BLUE OWL CAPITAL INC. 10-Q

Item 5. Other Information. Rule 10b5-1 Trading Plans During the fiscal quarter ended September 30, 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. 32 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) 3.3 Amended and Restated Bylaws of Blue Owl Capital Inc. (incorporated by reference to Exhibit 3.2 of Blue Owl Capital Inc. Quarterly Report on Form 10-Q filed on November 9, 2021) 4.1 Registration Rights and Lock-Up Agreement, dated July 1, 2024, by and among Blue Owl Capital Inc., Makena Strategic Opportunities Fund -- KH, LLC, KIS Holdings Ltd., KIS Participation LP, Kuvare Insurance Services LLC and other sellers party thereto (incorporated by reference to Exhibit 4.1 of Blue Owl Capital Inc. Current Report on Form 8-K filed on July 2, 2024) 4.2 Indenture dated as of June 10, 2021 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 June 10, 2021) 4.3 Sixth Supplemental Indenture, dated as of September 10, 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 September 10, 2024) 10.1 Second Amendment to the Amended and Restated Credit Agreement, dated as of July 23, 2024, by and among Blue Owl Finance LLC, the guarantors party thereto, the several banks and other financial institutions or entities party thereto and MUFG Bank, Ltd. (incorporated by reference to Exhibit 10.1 of Blue Owl Capital Inc. Current Report on Form 8-K filed on July 23, 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 September 30, 2024 and December 31, 2023, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, (iii) the Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 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 33 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: November 6, 2024 Blue Owl Capital Inc. By: /s/ Alan Kirshenbaum Alan Kirshenbaum Chief Financial Officer 34 Table of Contents INDEX TO FINANCIAL STATEMENTS Page Consolidated Statements of Financial Condition as of September 30, 2024 and December 31, 2023 F- 2 Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 F- 3 Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023 F- 4 Consolidated Statements of Cash Flows for the nine months ended September 30, 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) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 115,902 $ 104,160 Due from related parties 525,520 367,136 Investments (includes $ 380,044 and $ 78,779 at fair value and $ 186,640 and $ 337,595 of investments in the Company’s products, respectively) 456,222 344,265 Operating lease assets 291,304 281,669 Strategic Revenue-Share Purchase consideration, net 384,645 417,081 Deferred tax assets 1,042,492 781,694 Intangible assets, net 2,974,405 2,110,008 Goodwill 4,704,465 4,224,153 Other assets, net 256,899 187,455 Total Assets $ 10,751,854 $ 8,817,621 Liabilities Debt obligations, net $ 2,547,511 $ 1,681,241 Accrued compensation 340,171 370,726 Operating lease liabilities 356,488 319,532 TRA liability (includes $ 110,502 and $ 116,398 at fair value, respectively) 1,189,407 879,509 Warrant liability, at fair value 40,550 22,600 Earnout liability, at fair value 150,852 92,909 Deferred tax liabilities 40,629 34,419 Accounts payable, accrued expenses and other liabilities 207,284 138,754 Total Liabilities 4,872,892 3,539,690 Commitments and Contingencies (Note 8) Stockholders’ Equity Class A Shares, par value $ 0.0001 per share, 2,500,000,000 authorized, 568,254,126 and 464,425,386 issued and outstanding, respectively 57 46 Class C Shares, par value $ 0.0001 per share, 1,500,000,000 authorized, 612,974,223 and 632,486,822 issued and outstanding, respectively 61 63 Class D Shares, par value $ 0.0001 per share, 350,000,000 authorized, 312,115,409 and 317,089,623 issued and outstanding, respectively 31 32 Additional paid-in capital 3,057,762 2,410,982 Accumulated deficit ( 1,054,156 ) ( 882,884 ) Total Stockholders’ Equity Attributable to Blue Owl Capital Inc. 2,003,755 1,528,239 Stockholders’ equity attributable to noncontrolling interests 3,875,207 3,749,692 Total Stockholders’ Equity 5,878,962 5,277,931 Total Liabilities and Stockholders’ Equity $ 10,751,854 $ 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues Management fees, net (includes Part I Fees of $ 140,676 , $ 97,621 , $ 390,279 and $ 275,423 respectively) $ 523,309 $ 386,009 $ 1,436,961 $ 1,116,663 Administrative, transaction and other fees 77,289 43,641 224,592 120,404 Performance revenues 280 — 2,513 506 Total Revenues, Net 600,878 429,650 1,664,066 1,237,573 Expenses Compensation and benefits 271,107 213,976 723,001 619,875 Amortization of intangible assets 68,674 56,724 181,603 243,532 General, administrative and other expenses 121,329 65,485 291,535 173,101 Total Expenses 461,110 336,185 1,196,139 1,036,508 Other Loss Net gains (losses) on investments 3,748 ( 1,227 ) 9,545 2,415 Interest and dividend income 12,213 5,686 30,755 16,081 Interest expense ( 34,102 ) ( 19,672 ) ( 89,301 ) ( 57,208 ) Change in TRA liability 6,849 35 4,890 8,187 Change in warrant liability ( 6,300 ) ( 2,050 ) ( 17,950 ) ( 3,550 ) Change in earnout liability ( 10,056 ) ( 2,074 ) ( 10,711 ) ( 4,912 ) Total Other Loss ( 27,648 ) ( 19,302 ) ( 72,772 ) ( 38,987 ) Income Before Income Taxes 112,120 74,163 395,155 162,078 Income tax expense 12,796 10,652 45,764 22,494 Consolidated Net Income 99,324 63,511 349,391 139,584 Net income attributable to noncontrolling interests ( 69,519 ) ( 48,402 ) ( 260,550 ) ( 103,299 ) Net Income Attributable to Blue Owl Capital Inc. $ 29,805 $ 15,109 $ 88,841 $ 36,285 Earnings per Class A Share Basic $ 0.05 $ 0.03 $ 0.17 $ 0.08 Diluted $ 0.04 $ 0.03 $ 0.15 $ 0.07 Weighted-Average Class A Shares Basic (1) 575,249,883 466,376,329 531,422,518 460,691,359 Diluted 1,491,724,950 482,573,913 542,350,192 1,432,190,782 (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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Class A Shares Par Value Beginning balance $ 54 $ 45 $ 46 $ 45 Shares delivered on vested RSUs — — 1 — Class A Shares issued in connection with Prima Acquisition — — 1 — Class A Shares issued in connection with Kuvare Acquisition 2 — 2 — Class C Shares and Common Units exchanged for Class A Shares 1 1 7 1 Ending Balance $ 57 $ 46 $ 57 $ 46 Class C Shares Par Value Beginning balance $ 59 $ 63 $ 63 $ 63 Settlement of Oak Street Earnout Securities — — 1 1 Common Units and Class C Shares issued in connection with Prima Acquisition — — 1 — Common Units and Class C Shares issued in connection with Atalaya Acquisition 2 — 2 — Class C Shares and Common Units exchanged for Class A Shares ( 1 ) — ( 7 ) ( 1 ) Shares delivered on vested Common Units 1 — 1 — Class D Shares exchanged for Class C Shares — 1 — 1 Ending Balance $ 61 $ 64 $ 61 $ 64 Class D Shares Par Value Beginning balance $ 32 $ 32 $ 32 $ 32 Class D Shares and Common Units exchanged for Class A Shares ( 1 ) — ( 1 ) — Ending Balance $ 31 $ 32 $ 31 $ 32 Additional Paid-in Capital Beginning balance $ 2,729,472 $ 2,359,830 $ 2,410,982 $ 2,293,903 Offering costs related to shares issued in connection with acquisitions ( 245 ) — ( 245 ) — Equity classified contingent consideration in connection with Wellfleet Acquisition — — — ( 969 ) Deferred taxes on capital transactions 3,412 10,440 287,526 20,600 TRA liability on capital transactions ( 26,709 ) ( 1,628 ) ( 342,899 ) ( 25,151 ) Equity-based compensation 7,183 3,745 18,370 11,308 Withholding taxes on vested RSUs ( 5,753 ) ( 2,064 ) ( 12,066 ) ( 3,619 ) Reallocation between additional paid-in capital and noncontrolling interests due to changes in Blue Owl Operating Group ownership ( 67,064 ) 8,476 168,801 82,727 Class A Shares issued in connection with Prima Acquisition — — 109,827 — Class A Shares issued in connection with Kuvare Acquisition 417,466 — 417,466 — Ending Balance $ 3,057,762 $ 2,378,799 $ 3,057,762 $ 2,378,799 Accumulated Deficit Beginning balance $ ( 982,742 ) $ ( 788,525 ) $ ( 882,884 ) $ ( 689,345 ) Cash dividends declared on Class A Shares ( 101,219 ) ( 63,710 ) ( 260,113 ) ( 184,066 ) Comprehensive income 29,805 15,109 88,841 36,285 Ending Balance $ ( 1,054,156 ) $ ( 837,126 ) $ ( 1,054,156 ) $ ( 837,126 ) Total Stockholders’ Equity Attributable to Blue Owl Capital Inc. $ 2,003,755 $ 1,541,815 $ 2,003,755 $ 1,541,815 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Stockholders’ Equity Attributable to Noncontrolling Interests Beginning balance $ 3,471,271 $ 3,800,075 $ 3,749,692 $ 3,944,188 Equity-based compensation 64,070 64,198 179,239 190,078 Contributions 8,323 15,700 23,297 35,477 Distributions ( 179,073 ) ( 139,176 ) ( 558,251 ) ( 406,334 ) Withholding taxes on vested RSUs ( 11,075 ) ( 4,313 ) ( 22,822 ) ( 7,572 ) Reallocation between additional paid-in capital and noncontrolling interests due to changes in Blue Owl Operating Group ownership 67,064 ( 8,477 ) ( 168,801 ) ( 82,727 ) Common Units and Class C Shares issued in connection with Prima Acquisition — — 27,195 — Common Units and Class C Shares issued in connection with Atalaya Acquisition 385,108 — 385,108 — Comprehensive income 69,519 48,402 260,550 103,299 Ending Balance $ 3,875,207 $ 3,776,409 $ 3,875,207 $ 3,776,409 Total Stockholders’ Equity $ 5,878,962 $ 5,318,224 $ 5,878,962 $ 5,318,224 Cash Dividends Paid per Class A Share $ 0.18 $ 0.14 $ 0.50 $ 0.41 Number of Class A Shares Beginning balance 537,618,016 454,557,594 464,425,386 445,131,351 Shares delivered on vested RSUs 1,192,011 485,639 2,511,026 992,489 Class A Shares issued in connection with Prima Acquisition — — 6,352,047 — Class A Shares issued in connection with Kuvare Acquisition 23,519,636 — 23,519,636 — Class C Shares and Common Units exchanged for Class A Shares 4,085,924 543,557 68,201,817 9,462,950 Class D Shares and Common Units exchanged for Class A Shares 1,838,539 — 3,244,214 — Ending Balance 568,254,126 455,586,790 568,254,126 455,586,790 Number of Class C Shares Beginning balance 586,663,972 633,520,277 632,486,822 629,402,505 Common Units and Class C Shares issued in connection with Prima Acquisition — — 1,572,883 — Common Units and Class C Shares issued in connection with Atalaya Acquisition 20,016,013 — 20,016,013 — Class C Shares and Common Units exchanged for Class A Shares ( 4,085,924 ) ( 543,557 ) ( 68,201,817 ) ( 9,462,950 ) Shares delivered on vested Common Units 8,650,162 1,046,973 12,333,157 1,046,973 Class D Shares exchanged for Class C Shares 1,730,000 1,370,000 1,730,000 1,370,000 Settlement of Oak Street Earnout Units — — 13,037,165 13,037,165 Ending Balance 612,974,223 635,393,693 612,974,223 635,393,693 Number of Class D Shares Beginning balance 315,683,948 319,132,127 317,089,623 319,132,127 Class D Shares and Common Units exchanged for Class A Shares ( 1,838,539 ) — ( 3,244,214 ) — Class D Shares exchanged for Class C Shares ( 1,730,000 ) ( 1,370,000 ) ( 1,730,000 ) ( 1,370,000 ) Ending Balance 312,115,409 317,762,127 312,115,409 317,762,127 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) Nine Months Ended September 30, 2024 2023 Cash Flows from Operating Activities Consolidated net income $ 349,391 $ 139,584 Adjustments to reconcile consolidated net income to net cash from operating activities: Amortization of intangible assets 181,603 243,532 Equity-based compensation 203,287 219,075 Depreciation and amortization of fixed assets 11,707 7,406 Amortization of debt discounts and deferred financing costs 5,205 3,619 Non-cash lease expense 27,148 16,581 Payment of earnout liability in excess of acquisition-date fair value ( 13,808 ) ( 7,406 ) Net gains on investments, net of dividends on equity-method investments ( 2,271 ) ( 2,415 ) Change in TRA liability ( 4,890 ) ( 8,187 ) Change in warrant liability 17,950 3,550 Change in earnout liability 10,711 4,912 Deferred income taxes 29,004 7,147 Changes in operating assets and liabilities: Due from related parties ( 151,869 ) 12,116 Strategic Revenue-Share Purchase consideration 32,436 30,198 Other assets, net ( 23,724 ) ( 4,198 ) Accrued compensation ( 36,993 ) ( 34,510 ) Accounts payable, accrued expenses and other liabilities 40,649 9,792 Net Cash (Used in) Provided by Operating Activities 675,536 640,796 Cash Flows from Investing Activities Purchases of fixed assets ( 50,269 ) ( 34,372 ) Purchases of investments ( 310,130 ) ( 68,000 ) Proceeds from investment sales and maturities 203,944 34,507 Cash consideration paid for acquisitions, net of cash acquired ( 435,410 ) ( 26,245 ) Net Cash (Used in) Provided by Investing Activities ( 591,865 ) ( 94,110 ) Cash Flows from Financing Activities Offering costs related to the Acquisitions ( 245 ) — Proceeds from debt obligations 2,040,000 819,800 Debt issuance costs ( 24,915 ) ( 5,689 ) Repayments of debt obligations, including retirement costs ( 1,155,000 ) ( 700,000 ) Payment of earnout liability, up to acquisition-date fair value ( 79,981 ) ( 79,134 ) Equity-classified awards settled in cash — ( 3,186 ) Payments under the TRA ( 28,166 ) — Withholding taxes on vested RSUs ( 34,888 ) ( 11,191 ) Dividends paid on Class A Shares ( 260,113 ) ( 184,066 ) Contributions from noncontrolling interests 29,630 31,730 Distributions to noncontrolling interests ( 558,251 ) ( 406,334 ) Net Cash Provided by (Used in) Financing Activities ( 71,929 ) ( 538,070 ) Net Increase (Decrease) in Cash and Cash Equivalents 11,742 8,616 Cash and cash equivalents, beginning of period 104,160 68,079 Cash and Cash Equivalents, End of Period $ 115,902 $ 76,695 Supplemental Information Cash paid for interest $ 49,433 $ 47,482 Cash paid for income taxes $ 18,271 $ 13,882 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) September 30, 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 On May 19, 2021, the Business Combination was completed resulting from transactions contemplated by the business combination agreement dated as of December 23, 2020 (as the same has been or may be amended, modified, supplemented or waived from time to time), by and among Altimar Acquisition Corporation, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and the Dyal Capital Partners business acquired from Neuberger Berman Group LLC (the “Dyal Acquisition”). 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) 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), 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 (the “Par Four Acquisition”). 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 (the “CHI Acquisition”). Prima Acquisition On June 6, 2024, the Company completed its acquisition of Prima Capital Advisors Holdings LLC (“Prima”) (the “Prima Acquisition”). F-7 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 KAM Acquisition On July 1, 2024, the Company completed its acquisition of Kuvare Insurance Services LP (d/b/a Kuvare Asset Management) (“KAM”), a boutique investment management firm focused on providing asset management services to the insurance industry (the “KAM Acquisition”). Atalaya Acquisition On September 30, 2024, the Company acquired the rights to investment management agreements, investor relationships, related assets and personnel from Atalaya Capital Management LP (“Atalaya”) and Atalaya’s other investment advisor affiliates and subsidiaries (the “Atalaya Acquisition,” and collectively with the Dyal Acquisition, Oak Street Acquisition, Wellfleet Acquisition, Par Four Acquisition, CHI Acquisition, Prima Acquisition and KAM 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 September 30, 2024: September 30, 2024 Class A Shares 568,254,126 Class C Shares 612,974,223 Class D Shares 312,115,409 RSUs 27,778,399 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 September 30, 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 September 30, 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. F-8 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Warrants —The Company has warrants outstanding that were issued in connection with the Business Combination (“Private Placement Warrants”). The Private Placement Warrants currently have a strike price of $ 11.12 and will expire on May 19, 2026. Blue Owl Operating Partnerships’ Capital Structure The following table presents the interests outstanding of the Blue Owl Operating Group that were outstanding as of September 30, 2024, which interests are collectively referred to as “Blue Owl Operating Group Units”: Units September 30, 2024 GP Units 568,254,126 Common Units 925,089,632 Incentive Units 26,235,408 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 the Acquisitions and 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, 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) may receive tax distributions on unvested units to cover a portion or all of such tax liabilities. F-9 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 and nine months ended September 30, 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. The following table presents RSUs withheld to satisfy tax withholding obligations during each of the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Number of RSUs withheld to satisfy tax withholding obligations 950,196 542,167 1,951,014 901,113 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 and corresponding Class C Shares (collectively, the “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 were 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 employees associated with the Wellfleet Acquisition (“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. In connection with the Prima Acquisition, KAM Acquisition and Atalaya Acquisition, the Company agreed to deliver additional consideration to the sellers upon the occurrence of certain triggering events. See Note 3 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 statements of changes in stockholders’ equity for these amounts. F-10 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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. 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 is comprised solely of consolidated net income (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”). During the third quarter of 2024, the Company revised certain Credit platform investment strategies presented in Note 9. Prior period amounts have been reclassified to conform to the current period presentation. For details about Blue Owl’s significant accounting policies, see Note 2 to the consolidated financial statements in the Company’s Annual Report. Preferred Equity Investment The Company has elected the fair value option for its preferred equity investment in Kuvare UK Holdings in order to simplify the accounting for this instrument, and therefore changes in unrealized gains or losses are included in current-period earnings within net gains (losses) on investments in the consolidated statements of operations. Dividends compound quarterly, are payable when declared, and are included within interest and dividend income in the consolidated statements of operations. Additional disclosures related to fair value are included in Note 4. 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 the preferred equity investment and equity-based compensation grants; (iii) the fair values of liabilities with respect to the TRA (the portion considered contingent consideration) 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; (v) the fair value of net identifiable assets acquired in business combinations, as well as the determination of whether amounts paid or payable represent consideration or compensation and (vi) 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) September 30, 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 material 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) September 30, 2024 3. ACQUISITIONS AND INTANGIBLE ASSETS, NET Prima Acquisition The following table presents the consideration and net identifiable assets acquired and goodwill, subject to post-closing adjustments, related to the Prima Acquisition: (dollars in thousands) Consideration Equity consideration (1) $ 137,022 Cash consideration (2) 27,696 Earnout consideration (3) 18,600 Total Consideration $ 183,318 Net Identifiable Assets Acquired and Goodwill Assets acquired: Cash and cash equivalents $ 158 Due from related parties 2,005 Operating lease assets 456 Deferred tax assets 4,243 Intangible assets - Investment management agreements 108,000 Other assets, net 302 Total assets acquired 115,164 Liabilities assumed: Operating lease liabilities 456 Deferred tax liabilities 1,730 Accounts payable, accrued expenses and other liabilities 3,943 Total liabilities assumed 6,129 Net Identifiable Assets Acquired $ 109,035 Goodwill (4) $ 74,283 (1) Represents Class A Shares, Common Units and corresponding Class C Shares issued to Prima selling stockholders. The value of the Common Units was based on the price of the Company’s Class A Shares, as Common Units are exchangeable on a one-to-one basis for Class A Shares. (2) Includes cash consideration paid for seller-related transaction expenses and indebtedness. (3) Represents the fair value of contingent consideration payable to sellers related to the Prima Earnouts. (4) Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. Approximately $ 14.0 million of the goodwill and intangible assets recognized are expected to be deductible by the Blue Owl Operating Partnerships for tax purposes. The acquired investment management agreements had a weighted-average amortization period of 11.4 years from the date of acquisition. Prima’s results are included in the Company’s consolidated results starting from the date the acquisition closed, June 6, 2024. For the three and nine months ended September 30, 2024, the Company’s consolidated results included $ 4.9 million and $ 6.3 million, respectively, of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the Prima Acquisition to GAAP consolidated net income is not tracked on a standalone basis. The Company incurred $ 9.3 million of acquisition-related costs, which costs were included within general, administrative and other expenses in the Company’s consolidated statements of operations. F-13 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Prima Earnouts In connection with the Prima Acquisition, the sellers are entitled to receive additional consideration of up to $ 35.0 million (the "Prima Earnouts"), based on the performance of the acquired business during the earnout period, which period extends from the closing date to the fourth anniversary of the closing (the "Prima Earnout Period"). Earnout payments are contingent on the acquired business achieving specified revenue milestones during any rolling 12-month period ("LTM Earnout Period") within the Earnout Period (the achievement of any such milestone, a “Prima Triggering Event”); provided that the first LTM Earnout Period will not occur until after June 6, 2025. The Prima Earnouts will be settled in Class A Shares and Common Units with corresponding Class C Shares. KAM Acquisition The following table presents the consideration and net identifiable assets acquired and goodwill, subject to post-closing adjustments, related to the KAM Acquisition: (dollars in thousands) Consideration Equity consideration (1) $ 417,474 Cash consideration (2) 322,747 Earnout consideration (3) 102,000 Total Consideration $ 842,221 Net Identifiable Assets Acquired and Goodwill Assets acquired: Cash and cash equivalents $ 10,741 Deferred tax assets 1,749 Intangible assets - Investment management agreements 568,000 Other assets, net 8,307 Total assets acquired 588,797 Liabilities assumed: Accrued compensation 6,180 Deferred tax liabilities 3,364 Accounts payable, accrued expenses and other liabilities 5,121 Total liabilities assumed 14,665 Net Identifiable Assets Acquired $ 574,132 Goodwill (4) $ 268,089 (1) Represents Class A Shares issued to KAM selling stockholders. (2) Includes cash consideration paid for seller-related transaction expenses and indebtedness. (3) Represents the fair value of contingent consideration payable to sellers related to the KAM Earnouts. (4) Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. Approximately $ 531.0 million of the goodwill and intangible assets recognized are expected to be deductible by the Blue Owl Operating Partnerships for tax purposes. The acquired investment management agreements had a weighted-average amortization period of 15.6 years from the date of acquisition. F-14 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 KAM’s results are included in the Company’s consolidated results starting from the date the acquisition closed, July 1, 2024. For the three and nine months ended September 30, 2024, the Company’s consolidated results included $ 17.8 million of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the KAM Acquisition to GAAP consolidated net income is not tracked on a standalone basis. The Company incurred $ 35.9 million of acquisition-related costs, which costs were included within general, administrative and other expenses in the Company’s consolidated and combined statements of operations. KAM Earnouts In connection with the KAM Acquisition, the sellers are entitled to receive additional consideration of up to $ 250.0 million (the "KAM Earnouts"), based on the acquired business achieving specified revenue growth milestones in each of calendar years 2025, 2026 and 2027 (each, a “KAM Earnout Period,” and the achievement of any such milestone, a “KAM Triggering Event”). The KAM Earnouts will be paid in cash following the conclusion of each respective KAM Earnout Period. F-15 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Atalaya Acquisition The following table presents the consideration and net identifiable assets acquired and goodwill, subject to post-closing adjustments, related to the Atalaya Acquisition: (dollars in thousands) Consideration (1) Equity consideration (2) $ 385,108 Cash consideration (3) 105,666 Earnout liability (4) 15,000 Total Consideration $ 505,774 Net Identifiable Assets Acquired and Goodwill Assets acquired: Due from related parties $ 4,510 Intangible assets: Investment management agreements 360,000 Investor relationships 10,000 Total intangible assets 370,000 Other assets, net 472 Total assets acquired 374,982 Liabilities assumed: Deferred tax liabilities 4,831 Accounts payable, accrued expenses and other liabilities 2,317 Total liabilities assumed 7,148 Net Identifiable Assets Acquired $ 367,834 Goodwill (5) $ 137,940 (1) A product managed by the Company received 20 % of the consideration presented above as a result of a passive, minority stake it held in the business acquired. (2) Represents Common Units issued to sellers at fair value, which was based on the price of the Company’s Class A Shares, as Common Units are exchangeable on a one-to-one basis for Class A Shares. (3) Includes $ 9.8 million of cash consideration paid in October 2024. (4) Represents the fair value of contingent consideration payable to non-employee sellers related to the Atalaya Earnouts. (5) Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. Approximately $ 100.7 million of the goodwill and intangible assets recognized are expected to be deductible by the Blue Owl Operating Partnerships for tax purposes. The acquired investment management agreements and investor relationships had a weighted-average amortization period of 13.9 years and 7.2 years, respectively, from the date of acquisition. Atalaya’s results are included in the Company’s consolidated results starting from the date the acquisition closed, September 30, 2024. For the three and nine months ended September 30, 2024, the Company’s consolidated results included $ 0.7 million of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the Atalaya Acquisition to GAAP consolidated net income is not tracked on a standalone basis. The Company incurred $ 12.5 million of acquisition-related costs, which costs were included within general, administrative and other expenses in the Company’s consolidated and combined statements of operations. F-16 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Atalaya Earnouts In connection with the Atalaya Acquisition, the sellers are entitled to receive additional consideration of up to $ 350.0 million (the "Atalaya Earnouts"), based on the acquired business achieving specified revenue milestones in each of calendar years 2026 and 2028 (the achievement of any such milestone, an “Atalaya Triggering Event”). The Atalaya Earnouts payments are payable in two equal tranches: up to $ 175.0 million in 2027 based on 2026 revenues, and up to $ 175.0 million in 2029 based on 2028 revenues. There is also a catch-up mechanism in place if the 2027 payment is less than $ 175.0 million. If total payments for the Atalaya Earnouts exceed $ 175.0 million, at least $ 50.0 million (or any remaining unpaid amount) will be reallocated from the Atalaya Earnout to non-seller employees in the form of RSUs. The Atalaya Earnouts will be paid to sellers in the form of Common Units with corresponding Class C Shares. Approximately 80 % of these payments will be made to sellers that are subject to ongoing employment arrangements with the Company, and as such, these amounts have been classified as compensation and are being expensed over the expected service period. The remaining 20 % will be payable to a non-employee seller, and these amounts have been classified as contingent consideration, with the fair value of the obligation presented as an earnout liability in the table above. Intangible Assets, Net The following table summarizes the Company’s intangible assets, net: (dollars in thousands) September 30, 2024 December 31, 2023 Remaining Weighted-Average Amortization Period as of September 30, 2024 Intangible assets, gross: Investment management agreements $ 3,260,420 $ 2,224,420 12.5 years Investor relationships 470,300 460,300 7.7 years Total intangible assets, gross 3,730,720 2,684,720 Accumulated amortization: Investment management agreements ( 620,336 ) ( 471,104 ) Investor relationships ( 135,979 ) ( 103,608 ) Total accumulated amortization ( 756,315 ) ( 574,712 ) Total Intangible Assets, Net $ 2,974,405 $ 2,110,008 The following table presents expected future amortization of finite-lived intangible assets as of September 30, 2024: (dollars in thousands) Period Amortization October 1, 2024 to December 31, 2024 $ 76,490 2025 299,322 2026 285,481 2027 269,871 2028 264,391 Thereafter 1,778,850 Total $ 2,974,405 F-17 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Pro Forma Financial Information Unaudited pro forma revenues were $ 623.9 million and $ 474.9 million for the three months ended September 30, 2024 and 2023, and $ 1.8 billion and $ 1.4 billion for the nine months ended September 30, 2024 and 2023, respectively. Unaudited pro forma consolidated net income attributable to Class A stockholders was $ 29.9 million and $ 14.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 88.8 million and $ 34.9 million for the nine months ended September 30, 2024 and 2023, respectively. This pro forma financial information was computed by combining the historical financial information of the Company and Prima, KAM and Atalaya as though these acquisitions were consummated on January 1, 2023. These pro forma amounts assume a consistent ownership structure, annual effective tax rates and amortization of the fair value of acquired assets as of each respective acquisition date. The pro forma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues, or other factors, and therefore does not represent what the actual revenues and net income would have been had the businesses actually been combined as of the dates above. 4. INVESTMENTS AND FAIR VALUE DISCLOSURES The following table presents the components of the Company’s investments: (dollars in thousands) September 30, 2024 December 31, 2023 Preferred equity investment, at fair value $ 263,395 $ — Equity investments in the Company’s products, at fair value 111,221 76,258 Equity investments in the Company’s products, equity method 62,491 51,316 Loans, at amortized cost (includes $ 7,500 and $ 207,500 of investments in the Company’s products, respectively) 13,687 214,170 Investments in the Company’s CLOs, at fair value 5,428 2,521 Total $ 456,222 $ 344,265 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. F-18 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 • 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. The tables below summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023: September 30, 2024 (dollars in thousands) Level I Level II Level III Total Investments, at Fair Value Preferred equity investment $ — $ — $ 263,395 $ 263,395 Equity investments in the Company’s products — 111,221 — 111,221 CLOs — — 5,428 5,428 Total Assets, at Fair Value $ — $ 111,221 $ 268,823 $ 380,044 Liabilities, at Fair Value TRA liability $ — $ — $ 110,502 $ 110,502 Warrant liability — — 40,550 40,550 Earnout liability — 404 150,448 150,852 Total Liabilities, at Fair Value $ — $ 404 $ 301,500 $ 301,904 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-19 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 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 and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, 2024 Level III Assets (dollars in thousands) Preferred Equity CLOs Total Beginning balance $ 253,581 $ 5,915 $ 259,496 Net gains (losses) 9,814 ( 487 ) 9,327 Ending Balance $ 263,395 $ 5,428 $ 268,823 Change in net unrealized gains (losses) on assets still recognized at the reporting date $ 9,814 $ ( 487 ) $ 9,327 Nine Months Ended September 30, 2024 Level III Assets (dollars in thousands) Preferred Equity CLOs Total Beginning balance $ — $ 2,521 $ 2,521 Purchases 253,585 3,700 257,285 Net gains (losses) 9,810 ( 793 ) 9,017 Ending Balance $ 263,395 $ 5,428 $ 268,823 Change in net unrealized gains (losses) on assets still recognized at the reporting date $ 9,810 $ ( 793 ) $ 9,017 Three Months Ended September 30, 2023 Level III Assets (dollars in thousands) CLOs Total Beginning balance $ 2,430 $ 2,430 Net gains 278 278 Ending Balance $ 2,708 $ 2,708 Change in net unrealized gains on assets still recognized at the reporting date $ 278 $ 278 Nine Months Ended September 30, 2023 Level III Assets (dollars in thousands) CLOs Total Beginning balance $ 2,843 $ 2,843 Net losses ( 135 ) ( 135 ) Ending Balance $ 2,708 $ 2,708 Change in net unrealized losses on assets still recognized at the reporting date $ ( 135 ) $ ( 135 ) F-20 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Three Months Ended September 30, 2024 Level III Liabilities (dollars in thousands) TRA Liability Warrant Liability Earnout Liability Total Beginning balance $ 110,290 $ 34,250 $ 23,334 $ 167,874 Issuances — — 117,000 117,000 Net losses 212 6,300 10,114 16,626 Ending Balance $ 110,502 $ 40,550 $ 150,448 $ 301,500 Change in net unrealized losses on liabilities still recognized at the reporting date $ 212 $ 6,300 $ 10,114 $ 16,626 Nine Months Ended September 30, 2024 Level III Liabilities (dollars in thousands) TRA Liability Warrant Liability Earnout Liability Total Beginning balance $ 116,398 $ 22,600 $ 92,119 $ 231,117 Issuances — — 135,600 135,600 Settlements ( 8,551 ) — ( 87,875 ) ( 96,426 ) Net losses 2,655 17,950 10,604 31,209 Ending Balance $ 110,502 $ 40,550 $ 150,448 $ 301,500 Change in net unrealized losses on liabilities still recognized at the reporting date $ 2,851 $ 17,950 $ 10,357 $ 31,158 Three Months Ended September 30, 2023 Level III Liabilities (dollars in thousands) TRA Liability Warrant Liability Earnout Liability Total Beginning balance $ 112,830 $ 10,050 $ 88,752 $ 211,632 Net (gains) losses ( 35 ) 2,050 2,007 4,022 Ending Balance $ 112,795 $ 12,100 $ 90,759 $ 215,654 Change in net unrealized (gains) losses on liabilities still recognized at the reporting date $ ( 35 ) $ 2,050 $ 2,007 $ 4,022 Nine Months Ended September 30, 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 — — ( 86,250 ) ( 86,250 ) Net (gains) losses ( 7,792 ) 3,550 4,939 697 Ending Balance $ 112,795 $ 12,100 $ 90,759 $ 215,654 Change in net unrealized (gains) losses on liabilities still recognized at the reporting date $ ( 7,792 ) $ 3,550 $ 4,815 $ 573 Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Preferred Equity Investment The fair value of the preferred equity investment is determined using a discounted cash flow model, which estimates the present value of future expected cash flows. The key inputs in this model include the projected cash flows attributable to the preferred interest and the discount rate. The expected cash flows are based on management’s forecasts and projections, taking into consideration market conditions and redemption of the preferred interest. The discount rate applied reflects the time value of money and the risks associated with the preferred interest, which includes assumptions about the risk-free rate, credit risk, and market volatility. This investment is generally classified as Level III. F-21 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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. 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 September 30, 2024, the earnout liability was comprised of contingent consideration payable for the Wellfleet Earnouts, Prima Earnouts, KAM Earnouts and Atalaya Earnouts. As of December 31, 2023, the earnout liability was comprised of contingent consideration payable for the Oak Street Cash Earnout and the Wellfleet Earnouts. The Company uses a Monte Carlo simulation model to value certain earnouts where revenue milestones need to be achieved before a payment is due. These models consider current progress towards revenue targets, as well as forecasts, to simulate a range of outcomes based on market inputs such as volatility. For other earnouts, the Company uses a discounted cash flow model, which estimates the present value of future expected cash flows. The key inputs in this model include the projected cash flows attributable to the respective earnout and the discount rate. F-22 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 September 30, 2024: (dollars in thousands) Fair Value Valuation Technique Significant Unobservable Inputs Range Weighted Average Impact to Valuation from an Increase in Input Assets Preferred equity $ 263,395 Discounted cash flow Discount Rate 13 % - 13 % 13 % Decrease CLOs 5,428 Discounted cash flow Yield 10 % - 18 % 13 % Decrease Total Assets, at Fair Value $ 268,823 Liabilities TRA liability $ 110,502 Discounted cash flow Discount Rate 12 % - 12 % 12 % Decrease Warrant liability 40,550 Monte Carlo Simulation Volatility 28 % - 28 % 28 % Increase Earnout liability: 145,625 Monte Carlo Simulation Volatility 20 % - 38 % 26 % Increase 4,823 Discounted cash flow Discount Rate 6 % - 6 % 6 % Decrease 150,448 Total Liabilities, at Fair Value $ 301,500 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 92,119 Discounted cash flow Discount Rate 6 % - 16 % 15 % Decrease Total Liabilities, at Fair Value $ 231,117 F-23 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Fair Value of Other Financial Instruments As of September 30, 2024, the fair value of the Company’s debt obligations was approximately $ 2.4 billion compared to a carrying value of $ 2.5 billion, of which $ 2.3 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 September 30, 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 September 30, Nine Months Ended September 30, Lease Cost 2024 2023 2024 2023 Operating lease cost $ 9,738 $ 9,995 $ 30,636 $ 27,321 Short term lease cost 398 65 560 193 Net Lease Cost $ 10,136 $ 10,060 $ 31,196 $ 27,514 (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, Supplemental Lease Cash Flow Information 2024 2023 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases (1) $ 6,087 $ 4,250 $ 4,594 $ 10,933 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 9,938 $ 1,361 $ 33,430 $ 79,150 (1) The amount presented above for the three and nine months ended September 30, 2024, includes $ 3.1 million and $ 18.6 million of tenant improvement allowances received from the lessor, respectively. Lease Term and Discount Rate September 30, 2024 December 31, 2023 Weighted-average remaining lease term: Operating leases 12.0 years 12.5 years Weighted-average discount rate: Operating leases 5.6 % 5.4 % F-24 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 (dollars in thousands) Future Maturity of Operating Lease Payments Operating Leases October 1, 2024 to December 31, 2024 $ 2,009 2025 40,422 2026 43,624 2027 42,374 2028 43,101 Thereafter 331,170 Total Lease Payments 502,700 Imputed interest ( 146,212 ) Total Lease Liabilities $ 356,488 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 $ 0.4 million related to leases that have not commenced that were entered into as of September 30, 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 fourth quarter of 2024 and continue for approximately 2 years. 6. OTHER ASSETS, NET (dollars in thousands) September 30, 2024 December 31, 2023 Fixed assets, net: Leasehold improvements $ 171,117 $ 127,612 Furniture and fixtures 26,858 13,823 Computer hardware and software 8,544 8,328 Accumulated depreciation and amortization ( 26,635 ) ( 14,870 ) Fixed assets, net 179,884 134,893 Receivables 30,741 15,853 Prepaid expenses 20,487 7,212 Unamortized debt issuance costs on revolving credit facilities 10,246 9,265 Other assets 15,541 20,232 Total $ 256,899 $ 187,455 F-25 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 7. DEBT OBLIGATIONS, NET The following tables summarize outstanding debt obligations of the Company. Such descriptions do not give recognition to the impact of the Exchange Offers (as defined below): September 30, 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 $ — $ 56,857 2031 Notes 6/10/2031 700,000 700,000 — 688,361 2032 Notes 2/15/2032 400,000 400,000 — 393,423 2034 Notes 4/18/2034 1,000,000 1,000,000 — 980,669 2051 Notes 10/7/2051 350,000 350,000 — 338,201 Revolving Credit Facility 7/23/2029 1,725,000 90,000 1,628,424 90,000 Total $ 4,234,800 $ 2,599,800 $ 1,628,424 $ 2,547,511 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 2034 Notes On April 18, 2024 and June 6, 2024, the Company, through its indirect subsidiary, Blue Owl Finance LLC (the “Issuer”), issued $ 1.0 billion 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. The 2034 Notes are fully and unconditionally guaranteed, jointly and severally, by the Registrant, Blue Owl Operating Partnerships and certain of the Registrant’s other 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. In connection with the issuance of the 2034 Notes, the Registrant and certain other subsidiaries were added as guarantors to the 2028 Notes, 2031 Notes, 2032 Notes and 2051 Notes. F-26 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Revolving Credit Facility On December 7, 2021, the Company, through its indirect finance subsidiary, Blue Owl Finance LLC, 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, and was further amended in July 2024 to increase total borrowing capacity to $ 1.725 billion and extend the maturity date to July 23, 2029. 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 0.875 % to 1.375 %, 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 0.00 % to 0.375 %. The Company is subject to an undrawn commitment fee rate of 0.08 % to 0.2 % of the daily amount of available revolving commitment. The borrowing rates for balances outstanding under the Revolving Credit Facility as of September 30, 2024 and December 31, 2023 were 8.75 % and 6.96 %, respectively. 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. F-27 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 During the nine months ended September 30, 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 September 30, 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 October 1, 2024 to December 31, 2024 $ — 2025 53,713 2026 66,911 2027 81,478 2028 100,489 Thereafter 1,004,965 Total Payments 1,307,556 Less adjustment to fair value for contingent consideration ( 118,149 ) Total TRA Liability $ 1,189,407 Unfunded Product Commitments As of September 30, 2024, the Company had unfunded investment commitments to its products of $ 54.5 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. 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 September 30, 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-28 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 9. REVENUES The following table presents a disaggregated view of the Company’s revenues: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2024 2023 2024 2023 Credit Platform 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 Other 6,555 — 18,809 — Management Fees, Net 325,210 225,887 884,321 650,617 Administrative, transaction and other fees 59,123 31,246 173,966 84,170 Performance revenues 280 — 643 — Total GAAP Revenues - Credit Platform 384,613 257,133 1,058,930 734,787 GP Strategic Capital Platform GP minority stakes 152,633 132,498 431,908 393,218 GP debt financing 6,120 4,613 17,199 11,990 Professional sports minority stakes 757 683 2,721 1,650 Strategic Revenue-Share Purchase consideration amortization ( 11,116 ) ( 10,659 ) ( 32,436 ) ( 30,198 ) Management Fees, Net 148,394 127,135 419,392 376,660 Administrative, transaction and other fees 10,755 8,846 31,668 26,451 Total GAAP Revenues - GP Strategic Capital Platform 159,149 135,981 451,060 403,111 Real Estate Platform Net lease 41,246 32,987 123,433 89,386 Real estate credit 8,459 — 9,815 — Management Fees, Net 49,705 32,987 133,248 89,386 Administrative, transaction and other fees 7,411 3,549 18,958 9,783 Performance revenues — — 1,870 506 Total GAAP Revenues - Real Estate Platform 57,116 36,536 154,076 99,675 Total GAAP Revenues $ 600,878 $ 429,650 $ 1,664,066 $ 1,237,573 F-29 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 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 are primarily included within due from related parties and a portion is also included within other assets in the Company’s consolidated statements of financial condition. 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. Nine Months Ended September 30, (dollars in thousands) 2024 2023 Management Fees Receivable Beginning balance $ 243,203 $ 262,059 Ending balance $ 332,326 $ 226,321 Administrative, Transaction and Other Fees Receivable Beginning balance $ 42,059 $ 44,060 Ending balance $ 76,838 $ 46,990 Performance Revenues Receivable Beginning balance $ 2,975 $ 1,132 Ending balance $ 228 $ — Unearned Management Fees Beginning balance $ 9,398 $ 9,389 Ending balance $ 10,054 $ 9,196 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. Nine Months Ended September 30, (dollars in thousands) 2024 2023 Beginning Balance $ 417,081 $ 457,939 Amortization ( 32,436 ) ( 30,198 ) Ending Balance $ 384,645 $ 427,741 F-30 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 Amended and Restated 2021 Omnibus Equity Incentive Plan, approved by stockholders on June 13, 2024 (“A&R 2021 Equity Incentive Plan”). The A&R 2021 Equity Incentive Plan, among other things, (i) increased the number of Class A Shares authorized for issuance under the previously amended Equity Incentive 2021 Plan from 101,230,522 shares to 171,930,614 shares and (ii) added an “evergreen” provision that provides for an automatic increase to the total number of Class A Shares subject to the A&R 2021 Equity Incentive Plan on the first day of each fiscal year beginning in calendar year 2025, and ending in and including 2034, by a number of Class A Shares equal to the positive difference, if any, of (a) 5 % of the aggregate number of Class A Shares and Class B Shares, in each case, outstanding on the last day of the immediately preceding fiscal year (assuming that all Blue Owl Operating Group Units have converted on a one -for-one basis into Class A Shares) minus (b) the aggregate number of shares that were available for the issuance of future awards under the A&R 2021 Equity Incentive Plan on such last day of the immediately preceding fiscal year, unless the administrator should decide to increase the number of shares covered by the A&R 2021 Equity Incentive Plan by a lesser amount on any such date. 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 A&R 2021 Equity Incentive Plan is 171,930,614 , of which 84,303,798 remain available as of September 30, 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 A&R 2021 Equity Incentive Plan. The table below presents information regarding equity-based compensation expense. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2024 2023 2024 2023 Acquisition related Oak Street Earnout Units $ — $ 20,310 $ — $ 60,267 Wellfleet Earnout Shares 1,508 882 4,933 2,501 Total acquisition related 1,508 21,192 4,933 62,768 Incentive Units 57,036 42,104 144,898 118,950 RSUs 19,063 11,678 53,456 37,357 Equity-Based Compensation Expense $ 77,607 $ 74,974 $ 203,287 $ 219,075 Corresponding tax benefit $ 696 $ 180 $ 1,961 $ 652 Fair value of RSUs settled in Class A Shares $ 21,110 $ 5,702 $ 44,925 $ 12,408 Fair value of RSUs withheld to satisfy tax withholding obligations $ 16,828 $ 6,365 $ 34,888 $ 11,179 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. F-31 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 11.4 % and 11.6 % for the three and nine months ended September 30, 2024, respectively, and 14.4 % and 13.9 % for the three and nine months ended September 30, 2023, respectively. 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 September 30, 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. 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 changes in stockholders’ equity for these amounts. F-32 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 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 Prima Earnouts (6) Excluded Contingently issuable shares If-converted method (for earnouts issuable in Common Units) Atalaya Earnouts (7) 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 11,700,172 and 11,959,362 for the three and nine months ended September 30, 2024, and 11,393,389 and 10,927,643 for the three and nine months ended September 30, 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 and nine months ended September 30, 2024 and 2023. (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. (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 September 30, 2023, the Oak Street Triggering Events with respect to the Second Oak Street Earnout Units had not occurred nor were 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 and nine months ended September 30, 2023. However, had September 30, 2023 also been the end of the contingency period for the Second Oak Street Earnout Units, the Oak Street Triggering Event would have occurred, and therefore the Second Oak Street Earnout Units have been included in the calculation of diluted earnings per share for the three and nine months ended September 30, 2023. (6) As of September 30, 2024, the Prima Triggering Event with respect to the Prima Earnouts had not occurred nor are these earnouts issuable by the Registrant, and therefore such earnouts have not been included in the calculation of basic earnings per share for the three and nine months ended September 30, 2024. Had September 30, 2024 also been the end of the contingency period for the Prima Earnouts, the Prima Triggering Event would have not occurred and therefore the Prima Earnouts have not been included in the calculation of diluted earnings per share for the three and nine months ended September 30, 2024. F-33 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 (7) As of September 30, 2024, the Atalaya Triggering Event with respect to the Atalaya Earnouts had not occurred nor are these earnouts issuable by the Registrant, and therefore such earnouts have not been included in the calculation of basic earnings per share for the three and nine months ended September 30, 2024. Had September 30, 2024 also been the end of the contingency period for the Atalaya Earnouts, the Atalaya Triggering Event would have not occurred and therefore the Atalaya Earnouts have not been included in the calculation of diluted earnings per share for the three and nine months ended September 30, 2024. Three Months Ended September 30, 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 $ 29,805 575,249,883 $ 0.05 Effect of dilutive securities: Unvested RSUs — 9,429,072 — Warrants ( 2,397 ) 1,864,502 — Vested Common Units 39,005 905,181,493 — Vested Incentive Units — — 8,059,675 Unvested Incentive Units — — 21,533,293 Diluted $ 66,413 1,491,724,950 $ 0.04 Nine Months Ended September 30, 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 $ 88,841 531,422,518 $ 0.17 Effect of dilutive securities: Unvested RSUs — 9,135,488 — Warrants ( 6,412 ) 1,792,186 — Vested Common Units — — 923,735,043 Vested Incentive Units — — 8,457,957 Unvested Incentive Units — — 23,969,944 Diluted $ 82,429 542,350,192 $ 0.15 F-34 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 Three Months Ended September 30, 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 $ 15,109 466,376,329 $ 0.03 Effect of dilutive securities: Unvested RSUs — 5,491,852 — Warrants ( 663 ) 222,129 — Vested Common Units — — 953,172,293 Vested Incentive Units — — 9,380,431 Unvested Incentive Units — — 24,891,476 Oak Street Earnout Units — 10,483,603 — Diluted $ 14,446 482,573,913 $ 0.03 Nine Months Ended September 30, 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 $ 36,285 460,691,359 $ 0.08 Effect of dilutive securities: Unvested RSUs — 5,159,344 — Warrants ( 1,136 ) 34,602 — Vested Common Units 69,963 957,654,570 — Vested Incentive Units — — 8,036,109 Unvested Incentive Units — — 24,940,033 Oak Street Earnout Units — 8,650,907 — Diluted $ 105,112 $ 1,432,190,782 $ 0.07 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. (dollars in thousands) September 30, 2024 December 31, 2023 Management fees $ 332,326 $ 243,203 Performance revenues 228 2,975 Administrative fees 76,838 42,059 Other expenses paid on behalf of the Company’s products and other related parties 116,128 78,899 Due from Related Parties $ 525,520 $ 367,136 F-35 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 2024 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 $ 26.5 million and $ 74.4 million for the three and nine months ended September 30, 2024, respectively, and $ 15.8 million and $ 44.0 million for the three and nine months ended September 30, 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 $ 21.6 million and $ 58.5 million for the three and nine months ended September 30, 2024, respectively, and $ 12.2 million and $ 31.2 million for the three and nine months ended September 30, 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 $( 3.8 ) million and $( 11.6 ) million for the three and nine months ended September 30, 2024 respectively, and $( 0.8 ) million and $( 5.8 ) million for the three and nine months ended September 30, 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 $ 0.6 million and $ 2.3 million for the three and nine months ended September 30, 2024, respectively, and $ 0.9 million and $ 2.3 million for the three and nine months ended September 30, 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. As of June 30, 2024, this promissory note was fully repaid. The promissory note bore interest at a rate of SOFR plus 1.55 %, subject to change based on credit rating and leverage ratio. The Company recorded $ 5.4 million of interest income for the nine months ended September 30, 2024. As of September 30, 2023, $ 225.0 million was outstanding under this promissory note and the Company recorded $ 4.4 million and $ 12.8 million of interest income for the three and nine months ended September 30, 2023, respectively. Interest was payable monthly in arrears and settled in cash or equity in the related product. F-36 Table of Contents Blue Owl Capital Inc. Notes to Consolidated Financial Statements (Unaudited) September 30, 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 September 30, 2024, $ 7.5 million was outstanding under this promissory note and the Company recorded $ 0.2 million and $ 0.6 million of interest income for the three and nine months ended September 30, 2024, respectively. As of September 30, 2023, $ 7.5 million was outstanding under this promissory note and the Company recorded $ 0.2 million and $ 0.5 million of interest income for the three and nine months ended September 30, 2023, respectively. 14. SUBSEQUENT EVENTS Dividend On October 31, 2024, the Company announced a cash dividend of $ 0.18 per Class A Share. The dividend is payable on November 22, 2024, to holders of record as of the close of business on November 11, 2024. Acquisitions On October 7, 2024, the Company announced its entry into a definitive agreement to acquire substantially all of the assets of IPI Partners, LLC (the “IPI Acquisition”), a joint venture between an affiliate of ICONIQ Capital, LLC (“ICONIQ”) and an affiliate of Iron Point Partners. The aggregate consideration for the IPI Acquisition will be approximately $ 1.0 billion. The Company 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 A cquisition, the Company will enter into a services agreement with ICONIQ (the “Services Agreement”), pursuant to which ICONIQ will provide certain services, including investment analysis and investor relations services to the Company or its subsidiaries. Under the terms of the Services Agreement , in 2026 the Company expects to issue 14,175,000 Incentive Units, subject to future targets. The Company also expects 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. F-37