What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-01 · 156 added, 160 removed, 603 unchanged (34% of the section changed)

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Business” in the Annual Report.

2024 Second Quarter Overview

Three Months Ended June 30, Six Months Ended June 30,

2024 Third Quarter Overview

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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Please see “—GAAP Results of Operations Analysis” and “—Non-GAAP Analysis” for a detailed discussion of the underlying drivers of our results.

On June 6, 2024, we completed the Prima Acquisition (as defined in Note 1 to our Financial Statements) for $173 million, through a combination of cash and Blue Owl equity, creating our real estate finance strategy.

On July 1, 2024, we completed the KAM Acquisition (as defined in Note 1 to our Financial Statements).

KAM is a boutique investment management firm focused on providing asset management services to the insurance industry.

KAM’s capabilities in investment grade credit and real estate strategies supplement Blue Owl’s existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for insurance clients.

Our acquisition of KAM enhances our ability to serve the insurance market at scale and marks the official launch of Blue Owl Insurance Solutions.

Working seamlessly across our investment platforms, Blue Owl Insurance Solutions combines the focused alternatives approach with expanded industry capabilities to now serve insurance clients across a broader range of their needs.

See Note 3 to our Financial Statements for additional information.

Additionally, subject to achievement of certain milestones, we will deliver earnout consideration in the form of Class A Shares representing an aggregate value of approximately $26.3 million and earnout consideration in the form of Class C Shares and Common Units representing an aggregate value of up to approximately $8.7 million, representing a total value of up to $35.0 million.

On July 1, 2024, we completed the KAM Acquisition (as defined in Note 14 to our Financial Statements) for $750 million.

We funded the KAM Acquisition through a combination of $325 million in cash and $425 million in Blue Owl Class A common stock, subject to certain closing consideration adjustments.

In addition, there is potential for up to a $250 million earnout subject to certain adjustments and achievements of future revenue targets.

On July 16, 2024 we announced our entry into an agreement to acquire substantially all of the assets of Atalaya Capital Management LP (“Atalaya”), Atalaya Capital Leasing LLC and Atalaya’s other investment advisor affiliates and subsidiaries (the “Atalaya Acquisition”) for $450 million.

The Atalaya Acquisition will be funded through a combination of approximately $350 million of Class A Shares, Common Units and corresponding Class C Shares, and cash of approximately $100 million, subject to certain closing consideration adjustments.

Additionally, subject to achievement of certain revenue targets, we will deliver earnout consideration in the form of Common Units and Class C Shares representing an aggregate value of up to approximately $350 million.

The Atalaya Acquisition is expected to close in the second half of 2024, subject to customary closing conditions.

On September 30, 2024, we completed the Atalaya Acquisition (as defined in Note 1 to our Financial Statements).

Atalaya focuses primarily on asset-based credit investments across consumer and commercial finance, corporate and real estate assets.

The completion of the acquisition of Atalaya’s business represents a significant expansion of Blue Owl’s alternative credit presence.

See Note 3 to our Financial Statements for additional information.

On October 7, 2024, we announced the IPI Acquisition (as defined in Note 14 to our Financial Statements).

The aggregate consideration for the IPI Acquisition will be approximately $1.0 billion.

We will fund the IPI Acquisition through a combination of approximately $788.6 million in Common Units and corresponding Class C Shares and approximately $203.8 million in cash, subject to certain closing consideration adjustments.

In addition, in connection with the IPI Acquisition, we will enter into a services agreement with ICONIQ (as defined in Note 14 to our Financial Statements) (the “Services Agreement”), pursuant to which ICONIQ will provide certain services, including investment analysis and investor relations services to us or our subsidiaries.

Under the terms of the Services Agreement, in 2026 we expect to issue 14,175,000 Incentive Units, subject to future targets.

We also expect to issue in 2027 or 2028 a meaningful amount of additional Incentive Units pursuant to the Services Agreement, subject to the achievement of certain future targets.

The Incentive Units will be fully vested upon issuance.

The IPI Acquisition is expected to close in the fourth quarter of 2024 or first quarter of 2025, subject to certain closing conditions including third party consents.

Assets Under Management

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$29.8 billion

Diversified Lending

Commenced 2016

Direct Lending

$91.0 billion

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GP Minority Stakes

Commenced 2010

$58.4 billion

$33.6 billion

Commenced 2009

$28.9 billion

$16.1 billion

Technology Lending

Commenced 2018

$22.4 billion

Alternative Credit

$10.6 billion

GP Debt Financing

Commenced 2019

Real Estate Finance

Commenced 2024

Real Estate Credit

$15.2 billion

First Lien Lending

Commenced 2018

$13.6 billion

Investment Grade Credit

$17.3 billion

$16.3 billion

Professional Sports

Minority Stakes

Commenced 2021

Opportunistic Lending

Commenced 2020

Liquid Credit

Commenced 2022

All amounts shown as of June 30, 2024, totals may not sum due to rounding.

As of June 30, 2024, our AUM was $192.2 billion, which included $121.5 billion of FPAUM.

As of June 30, 2024, we have $15.9 billion in AUM not yet paying fees, providing over $200 million of annualized management fees once deployed.

All amounts shown as of September 30, 2024, totals may not sum due to rounding.

As of September 30, 2024, our AUM was $234.6 billion, which included $154.2 billion of FPAUM.

As of September 30, 2024, we have $21.7 billion in AUM not yet paying fees, providing over $260 million of annualized management fees once deployed.

See “—Assets Under Management” for additional information, including important information on how we define these metrics.

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Our business is impacted by conditions in the financial markets and economic conditions in the United States, and to a lesser extent, globally.

We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, including during periods of market uncertainty and volatility.

During the second quarter of 2024, industry M&A and capital markets activity remained moderately constructive, a continuation of the improvement relative to late 2022 and early 2023.

Over the past twelve months, 91% of our GAAP management fees and 92% of our FRE management fees were generated by Permanent Capital and the remainder was predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions.

Fundraising and capital deployment contributed to management fee growth of 21% over the last twelve months.

We ended the second quarter of 2024 with substantial available capital to deploy, reporting $15.9 billion of AUM not yet paying fees.

The second quarter of 2024 was our most active deployment quarter ever, with $19 billion of originations, as direct lenders continued to play a significant role in new deals, add-ons and refinancings alongside the syndicated market.

For Blue Owl, positive net deployment and ongoing capital raising continued to drive management fees higher while the credit quality of our portfolio remains strong.

We continue to see attractive deployment opportunities for our GP Strategic Capital products, as capital needs across the private alternative asset management sector remain elevated, particularly in the current challenging fundraising and realization environment.

We continue to raise capital across our large-cap and mid-cap GP stakes strategies.

In Real Estate, we continue to actively deploy capital in our net lease strategy at attractive cap rates in the mid to high 7 percent range behind our four major themes:

We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, particularly during periods of market uncertainty and volatility, as we have seen over the past few years.

During the third quarter of 2024, industry M&A and capital markets activity remained moderately constructive, a continuation of the improvement relative to late 2022 and early 2023.

Over the past twelve months, 91% of our GAAP and FRE management fees were generated by Permanent Capital and the remainder was predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions.

Fundraising and capital deployment contributed to management fee growth of over 25% over the last twelve months.

We ended the third quarter of 2024 with substantial available capital to deploy, reporting approximately $21.7 billion of AUM not yet paying fees.

We continued to execute on our strategic M&A plans in the third quarter, closing our acquisitions of Kuvare Asset Management and Atalaya Capital Management, adding over $30 billion to AUM.

Subsequent to quarter end, we announced our intention to acquire IPI’s business, reflecting a significant step forward in Blue Owl’s presence in the digital infrastructure ecosystem.

Pro-forma for IPI, our AUM exceeds a quarter of a trillion dollars.

Together, these businesses further diversify our business and further expand Blue Owl’s strong positioning within the largest transformational shifts happening within financial markets.

The third quarter of 2024 was once again a very active quarter for deployment, with $11 billion of originations, as direct lenders continued to play a significant role in new deals, add-ons and refinancings alongside the syndicated market.

For Blue Owl, positive net deployment and ongoing capital raising remained key drivers of higher management fees and the credit quality of our portfolio remained strong.

We continue to see attractive deployment opportunities for our GP Strategic Capital products, as capital needs across the private alternative asset management sector remain elevated.

We raised incremental capital in our GP minority stakes strategy from both the Institutional and Private Wealth channels.

During the third quarter, Blue Owl GP Stakes III completed a strip sale of certain assets within the fund, providing liquidity for existing investors while offering a creative way for new investors to access to our pool of leading notable Partner Managers.

In Real Estate, we continue to actively deploy capital in our net lease strategy at attractive cap rates behind our four major themes:

digital infrastructure, onshoring, healthcare real estate and essential retail.

Investors in our net lease strategy continue to benefit from inflation-mitigation, highly predictable net rent growth and long-duration contractual income across the portfolio.

We also closed the Prima Acquisition during the second quarter, forming the base of our newly launched real estate finance strategy and expanding the array of financing solutions we offer.

The capital needs in each of these areas remains very significant, and we continue to see strong demand from investors in these products.

During the third quarter, we held an early close for our Europe net lease strategy and deployed capital across net lease and real estate credit strategies.

We are continuing to closely monitor developments related to the macroeconomic factors that have contributed to market volatility, and to assess the impact of these factors on financial markets and on our business.

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Risk Factors — Risks Related to Macroeconomic Factors ” in our Annual Report.

Additionally, we intend to pursue strategic acquisitions and investments to accelerate our growth and broaden our product offerings.

Additionally, we intend to continue pursuing strategic acquisitions and investments to accelerate our growth and broaden our product offerings.

Our acquisition strategy is centered around driving additional scale or expanding capabilities that complement or augment our existing products.

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In addition, our calculation of AUM includes amounts that are fee exempt (i.e., not subject to fees).

As of June 30, 2024, assets under management related to us, our executives and other employees totaled approximately $3.9 billion (including $1.8 billion related to accrued carried interest).

As of September 30, 2024, assets under management related to us, our executives and other employees totaled approximately $4.4 billion (including $1.8 billion related to accrued carried interest).

A portion of these assets under management are not charged fees.

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AUM not yet paying fees could provide over $260 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays.

All amounts shown as of June 30, 2024, totals may not sum due to rounding.

All amounts shown as of September 30, 2024, totals may not sum due to rounding.

Permanency and Duration of Assets Under Management

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Changes in AUM

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(dollars in millions) Credit GP Strategic Capital Real Estate Total Credit GP Strategic Capital Real Estate Total

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Ending Balance $ 128,443 $ 62,027 $ 44,113 $ 234,583 $ 79,527 $ 51,398 $ 25,941 $ 156,866

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(dollars in millions) Credit GP Strategic Capital Real Estate Total Credit GP Strategic Capital Real Estate Total

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Ending Balance $ 128,443 $ 62,027 $ 44,113 $ 234,583 $ 79,527 $ 51,398 $ 25,941 $ 156,866

The increase in AUM for the six months ended June 30, 2024 was driven by the following:

• $3.3 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.

• $1.8 billion new capital raised in first lien lending, primarily driven by recently launched products.

• $0.8 billion new capital raised in technology lending, primarily driven by continued private wealth fundraising in OTIC.

• $5.2 billion of additional net debt commitments, primarily in diversified lending and technology lending strategies as we continue to opportunistically manage leverage in our BDCs.

• $2.9 billion offsetting decrease in distributions, which primarily relate to distributions paid from our BDCs.

The increase in AUM for the nine months ended September 30, 2024 was driven by the following:

• $27.8 billion driven by the products added in connection with the KAM Acquisition and the Atalaya Acquisition.

• $8.2 billion new capital raised in direct lending, primarily driven by continued private wealth fundraising in OCIC and OTIC, as well as additional fundraise in other recently launched products.

• $8.2 billion of additional net debt commitments, primarily in direct lending as we continue to opportunistically manage leverage in our BDCs.

• $4.7 billion offsetting decrease in distributions, which primarily relates to distributions paid from our BDCs and CLOs.

Redemptions and repurchases from these products were not material.

• $1.7 billion of overall appreciation across the platform.

• $2.9 billion of overall appreciation across the platform, primarily in direct lending.

GP Strategic Capital.

The increase in AUM for the six months ended June 30, 2024 was driven by overall appreciation primarily in our GP minority stakes strategy of $2.4 billion and new capital raised of $2.0 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product.

The increase in AUM for the six months ended June 30, 2024 was driven by the products added in connection with the Prima Acquisition that closed in June 2024 and new capital raised of $1.7 billion across various products, primarily Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, and Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown product.

The increase in AUM for the nine months ended September 30, 2024 was driven by new capital raised of $5.4 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product, and overall appreciation primarily in our GP minority stakes strategy of $3.3 billion.

The increase in AUM for the nine months ended September 30, 2024 was driven by $15.2 billion of products added in connection with the Prima Acquisition (as defined in Note 1 to our Financial Statements) and the KAM Acquisition, as well as new capital raised of $3.0 billion across various products, primarily Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, and Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown product.

Changes in FPAUM

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(dollars in millions) Credit GP Strategic Capital Real Estate Total Credit GP Strategic Capital Real Estate Total

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Ending Balance $ 89,301 $ 35,116 $ 29,765 $ 154,182 $ 54,300 $ 28,622 $ 14,099 $ 97,021

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(dollars in millions) Credit GP Strategic Capital Real Estate Total Credit GP Strategic Capital Real Estate Total

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Ending Balance $ 89,301 $ 35,116 $ 29,765 $ 154,182 $ 54,300 $ 28,622 $ 14,099 $ 97,021

The increase in FPAUM for the six months ended June 30, 2024 was driven by the following:

• $5.4 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.

• $1.8 billion new capital raised in technology lending, driven by continued private wealth fundraising in OTIC.

• $0.5 billion new capital raised in our strategic equity investment strategy.

• $2.7 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs.

The increase in FPAUM for the nine months ended September 30, 2024 was driven by the following:

• $22.8 billion driven by the products added in connection with the KAM Acquisition and the Atalaya Acquisition.

• $10.3 billion new capital raised in direct lending, primarily driven by continued private wealth fundraising in OCIC, OTIC.

• $4.3 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs and CLOs.

Redemptions and repurchases from these products were not material.

• $1.5 billion of overall appreciation across the platform.

• $2.4 billion of overall appreciation across the platform, primarily in direct lending.

GP Strategic Capital.

The increase in FPAUM for the six months ended June 30, 2024 was driven by new capital raised of $1.7 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product.

The increase in FPAUM for the six months ended June 30, 2024 was driven by the products added in connection with the Prima Acquisition that closed in June 2024, and by capital raised and deployment of $1.9 billion primarily in ORENT and OREF VI.

The increase in FPAUM for the nine months ended September 30, 2024 was driven by new capital raised of $4.1 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product.

The increase in FPAUM for the nine months ended September 30, 2024 was driven by the $13.5 billion of products added in connection with the Prima Acquisition and the KAM Acquisition, as well as capital raised and deployed of $3.3 billion, primarily in ORENT and OREF VI.

Product Performance

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Value Gross (8) Net (9) Gross (10) Net (11)

Diversified Lending (1)

Direct Lending

Blue Owl Capital Corporation (1) 2016 $ 15,071 $ 5,977 $ 5,977 $ 3,369 $ 5,994 $ 9,363 1.84x 1.59x 13.7 % 9.8 %

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(1)(2) 2020 $ 25,257 $ 12,436 $ 11,551 $ 1,428 $ 11,847 $ 13,275 NM 1.17x NM 11.2 %

Technology Lending (1)

Blue Owl Technology Finance Corp.

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(1)(2) 2022 $ 5,681 $ 2,797 $ 2,578 $ 289 $ 2,641 $ 2,930 NM 1.15x NM 11.6 %

First Lien Lending (3)

Blue Owl First Lien Fund Levered (3) 2018 $ 1,636 $ 986 $ 912 $ 570 $ 677 $ 1,247 1.45x 1.38x 10.7 % 8.8 %

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GAAP Results of Operations Analysis

Three Months Ended June 30, 2024, Compared to the Three Months Ended June 30, 2023

Three Months Ended June 30,

Three Months Ended September 30, 2024, Compared to the Three Months Ended September 30, 2023

Three Months Ended September 30,

(dollars in thousands) 2024 2023 $ Change

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Total Expenses 461,110 336,185 124,925

Net gains on investments 2,624 3,030 (406)

Net gains (losses) on investments 3,748 (1,227) 4,975

Interest and dividend income 12,213 5,686 6,527

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See Note 9 to our Financial Statements for additional details on our GAAP management fees by strategy.

• Credit increased $71.8 million, including an increase in Part I Fees of $36.3 million, due to continued fundraising and deployment of capital within new and existing Credit products.

• Credit increased $99.3 million, including an increase in Part I Fees of $42.5 million, due to continued fundraising and deployment of capital primarily within new and existing direct lending products, as well as management fees from products relating to the KAM Acquisition of $13.3 million.

• GP Strategic Capital increased $21.3 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.

• Real Estate increased $11.8 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.

• Real Estate increased $16.7 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily ORENT and OREF VI, as well as management fees from products relating to the Prima Acquisition of $4.9 million and the KAM Acquisition of $3.5 million.

Administrative, Transaction and Other Fees .

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• $61.1 million increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

• $10.9 million offsetting decrease in equity-based compensation, primarily reflecting an $18.7 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2024, partially offset by an $8.0 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation.

• $2.6 million increase in equity-based compensation, primarily due to a $22.7 million increase in our recurring annual equity grants driven in part by additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation, partially offset by a $19.1 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2024.

• $6.6 million offsetting decrease in acquisition-related cash compensation, primarily due to the settlement of the Second Oak Street Earnout in January 2024.

Amortization of Intangible Assets.

Amortization of intangible assets decreased $59.2 million reflecting the increase in trademarks amortization as a result of corporate actions taken in the prior year period that resulted in a shorter useful life.

Amortization of intangible assets increased $12.0 million reflecting the increase in intangible assets as a result of the KAM Acquisition and Prima Acquisition.

General, Administrative and Other Expenses .

General, administrative and other expenses increased primarily due to the following:

• $35.2 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Atalaya Acquisition.

• $10.0 million increase in distribution costs, primarily related to our Credit and Real Estate Products.

• $9.6 million increase in reimbursed expenses, primarily related to dealer manager expenses, due to growth in our products and business overall.

• $7.9 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Prima Acquisition.

• The remaining net change was across various categories, driven by our continued growth.

• The remaining net change was across various categories, primarily in office-related and other expenses driven by our continued growth.

Interest and Dividend Income.

The increase in interest and dividend income was driven by dividend income from the preferred equity investment related to the KAM Acquisition.

The increase in interest and dividend income was driven by dividend income from the preferred equity investment made in April 2024 in Kuvare UK Holdings.

Interest Expense .

The increase in interest expense was driven by higher average debt outstanding, reflecting the issuance of senior notes during the three months ended June 30, 2024.

Change in TRA Liability.

The change in TRA for the current year and prior year periods was driven by changes in fair value attributable to the portion of the TRA classified as contingent consideration from the Business Combination.

The change for the current year period was driven by the passage of time, while the change for the prior year period was driven by a combination of a higher discount rate, a change in the expected timing of future payments and the passage of time.

The increase in interest expense was driven by higher average debt outstanding due to the issuance of the 6.250% Senior Notes due 2034 (the “2034 Notes”) during the second quarter of 2024.

Change in Earnout Liability.

The change in the earnout liability for the current year period was driven by the change in the fair value of the KAM Earnouts (as described in Note 3 to our Financial Statements).

Income Tax Expense

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Net income attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s post-Business Combination net income due to the drivers discussed above.

The Common Units represent an approximately 66% and 68% weighted average economic interest in the Blue Owl Operating Group for the three months ended June 30, 2024 and June 30, 2023, respectively.

Six Months Ended June 30, 2024, Compared to the Six Months Ended June 30, 2023

Six Months Ended June 30,

The Common Units represent approximately 61% and 67% weighted average economic interest in the Blue Owl Operating Group for the three months ended September 30, 2024 and September 30, 2023, respectively.

The decrease in the Common Units’ interest in the Blue Owl Operating Group was primarily due to exchanges of Common Units for Class A Shares, as well as Class A Shares issued in connection with the Prima and KAM Acquisitions.

Nine Months Ended September 30, 2024, Compared to the Nine Months Ended September 30, 2023

Nine Months Ended September 30,

(dollars in thousands) 2024 2023 $ Change

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See Note 9 to our Financial Statements for additional details on our GAAP management fees by strategy.

• Credit increased $134.4 million, including an increase in Part I Fees of $69.5 million, due to continued fundraising and deployment of capital within new and existing Credit products.

• Credit increased $233.7 million, including an increase in Part I Fees of $112.0 million, due to continued fundraising and deployment of capital primarily within new and existing Credit products.

• GP Strategic Capital increased $42.7 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.

• Real Estate increased $27.1 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.

• Real Estate increased $43.9 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT, as well as management fees from products relating to the Prima Acquisition of $6.3 million and KAM Acquisition of $3.5 million.

Administrative, Transaction and Other Fees .

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• $54.4 million increase in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.

• $17.9 million increase in dealer manager revenues, due primarily to growth in the distribution of our retail OCIC and ORENT.

• $27.2 million increase in dealer manager revenues, due primarily to growth in the distribution of OCIC and ORENT.

• $22.1 million increase in administrative fees, driven by a higher level of reimbursable compensation expenses due to growth of our products and business overall.

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Amortization of Intangible Assets.

Amortization of intangible assets decreased $73.9 million due to increased trademarks amortization as a result of corporate actions taken in the prior year period that resulted in a shorter useful life.

Amortization of intangible assets decreased $61.9 million, primarily due to increased trademarks amortization taken in the prior year period as a result of corporate actions that resulted in a shorter useful life.

General, Administrative and Other Expenses .

General, administrative and other expenses increased, primarily driven by the following:

• $51.2 million increase in Transaction Expenses, primarily due to the KAM Acquisition, Atalaya Acquisition and Prima Acquisition.

• $34.2 million increase in distribution costs, primarily related to our Credit and Real Estate products.

• $28.0 million increase in reimbursed expenses, primarily related to dealer manager expenses, due to growth in our products and business overall.

• $16.0 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Prima Acquisition.

• The remaining net change was across various categories, driven by our continued growth.

• The remaining net change was across various categories, primarily in office-related and other expenses driven by our continued growth.

Interest and Dividend Income.

The increase in interest and dividend income was driven by dividend income from the preferred equity investment related to the KAM Acquisition.

The increase in interest and dividend income was driven by dividend income from the preferred equity investment made in April 2024 in Kuvare UK Holdings.

Interest Expense .

The increase in interest expense was driven by higher average debt outstanding, reflecting the issuance of senior notes during the six months ended June 30, 2024.

Change in TRA Liability.

The change for the current year period was driven by a combination of a change in the expected timing of future payments, the passage of time and a higher discount rate, while the change for the prior year period was driven by a combination of a change in the expected timing of future payments and the passage of time.

The increase in interest expense was driven by higher average debt outstanding, reflecting the issuance of the 2034 Notes during the second quarter of 2024.

Change in Warrant Liability.

The change in the warrant liability for the current and prior period was driven by the increase in the price of our Class A Shares.

Change in Earnout Liability.

The change in the earnout liability for the current year period was driven by the change in the fair value of the KAM Earnouts (as described in Note 3 to our Financial Statements).

Income Tax Expense

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Net income attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s net income or loss due to the drivers discussed above.

The Common Units represented an approximately 65% and 68% weighted average economic interest in the Blue Owl Operating Group for the six months ended June 30, 2024 and June 30, 2023, respectively.

The Common Units represented an approximately 64% and 68% weighted average economic interest in the Blue Owl Operating Group for the nine months ended September 30, 2024 and September 30, 2023, respectively.

Non-GAAP Analysis

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Fee-Related Earnings and Distributable Earnings Summary

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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Distributable Earnings $ 301,007 $ 229,523 $ 814,071 $ 665,553

Fee-Related Earnings and Distributable Earnings for the three months ended June 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.

Fee-Related Earnings and Distributable Earnings for the six months ended June 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.

Three Months Ended June 30, Six Months Ended June 30,

Fee-Related Earnings and Distributable Earnings for the three months ended September 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.

Fee-Related Earnings and Distributable Earnings for the nine months ended September 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

Credit Platform

Diversified lending $ 208,010 $ 155,086 $ 400,388 $ 301,181

Technology lending 61,428 48,097 120,638 95,787

First lien lending 3,410 4,748 7,513 9,233

Opportunistic lending 2,398 2,475 4,783 4,875

Direct lending $ 296,974 $ 219,297 $ 830,296 $ 630,373

Alternative credit 671 — 671 —

Investment grade credit 13,260 — 13,260 —

Liquid credit 7,750 6,590 21,285 20,244

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Net lease 41,246 32,987 123,433 89,386

Real estate finance 1,356 — 1,356 —

Real estate credit 8,459 — 9,815 —

Management Fees, Net 49,705 32,987 133,248 89,386

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FRE Management Fees .

For the three months ended June 30, 2024, the increase in FRE management fees was primarily driven by the following:

• Credit FRE management fees increased $71.8 million, including an increase in Part I Fees of $36.3 million, due to continued fundraising and deployment of capital within new and existing Credit products.

For the three months ended September 30, 2024, the increase in FRE management fees was primarily driven by the following:

• Credit FRE management fees increased $99.3 million, including an increase in Part I Fees of $42.5 million, due to continued fundraising and deployment of capital primarily within new and existing direct lending products, as well as management fees from products relating to the KAM Acquisition of $13.3 million.

• GP Strategic Capital FRE management fees increased $21.7 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.

• Real Estate FRE management fees increased $11.8 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.

• Real Estate FRE management fees increased $16.7 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily ORENT and OREF VI, as well as management fees from products relating to the Prima Acquisition of $4.9 million and the KAM Acquisition of $3.5 million.

FRE Management Fees .

For the six months ended June 30, 2024, the increase in FRE management fees was primarily driven by the following:

• Credit FRE management fees increased $134.4 million, including an increase in Part I Fees of $69.5 million, due to continued fundraising and deployment of capital within new and existing Credit products.

For the nine months ended September 30, 2024, the increase in FRE management fees was primarily driven by the following:

• Credit FRE management fees increased $233.7 million, including an increase in Part I Fees of $112.0 million, due to continued fundraising and deployment of capital primarily within new and existing Credit products.

• GP Strategic Capital FRE management fees increased $45.0 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.

• Real Estate FRE management fees increased $27.1 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.

• Real Estate FRE management fees increased $43.9 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT, as well as management fees from products relating to the Prima Acquisition of $6.3 million and KAM Acquisition of $3.5 million.

FRE Administrative, Transaction and Other Fees .

For the three and six months ended June 30, 2024, the increase in FRE administrative, transaction and other fees was driven primarily by an increase of $22.6 million and $38.9 million, respectively, in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.

Three Months Ended June 30, Six Months Ended June 30,

For the three and nine months ended September 30, 2024, the increase in FRE administrative, transaction and other fees was driven primarily by an increase of $15.5 million and $54.4 million, respectively, in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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FRE Compensation and Benefits.

For the three and six months ended June 30, 2024, FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

For the three and nine months ended September 30, 2024, FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

FRE General, Administrative and Other Expenses .

For the three months ended June 30, 2024, FRE general, administrative and other expenses increased, driven by the following:

• $13.3 million increase primarily in office-related expenses and professional fees due to increased headcount and our continued growth.

• $10.2 million increase in distribution costs, primarily related to our Credit and Real Estate products.

• $2.2 million increase in occupancy costs, driven by additional leased space to accommodate our continued growth.

For the three months ended September 30, 2024, FRE general, administrative and other expenses increased, driven by the following:

• $10.4 million increase primarily in office-related and other expenses due to increased headcount and our continued growth.

• The remaining net change was across various categories, driven by our continued growth.

FRE General, Administrative and Other Expenses .

For the six months ended June 30, 2024, FRE general, administrative and other expenses increased, driven by the following:

• $17.9 million increase primarily in office-related expenses and professional fees due to increased headcount and our continued growth.

• $6.1 million increase in distribution costs, primarily related to our Credit products.

For the nine months ended September 30, 2024, FRE general, administrative and other expenses increased, driven by the following:

• $28.3 million increase primarily in office-related and other expenses due to increased headcount and our continued growth.

• $7.1 million increase in occupancy costs, driven by additional leased space to accommodate our continued growth.

• $6.7 million increase in distribution costs, primarily related to our Real Estate products.

• The remaining net change was across various categories, driven by our continued growth.

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Please see “—Non-GAAP Analysis” for important information regarding these measures.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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Expense support (3,860) (1,352) (11,735) (6,525)

Net losses on investments (2,624) (3,030) (5,797) (3,642)

Net gains (losses) on investments (3,748) 1,227 (9,545) (2,415)

Change in TRA liability (6,849) (35) (4,890) (8,187)

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Distributable Earnings $ 301,007 $ 229,523 $ 814,071 $ 665,553

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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FRE Revenues $ 568,327 $ 412,771 $ 1,574,881 $ 1,191,650

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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FRE Compensation and Benefits $ 171,916 $ 116,197 $ 458,784 $ 335,418

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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FRE General, Administrative and Other Expenses $ 59,188 $ 45,643 $ 177,232 $ 132,784

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(dollars in thousands) 2024 2023 2024 2023

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We may also rely on our Revolving Credit Facility for liquidity needed to fund acquisitions, which we may replace with longer-term financing, subject to market conditions.

We ended the second quarter of 2024 with $436.8 million of cash and cash equivalents and approximately $1.5 billion available under our Revolving Credit Facility.

During the three months ended June 30, 2024, we issued $1.0 billion of 6.250% Senior Notes due 2034 (the “2034 Notes”), which proceeds we used to repay outstanding borrowings under our Revolving Credit Facility and provide additional liquidity for general corporate purposes, including to fund strategic acquisitions and related transactions and growth initiatives.

We ended the third quarter of 2024 with $115.9 million of cash and cash equivalents and approximately $1.6 billion available under our Revolving Credit Facility.

Based on management’s experience and our current level of liquidity and assets under management, we believe that our current liquidity position and cash generated from management fees will continue to be sufficient to meet our anticipated working capital needs for at least the next 12 months.

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Debt Obligations

As of June 30, 2024, our long-term debt obligations consisted of $59.8 million aggregate principal amount of 7.397% Senior Notes due 2028 (the “2028 Notes”), $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the “2031 Notes”), $400.0 million aggregate principal amount of 4.375% Senior Notes due 2032 (the “2032 Notes”), $1.0 billion aggregate principal amount of 2034 Notes and $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the “2051 Notes” and collectively with the 2028 Notes, 2031 Notes, 2032 and the 2034 Notes, the “Notes”).

Our Revolving Credit Facility was fully repaid as of June 30, 2024.

As of September 30, 2024, our long-term debt obligations consisted of $59.8 million aggregate principal amount of 7.397% Senior Notes due 2028 (the “2028 Notes”), $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the “2031 Notes”), $400.0 million aggregate principal amount of 4.375% Senior Notes due 2032 (the “2032 Notes”), $1.0 billion aggregate principal amount of the 2034 Notes and $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the “2051 Notes” and, collectively with the 2028 Notes, the 2031 Notes, the 2032 Notes and the 2034 Notes, the “Notes”).

We also had $90.0 million outstanding under our Revolving Credit Facility as of September 30, 2024.

Subsequent to the quarter ended September 30, 2024, the full amount outstanding under our Revolving Credit Facility was repaid.

We expect to use cash on hand to pay interest and principal due on our financing arrangements over time, which would reduce amounts available for dividends and distributions to our stockholders.

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See Note 7 to our Financial Statements and Note 4 to the financial statements in our Annual Report for additional information regarding our debt obligations.

In September 2024, the Issuer (as defined in Note 7 to our Financial Statements) commenced an offer to exchange the Notes for newly issued registered notes with substantially similar terms of the respective series of Notes sought to be exchanged (the “Exchange Notes”).

The Exchange Notes settled on October 28, 2024 and approximately 99.8% of the Notes had been validly tendered, which consisted of $59.8 million aggregate principal amount of 2028 Notes, $697.2 million aggregate principal amount of 2031 Notes, $397.3 million aggregate principal amount of 2032 Notes, $999.4 million aggregate principal amount of 2034 Notes and $350.0 million aggregate principal amount of 2051 Notes.

Tax Receivable Agreement

As discussed in Note 8 to our Financial Statements, we made a payment under the TRA and may in the future be required to make additional payments.

As of June 30, 2024, assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain Blue Owl Operating Group assets, we expect to pay approximately $1.3 billion under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration).

As of September 30, 2024, assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain Blue Owl Operating Group assets, we expect to pay approximately $1.3 billion under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration).

Future cash savings and related payments under the TRA in respect of subsequent exchanges of Blue Owl Operating Group Units for Class A or B Shares would be in addition to these amounts.

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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 and six months ended June 30, 2024 and 2023.

There were no repurchases made under the Program during the three and nine months ended September 30, 2024 and 2023.

Additionally, pursuant to the terms of our RSU agreements, upon the vesting of RSUs to employees, we may net settle awards to satisfy employee tax withholding obligations.

In such instances, we cancel a number of RSUs equivalent in value to the amount of tax withholding payments that we make on behalf of employees out of available cash.

During the three and six months ended June 30, 2024, 31,669 RSUs with a fair value of $0.6 million and 1,000,818 RSUs with a fair value of $18.1 million, respectively, were withheld to satisfy tax withholding obligations.

During the three and six months ended June 30, 2023, 39,640 RSUs with a fair value of $0.4 million and 358,946 RSUs with a fair value of $4.8 million, respectively, were withheld to satisfy tax withholding obligations.

Oak Street Cash Earnouts, Wellfleet Earnouts and Prima Earnouts

A portion of the Oak Street Cash Earnout, the Wellfleet Earnouts (each as defined in Note 3 in our Annual Report) and the Prima Earnouts (defined in Note 3 to the Financial Statements) is classified as a liability and represents the fair value of the obligation to make future cash payments that would need to be made if all the respective Oak Street Triggering Events, Wellfleet Triggering Events and Prima Triggering Events occur.

In April 2023, we modified our purchase agreement with the Wellfleet sellers, such that Wellfleet Earnout Shares will be delivered in cash in lieu of Wellfleet Earnout Shares.

As we approach each Triggering Event, we generally would expect the respective liabilities to increase due to the passage of time, which would result in mark-to-market losses being recognized in our consolidated statement of operations.

Further, the cash portion classified as compensation expense will be expensed and a corresponding accrued compensation liability will be recorded over the service period.

During the three and nine months ended September 30, 2024, 950,196 RSUs with a fair value of $16.8 million and 1,951,014 RSUs with a fair value of $34.9 million, respectively, were withheld to satisfy tax withholding obligations.

During the three and nine months ended September 30, 2023, 542,167 RSUs with a fair value of $6.4 million and 901,113 RSUs with a fair value of $11.2 million, respectively, were withheld to satisfy tax withholding obligations.

Earnout Liability

The Oak Street Cash Earnouts and the Wellfleet Earnouts (each as defined in Note 3 in our Annual Report), and the KAM Earnouts (as defined in Note 3 to the Financial Statements) are classified as liabilities in our consolidated statements of financial position and represent the fair value of the obligation to make future cash payments if the respective triggering events occur.

As we approach each triggering event, we generally would expect the respective liabilities to increase due to the passage of time and meeting certain revenue thresholds, which would result in mark-to-market losses being recognized in our consolidated statements of operations.

To the extent we have insufficient cash on hand or that we opt to, we may rely on debt or equity financing to facilitate these transactions in the future.

In January 2023, the Oak Street Triggering Event occurred with respect to the First Oak Street Earnout.

In April 2023, the Wellfleet Triggering Event occurred with respect to the First Wellfleet Earnout.

In January 2024, the Oak Street Triggering Event occurred with respect to the Second Oak Street Earnout.

In April 2024, the Wellfleet Triggering Event occurred with respect to the Second Wellfleet Earnout.

For details on the Oak Street Cash Earnout and Wellfleet Earnouts, see Note 1 to the Financial Statements and Note 3 to the financial statements in our Annual Report for additional information.

For additional information on these earnout liabilities, see Note 1 and Note 3 to the Financial Statements, as well as Note 3 to the financial statements in our Annual Report.

The Prima Earnouts and Atalaya Earnouts (each defined in Note 3 to the Financial Statements) are payable in Class A Shares or Common Units.

As we approach each Triggering Event, we generally would expect the respective liabilities to increase due to the passage of time and the achievement of certain revenue thresholds, which would result in mark-to-market losses being recognized in our consolidated statements of operations.

Dividends and Distributions

Starting in 2023, we moved to a fixed quarterly dividend based on our expected annual Distributable Earnings for the current fiscal year, which will be reassessed on an annual basis.

For the second quarter of 2024, we declared a dividend of $0.18 to holders of record as of the close of business on August 21, 2024, which will be paid on August 30, 2024.

For the third quarter of 2024, we declared a dividend of $0.18 to holders of record as of the close of business on November 11, 2024, which will be paid on November 22, 2024.

We set the target annual dividend for fiscal year 2024 at $0.72 per Class A Share (representing a fixed quarterly dividend of $0.18 per Class A Share), subject to the approval of the Board each quarter on or prior to each quarterly distribution date and in compliance with Delaware law, and such dividends are paid following the end of each quarter.

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Cash Flows Analysis

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in thousands) 2024 2023 $ Change

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One of our largest operating cash outflows generally relates to bonus expense, which are generally paid out during the first quarter of the year following the expense.

Net cash flows from operating activities decreased from the prior year period due to higher operating expenses, in particular higher bonus payments made during the first quarter related to the prior year, partially offset by higher management fees.

Included in the six months ended June 30, 2024 were the cash outflows of the portion of the Second Oak Street Earnout classified as contingent consideration in excess of the acquisition-date fair value that settled in January 2024;

Net cash flows from operating activities increased from the prior year period due to higher management fees, partially offset by higher operating expenses, in particular higher bonus payments made during the first quarter related to the prior year.

Included in the nine months ended September 30, 2024 were the cash outflows of the portion of the Second Oak Street Earnout classified as contingent consideration in excess of the acquisition-date fair value that settled in January 2024;

the amount paid up to the acquisition-date fair value was included in financing activities and the remainder (i.e., accretion since the acquisition date) was included in operating activities.

Included in the six months ended June 30, 2023 were the cash outflows of the portion of the First Oak Street Earnout classified as contingent consideration that settled in January 2023;

Included in the nine months ended September 30, 2023 were the cash outflows of the portion of the First Oak Street Earnout classified as contingent consideration that settled in January 2023;

the amount paid up to the acquisition-date fair value was included in financing activities and the remainder (i.e., accretion since the acquisition date) was included in operating activities.

Investing Activities.

Cash flows from investing activities for the six months ended June 30, 2024 were primarily related to a preferred equity investment in Kuvare UK Holdings, investments in our products and cash outflows for office space-related leasehold improvements.

Cash flows from investing activities for the nine months ended September 30, 2024 were primarily related to cash consideration paid in connection with the KAM Acquisition and Atalaya Acquisition, a preferred equity investment in Kuvare UK Holdings, investments in our products and cash outflows for office space-related leasehold improvements.

In addition, investment activities included inflows from repayments on our interest-bearing revolving promissory note receivable from a product we manage that was fully repaid.

Cash flows from investing activities for the six months ended June 30, 2023, were primarily related to purchases of investments in our Real Estate products, as well as cash outflows related to office space-related leasehold improvements.

Cash flows from investing activities for the nine months ended September 30, 2023, were primarily related to purchases of investments in our Real Estate products, cash outflows related to office space-related leasehold improvements, as well as cash consideration paid in connection with the Par Four Acquisition (as defined in Note 1 to our Financial Statements).

In addition, investment activities included inflows from repayments on our notes receivable.

Financing Activities.

Cash flows from financing activities for the six months ended June 30, 2024 were primarily related to the issuance of our 2034 Notes and borrowing and repayment activity under our Revolving Credit Facility, which borrowings were used to finance the Prima Acquisition that closed on June 6, 2024 and the KAM Acquisition that closed on July 1, 2024.

Cash flows from financing activities for the nine months ended September 30, 2024 were primarily related to the issuance of our 2034 Notes and borrowing and repayment activity under our Revolving Credit Facility, which borrowings were used to finance the Prima Acquisition, the KAM Acquisition and the Atalaya Acquisition.

In addition, we had distributions on our Common Units (noncontrolling interests) and dividends on our Class A Shares.

Included in the six months ended June 30, 2024 was a portion of the cash outflows related to the Second Oak Street Earnout classified as contingent consideration that settled in January 2024, as discussed above, as well as amounts paid under the TRA.

Cash flows from financing activities for the six months ended June 30, 2023 were primarily driven by dividends on our Class A Shares and related distributions on our Common Units (noncontrolling interests).

Included in the nine months ended September 30, 2024 was a portion of the cash outflows related to the Second Oak Street Earnout classified as contingent consideration that settled in January 2024, as discussed above, as well as amounts paid under the TRA.

Cash flows from financing activities for the nine months ended September 30, 2023 were primarily driven by dividends on our Class A Shares and related distributions on our Common Units (noncontrolling interests).

In addition, we had borrowings and repayments under our Revolving Credit Facility, as well as the issuance of our 2028 Notes, which borrowings were used to finance working capital needs and general capital purposes.

Included in the six months ended June 30, 2023, were a portion of the cash outflows related to the First Oak Street Earnout classified as contingent consideration that settled in January 2023.

Included in the nine months ended September 30, 2023, were a portion of the cash outflows related to the First Oak Street Earnout classified as contingent consideration that settled in January 2023.

Critical Accounting Estimates

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Equity-based Compensation

The grant-date fair values of our RSU and Incentive Unit (both defined in Note 1 to our Financial Statements) grants, as well as the Wellfleet Earnouts are generally determined using our Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount for lack of marketability on RSUs and Incentive Units that are subject to post-vesting transfer restrictions.

The grant-date fair values of our RSU and Incentive Unit (both defined in Note 1 to our Financial Statements) grants, as well as the compensation-classified earnouts are generally determined using our Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount for lack of marketability on RSUs and Incentive Units that are subject to post-vesting transfer restrictions.

The higher these discounts, the lower the compensation expense taken over time for these grants.

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Impact of Changes in Accounting on Recent and Future Trends

We believe that none of the changes to GAAP that went into effect during the six months ended June 30, 2024, or that have been issued but that we have not yet adopted, are expected to materially impact our future trends.

We believe that none of the changes to GAAP that went into effect during the nine months ended September 30, 2024, or that have been issued but that we have not yet adopted, are expected to materially impact our future trends.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis