500 of investments in the Company’s products, respectively) $ 214,038 $ 214,170 Equity investments in the Company’s products, equity method 55,677 51,316 Equity investments in the Company’s products, at fair value 85,682 76,258 Investments in the Company’s CLOs, at fair value 2,377 2,521 Total $ 357,774 $ 344,265 F-13 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 Fair Value Measurements Categorized within the Fair Value Hierarchy Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). The Company and the products it manages hold a variety of assets and liabilities, certain of which are not publicly traded or that are otherwise illiquid. Significant judgement and estimation go into the assumptions that drive the fair value of these assets and liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, prices from third parties (including independent pricing services and relevant broker quotes), models or other valuation methodologies based on pricing inputs that are neither directly nor indirectly market observable. Due to the inherent uncertainty of valuations of assets and liabilities that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the financial assets and liabilities. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Financial assets and liabilities measured at fair value are classified and disclosed into one of the following categories based on the observability of inputs used in the determination of fair values: • Level I – Quoted prices that are available in active markets for identical financial assets or liabilities as of the reporting date. • Level II – Valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. These financial assets and liabilities exhibit higher levels of liquid market observability as compared to Level III financial assets and liabilities. • Level III – Pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the financial asset or liability. The inputs into the determination of fair value of financial assets and liabilities in this category may require significant management judgment or estimation. The fair value of these financial assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, models or other valuation methodologies based on pricing inputs that are neither directly nor indirectly market observable (e.g., cash flows, implied yields). In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial asset or liability when the fair value is based on unobservable inputs. F-14 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The tables below summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023: March 31, 2024 (dollars in thousands) Level I Level II Level III Total Investments, at Fair Value Equity investments in the Company’s products $ — $ 85,682 $ — $ 85,682 CLOs — — 2,377 2,377 Total Assets, at Fair Value $ — $ 85,682 $ 2,377 $ 88,059 Liabilities, at Fair Value TRA liability $ — $ — $ 107,311 $ 107,311 Warrant liability — — 37,300 37,300 Earnout liability — 973 9,646 10,619 Total Liabilities, at Fair Value $ — $ 973 $ 154,257 $ 155,230 December 31, 2023 (dollars in thousands) Level I Level II Level III Total Investments, at Fair Value Equity investments in the Company’s products $ — $ 76,258 $ — $ 76,258 CLOs — — 2,521 2,521 Total Assets, at Fair Value $ — $ 76,258 $ 2,521 $ 78,779 Liabilities, at Fair Value TRA liability $ — $ — $ 116,398 $ 116,398 Warrant liability — — 22,600 22,600 Earnout liability — 790 92,119 92,909 Total Liabilities, at Fair Value $ — $ 790 $ 231,117 $ 231,907 F-15 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 Reconciliation of Fair Value Measurements Categorized within Level III Unrealized gains and losses on the Company’s assets and liabilities carried at fair value on a recurring basis are included within other loss in the consolidated statements of operations. There were no transfers in or out of Level III. The following table sets forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2024 and 2023: (dollars in thousands) Level III Assets Investment in CLOs Three Months Ended March 31, 2024 2023 Beginning balance $ 2,521 $ 2,843 Net losses ( 144 ) ( 165 ) Ending Balance $ 2,377 $ 2,678 Change in net unrealized losses on assets still recognized at the reporting date $ ( 144 ) $ ( 165 ) Three Months Ended March 31, 2024 Level III Liabilities (dollars in thousands) TRA Liability Warrant Liability Earnout Liability Total Beginning balance $ 116,398 $ 22,600 $ 92,119 $ 231,117 Settlements ( 8,551 ) — ( 82,875 ) ( 91,426 ) Net (gains) losses ( 536 ) 14,700 402 14,566 Ending Balance $ 107,311 $ 37,300 $ 9,646 $ 154,257 Change in net unrealized (gains) losses on liabilities still recognized at the reporting date $ ( 536 ) $ 14,700 $ 402 $ 14,566 Three Months Ended March 31, 2023 Level III Liabilities (dollars in thousands) TRA Liability Warrant Liability Earnout Liability Total Beginning balance $ 120,587 $ 8,550 $ 172,070 $ 301,207 Settlements — — ( 81,250 ) ( 81,250 ) Net losses 2,364 1,950 994 5,308 Ending Balance $ 122,951 $ 10,500 $ 91,814 $ 225,265 Change in net unrealized losses on liabilities still recognized at the reporting date $ 2,364 $ 1,950 $ 994 $ 5,308 Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Equity Investments in the Company’s Products The fair value of equity investments in the Company’s products is determined based on the published net asset value of these investments, as such values are the price at which contributions and redemptions are effectuated on a monthly basis. These investments are generally classified as Level II. The remaining balance is generally redeemable on a monthly basis at the Company’s option. CLOs The fair value of CLOs are determined based on inputs from independent pricing services. These investments are classified as Level III. The Company obtains prices from independent pricing services that utilize discounted cash flows, which take into account unobservable significant inputs, such as yield, prepayments and credit quality. F-16 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 TRA Liability The TRA related to the Dyal Acquisition is considered contingent consideration and is measured at fair value based on discounted future cash flows. The remaining TRA liability on the Company’s consolidated statements of financial condition is not measured at fair value. Warrant Liability The Company uses a Monte Carlo simulation model to value the Private Placement Warrants. The Company estimates the volatility of its Class A Shares based on the volatility implied by our peer group. The risk-free interest rate is based on U.S. Treasuries for a maturity similar to the expected remaining life of the warrants. The expected term of the warrants is assumed to be equivalent to their remaining contractual term. Earnout Liability As of March 31, 2024, the earnout liability was comprised of the Wellfleet Earnouts. As of December 31, 2023, the earnout liability was comprised of the Oak Street Cash Earnout and the Wellfleet Earnouts, each of which were deemed to be contingent consideration on the Oak Street Acquisition and Wellfleet Acquisition, respectively. The fair value of the Oak Street Cash Earnout was determined using a discounted cash flow model as of December 31, 2023. The fair value of the Wellfleet Earnouts, which are primarily comprised of future contingent cash payments, was determined using a discounted cash flow model. Quantitative Inputs and Assumptions for Fair Value Measurements Categorized within Level III The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of March 31, 2024: (dollars in thousands) Fair Value Valuation Technique Significant Unobservable Inputs Range Weighted Average Impact to Valuation from an Increase in Input Assets CLOs $ 2,377 Discounted cash flow Yield 13 % - 17 % 15 % Decrease Liabilities TRA liability $ 107,311 Discounted cash flow Discount Rate 12 % - 12 % 12 % Decrease Warrant liability 37,300 Monte Carlo Simulation Volatility 27 % - 27 % 27 % Increase Earnout liability: Wellfleet Earnouts 9,646 Discounted cash flow Discount Rate 6 % - 6 % 6 % Decrease Total Liabilities, at Fair Value $ 154,257 F-17 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of December 31, 2023: (dollars in thousands) Fair Value Valuation Technique Significant Unobservable Inputs Range Weighted Average Impact to Valuation from an Increase in Input Assets CLOs $ 2,521 Discounted cash flow Yield 15 % - 19 % 17 % Decrease Liabilities TRA liability $ 116,398 Discounted cash flow Discount Rate 11 % - 11 % 11 % Decrease Warrant liability 22,600 Monte Carlo Simulation Volatility 31 % - 31 % 31 % Increase Earnout liability: Oak Street Earnouts 82,875 Discounted cash flow Discount Rate 16 % - 16 % 16 % Decrease - Wellfleet Earnouts 9,244 Discounted cash flow Discount Rate 6 % - 6 % 6 % Decrease 92,119 Total Liabilities, at Fair Value $ 231,117 Fair Value of Other Financial Instruments As of March 31, 2024, the fair value of the Company’s debt obligations was approximately $ 1.8 billion compared to a carrying value of $ 2.1 billion, of which $ 1.2 billion of the fair value would have been categorized as Level II within the fair value hierarchy and the remainder as Level III. As of December 31, 2023, the fair value of the Company’s debt obligations was approximately $ 1.4 billion compared to a carrying value of $ 1.7 billion, of which $ 1.2 billion of the fair value would have been categorized as Level II within the fair value hierarchy and the remainder as Level III. Management estimates that the carrying value of the Company’s other financial instruments, which are not carried at fair value, approximated their fair values as of March 31, 2024 and December 31, 2023, respectively, and such fair value measurements are categorized as Level III within the fair value hierarchy. 5. LEASES The Company primarily has non-cancelable operating leases for its headquarters in New York and various other offices. The operating lease for the Company’s headquarters does not include any renewal options; however, certain of the Company’s other leases contain renewal and early termination options that the Company has determined are not reasonably certain of being exercised. (dollars in thousands) Three Months Ended March 31, Lease Cost 2024 2023 Operating lease cost $ 10,759 $ 8,171 Short term lease cost 37 62 Net Lease Cost $ 10,796 $ 8,233 F-18 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 (dollars in thousands) Three Months Ended March 31, Supplemental Lease Cash Flow Information 2024 2023 Cash paid (received) for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases (1) $ ( 9,065 ) $ 3,152 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,495 $ 35,933 (1) The amount presented above for the three months ended March 31, 2024, includes $ 14.7 million of tenant improvement allowances received from the lessor. Lease Term and Discount Rate March 31, 2024 December 31, 2023 Weighted-average remaining lease term: Operating leases 12.4 years 12.5 years Weighted-average discount rate: Operating leases 5.5 % 5.4 % (dollars in thousands) Future Maturity of Operating Lease Payments Operating Leases April 1, 2024 to December 31, 2024 $ 19,081 2025 36,427 2026 39,642 2027 38,435 2028 39,366 Thereafter 303,774 Total Lease Payments 476,725 Imputed interest ( 142,139 ) Total Lease Liabilities $ 334,586 Amounts presented in the table above are presented net of tenant improvement allowances and reflect the impacts of rent holiday periods. The Company has future operating lease payments of approximately $ 30.9 million related to leases that have not commenced that were entered into as of March 31, 2024. Such lease payments are not included in the table above or the Company’s consolidated statements of financial condition as operating lease assets and operating lease liabilities. These operating lease payments are anticipated to commence in the second quarter of 2024 and continue for approximately 14 years. F-19 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 6. OTHER ASSETS, NET (dollars in thousands) March 31, 2024 December 31, 2023 Fixed assets, net: Leasehold improvements $ 147,904 $ 127,612 Furniture and fixtures 13,936 13,823 Computer hardware and software 9,361 8,328 Accumulated depreciation and amortization ( 17,683 ) ( 14,870 ) Fixed assets, net 153,518 134,893 Receivables 11,386 15,853 Prepaid expenses 9,079 7,212 Unamortized debt issuance costs on revolving credit facilities 8,750 9,265 Other assets 13,903 20,232 Total $ 196,636 $ 187,455 7. DEBT OBLIGATIONS, NET The following tables summarize outstanding debt obligations of the Company: March 31, 2024 (dollars in thousands) Maturity Date Aggregate Facility Size Outstanding Debt Amount Available Net Carrying Value 2028 Notes 5/26/2028 $ 59,800 $ 59,800 $ — $ 58,504 2031 Notes 6/10/2031 700,000 700,000 — 687,585 2032 Notes 2/15/2032 400,000 400,000 — 393,000 2051 Notes 10/7/2051 350,000 350,000 — 338,030 Revolving Credit Facility 6/29/2028 1,550,000 595,000 948,300 595,000 Total $ 3,059,800 $ 2,104,800 $ 948,300 $ 2,072,119 December 31, 2023 (dollars in thousands) Maturity Date Aggregate Facility Size Outstanding Debt Amount Available Net Carrying Value 2028 Notes 5/26/2028 $ 59,800 $ 59,800 $ — $ 58,390 2031 Notes 6/10/2031 700,000 700,000 — 687,163 2032 Notes 2/15/2032 400,000 400,000 — 392,766 2051 Notes 10/7/2051 350,000 350,000 — 337,922 Revolving Credit Facility 6/29/2028 1,550,000 205,000 1,338,300 205,000 Total $ 3,059,800 $ 1,714,800 $ 1,338,300 $ 1,681,241 F-20 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 Revolving Credit Facility On December 7, 2021, the Company entered into a revolving credit facility (the “Revolving Credit Facility”), which was amended in June 2023 to increase total borrowing capacity to $ 1.6 billion and extend the maturity date to June 29, 2028. Amounts available for the Revolving Credit Facility presented in the tables above are reduced by outstanding letters of credit related to certain leases. Borrowings under the Revolving Credit Facility bear interest at the Company’s discretion at a rate (a) per annum of adjusted-term secured overnight financing rate (“SOFR”) plus a margin of 1.25 % to 1.875 %, plus 0.1 % term SOFR adjustment, or (b) the greater of the (i) prime rate, (ii) New York Fed Bank Rate plus 0.50 % or (iii) adjusted-term SOFR plus 1 %, plus a margin of 0.25 % to 0.875 %. The Company is subject to an undrawn commitment fee rate of 0.125 % to 0.375 % of the daily amount of available revolving commitment. The borrowing rates for balances outstanding under the Revolving Credit Facility as of March 31, 2024 and December 31, 2023, were 6.92 % and 6.96 % , respectively. As of the date of this report, the amount borrowed under the Revolving Credit Facility was fully repaid. For a description of terms of the other debt obligations presented in the tables above as well as related financial covenants, see Note 4 to the financial statements in the Company’s Annual Report. 8. COMMITMENTS AND CONTINGENCIES Tax Receivable Agreement Pursuant to the TRA, the Company will pay 85 % of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of any increases in tax basis of the assets of the Blue Owl Operating Group related to the Business Combination and any subsequent exchanges of Blue Owl Operating Group Units for shares of the Registrant or cash. Payments under the TRA will continue until all such tax benefits have been utilized or expired unless (i) the Company exercises its right to terminate the TRA and pays recipients an amount representing the present value of the remaining payments, (ii) there is a change of control or (iii) the Company breaches any of the material obligations of the TRA, in which case all obligations will generally be accelerated and due as if the Company had exercised its right to terminate the TRA. In each case, if payments are accelerated, such payments will be based on certain assumptions, including that the Company will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions. The estimate of the timing and the amount of future payments under the TRA involves several assumptions that do not account for the significant uncertainties associated with these potential payments, including an assumption that the Company will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make payments. During the three months ended March 31, 2024, the Company made a TRA payment of $ 28.2 million (including $ 2.8 million to related parties). The table below presents management’s estimate as of March 31, 2024, of the maximum amounts that would be payable under the TRA assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings. In light of the numerous factors affecting the Company’s obligation to make such payments, the timing and amounts of any such actual payments may differ materially from those presented in the table. (dollars in thousands) Potential Payments Under the Tax Receivable Agreement April 1, 2024 to December 31, 2024 $ — 2025 53,732 2026 62,268 2027 82,022 2028 82,180 Thereafter 858,518 Total Payments 1,138,720 Less adjustment to fair value for contingent consideration ( 121,341 ) Total TRA Liability $ 1,017,379 F-21 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 Unfunded Product Commitments As of March 31, 2024, the Company had unfunded investment commitments to its products of $ 33.2 million, which is exclusive of commitments that employees and other related parties have directly to the Company’s products, and which the Company expects to fund over the next several years. In addition, the Company has unfunded commitments under a promissory note with one of its products, as further discussed in Note 13. Indemnification and Guarantee Arrangements In the normal course of business, the Company enters into contracts that contain indemnities or guarantees for related parties of the Company, including the Company’s products, as well as persons acting on behalf of the Company or such related parties and third parties. The terms of the indemnities and guarantees vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined or the risk of material loss is remote, and therefore no amounts have been recorded in the consolidated statements of financial condition. As of March 31, 2024, the Company has not had prior claims or losses pursuant to these arrangements. Litigation From time to time, the Company is involved in legal actions in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows. F-22 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 9. REVENUES The following table presents a disaggregated view of the Company’s revenues: Three Months Ended March 31, (dollars in thousands) 2024 2023 Credit Platform Diversified lending $ 192,378 $ 146,095 Technology lending 59,210 47,690 First lien lending 4,103 4,485 Opportunistic lending 2,385 2,400 Liquid credit 6,799 7,518 Other 5,926 — Management Fees, Net 270,801 208,188 Administrative, transaction and other fees 47,421 20,091 Performance revenues 175 — Total GAAP Revenues - Credit Platform 318,397 228,279 GP Strategic Capital Platform GP minority stakes 139,786 130,296 GP debt financing 5,405 3,751 Professional sports minority stakes 1,232 402 Strategic Revenue-Share Purchase consideration amortization ( 10,660 ) ( 9,769 ) Management Fees, Net 135,763 124,680 Administrative, transaction and other fees 10,800 8,405 Total GAAP Revenues - GP Strategic Capital Platform 146,563 133,085 Real Estate Platform Net lease 41,334 25,957 Management Fees, Net 41,334 25,957 Administrative, transaction and other fees 5,176 3,159 Performance revenues 1,870 506 Total GAAP Revenues - Real Estate Platform 48,380 29,622 Total GAAP Revenues $ 513,340 $ 390,986 F-23 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The table below presents the beginning and ending balances of the Company’s management fees, performance revenues and administrative, transaction and other fees receivable and unearned management fees. Substantially all of the amounts receivable are collected during the following quarter. A liability for unearned management fees is generally recognized when management fees are paid to the Company in advance. The entire change in unearned management fees shown below relates to amounts recognized as revenues in the current year period. Management fees, performance revenues and administrative, transaction and other fees receivable are included within due from related parties and unearned management fees are included within accounts payable, accrued expenses and other liabilities in the Company’s consolidated statements of financial condition. Three Months Ended March 31, (dollars in thousands) 2024 2023 Management Fees Receivable Beginning balance $ 243,203 $ 262,059 Ending balance $ 270,139 $ 213,969 Administrative, Transaction and Other Fees Receivable Beginning balance $ 42,059 $ 44,060 Ending balance $ 41,805 $ 32,331 Performance Revenues Receivable Beginning balance $ 2,975 $ 1,132 Ending balance $ 1,184 $ 320 Unearned Management Fees Beginning balance $ 9,398 $ 9,389 Ending balance $ 7,610 $ 12,764 The table below presents the changes in the Company’s Strategic Revenue-Share Purchase consideration. The consideration paid in 2021, which includes $ 455.0 million paid in Class A Shares and $ 50.2 million in cash, is being amortized as a reduction of management fees, net in the Company’s consolidated statements of operations over a weighted-average period of 12 years, which represents the average period over which the related customer revenues are expected to be recognized. Three Months Ended March 31, (dollars in thousands) 2024 2023 Beginning Balance $ 417,081 $ 457,939 Amortization ( 10,660 ) ( 9,769 ) Ending Balance $ 406,421 $ 448,170 10. EQUITY-BASED COMPENSATION The Company grants equity-based compensation awards in the form of RSUs and Incentive Units to its management, employees, consultants and independent members of the Board under the 2021 Omnibus Equity Incentive Plan, as amended (“2021 Equity Incentive Plan”). Equity-based compensation awards are generally subject to a three to five-year requisite service period, although certain grants are immediately vested at grant. The total number of Class A Shares and Blue Owl Operating Group Units, collectively, that may be issued under the 2021 Equity Incentive Plan is 101,230,522 , of which 17,770,216 remain available as of March 31, 2024. To the extent that an award expires or is canceled, forfeited, terminated, surrendered, exchanged or withheld to cover tax withholding obligations, the unissued awards will again be available for grant under the 2021 Equity Incentive Plan. F-24 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 The table below presents information regarding equity-based compensation expense. Three Months Ended March 31, (dollars in thousands) 2024 2023 Acquisition related Oak Street Earnout Units $ — $ 19,868 Wellfleet Earnout Shares 2,103 811 Total acquisition related 2,103 20,679 Incentive Units 46,503 39,474 RSUs 17,107 13,122 Equity-Based Compensation Expense $ 65,713 $ 73,275 Corresponding tax benefit $ 825 $ 242 Fair value of RSUs settled in Class A Shares $ 22,580 $ 5,856 Fair value of RSUs withheld to satisfy tax withholding obligations $ 17,435 $ 4,400 11. INCOME TAXES The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income that is subject to tax, permanent differences between the Company’s GAAP earnings and taxable income, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change throughout the year as new events occur, additional information is obtained or as tax laws and regulations change. Accordingly, the effective tax rate for future interim periods may vary materially. The Registrant is a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal and state and local corporate-level income taxes on its share of taxable income from the Blue Owl Operating Group. Further, the Registrant’s income tax provision and related income tax assets and liabilities are based on, among other things, an estimate of the impact of exchanges of Common Units for Class A Shares, inclusive of an analysis of tax basis and state tax implications of the Blue Owl Operating Group and their underlying assets and liabilities. The Company’s estimate is based on the most recent information available. The tax basis and state impact of the Blue Owl Operating Group and their underlying assets and liabilities are based on estimates subject to finalization of the Company’s tax returns. The Blue Owl Operating Partnerships, are partnerships for U.S. federal income tax purposes and taxable entities for certain state and local taxes, such as New York City UBT. The Company had an effective tax rate of 11.7 % for the three months ended March 31, 2024 and 13.3 % for the three months ended March 31, 2023. The effective tax rates differed from the statutory rate primarily due to the portion of income allocated to noncontrolling interests, nondeductible compensation and state and local taxes. The Company regularly evaluates the realizability of its deferred tax asset and may recognize or adjust any valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax asset may not be realized. As of March 31, 2024, the Company has not recorded any valuation allowances. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the tax years that remain open under the statute of limitations may be subject to examinations by the appropriate tax authorities. The Company is generally no longer subject to state or local examinations by tax authorities for tax years prior to 2019. F-25 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 In connection with and subsequent to the Business Combination, the Company recorded to additional paid-in capital various adjustments to deferred tax assets and liabilities, as well as related impacts to the TRA liability, related to capital transactions. These adjustments primarily resulted from differences between the Company’s GAAP and tax basis in its investment in the Blue Owl Operating Partnerships, as well as portions related to the TRA liability that may eventually lead to additional tax basis in the Blue Owl Operating Partnerships upon future TRA payments. The deferred tax assets will be recovered as the basis is amortized. See the Company’s consolidated statements of stockholders’ equity for these amounts. 12. EARNINGS PER SHARE The table below presents the Company’s treatment for basic and diluted earnings per share for instruments outstanding of the Registrant and the Blue Owl Operating Group. Potentially dilutive instruments are only considered in the calculation to the extent they would be dilutive. Basic Diluted Class A Shares (1) Included Included Class B Shares None outstanding None outstanding Class C Shares and Class D Shares Non-economic voting shares of the Registrant Non-economic voting shares of the Registrant Vested RSUs (1) Contingently issuable shares Contingently issuable shares Unvested RSUs Excluded Treasury stock method Warrants (2) Excluded Treasury stock method Compensation-classified Wellfleet Earnout Shares (3) Excluded Excluded Contingent consideration-classified Wellfleet Earnout Shares (3) Excluded Excluded Potentially Dilutive Instruments of the Blue Owl Operating Group: Vested Common Units and Incentive Units (4) Excluded If-converted method Unvested Incentive Units (4) Excluded The Company first applies the treasury stock method to determine the number of units that would have been issued, then applies the if-converted method to the resulting number of units Oak Street Earnout Units (5) Excluded Contingently issuable shares If-converted method (1) Included in the weighted-average Class A Shares outstanding are RSUs that have vested but have not been settled in Class A Shares. These RSUs do not participate in dividends until settled in Class A Shares. These vested RSUs totaled 12,098,617 for the three months ended March 31, 2024, and 10,736,476 for the three months ended March 31, 2023. (2) The treasury stock method for warrants, which are carried at fair value, includes adjusting the numerator for changes in fair value impacting net income for the period. (3) During the second quarter of 2023, the Company modified the Wellfleet Earnout Shares arrangement such that settlement of the Wellfleet Earnout Shares would be in cash at each payment date. As a result of the modification, Wellfleet Earnout Shares are excluded from basic and diluted earnings per share for three months ended March 31, 2024. As of March 31, 2023, the Wellfleet Triggering Events with respect to the Wellfleet Earnout Shares had not occurred, and therefore such shares have not been included in the calculation of basic earnings per share for the three months ended March 31, 2023. However, had March 31, 2023, also been the end of the contingency period for the Wellfleet Earnout Shares, the Wellfleet Triggering Events would have occurred, and therefore the Wellfleet Earnout Shares have been included in the calculation of diluted earnings per share for the three months ended March 31, 2023, as if such shares were outstanding from the date of the Wellfleet Acquisition. (4) The if-converted method for these instruments includes adding back to the numerator any related income or loss allocations to noncontrolling interest, as well as any incremental tax expense had the instruments converted into Class A Shares as of the beginning of the period. F-26 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 (5) The Second Oak Street Earnouts and the First Oak Street Earnouts were settled as common units during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2023, the Oak Street Triggering Events with respect to the Second Oak Street Earnout Units had not occurred nor are these units issuable by the Registrant (they would be issued as Common Units of the Blue Owl Operating Group), and therefore such units have not been included in the calculation of basic earnings per share for the three months ended March 31, 2023. Had March 31, 2023, also been the end of the contingency period for the Second Oak Street Earnout Units, the Oak Street Triggering Event would have not occurred, and therefore the Second Oak Street Earnout Units have not been included in the calculation of diluted earnings per share for the three months ended March 31, 2023. Three Months Ended March 31, 2024 Net Income Attributable to Class A Shares Weighted-Average Class A Shares Outstanding Earnings Per Class A Share Weighted-Average Number of Antidilutive Instruments (dollars in thousands, except per share amounts) Basic $ 25,091 488,435,221 $ 0.05 Effect of dilutive securities: Unvested RSUs — 8,685,416 — Warrants ( 5,153 ) 1,617,910 — Vested Common Units — — 951,592,871 Vested Incentive Units — — 8,636,283 Unvested Incentive Units — — 25,282,958 Diluted $ 19,938 498,738,547 $ 0.04 Three Months Ended March 31, 2023 Net Income Attributable To Class A Shares Weighted-Average Class A Shares Outstanding Earnings Per Class A Share Weighted-Average Number of Antidilutive Instruments (dollars in thousands, except per share amounts) Basic $ 8,317 456,189,118 $ 0.02 Effect of dilutive securities: Unvested RSUs — 5,164,511 — Warrants ( 618 ) 200,334 — Compensation-classified Wellfleet Earnout Shares — 278,761 — Contingent consideration-classified Wellfleet Earnout Shares — 78,393 — Vested Common Units — — 961,462,973 Vested Incentive Units — — 6,406,975 Unvested Incentive Units — — 25,016,462 Diluted $ 7,699 461,911,117 $ 0.02 13. RELATED PARTY TRANSACTIONS The majority of the Company’s revenues, including all management fees and certain administrative, transaction and other fees, are earned from the products it manages, which are related parties of the Company. The Company also has arrangements in place with products that it manages, whereby certain costs are initially paid by the Company and subsequently are reimbursed by the products. These amounts are included within due from related parties in the Company’s consolidated statements of financial condition. F-27 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 (dollars in thousands) March 31, 2024 December 31, 2023 Management fees $ 270,139 $ 243,203 Performance revenues 1,184 2,975 Administrative fees 41,805 42,059 Other expenses paid on behalf of the Company’s products and other related parties 70,823 78,899 Due from Related Parties $ 383,951 $ 367,136 Administrative Fees Administrative fees represent allocable compensation and other expenses incurred by the Company, pursuant to administrative and other agreements, that are reimbursed by the products it manages and other related parties. These administrative fees are included within administrative, transaction and other fees on the consolidated statements of operations and totaled $ 24.0 million and $ 13.8 million for the three months ended March 31, 2024 and 2023, respectively. Dealer Manager Revenues Dealer manager revenues represent commissions earned from certain of the Company’s products for distribution services provided. These dealer manager revenues are included within administrative, transaction and other fees on the consolidated statements of operations and totaled $ 16.7 million and $ 8.8 million for the three months ended March 31, 2024 and 2023, respectively. Substantially all of these dealer manager revenues are subsequently paid out to third party broker-dealers, and such payments are recorded within general, administrative and other expenses on the consolidated statements of operations. Expense Support and Caps Arrangements The Company is party to expense support and cap arrangements with certain of the products it manages. Pursuant to these arrangements, the Company may absorb certain expenses of these products when in excess of stated expense caps or until such products reach certain profitability, cash flow or fundraising thresholds. In certain cases, the Company is able to recover these expenses once certain profitability, cash flow or fundraising thresholds are met. The Company recorded net expenses (recoveries) related to these arrangements of $( 1.8 ) million and $( 1.9 ) million for the three months ended March 31, 2024 and 2023, respectively. These net expenses (recoveries) are included in general, administrative and other expenses within the consolidated statements of operations. Aircraft Reimbursements In the normal course of business, the Company reimburses certain related parties for business use of their aircraft based on current market rates. Personal use of the aircraft is not charged to the Company. The Company recorded expenses for these aircraft reimbursements of $ 0.9 million for the three months ended March 31, 2024 and 2023, respectively. Promissory Notes On August 8, 2022, the Company entered into an interest-bearing revolving promissory note with a product it manages, allowing the product to borrow from the Company up to an aggregate of $ 250.0 million. On November 9, 2023, the promissory note was amended to maintain the total borrowing capacity of $ 250.0 million upon repayment of borrowings and established a maturity date of June 30, 2024 unless extended. The promissory note bears interest at a rate of SOFR plus 1.7 %, subject to change based on credit rating and leverage ratio. As of March 31, 2024, $ 200.0 million was outstanding under this promissory note, and the Company recorded $ 3.6 million of interest income for the three months ended March 31, 2024. As of March 31, 2023, $ 250.0 million was outstanding under this promissory note and the Company recorded $ 4.1 million of interest income for the three months ended March 31, 2023. Interest is payable monthly in arrears and may be settled in cash or equity in the related product. Any unpaid principal balance and unpaid accrued interest is payable at maturity. F-28 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) March 31, 2024 On November 15, 2022, the Company entered into an interest-bearing revolving promissory note with a product it manages, allowing the product to borrow from the Company up to an aggregate of $ 15.0 million. The promissory note bears interest at a rate of SOFR plus 4.75 %, with any such interest amounts capitalized monthly. Any unpaid principal balance and unpaid accrued interest may be prepaid in full or in part any time prior to maturity in January 2026. As of March 31, 2024, $ 7.5 million was outstanding under this promissory note and the Company recorded $ 0.2 million of interest income for the three months ended March 31, 2024. As of March 31, 2023, $ 4.5 million was outstanding under this promissory note and the Company recorded $ 0.1 million of interest income for the three months ended March 31, 2023. 14. SUBSEQUENT EVENTS Dividend On May 2, 2024, the Company announced a cash dividend of $ 0.18 per Class A Share. The dividend is payable on May 30, 2024, to holders of record as of the close of business on May 21, 2024. Acquisitions In April 2024, the Company announced its entry into an agreement to acquire Kuvare Insurance Services LP (dba Kuvare Asset Management) (“KAM”), a boutique investment management firm focused on providing asset management services to the insurance industry, including Kuvare UK Holdings (“Kuvare”), for $ 750 million (the “KAM Acquisition”). The Company will fund the KAM Acquisition through a combination of $ 325 million in cash and $ 425 million in Blue Owl Class A common stock. The KAM Acquisition is expected to close in the second or third quarter of 2024 and remains subject to customary regulatory approvals and other closing conditions and specified termination rights. Separately, the Company made a long-term investment in Kuvare, purchasing $ 250 million of preferred equity. In April 2024, the Company announced its entry into an agreement to acquire Prima Capital Advisors (“Prima”) for $ 170 million (the “Prima Acquisition”). The Prima Acquisition will be funded through a combination of approximately $ 157 million of Class A Shares, Class C Shares and Blue Owl Operating Group Units and approximately $ 13 million in cash, subject to certain closing consideration adjustments. The Prima Acquisition is expected to close in the second or third quarter of 2024, subject to customary closing conditions. 2034 Notes In April 2024, the Company, through its indirect subsidiary, Blue Owl Finance LLC, issued $ 750.0 million aggregate principal amount of 6.250 % Senior Notes due 2034 (the “2034 Notes”). The 2034 Notes bear interest at a rate of 6.250 % per annum and mature on April 18, 2034. Interest on the 2034 Notes will be payable semi-annually in arrears on April 18 and October 18 of each year, commencing October 18, 2024. Proceeds from the 2034 Notes were used to repay the outstanding borrowings under the Revolving Credit Facility. The remaining proceeds will be used for general corporate purposes, including to fund any future strategic acquisitions or related transactions and growth initiatives. The 2034 Notes are fully and unconditionally guaranteed, jointly and severally, by the Registrant, Blue Owl Operating Partnerships and certain of their subsidiaries. The guarantees are unsecured and unsubordinated obligations of the guarantors. All or a portion of the 2034 Notes may be redeemed at the Company’s option in whole, at any time, or in part, from time to time, prior to their stated maturity, subject to a make-whole redemption price; provided, however, that if the Company redeems any amounts on or after January 18, 2034, the redemption price for the 2034 Notes will be equal to 100 % of the principal amount of the amounts redeemed, in each case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the 2034 Notes are subject to repurchase by the Company at a repurchase price in cash equal to 101 % of the aggregate principal amount repurchased plus any accrued and unpaid interest. The 2034 Notes also provide for customary events of default and acceleration. F-29